Official Lacks Necessary Authority to Regulate Insurance Rates
One policy we at Hodes Milman Liebeck pride ourselves on is that our attorneys represent only consumers—the individuals who are the victims of personal injury, medical malpractice and other wrongful conduct at the hands of others. We never represent insurance companies. We believe the insurance industry’s power in California is excessive and insufficiently checked, and we stand firmly on the side of healthcare consumers and policyholders.
The insurance industry’s inordinate power in this state has perhaps never been more evident than over the past year, as provider after provider has announced double-digit rate increases. Anthem attempted last year to raise its rates by 39 percent, and Blue Shield is trying this year to up its rates by as much as 59 percent.
The providers claim they have to increase rates to cover rising healthcare costs, despite the fact that their balance sheets show record profits, and their executive compensation packages are in the multi-million dollar range. A serious problem in California is that the state official charged with investigating those claims and protecting policyholders against unreasonable rate increases, the California insurance commissioner, doesn’t have the same, necessary authority to regulate health insurance rates as he does over auto and homeowner’s insurance rates.
A bill that would have given the commissioner authority to veto unreasonable rate increases died in the state Assembly last year. Fortunately, the bill will be re-introduced this year under the new governor and California’s newly elected, tough-on-providers insurance commissioner, Dave Jones. Jones told Los Angeles Times columnist Michael Hiltzik recently, though, that passage of the legislation will be “hard fought in the Legislature.”
“Notwithstanding the huge public outcry about the need for reform,” he said, “the health insurance industry wields a tremendous amount of influence in the Legislature.”
In the same column, Kaiser Family Foundation president Drew Altman told Hiltzik why, despite industry opposition, something simply must be done about runaway health insurance rates. ”
Increases of 20, 30, 40 percent,” he said, “are not survivable for real people…Whether they’re justifying it or not, that’s not a reasonable increase to ask people to pay.”
The cost of health insurance in California is already high, and the providers have demonstrated that they are more than willing to pad their bottom line by making huge rate increases that will leave many who currently have health insurance unable to continue to afford it. When Californians can no longer afford health insurance, the cost of their healthcare can fall to the State (i.e. you, the taxpayer), using up resources already spread razor-thin due to the State’s current budget crisis.
This is an issue that directly affects us all, and the California Legislature needs to step up and address it head-on. The best way to accomplish that is by allowing the California Insurance Commissioner the authority to regulate and approve health insurance rates, a power that he already has in regard to auto and homeowners insurance rates.
We at Hodes Milman Liebeck strongly urge you to contact your representatives in the California Legislature, and urge them to support legislation that will allow the California Insurance Commissioner the authority to veto unreasonable rate increases. Your health may depend on it.To find the name and contact information of the Assembly Member and Senator for your District, click this link and enter your zip code: http://www.leginfo.ca.gov/yourleg.html