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Santa Monica, CA -- Four of the largest health insurance companies in California have increased premiums for 1.1 million Californians and small business owners by as much as 20% on April and May 1st according to data filed with state regulators, said Consumer Watchdog Campaign today. The rate increases are the second or third for most policyholders over the last two years.

A ballot initiative proposed by Consumer Watchdog Campaign would combat skyrocketing rate hikes by making health insurance companies publicly justify rates and get permission before increases take effect. Members of the public can print and sign the petition at www.JustifyRates.org.

Four health insurance companies – Aetna, Anthem Blue Cross, Health Net and UnitedHealthcare – have raised rates for Californians with individual and small business health plans this month. The average rate increase is between 3.66 and 13.8 percent, and will reach as high as 20.4% for some patients.

“Health insurance companies raise premiums behind closed doors with no accountability. California families and small businesses have reached the breaking point with year after year of reduced benefits and crushing double-digit rate increases. This initiative will bring health insurance prices into the light of day and block increases that can’t be justified,” said Carmen Balber with Consumer Watchdog Campaign.

Unlike 35 other states, California regulators do not have the power to modify or deny rate increases, even if they are deemed unreasonable or excessive.

The United States Supreme Court heard oral arguments last week in the case to overturn the federal health reform law. California governor Jerry Brown has indicated his administration will push ahead with health reform whatever the court decides.

Health insurance costs in California increased at five times the rate of inflation in the last decade. Although the reform law requires every American to have health insurance by 2014, it does not control what private health insurance companies can charge.

“The fate of federal health reform law may be less certain today than it was last week, but the affordability crisis is clear.  No matter the court’s decision, California will still need to tackle the epidemic of rising prices. Rate regulation will hold down skyrocketing insurance premiums and make health insurance more affordable,” said Balber.

A Consumer Watchdog report last year demonstrated that rate regulation was necessary 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. Click here to download the report.

Rate regulation has a successful track record for auto and homeowners insurance in California. The law regulating these markets, Proposition 103, has saved drivers $62 billion in premiums since it was enacted in 1988, according to a 2008 Consumer Federation of America report. Auto insurance rates in California decreased by 13.4% since 1988, while they increased an average of 38.6% over the same period nationwide.

The ballot initiative sponsored by Consumer Watchdog Campaign would protect Californians like Alison Heath, a self-employed mother from San Francisco, received a 19.7% premium increase on May 1st that will be her third increase since October of 2010. The monthly premium on the Anthem policy that covers Alison and her husband is now $1767 a month – a 66% increase in less than two years.  

The chart reflects health insurance rate filings submitted to the California Department of Insurance and the Department of Managed Health Care with an April 1 or May 1 effective date.

 

More information on the ballot initiative at www.JustifyRates.org.

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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.