Legislation seeks approval for health insurance rate hikes

SACRAMENTO - Blue Shield of California has made the decision to raise individual policy rates as much as 59%, underscoring the need for Assembly Bill 52, legislation introduced in December 2010 by Assemblyman Mike Feuer (D-Los Angeles), proponents said. The bill requires health plans and insurers to receive approval from the state for such rate increases."In this economic climate, staggering rate hikes like those proposed by Blue Shield will make healthcare unaffordable for many Californians," Feurer said. "Health insurers should be required to justify their reasons for raising rates that could cause even more families to lose their coverage. If insurers can't sufficiently justify increases, then state regulators should have the authority to reject them." According to published reports, Blue Shield plans to cumulatively increase the rates of 193,000 of its individual plan members by 30%-30% on average. Feurer's legislation would ensure that such increases would have to be reviewed and approved by the state before being imposed upon subscribers. Specifically, the measure would require health care service plans and health insurers to seek approval from the Department of Managed Health Care or the Department of Insurance prior to raising health care premiums, copayments or deductibles. The measure would also require that insurers provide justification in the rate review process for such rate increases. It would build upon newly-implemented federal and state law improving the health insurance rate filing and review process. "I find it stunning that Blue Shield would seek to impose such massive rate hikes on policyholders during these troubling economic times," said insurance commissioner Dave Jones. "These rate hikes will impose significant financial burdens on struggling families and, in some cases, will lead to the loss of health care coverage. I urge Blue Shield to reconsider its decision." In 2010, Feuer and then-Assemblyman Dave Jones jointly introduced a far-reaching plan to establish a permanent rate review and approval process after a similar proposed rate increase by Anthem Blue Cross. That measure was ultimately defeated in the Senate. "These huge rate hikes would be shocking if we had not seen them year after year, New federal and state laws now make these rate hikes public, but we need to take the next step with health reform, to give state regulators the authority to deny unjustified rate increases," said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition. "Blue Shield blames medical costs, but medical inflation, as high as it is, is nowhere near 59 percent. That's why state regulators need more tools to scrutinize these rates and deny them if need be."

********** Published: January 13, 2011 - Volume 9 - Issue 39

NewsEric Pierce