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By ED SEALOVER
DENVER - Colorado's insurance commissioner would have broad power to reduce annual rate increases proposed by private health insurers - - but not auto insurers -- under a bill that passed in committee Thursday.
Auto insurance companies didn't escape unscathed, however. A separate committee approved a bill to require drivers to buy medical policies as part of their plans.
HB1389, which strengthens the oversight of Insurance Commissioner Marcy Morrison, could be one of the most significant changes to the industry in recent history. It eradicates the "file-and-use" system under which insurance companies inform her office of increases but have them questioned only if found to be excessive, inadequate or unfairly discriminatory. Instead, the state would have a "prior- approval" system in which companies must justify increases.
Health insurance costs have risen at six times the rate of inflation since 2001, and Colorado has the seventh-highest premiums de- spite being the country's healthiest state. Though Rep. Morgan Carroll, D-Aurora, acknowledged rising health care costs have contributed to those statistics, she said bloated administrative costs and excessive reserve accounts by insurance firms play a part.
The state now requires companies to detail justifications for rate increases, but Carroll's bill would give the insurance division the power to use the numbers to bring down costs and require the division to disseminate the information to the public in understandable ways. With such transparency in place, companies would be slower to jack up prices, she said.
"This is about quality of life for millions of people in this state," she said, pointing to studies showing states without prior- approval systems have higher rates of uninsured residents. The bill goes to the House Appropriations Committee after passing the House Business Affairs and Labor Committee on a party-line 7-4 vote.
Insurers and Republicans said the only way to bring down prices is to remove regulation and open the market to more competition. More states are moving away from priorapproval systems, several people said, and those states with it can take six to nine months to approve rate increases, hurting insurance firms financially.
Opponents managed to get prior approval for auto insurance removed from the measure, arguing that people calling for significant reform complain about medical costs.
Auto insurers would have to sell policies that cover drivers and their passengers for $10,000 worth of medical coverage under another bill heading to the Senate floor.
SB211 aims to address complaints from ambulance drivers and traumacare doctors that they aren't getting reimbursed quickly or fully under laws that don't require drivers to have medical insurance and don't require claims payments until fault is established.
(c) 2008 Gazette, The; Colorado Springs, Colo.. Provided by ProQuest Information and Learning. All rights Reserved.
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