Democratic bills would tighten rules on insurance
Steven K. Paulson, Associated Press
Monday, March 31, 2008
Democrats plan to introduce bills to require health insurance firms to get prior approval for rate hikes, punish them for improper denial of claims and encourage efficiencies.
The plan, dubbed the Insurance Rate Accountability, Transparency and Equity Act of 2008, was unveiled Sunday.
Rep. Morgan Carroll, D-Aurora, said insurance companies are allowed to increase rates at will and get approval from the Division of Insurance later. She said they are rarely punished if increases are found to be unjustified.
"This way, people will know they are getting good rates, they are getting what they paid for and costs will go down as they become more efficient," she said.
Carroll said she is considering adding auto insurance in a separate measure.
House Speaker Andrew Romanoff, D-Denver, is sponsoring a bill that would impose penalties if a claim is improperly denied.
"We ought to make sure you get what you pay for, you don't pay too much and you see what you are getting," he said.
Carroll said Colorado's health insurance rates are seventh highest in the nation, according to the Kaiser Family Foundation, even though Coloradans are healthier than residents in most states. She said auto insurance rates also are too high.
Carroll said that in 2002, one dollar of a typical insurance premium bought $188 in benefits. In 2007, that same dollar bought $46 worth of coverage.
"The industry says the current system is working," she said. "It's not working."
Carole Walker, spokeswoman for the Rocky Mountain Insurance Information Association, said the reform package would drive up auto insurance rates, not lower them.
She said states that require prior approval for rate hikes sometimes take as long as two years to make a decision, which pushes insurance companies to ask for even higher rates because they can't predict what will happen that far out.
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March 31, 2008
6:13 a.m.
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JanetW writes:
Have these people ever met a price control they didn't like? This would just drive out more and more companies and kill your chance to shop around for a competitive rate.
This isn't rocket science.
March 31, 2008
9:40 a.m.
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kathyM writes:
I don't like the price-control part of the proposed legislation. But I DO like the idea of punishing insurers who decline or delay payment for valid claims. Wish we could include Medicare and Medicaid, as they're two of the worst offenders.