Many factors are contributing to higher health insurance costs in Colorado next year. Among them are rising doctor and hospital fees, increased use of medical and lab tests and a population that is growing older and sicker.

National healthcare reform legislation, however, currently does not appear to be adding much to the bill, as some might have feared.

This year, several elements of healthcare reform went into effect as part of the Patient Protection and Affordable Care Act signed into law last March. These included a ban on denial of coverage for children with pre-existing conditions; no lifetime limits on benefits; restricted annual benefit limits; a ban on policy cancellations except in cases of fraud; and allowing dependents to remain on their parents’ insurance up to age 26.

Those parts of the new law that went into effect this year will increase rates by a maximum of 5 percent and often by much less, according to state regulators.

Recently a Denver insurance brokerage firm projected an overall increase in health-insurance costs of 14.4 percent for Colorado in 2011, the biggest jump in six years and higher than the national average.

Despite the jump, double-digit price increases for health insurance are nothing new in Colorado. Rates have gone up by around 12 to 14 percent each year for at least a decade, including a whopping 19 percent increase in 2003.

The Colorado Division of Insurance, which must approve all rate increases, has been reviewing rates submitted by health carriers, according to Marcy Morrison, the state insurance commissioner.

"What we found isn’t surprising — health insurance premiums continue to rise," Morrison says.

Morrison says that a variety of factors contributed to health insurance increases in past years, and for the most part those same factors are
driving current increases. For example, people are scheduling more doctor visits, receiving more tests and more expensive lab tests. In addition, the population overall is aging, and the average health status of Americans is decreasing.

"What may be eye-opening for some people is that federal health reforms have contributed from zero to a maximum of 5 percent of those increases. It’s not the primary cause for increasing rates," Morrison says.

State law specifies which factors an insurance company can review when it adjusts healthcare premiums each year. The allowable factors include such things as previous claims, changes in benefit plans and new state or federal laws. Guidelines vary based on whether insurance is offered through a large-group employer (50 or more employees), small-group employer (fewer than 50 employees) or to individuals.

Insurers were allowed to take the new healthcare legislation into account when they adjusted their rates for next year. Despite asking for rate increases of up to 30 percent in some cases, insurers on average blamed little of that increase on healthcare-reform requirements. For example, large-group insurers sought rate increases of only 0.4 percent for covering dependents up to age 26.