Health-care reform has given the state the power and resources to slap down the kind of insurance-premium hikes that infuriate consumers, with advocacy groups pointing to a failed 24 percent increase request by Cigna.

Cigna’s rejected hike for individual health policies in 2013 included a 31 percent jump for four mountain counties singled out in a way the state says isn’t justified by geography.

The smallest increase sought among the Cigna policies was 10 percent, while some Colorado clients’ policies would have soared 75 percent. An actuary consulting for a consumer group said the hikes “could result in rate shock and financial hardships” for many of the 21,000 lives covered by about 10,500 Cigna policies.

The steep boost was “extremely high compared to other carriers,” said Tom Abel, supervisor of rate reviews for the state Division of Insurance.

“They didn’t support anything. We didn’t even know if this was an educated guess or just a guess,” he said.

The state’s rejection of the unsubstantiated Cigna request was “a perfect example of the system working,” Abel said.

The Colorado Consumer Health Initiative argues that health insurers must be watched carefully because they frequently seek sharp hikes, even while consumer use of medical resources is down

. Meanwhile, insurer profits remain high, they add.

The consumer group has used grant money to hire actuaries to critique three rate filings this fall, including the Cigna hike.

“Twenty thousand Cigna customers would have seen their fourth rate increase in three years. It is wrong that consumers are subject to high and frequent rate increases,” said Dede de Percin, director of the Colorado Consumer Health Initiative.

The Cigna request would have added $11.6 million in premiums to the $48.5 million paid by policyholders already, the group’s adviser said.

Cigna said many insurers group the same mountain counties together for higher rates because of historic high prices and claims there, a practice allowed by insurance laws. Inpatient hospital costs in Pitkin, Routt, Eagle and Garfield counties are 58 percent higher than in Denver, and 28 percent higher than the rest of rural Colorado, said Cigna spokeswoman Mary Engvall in an e-mail response.

Medical costs in those mountain counties exceeded premiums collected last year, she said.

Nevertheless, she added, Cigna has taken the Division of Insurance feedback into account and is resubmitting its request for about 10,500 individual policies it holds in Colorado. The request was for health policies bought by individuals and their family members, not for other plans that cover employers or small groups.

A review of the state’s database of rate filings, though, shows Cigna asking for the same 24 percent average increase this time. (Some of Cigna’s rate filings appear under its former name, Connecticut General.) The state also has asked Cigna to put all mountain counties in the same rate group.

“Insurance is a pooling of risk,” Abel said. “If you’re not pooling them, it’s not really insurance.”

The consumer group also questioned large rate hikes for 2013 by Humana and Kaiser Permanente, but those requests were approved by the state.

State powers to review and deny insurance hikes have grown since 2008, when a new Colorado law reversed years of practice. Insurers used to raise rates on their own, subject to later review. Now Colorado has a “prior approval” requirement, and the law gave regulators specific reasons to reject hikes for being excessive or discriminatory.

The federal Affordable Care Act of 2010, meanwhile, also requires review of hikes of more than 10 percent a year. The act also granted states money to hire actuaries and build consumer-friendly information, with $5 million going to Colorado. A Colorado website now allows public review of all rate filings.

The changes invite consumers to get more involved with health-cost increases and “level the playing field with insurance companies,” de Percin said.

The state also has strengthened its reviews by asking for more years of trends in medical inflation, rather than just the most recent year, she said.

State insurance reviews have saved consumers more than $32 million in each of the past two years of reporting, according to the Division of Insurance.

Michael Booth: 303-954-1686, mbooth@denverpost.com or twitter.com/mboothdp