Seen in the Rocky Mountain News:
Democrats plan to introduce bills to require health insurance firms to get prior approval for rate hikes, punish them for improper denial of claims and encourage efficiencies.[...]
Rep. Morgan Carroll, D-Aurora, said insurance companies are allowed to increase rates at will and get approval from the Division of Insurance later. She said they are rarely punished if increases are found to be unjustified.
“This way, people will know they are getting good rates, they are getting what they paid for and costs will go down as they become more efficient,” she said.
Carroll said she is considering adding auto insurance in a separate measure.
House Speaker Andrew Romanoff, D-Denver, is sponsoring a bill that would impose penalties if a claim is improperly denied.
Since when has regulation promoted efficiency? It’s been my experience that the two concepts tend to be opposites.
A far greater incentive to become efficient…as well as providing better service…is the knowledge that your competitors might do just that, and they have the potential to quickly, easily reflect that in their rates, without having to be concerned about an inability to respond to trend in the future.
Besides, on the health insurance front, such moves seem doomed to have limited effect, seeing as how most Americans get their health coverage through plans which are federally regulated, exempt from state interference (for better or worse).