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Santa Monica, CA -- The first large-scale survey of Americans about their problems with medical debt show 1 in 5 are burdened by medical debt and half of them are unable to pay the debt at all. Having health insurance is a key to being able to pay for medical care, said the Consumer Watchdog Campaign, but spiraling insurance rates have left millions of Americans uninsured or badly underinsured. A ballot initiative proposed in California would make health insurance more affordable by regulating premium increases, and give the state the ability to curb excessive rates before they go into effect.
 
The report released today by the federal Centers for Disease Control found that medical debt hit hardest at younger families and the working class, people who are least likely to be able to afford insurance.
 
“When one in five Americans are in medical debt it’s clear that we’re not doing enough to make health insurance affordable. Soon, federal law will require every American to have insurance, but nothing controls what health insurers can charge. States need the power to say no to excessive health insurance premium hikes,” said Carmen Balber with the Consumer Watchdog Campaign. “The California ballot initiative will allow the state to rein in out-of-control spending on insurance bureaucracy, executive salaries and profits that is driving the up cost of health care and driving consumers out of coverage and into medical debt.”
 
Lead report author Robin Cohen, of the CDC’s National Center for Health Statistics, said insurance, public or private, frequently determines whether families can pay their health care expenses.
 
“But even among people with private insurance, about 16 percent had trouble paying medical bills and 6 percent couldn’t pay at all,” Cohen told Health Day.
 
A ballot initiative sponsored by Consumer Watchdog Campaign and aiming for the November California ballot would require insurance companies to justify rate increases, under penalty of perjury, before they take effect. Regulators would have the power to reject or modify unreasonable premium rates, and limit the amount of wasteful overhead, profit and executive compensation that insurance companies may pass on to consumers. The measure would add health insurance policies sold to 5.3 million Californians to the state’s rate regulation law. It also prohibits health, auto and home insurers from using Californians’ credit history or prior insurance coverage to increase premiums or deny coverage.
 
The measure is based on the insurance reform law, Proposition 103, that regulated auto and homeowners insurance in California. That law has saved drivers $62 billion in premiums since 1988, according to a 2008 Consumer Federation of America report.
 
The campaign is using a mixed paid and 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 petition, authored an email to millions of California voters asking them to download, print, sign and return the official ballot petition online at www.JustifyRates.org.
 
The federal health reform law requires review of some health insurance rate increases, but does not give any state regulator the authority to modify or deny rate increases even when they are found to be excessive or unreasonable.
 
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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.