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California Turns to Consumer Group for Help with Health Insurance Rates Review

SNL INSURANCE DAILY

The California insurance department has called on Consumer Watchdog to help review health insurance rates increases following Commissioner Dave Jones' censure of Anthem Blue Cross L&H Insurance Co.'s small-group rate increases, the Los Angeles Times reported April 3.

The insurance department and Consumer Watchdog inked a one-year contract, which could amount to about $88,000, under which the consumer group will supplement the department's own rates review.

The department's action was met with criticism from the insurance industry and public-policy experts, with Patrick Johnston, president of the insurance trade group California Association of Health Plans, reportedly raising questions about potential conflicts of interest and calling for an independent review.

But Jones said it is important to bring on board the consumer perspective, adding that it is the department which ultimately makes the final determination. He reportedly went on describe the use of grant money from the federal health care law to hire Consumer Watchdog as "drop in the bucket" when compared against funding that health insurers and HMOs receive.

Consumer Watchdog President Jamie Court said the group is the "ideal choice" for California. "This grant allows us to pull back the curtain and show how the wizards at Anthem and other companies are manipulating Oz. We want to prove that rates are too high," he said.

Anthem Blue Cross Life and Health is a unit of WellPoint Inc.