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Santa Monica, CA -- Some of the top Democratic recipients of health insurance cash teamed up with Republicans in the California state senate late Monday to block health insurance premium legislation authored by state Assembly Members Dave Jones and Mike Feuer. Overall health insurers have given $800,218 in campaign contributions to California senators since 2007, in addition to gifts and donations made at their behest to nonprofit groups according to an analysis by Consumer Watchdog.

When Anthem Blue Cross announced its controversial premium increases in California recently, the insurer claimed, "a carrier must be able to receive actuarially sound rates." So it is remarkable that "progressive" San Francisco State Senator Mark Leno, a single payer health care advocate, recently introduced eleventh hour legislation codifying Anthem Blue Cross's "actuarially sound" defense of premium increases in law.

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.

The $1-million grants, which went to all but five states, will help many expand public access to information about rate hikes and hire experts to review proposed charges.

In California, Gov. Arnold Schwarzenegger's administration specifically ruled out seeking prior approval authority. Consumer Watchdog, a Santa Monica-based advocacy group, urged the administration to reject California's grant application, saying the grant would "prevent, not develop, any effective state regulation of health insurance rates." California nonetheless received its grant, which is to be used to streamline collection of data on proposed rate hikes.

$1 Million Grant Would Bolster Industry-favored Schwarzenegger Plan, Help Kill Actual Regulation of Insurance Companies

Washington, DC -- Consumer Watchdog today asked Health and Human Services Secretary Kathleen Sebelius to reject Gov. Arnold Schwarzenegger’s request for a $1 million grant under the new health reform law. The grants are intended to help states strengthen regulation of health insurance companies, but the Schwarzenegger administration’s weak plan would kill proposed protections against unjustified rate increases, Consumer Watchdog charged.

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.

OLDWICK, N.J. --Since the passage of U.S. health care reform, battles have erupted in some states between insurance commissioners and health insurers over double-digit premium rate increases sought by insurers on members in their individual and small group health plans. With more talk at the federal level about the need for oversight of excessive rates, insurance commissioners are interested in showing that they are acting to protect consumers, said Carmen Balber, director of the Washington, D.C. office for Consumer Watchdog. Insurance departments are scrutinizing premium rates because consumers "have reached their breaking point," said Balber. Complaints are rolling into departments from consumers who cannot pay "the outrageous prices" insurers are charging, she said.

Carmen Balber, director of the Washington office for Consumer Watchdog, an advocacy group that has been highly critical of the insurance industry and is closely tracking implementation of the health reform law, concurred. "This regulation was one of the most concrete steps that Congress took to rein in costs for consumers," she said. "The idea here was to ensure that insurers spend more on patient care and less on overhead and profit."

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.

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.

Proponents failed in their attempt “to scam California drivers by authorizing surcharges that voters made illegal in 1988 when they passed Proposition 103,” said Harvey Rosenfield, founder of Consumer Watchdog and author of the ballot measure that has regulated car insurance rates for 22 years. “This is a victory not just for motorists in California, but a broader victory for California voters, who have made it clear they don’t intend to let insurance companies or utility companies or other big corporations subvert the people’s initiative process,” Rosenfield said.

Proposition 17, auto insurance measure, appeared to be headed for defeat. With 99. 1 percent of the precincts reporting, it was losing by 158,000 votes, or 52-48 percent.

Stunning Upset in $16 Million Campaign to Scam California Drivers
 
Santa Monica, CA - Ignoring a deceptive $16 million campaign by Mercury Insurance Company, California voters rejected a ballot measure that would have amended 1988 insurance reform Proposition 103 to allow insurance companies to impose surcharges on motorists who were not previously insured or had a break in coverage for virtually any reason. A majority of Californians voting against Proposition 17, despite ads promising $250 premium reductions.

Voters rejected two business-backed measures that would have changed the electric power and auto insurance industries in California. Harvey Rosenfield, the noted consumer advocate who led the fight against the proposition, was scheduled to make a statement later. Existing law lets insurers offer loyalty (or “persistency”) discounts to long-term customers. Mercury has been fighting for years for the right to extend the discounts to other insurers’ long-term customers in an effort to lure them away. Rosenfield says that because of the “zero sum” regulations governing insurance premiums in California, companies that give discounts to one group have to raise premiums on others. He said newly insured motorists, or those who’d let their insurance expire temporarily, would pay big surcharges as a result.

The outcome was a victory for consumer groups that argued the referendum would effectively legalize surcharges outlawed since the passage of Proposition 103 in 1988. Because those with lapses in coverage or payments would be disqualified from discounts, the initiative would allow insurers to charge those customers more, they argued.

Two other initiatives put on the ballot by major corporations — Proposition 16 requiring voter approval before cities can get into the electricity business, and Proposition 17 giving auto insurance companies more leeway in setting rates — were rejected by voters. Jamie Court, president of Consumer Watchdog, said he was heartened that those propositions were so close despite tens of millions spent by companies that would benefit. "I think it says the electorate isn't as stupid as the corporations think it is," Court said.

California voters rejected the two initiatives put on Tuesday's ballot by major corporations -- Proposition 16, requiring voter approval before cities can get into the electricity business, and Proposition 17, giving auto insurance companies more leeway in setting rates.

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."

A leading consumer advocate charged Prop. 17’s chief sponsor, Mercury Insurance, of fraudulently suggesting in recent mailers that the Consumer Coalition of California backs the measure. That coalition is “run by a Texas woman, Virginia Jarrow, who has repeatedly sided with industry,” said Harvey Rosenfield, founder of Consumer Watchdog, who also said Mercury failed to identify itself as an insurance firm in mailers as mandated by law.