The state of Colorado recently rejected a health insurance rate increase from Cigna that on average would have raised rates 24 percent, with increases for individuals ranging from 10 percent to 75 percent. Experts in the Colorado Division of Insurance who reviewed and rejected the increase expressed concern that it was much higher than increases from other insurers, inappropriately singled out four counties, and wasn’t backed up by any supporting data to justify the request. Colorado has rejected other excessive increases too, saving consumers $32 million a year.
Wonder why you don’t hear about the state rejecting unreasonable health insurance rate hikes in Texas? Because it doesn’t happen here. Unlike in Colorado and most other states, our Department of Insurance does not have the authority to reject an unreasonable rate increase.
Under the Affordable Care Act (a.k.a. Obamacare), Texas is now reviewing many health insurance rate increases that exceed 10% to determine if they are reasonable. However, the Texas Department of Insurance is not authorized to deny a rate increase it deems excessive. If a rate increase is excessive in Texas, that fact is posted on TDI’s website (you can find summary information on rate hikes here), but consumers will still have to pay the excessive rate because TDI’s hands are essentially tied. To let the agency block excessive rate hikes and keep Texas consumers from getting ripped off, the Legislature should take action this session.
