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If you believe that health insurance companies will really go broke if they don't get 20% premium increases during a deep recession, raise your hand. Ah, the one hand I see raised is Karen Ignagni's. She's the top lobbyist for the health insurance industry, and president of America's Health Insurance Plans. She's pleading for Congress not to regulate health insurance rates, no matter how bad her clients look to the rest of us. All we need to do, in her view, is trust the insurance industry's own math.

Actuarial Soundness” Defense Protects Insurers At Expense of Rate Regulation, Consumer Watchdog Says

Los Angeles, CA -- Anthem Blue Cross’s defense of its recent controversial premium increases will be codified in law under eleventh hour legislation by San Francisco State Senator Mark Leno, SB 1163, just as the California legislature is set to adjourn Tuesday night. Consumer Watchdog, the group behind auto insurance regulation Prop 103 that has saved Californians $62 billion, warned that if health insurers can defend rates simply by having an actuary say the increases are “actuarial sound,” as Anthem Blue Cross did and Leno’s legislation provides, consumers will be in big trouble.

Program Provides Economic Opportunity in Tough Times, With No Taxpayer Cost
 
Santa Monica, CA – California lawmakers gave final approval Wednesday to legislation strengthening and extending the innovative “Low Cost Auto Insurance Program” that offers an affordable bare bones car insurance policy to low-income motorists with no taxpayer cost. Consumer advocates applauded lawmakers for passing AB 1597 (Jones) on a bipartisan basis and are urging Governor Schwarzenegger to sign the bill in order to keep this program available.

Illinois regulators will ask lawmakers for the authority to approve or deny health insurance rate increases, saying residents need protection from skyrocketing costs that aren't justified. The state's effort to push for more aggressive oversight is "a huge step forward," in protecting an estimated 3 million residents covered by state-regulated policies, said Carmen Balber, director of Consumer Watchdog, a nonprofit, nonpartisan organization that monitors how states regulate insurance rates. "We're talking about a product that in just a few years every American will have to have," Balber said. "With skyrocketing costs and mandatory coverage, regulators have to act to protect consumers from what would an unaffordable requirement."

As an Aug. 31 deadline nears, state lawmakers haggle over how difficult it should be for companies to significantly raise premiums.

Consumer groups, meanwhile, say that allowing insurance companies to pick the actuaries who review their filings would give them too much influence over the process. "Insurance companies in California will be getting millions of new customers, and the least that Californians should get in return is strong oversight of rates and premiums," said Judy Dugan, research director for Consumer Watchdog in Santa Monica. "Instead, the governor's proposal would prevent effective oversight."

If Californians Have to Buy Health Insurance, Insurers Have to Be Regulated, Says Watchdog’s Letter to Gov.

Santa Monica, CA -- Consumer Watchdog has called on Gov. Arnold Schwarzenegger to withdraw weak pseudo-reforms of the health insurance industry that would bar strong regulation of health insurers. Schwarzenegger sent his proposals this month to lawmakers who are seeking stronger state regulation modeled on the successful market reforms of auto and homeowner insurance under Proposition 103, demanding that they substitute his legislation for their bills.

After taking heat for proposing to raise insurance rates as high as 39 percent, Anthem Blue Cross proposed rates Wednesday that would raise health premiums by an average of 14 percent and as much as 20 percent for thousands of California consumers. Several consumer groups said the Anthem case highlights the need for greater rate regulatory oversight. "Examining and controlling health insurance rates needs to be the law, not a one-time favor to consumers," said Judy Dugan, research director of Consumer Watchdog, which is based in Santa Monica.

Greater government oversight is crucial to protecting consumers, said Jamie Court, president of Consumer Watchdog, a left-leaning Santa Monica-based advocacy group. "The problem is we don't have a standard that sets out what is excessive and what is not," Court said. He argues the state should have the ability to deny rate increases it determines are too high. "We should let the regulators determine what's excessive," Court said.

Consumer Watchdog Says Average 15% Rate Could Still be Excessive Under Proposed ‘Prior Review’ Rate Regulations

Santa Monica, CA -- Anthem Blue Cross of California, under fire for substantial math errors in its proposed health premium increases averaging 25%, has made the minimum possible reduction in reissuing its proposed increases, said Consumer Watchdog. The new policy increases average 15%, with a maximum increase of 20%. The decrease, while substantial, does no more than account for the gross calculation errors found by an independent examination of its original rate increase, said the group.

The Department of Insurance said it found "substantial mathematical errors" in the rate filings submitted by Aetna, which had planned to raise premiums by an average of 19 percent on 65,000 Californians who buy insurance on their own. "This just confirms that we need to take a closer look at every rate filing," said Jamie Court, president of Consumer Watchdog, a left-leaning Santa Monica-based advocacy group. "It's amazing how insurers are making mathematical errors," he said, "when they're not used to regulators checking their math."

The health insurer pulled back after multiple math errors in its paperwork were found by its own staff and by an independent consultant working for California.

Consumer advocates applauded the withdrawal of Aetna's rate filing, seeing the move as part of a broader effort to rein in insurance companies. "It seems like there is a lot of momentum building toward rate regulation," said Jamie Court, president of Santa Monica-based Consumer Watchdog. "Insurers have to worry about that because they haven't had anyone looking over their shoulder."

It was insurance company lobbying that stuck Americans with a health reform law that lets private insurance companies run the show. The industry keeps proving that it has no intention of doing an honest job of it. The California Department of Insurance announced Thursday that Aetna's rate increases in the individual market, like those of Anthem Blue Cross, were full of "substantial mathematical errors." The company (also like Blue Cross) "agreed" to withdraw the planned premium hikes.

Mercury "got taken for a ride" by political consultants, said Jamie Court, president and chairman of Consumer Watchdog and a board member of its CCR affiliate. Prop 17, which lost by a 4% margin, was never going to pass, he said.

Consumer Watchdog founder Harvey Rosenfield wrote and lobbied for Proposition 103 in 1988. With its passage, the state regulated auto and homeowners' insurance and challenged rate hikes, he said. "In California, five companies control 96 percent of the health insurance market. It's almost a cartel," he said. "After a decade's worth of double-digit increases, and you get them again in a recession, there's just no more money to pay the price."

Mercury is the culprit, according to No on Prop. 17 campaigners, led by the Santa Monica-based Consumer Watchdog. Its director, Doug Heller, says that it’s rarely mentioned that Prop. 17 would give Mercury and other insurers free will to hand down hefty $1,000 surcharges to drivers — four times the savings touted by Prop. 17 supporters. 

Critics: Some Drivers May Face Surcharge

The insurance company that placed Proposition 17 on the June ballot says it did so to save money for most policyholders. The consumer-advocacy groups opposing it say that’s merely a smoke screen. What the company, Mercury Insurance, really wants is to undermine a provision of a voter-approved insurance initiative passed in 1988, said Harvey Rosenfield, founder of the Santa Monica-based group Consumer Watchdog. That would allow it to assess a surcharge on drivers who seek to restart auto insurance coverage after dropping it temporarily.

Consumer Watchdog has been warning for weeks that the health reform law will be riddled with costly loopholes if insurers get their way in implementing the regulations that control big expansions in health coverage. It's a hard slog, especially when you're talking about technical, math-laden stuff like "medical loss ratio" and "rate and premium review." Now our concerns are hitting the mainstream, with a boost from the editorial boards of the New York Times and the L.A. Times.

Frankly, there's little credibility in a major insurance company spending beaucoup bucks on a ballot measure just so it can offer motorists a discount. But that is what Mercury Insurance wants you to swallow. We can't trust Mercury Insurance or any big, special interest that goes out and buys a ballot proposition. Vote "no" on Proposition 17.

Opponents of Proposition 17 have leveled yet another charge of discrimination against Mercury Insurance, the auto insurer bankrolling the June 8 ballot measure to allow companies to use coverage history in determining insurance rates. The latest alleged victims? Cougars.

Opponents Doubt Many Drivers Would Benefit

Doug Heller, spokesman for Consumer Watchdog, argues that there are many legitimate reasons some people may have chosen to go without insurance for a period of time — a prolonged recovery from surgery, a loss of employment that resulted in having to sell a vehicle, a period of time living on a college campus or in an area well-served by public transit.