Colo. health insurance premiums rose 12.9% in 2010

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The Colorado  Division of Insurance says the average annual rate increase this year was 12.9 percent.

And, it’s expected to keep rising in 2011.

Some factors that affect costs include: “claims experience,” or how many claims were filed in the prior year and how severe they were; medical costs, including doctors, hospital charges, laboratory services and pharmacy expenses; cost and frequency of services such as MRIs, X-rays, CAT scans; age; geographic location; and new state or federal benefits that are required by law.

“Our rate analysts and actuaries look over all submitted rate filings to be sure the proposed rates are justified,” said John Postolowski, interim commissioner of insurance. “While we scrutinize rate increases to be sure they are not excessive, we have to recognize that the cost of providing health care continues to rise.”

So far, the state insurance division has found that health care reform only accounts for 0 percent to 5 percent of the overall increase of any insurance company’s premium rate, but it plans to continue reviewing proposed rate increases and the factors that affect costs.

Although a large number of insurance companies file premium rates in the late fall and early winter months for policies that renew in January or February each year, there is no restriction on how often a company may file new rates. Although group and employer-sponsored plans usually contract for a year and set premiums for a 12-month period, individual health insurance plans may see several adjustments – increases or decreases – throughout the year.

To view a comprehensive list of factors which affect premium rates, visit the Division of Insurance website.