If you buy health insurance on the individual market, without help from an employer, you may want to know what California is doing to protect you from unfair and unnecessary premium rate increases. Here’s a summary of the California laws that govern rate increases.

  • California does not have prior approval authority to approve or reject premium rate increases before they go into effect.
  • Health insurance plans are regulated by the Department of Managed Healthcare (DMHC) and the Department of Insurance (CDI).
  • A law that went into effect on January 1, 2011, requires insurers to file rate information and a certification by an independent actuary that the rates are “actuarially sound.” Insurers file the required information with either the DMHC or the CDI. HEALTH & SAFETY CODE §§ 1385.01-1385.13; INS. CODE §§ 10181-10181.13.
  • The DMHC and the CDI have authority to review the rate filings to determine if a rate increase is unreasonable, in accordance with federal rules under the Affordable Care Act. HEALTH & SAFETY CODE §§ 1385.01-1385.13; INS. CODE §§ 10181-10181.13. The agencies do not have authority to stop an insurer from implementing a rate increase if it is found to be unreasonable.
  • The CDI began posting individual market rate filings on it website in 2010 and has launched an email alert system to notify consumers by email when rate requests are submitted. The DMHC began posting individual market and small group rate increase information on its website in January 2011.
  • California has closed block regulations. HEALTH & SAFETY CODE § 1367.15; INS. CODE § 10176.10.