Californians spent $250 million on excessive health premiums, group says

[July 03, 2014]  By Sharon Bernstein

SACRAMENTO Calif. (Reuters) - Californians paid a quarter of a billion dollars in health insurance premiums during a 15-month period ended last year that were deemed excessive by state regulators, a consumer group said Wednesday.

Santa Monica-based Consumer Watchdog, which released the figures on Wednesday, is pushing Proposition 45, a ballot initiative that would give regulators the power to reject rate increases determined to be excessive.

"Patients are powerless against these rate increases," said Paul Song, a physician and activist based in Los Angeles who is working to support the ballot initiative. "This system has been deleterious to our patients."

Using data from the California Department of Insurance and the California Department of Managed Healthcare, the organization said that from April 1, 2012 though November 1, 2013, regulators found $250 million worth of planned insurance increases for people who buy their own individual insurance policies to be unreasonable, the group said.
 

Their ballot measure, which is supported by California Insurance Commissioner Dave Jones, would give regulators the power to approve or deny proposed rate increases.

"Over 1 million Californians were forced to pay excessive rates because our determination is not binding," Jones said at a legislative hearing on the proposed ballot initiative in Sacramento on Wednesday. Had he been granted the power to deny insurance companies rate increases deemed excessive, the $250 million in unwarranted premium increases would not have been allowed, Jones said.

The initiative, which has already been approved for the November 2014 ballot, has drawn opposition from a insurance companies, which say it will limit their ability to manage the costs of providing care. The California Medical Association, which represents doctors, has said it could lead insurers to reduce the rates paid to physicians by limiting the ability of insurance companies to set rates as needed.

Peter Lee, head of California's insurance exchange set up under the Affordable Care Act, or Obamacare, said he worried that giving the state insurance commissioner veto power over rates could cause insurers to leave the state.

Such power could also undermine the exchange's role in negotiating rates for its own customers with the insurance plans, Lee said.

But Jones, the state insurance commissioner, said those concerns were unwarranted.

(Reporting by Sharon Bernstein; Editing by Steve Orlofsky)

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