Consumer Groups Analyze Health Insurance Rate Filings CCHI, CoPIRG identify areas for Division of Insurance scrutiny DENVER

July 24, 2014
Contact: Jenny Davies-Schley, 720-296-9645

DENVER – After weeks of analysis, the Colorado Consumer Health Initiative has raised questions and submitted comments to the Division of Insurance on some of the proposed 2015 health insurance rates. The Colorado Consumer Health Initiative submitted comments to the Division of Insurance on nine rate filings, identifying several deficiencies. The Colorado Public Interest Research Group Foundation (CoPIRG), a partner of CCHI, also submitted a consumer petition with 700 signatures asking that the Division of Insurance scrutinize the rate filings to protect consumers.

“We have asked that the Colorado Division of Insurance verify that no insurance company is taking advantage of consumers in this mass filing process,” said Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative.  “Coloradans need access to affordable health insurance so they can get the health care they need, when they need it.”

Some proposed rates are decreasing, reflecting the fact that insurance companies are positioning themselves to compete for Coloradans’ business. Nevertheless, CCHI identified the following issues in evaluating the rate filings submitted to the Division of Insurance last month:

Too Many Secrets. Lack of information about projected health of enrollees, geographic experience, membership distribution and more make it very difficult for consumers to understand how rates are developed or evaluate their merit.

No Account for Reduced Uncompensated Care. A cost driver in health insurance premiums has been “cost shifting.” Yet rates do not appear to reflect the average 36 percent decrease in charity care per hospital during the first quarter of 2014 reported by the Colorado Hospital Association and the resulting reduced cost shift.

Health of New Enrollees. While several insurers project sicker consumers to enroll in 2015, that does not seem likely given that consumers with the highest health needs are likely to have already obtained insurance and others will move from pre-ACA individual market plans to new ones as they become aware of the tax credits.

Overestimated Pharmaceutical Costs. Despite the prescription drug cost growth rate of 3.6 percent last year, some companies are projecting large increases in prescription costs – up to 21 percent –sometimes for just one drug.

“We need greater transparency in the rate filings so that Coloradans can feel confident that insurers aren’t taking advantage of them,” said Danny Katz, executive director of CoPIRG.  “It’s totally reasonable to expect insurers to clearly and publicly justify their proposed rates.”

More than 140,000 Coloradans gained coverage through Connect for Health Colorado, the state’s new marketplace, in 2014. Connect for Health Colorado will continue to offer robust coverage and access to financial assistance when open enrollment for 2015 begins on November 15, 2014.

Colorado Consumer Health Initiative represents 50+ Colorado health advocacy organizations with more than 500,000 health care consumer members and advocates for affordable, accessible quality health care for all Coloradans. CoPIRG is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security or our right to fully participate in our democratic society.

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