Anthem Blue Cross and Blue Shield announced last week that it will pay policyholders in Colorado $20 million to end a review by the state’s Department of Regulatory Agencies Division of Insurance. The settlement seems a remarkable victory for consumers against unfair gouging. But Anthem admits no guilt, the state has leveled no fine and it appears that the rates under question will remain the same.

At the beginning of the year, when notification of the 20 percent rate hike began landing in Colorado mailboxes, policyholders lodged hundreds of complaints with the Division of Insurance. The rate increase targeted individual insurance plans and raised a typical $300 monthly bill to roughly $360. Consumer complaints led Division of Insurance regulators to launch the review. News of the settlement has given rise to a sort of qualified celebration.

“Getting $20 million back into the pockets of Colorado consumers is a positive and beneficial

outcome,” Insurance Commissioner Marcy Morrison said in a release. In conversation with the Denver Business Journal and bound by the confidentiality stipulated to in the agreement with Anthem, however, she added that consumers will have to infer the meaning of the settlement. “The question to Anthem is: Why were they willing to settle? … Anthem knows precisely why it is paying $20 million.”

Under the terms of the agreement, the Division of Insurance will now end any investigation related to the hikes. The Division release is available as a pdf here and the settlement arrangements are available as a pdf here.

According to the terms of the settlement, Anthem admits to no fault. A representative told the Business Journal only that Anthem wanted to put the investigation behind it and that the corporation had cash on reserve specifically dedicated to such legal costs.

The Anthem payment will be dispersed as credits to affected Anthem policyholders and as cash to people affected by the hikes but who no longer hold a policy with Anthem.

From December of last year through March of this year, the Division of Insurance received a spike in complaints about Anthem, the vast majority related to the hikes. Complaints went from roughly 2 per month to 42 per month. At the time, Anthem was coming under fire in California for similarly high rate hikes there.

In Colorado, the hikes were submitted to regulators for review just as congressional town halls here featured fierce debate over the federal health reform legislation that passed in the spring and that seeks to address insurance company abuses. Colorado regulators approved the hikes in September. The state insurance commissioner who reviewed the hike, Tom Abel, told the Colorado Independent at the time that he was unsurprised by the hike because higher and higher health insurance increases have become the norm.

The question of whether and why the elevated rate will remain in place, or indeed whether it will be hiked again, casts the settlement in a less flattering light.

Roughly 6 percent of the state population does not receive employer-based insurance but instead buys insurance on the individual insurance market, a percentage of the population that Morrison says is expanding every day. Even at 6 percent, though, an increase of $60 on each plan would reap an additional $14.4 million for individual-plan insurance providers. Anthem/WellPoint, the largest health insurer in the nation and the most popular in Colorado on the individual market, will continue to take the lion’s share of that cash. If the rate hike is allowed to remain in place, the $20 million settlement announced last week will be paid for quickly and profits for that market will begin to roll in again soon.

At post time, staff at the Division of Insurance were not available for comment.