DENVER (AP) — The federal government has approved Colorado's plan to consolidate several rating areas to reduce health insurance premiums, hoping to reduce costs in mountain and rural areas, including pricy resort towns, the Colorado Division of Insurance said Monday.
Under the Affordable Care Act, the state was divided into geographic rating areas based on medical care costs, which determined a range of premiums on the state health exchange.
Two Western Slope mountain rating areas comprising 21 counties, including pricey mountain resorts, will be combined into one new rating area to reduce cost and risk. Two Eastern Plains rating areas consisting of 26 counties will also be combined under the plan the U.S. Department of Health & Human Services approved, the Denver Post reported Monday (http://tinyurl.com/onkyo9t ).
The changes as proposed would reduce premiums slightly in Garfield, Eagle, Pitkin and Summit counties. But premiums on the individual market would go up slightly in other areas of western Colorado. Mesa County would continue to be its own rating area.
Two eastern Colorado regions would also join under the plan, from Sedgwick County in northeast Colorado to Baca County in the southeastern corner or the state.
Insurance Commissioner Marguerite Salazar said earlier this month the new rating areas would be the fairest way to blunt sky-high premiums in the "resort" area.
"This is the fairest way of addressing the issue and working toward stable premiums in all regions of the state," Salazar said in a statement. A spokesman for the commissioner's office did not return an email seeking comment Monday.
It's too soon to know exactly how premiums would change in those areas. Insurers haven't yet turned in proposals for 2015 pricing, when the change would take effect.
The "resort" area was named one of the nation's most expensive by the nonpartisan Kaiser Family Foundation. In this part of the state, the cheapest midlevel plan is $483 a month. In Denver, the same plan is about $280 a month. The gap narrows for customers who qualify for subsidies under the new health law.
The new health care law doesn't allow insurers to use health conditions to set premiums. Insurers may use only three criteria for setting premiums — age, tobacco use and geography.
One of the chief critics of Colorado's health-insurance zones, Democratic U.S. Rep. Jared Polis, favored the new plan.
"I am hopeful that this change will bring down the staggering premiums" faced by people the "resort" region, wrote Polis, whose district includes part of the region.
Information from: The Denver Post, http://www.denverpost.com