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DOI: Single Geographic Region Not the Answer

Residents of Colorado’s mountain counties have expressed alarm and anger at the dramatically higher insurance premiums they face compared with the rest of Colorado.
March 10, 2023

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A newly released study conducted for the state Division of Insurance (DOI) examined what would happen if Colorado prohibited insurers from charging higher insurance premiums based on where their policyholders live, an idea known as a single geographic rating area. 

The DOI regulates the individual and small group markets but has less regulatory authority over the large group market. Price increases in the individual market have been dramatically higher on the Western Slope in recent years, while the small group market has seen more stable prices. The study concluded that this policy could lead to insurers leaving some markets. This could in turn lead to less insurer competition and eventually higher insurance premiums — an unraveling of the insurance market.

Insurance Commissioner Marguerite Salazar, with that finding in mind, said her office does not intend to consolidate geographic rating areas. Instead, the DOI will look for ways to address the underlying causes of high health care costs and control rising insurance prices.