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Santa Monica, CA – Blue Shield has $3.1 billion in excess surplus, 1400% more than the state requires, yet still plans to raise rates up to 14.8% for 320,000 California patients on March 1st. Repeated rate hikes in the face of massive company surpluses at the same time that inflation slows show the need for a ballot initiative to prevent excessive rate increases, said Consumer Watchdog Campaign today.
 
A ballot measure proposed by Consumer Watchdog Campaign, which can be signed by voters at www.JustifyRates.org, would regulate health insurance policies sold to more than 5.3 million Californians. Health insurance companies would have to publicly justify, and get approval for, rate hikes before they take effect. Unlike 35 other states, California regulators have no power to prevent excessive health insurance rate increases.
 
Blue Shield rates will increase an average of 7.9%, and as high as 14.8%, for 265,000 Californians with individual policies filed with the Department of Insurance. The 56,000 patients whose Blue Shield policies are filed with the Department of Managed Health Care face average increases of 8.9% on March 1. Anthem Blue Cross has also proposed rate hikes of up to 13.8% for hundreds of thousands of Californians, scheduled to take effect May 1 and July 1.
 
Bruce Bodaken, CEO of the non-profit Blue Shield, was paid $4.6 million in 2010, more than four times the salary of the chief officer at the for-profit Anthem Blue Cross.
 
“Starting tomorrow, California consumers will pay tens of millions of dollars more for their health insurance policies because no one in the state has the power to make Blue Shield reduce its excessive reserves or question its exorbitant executive salaries. This initiative gives voters the chance to rein in health insurance prices, and Blue Shield just gave 320,000 policyholders a reason to sign the ballot petition,” said Carmen Balber, campaign manager for the nonprofit Consumer Watchdog Campaign.
 
The official ballot petition can be downloaded to print, sign and return at www.JustifyRates.org. The campaign is relying on a strong volunteer effort to gather the 505,000 signatures necessary to qualify for the November ballot. U.S. Senator Dianne Feinstein, who was the first person to sign the ballot initiative petition, authored an email and video that will reach millions of California voters asking them to sign the petition at www.JustifyRates.org.
 
Health insurance premiums in California have gone up 153% in the last decade, while inflation rose just 29%, according to the California HealthCare Foundation.
 
The “Insurance Rate Public Justification and Accountability Act:”
·  Requires health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect.
·  Makes every document filed by an insurance company to justify a rate increase a public record, and requires public hearings on some proposed rate increases.
·  Gives Californians the right to challenge excessive and unfair premium rate increases.
·  Prohibits health, auto and home insurers from considering Californians’ credit history or prior insurance coverage when setting premiums or deciding whether to offer coverage.
·  Gives the insurance commissioner authority to reject unjustified health insurance rate increases.
 
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Consumer Watchdog Campaign is chaired by insurance reform Proposition 103 author Harvey Rosenfield. Consumer Watchdog Campaign is the campaign affiliate of Consumer Watchdog, which was founded by Rosenfield and whose president, Jamie Court, an award-winning consumer advocate and author, is the proponent of the proposed ballot initiative.