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Division of Insurance Offers Potential New Options for Geographic Rating Areas for 2015




May 2, 2014             FOR IMMEDIATE RELEASE

Contact:  Vincent Plymell, Communications Manager,

Colorado Division of Insurance, 303.894.2261,


Division of Insurance Offers Potential New Options for Geographic Rating Areas for 2015


Denver – At a meeting of the Colorado Healthcare Cost Study Group today, Insurance Commissioner Marguerite Salazar offered new options for geographic rating areas for health insurance for 2015.  Geographic rating areas are geographical units made up of metropolitan statistical areas (MSAs), counties or three-digit zip codes, which are used by insurance carriers to price premiums.   The options include the current geographic rating plan and two others that would also promote stability and minimize variability in premium costs.


The new options emerged from an actuarial analysis performed for the group by Miller & Newberg Consulting Actuaries.


Earlier this year, Gov. John Hickenlooper asked Commissioner Salazar to convene the Healthcare Cost Study Group to learn more about the cost of healthcare and health insurance across the state.


“Variations in health insurance premiums across regions arise due to variations in the cost of healthcare across regions,” said Commissioner Salazar.  “These variations are not new, but the transparency brought by the Affordable Care Act is new.”


In addition to reviewing what drives health costs in each region, Miller & Newberg analyzed five options for the rating areas, including the current breakdown of 11 areas, also known as 7 Metropolitan Statistical Areas (MSAs) + 2 non-MSAs.  An MSA is a geographical region with a relatively high population center and close economic ties throughout the area.  Of these five options, Miller & Newberg identified three that would minimize uncertainty and promote stability in the cost of health insurance premiums.

  • 7MSAs + 4 non-MSAs – The current 11 rating areas.  The four non-MSAs are Southeast, Northeast, West and Resort, and incorporate the counties in those regions of the state.
  • 7 MSAs + 2 non-MSAs – This would combine the existing four non-MSAs into two, East and West.
  • 7 MSAs + 1 non-MSA – This would combine the existing four non-MSAs into a single non-MSA geographic area.

The DOI’s suggested option is 7 MSAs + 2 non-MSAs, which would combine the Western Slope regions of West and Resort into one region, and the Eastern Plains regions Southeast and Northeast into another region.


“Combining those four counties into two larger groups spreads the cost risks more broadly,” said Commissioner Salazar.  “We believe this option would lead to the fairest distribution of costs across these regions.”  She asked the study group to provide feedback on the three options no later than May 7, to allow insurance carriers to incorporate any changes into their plans and rates for 2015. Carriers must submit their 2015 plans and rates to the DOI later this spring.


The DOI enlisted a diverse group of stakeholders to participate in the Healthcare Cost Study Group, including representatives of hospitals, healthcare providers, consumer groups, insurance carriers and representatives from the mountain communities.
Consumers with questions about insurance can contact the Division of Insurance at 303-894-7490 or 1-800-930-3745 (outside the Denver metro area).  The Division has trained experts ready to answer consumers’ health insurance questions.


The Colorado Division of Insurance regulates the insurance industry and assists consumers and other stakeholders with insurance issues.


DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado.


Consumer protection is our mission.

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