April 23, 2008 4:48 PM

House votes initial OK on bill requring health insurers to justify rate hikes

Democrats won initial House approval on a ground-breaking bill today that would allow the state to reject unjustified health insurance hikes and track how consumer dollars are spent.

"Colorado rates are the 7th most expensive in the country, yet we have one of the healthiest populations in the U.S," said HB 1389 sponsor Rep. Morgan Carroll, D-Aurora. "That does not add up. Why are our premiums higher?"

"We have been the profit playground for the (insurance) carriers all across the country," she said, because Colorado allow insurers to "file and use" rates hikes, with no prior review.

"Coloradans have been paying more for less every year. It's time to challenge unjustified rate increases," said Carroll, whose bill would allow the Insurance Commission to reject unjustified rate hikes.

Republicans, however, argue that increased regulation will boost insurance costs for consumers and drive companies -- and price competition - out of the state.

Rep. Douglas Bruce, R-Colorado Springs, said the bill will impose "price controls" that failed during the Nixon administration.

"If we do insurance now, are we going to regulate the price of gasoline or groceries" in the future? Bruce asked.

For the first time, Carroll said, the bill will require the Insurance Commission to analyze detailed industry cost data that's already collected to see where health care dollars go.

"We are going to have unprecedented transparency to be able to follow our health care dollar," she said. "We will have a level of accountability that hasn't existed in this state before."

This will end the "blame game" of insurers, trial lawyers, doctors, hospitals and pharmaceutical firms pointing fingers about whose driving up health-care costs, she said.

If the bill becomes law, the Insurance Commission Web site would provide consumers with "a one-stop-shop, easy-to-read, follow-your-dollar" reports, Carroll said. "So people can see for themselves where their money is going and which carriers are not only charging less but providing more back-for-buck value."

The bill faces a vote on final House passage later this week.

--Alan Gathright

Posted by Alan Gathright at 4:48 PM | Comments (2)