Consumer Watchdog Campaign: Anthem Plans Rate Hikes Up To 20% for Nearly 600,000 Californians
Santa Monica, CA – Anthem Blue Cross will raise health insurance rates for nearly 600,000 Californians by as much as 20% on May 1. A ballot initiative to make health insurance more affordable by regulating premium increases is necessary to protect Californians from excessive rate hikes, said Consumer Watchdog Campaign today.
Friday is the 2nd anniversary of the federal health reform law, which will require every American to have health insurance by 2014 but does not control what private health insurance companies can charge. The ballot initiative proposed by Consumer Watchdog Campaign would require health insurance companies to publicly justify rates, under penalty of perjury, and get rate increases approved before they take effect.
"Every time insurance companies force another double-digit rate increase on consumers they make the case for our ballot initiative to rein in excessive rate hikes. If Anthem had to include a copy of our petition in the rate increase notice it mailed to more than half a million consumers, we'd already have the 505,000 signatures necessary to qualify the measure for the November ballot," said Carmen Balber with Consumer Watchdog Campaign.
The ballot measure would regulate health insurance policies that cover 5.3 million Californians. 35 states have the power to reject excessive rate increases, but California does not.
"The Affordable Care Act ends some of health insurers' worst abuses – like cancelling coverage when patients get sick, or charging women more just for being women. But the law falls short on cost control. Health reform cannot succeed if we don't put the brakes on skyrocketing insurance premiums. Strong rate regulation will lower premiums, give insurers incentives to cut spending and save health reform," said Balber.
On Monday, the U.S. Supreme Court will begin hearing oral arguments in a case that will determine whether the law's mandate that individuals purchase insurance violates the Constitution. Regardless of what the court decides, the experience with health reform in Massachusetts shows that consumers will need the protection of rate regulation to hold down insurance prices, said the group.
Consumer Watchdog released a report last year demonstrating how rate regulation has begun to curb insurance premiums in Massachusetts, where the mandate that people buy health insurance -- the model for the 2010 federal reform law -- failed to control costs. Other states that instituted or strengthened state laws requiring rate review and approval of health insurance rates, including New York, Oregon and Maine, have also seen cost-control results. States without regulation of health insurance rates have seen massive and unjustified rate increases take effect with no power to stop them.
A new report from the California HealthCare Foundation finds that 38% of Californians say the cost of their health insurance went up in 2011, and 37% delayed getting health care they needed because of costs.
"The reality is that consumers will not purchase insurance they cannot afford, and insurance prices become more out of reach for families every year," said Balber. "Experience in states from California to New York has shown that rate regulation is the only way to force insurance companies to open their books, justify spending, and block excessive profits."
The Centers for Disease Control and Prevention reported last week that 1 in 5 Americans are burdened by medical debt and half of them are unable to pay the debt at all. Health insurance premiums in California increased at a pace five times the rate of inflation in the last decade, according to the California HealthCare Foundation.
Download the Consumer Watchdog Report, "Health Reform and Insurance Regulation: Can't Have One Without The Other".
Read more about the initiative at www.JustifyRates.org.
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.
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