Boulder County Business Report
DENVER - The state of Colorado is extending its examination of premium rates being charged by Rocky Mountain Hospital and Medical Service Inc., commonly known as Anthem Blue Cross and Blue Shield.
The exam, being conducted by the Colorado Department of Regulatory Agencies' Division of Insurance, considers profits, dividends, investment income or losses, unearned premium reserve and reserve for losses, surpluses, executive salaries, expected benefits, ratios, as well as annual reports and other actuarial factors.
"Colorado is unique with the recent passage of HB 1389, which expanded our ability to review health rates," said Marcy Morrison, commissioner of the Division of Insurance. "We have more authority to be sure increases are justified, even if the rates have been previously approved. In fact, we have a duty to do so."
The bill was passed in 2008 for rates effective in 2009 and later.
Morrison said the exam schedule placed Anthem first in line for an extended exam, but that it is not being singled out. "Other companies should be aware that a thorough financial analysis may occur in future market conduct exams," Morrison said. "It is in the best interest of Colorado consumers for us to analyze more information so we can fairly and completely assess a company's financial situation and understand the factors that are driving rate increases."
Insurance officials would not specify how long the examination would take. Morrison said the division will be asking the company for additional information and must give the company time to respond to each request. "The answers we receive may satisfy our questions, or may prompt additional requests for information, but we won't know until that give and take occurs," Morrison said.
Colorado law allows carriers 10 days to respond to each new request for information.
Anthem may continue to use its filed rates during the market conduct examination. Carriers may implement new rates on the condition that the division may require correction of any deficiencies upon later review if the rate charged is found to be excessive, inadequate or unfairly discriminatory.
The exam, being conducted by the Colorado Department of Regulatory Agencies' Division of Insurance, considers profits, dividends, investment income or losses, unearned premium reserve and reserve for losses, surpluses, executive salaries, expected benefits, ratios, as well as annual reports and other actuarial factors.
"Colorado is unique with the recent passage of HB 1389, which expanded our ability to review health rates," said Marcy Morrison, commissioner of the Division of Insurance. "We have more authority to be sure increases are justified, even if the rates have been previously approved. In fact, we have a duty to do so."
The bill was passed in 2008 for rates effective in 2009 and later.
Morrison said the exam schedule placed Anthem first in line for an extended exam, but that it is not being singled out. "Other companies should be aware that a thorough financial analysis may occur in future market conduct exams," Morrison said. "It is in the best interest of Colorado consumers for us to analyze more information so we can fairly and completely assess a company's financial situation and understand the factors that are driving rate increases."
Insurance officials would not specify how long the examination would take. Morrison said the division will be asking the company for additional information and must give the company time to respond to each request. "The answers we receive may satisfy our questions, or may prompt additional requests for information, but we won't know until that give and take occurs," Morrison said.
Colorado law allows carriers 10 days to respond to each new request for information.
Anthem may continue to use its filed rates during the market conduct examination. Carriers may implement new rates on the condition that the division may require correction of any deficiencies upon later review if the rate charged is found to be excessive, inadequate or unfairly discriminatory.
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