The Fair Accountable Insurance Rates Act (FAIR Act - HB 1389) was signed by Governor Ritter today. The bill was authored by Rep. Morgan Carroll (D-Aurora) and Sen. Paula Sandoval (D-Denver).
The purpose of this bill is to address affordable access to health care for the 1.5 million or so Colorado residents who depend on health insurance for access to health care. Colorado has suffered rate increases of 98% over seven years and has the 7th highest premiums in the country despite being one of the healthiest states in the nation.
Why is that? Colorado, until today, was among a minority of states that allowed insurance companies to raise rates at will with no ability to block unjustified rate increases before they took effect.
While costs for heatlh care have no doubt gone up, it is also true that the industry spends about $98 Billion per year in excess administration, when $77 Billion would insure every single American.
Health insurance companies made with $225 Billion in revenue and $12 Billion in profit in 2007 , not counting the $3 Billion paid in CEO salaries or the $482 Million in stock options for the CEO's. Yet, the portion of those funds spent in Colorado on actual health care continues to decline.
What's more is the insurance industry is estimated to be sitting on $600 Billion in surpluses (not counting reserves, actual claims, salaries, administration or profits.)
The FAIR Act will requires insurance companies to justify their rate increases before they can take effect and gives the Insurance Commissioner the long overdue power to reject unjustified rate hikes.
The FAIR Act will also bring unprecedented transparency to the reasons that rates go up so that consumers, businesses and policymakers can make good informed decisions based on objective data. The bill will track all of the cost drivers and make that information available to the public.
Passage is this bill will save consumers hundreds of millions of dollars and help ensure more of our premium dollars are actually spent on health care.
This bill impacts the 4.7 million residents in the State of Colorado who either pay for insurance or else pay for the cost of the uninsured in the form of unreimbursed hospital care or in medical debt.
Thursday, June 5, 2008
RITTER SIGNS FAIR ACT
Posted by DenverCommunityNewspapers at 2:57 PM