Focus Area
Regulating Health Insurance Rates
California’s Health Insurance Crisis, and How to Fix It
The escalating cost of health insurance in California is a crisis.
If you're a California voter, go to Justifyrates.org to download and sign the ballot petition to regulate health insurance prices.
If you have a story about your health insurance rate hikes or other insurer abuses please click here to tell us about it.
By 2014, the federal health reforms will require all Americans to have health insurance or pay a fine. But rising premiums are making insurance unaffordable. The California HealthCare Foundation found that health insurance premiums for Californians have gone up 153% in the last decade.
Consumer Watchdog is supporting a new ballot measure that will make health insurance companies publicly justify their rate increases before they take effect. Sign up here for more information about that ballot initiative and how to get involved.
A majority of states already have, or are putting into law, the right for regulators to modify or reject rates before they go into effect. Not California.
The reason for California’s poorly regulated market and lack of alternative choices is the power of the insurance and medical lobbies in the state, along with a Legislature that has failed to stand up to them.
Legislation to properly regulate California health insurance rates, in the same way that auto and homeowner insurance rates are successfully regulated, failed again in the Legislature in 2011. There’s a chance it could pass in 2012. But if it doesn’t, Californians will have the chance to pass it themselves with a ballot initiative.
Resources
A 2011 study by Consumer Watchdog found that without strong state powers to approve or deny health insurance rates, federal health reform cannot succeed. As the subtitle of the study put it, “Can’t Have One Without the Other.”
Watch here as Sen. Dianne Feinstein introduces Consumer Watchdog’s study in Washington. She calls for rate regulation as a first step, but goes much further—she excoriates private insurance companies for creating a costly, unfair system that denies healthcare to millions of people nationally and in California.
A 2011 study by the Kaiser Family Foundation shows that both employers and employees are being hammered by health insurance rate increases far in excess of medical inflation, even as workers’ pay has been flat or declining for a decade.
The result of these rate increases, in concert with the recession, is that fewer than half of Californians now have health insurance through an employer. Those who do have it are paying an ever-higher share or premiums, and more for copays and deductibles.
HHS sees “prior approval” rate regulation as providing “maximum protection for consumers.”
Disclosure by insurance companies is not enough to hold down rates
Chart and news release on Blue Shield $2.9 billion surplus, 12 times the statutory minimum reserve.
Patient Stories
What happens to real people when private health insurance becomes unaffordable? Here are stories of the strain, worry and loss of insurance caused by escalating premiums and other medical costs
See Consumer Watchdog’s latest blogs and news releases about health insurer accountability.
