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Critics Call For Ballot Initiative To Cap Healthcare Costs

By Greg Mellen, San Bernardino County Sun, Calif.
McClatchy-Tribune Information Services

Feb. 01--As about 730,000 California health insurance consumers' rates rise an average 17.5 percent today, a consumer group is renewing its support for a ballot initiative to rein in costs.

The group, Consumer Watchdog, called the hikes announced last year outrageous, but representatives from Anthem Blue Cross and the California Association of Health Plans said the boosts were necessary and in line with industry norms and federal health care requirements.

Carmen Balber, executive director of Consumer Watchdog, said her group supports a state proposition that will appear on the November 2014 ballot that would give California the authority to publicly review rate increases and reject those that are excessive.

Janice Rocco, a deputy commissioner at the California Department of Insurance, said her group was reviewing the rate hike filing by Anthem and would release a report likely by the end of next week.

"If we find (the increase) to be unreasonable, we would ask (Anthem Blue Cross) to refund money," she said.

However, unlike the automobile, home and business insurance industries that need to get approval for rate hikes, medical insurers aren't under such constraints.

Rocco said the state has no authority to require that an insurer comply.

Earlier this year, California Insurance Commissioner Dave Jones labeled as "unreasonable" an average 10.6 percent rate increase by Anthem Blue Cross on more than 250,000 small-business

policyholders.

The company disagreed with the finding and the department's methodology and continued the hike.

As for the new hikes, Daniel Ng, a spokesman for Anthem Blue Cross, said, "The rate increase is not unique to Anthem Blue Cross but reflects the economic reality faced by the entire health care industry."

Consumer Watchdog says medical insurance hikes in California are out of control and have jumped 153 percent in the past decade, or five times the rate of inflation. Balber said California is one of only 15 states with no authority to control rates.

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Nicole Evans, spokeswoman for the California Association of Health Plans, a trade group for the health insurance industry, said claims by Consumer Watchdog are misleading.

Evans said the federal Affordable Care Act requirement that 80 percent to 85 percent of all costs go to medical care is a de facto consumer protection.

She said it is the underlying costs of providing medical care that drive up medical insurance rates.

"Rate regulations do nothing to address the underlying causes," she said.

Officials at Anthem Blue Cross said that even with the rate hikes, it will take a 2.5 percent loss on 636,000 of those affected by the hikes.

Ng said part of the reason for the upward spiral in insurance costs is that as health care costs have risen, young and healthy people have elected to drop insurance "leaving the remaining pool as older and less healthy."

greg.mellen@presstelegram.com, 562-714-2093, twitter.com/gregmellen

___

(c)2013 the San Bernardino County Sun (San Bernardino, Calif.)

Visit the San Bernardino County Sun (San Bernardino, Calif.) at www.sbsun.com

Distributed by MCT Information Services

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