Insurance rate regulation hangs in the balance

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By Consumers Union on Friday, July 1st, 2011

The California Senate Health Committee held a four-hour hearing yesterday to discuss a bill that would help rein in excessive health insurance rate hikes. AB 52, sponsored by Assemblymember Mike Feuer, protects consumers by giving California the power to deny or modify unfair rate increases.

Californians deserve transparency and accountability from the health insurance industry.  We are struggling to keep up with rising premiums, while many health insurers are raking in big profits. We are sick and tired of paying more for premiums, co-pays and deductibles every year with no end in sight.

The bill’s fate is uncertain and the vote is scheduled for next Wednesday July, 6th.  The Chair, Senator Ed Hernandez, has signaled that he has concerns with the bill and there are possible amendments forthcoming.  Let’s hope they do not weaken AB 52 to the point where it doesn’t help Californians struggling with ballooning health insurance premiums.

Right now, insurers in California can simply file rate hikes and begin using them.  Our system essentially relies on self-policing to hold down rates.  With one double-digit hike after another, we know that is not working to rein in prices.

Currently, regulators may only declare rate increases unreasonable. They lack authority to prevent them from going into effect.  AB 52 would put a cop on the beat to make sure each rate increase is truly fair.   It ensures health insurance rates are subject to the oversight necessary to protect us from being gouged.  AB 52 gives regulators the ability to approve, deny or modify excessive, inadequate, or unfairly discriminatory rates before they take effect.

Have a story to share about rate increases or haggling with insurers over co-pays, deductibles or poor service? Let us know by clicking here. Your story is vital to our efforts to move this bill through the California Senate and on to Governor Brown.

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