Small Businesses Stuck With Unjustifiable 8% Rate Hike, 30% Increase Over Last 24 Months Says Department of Insurance
The California Department of Insurance has announced that Aetna is imposing an 8% annual health insurance rate hike on its small business customers despite state actuaries’ findings that the increase is “unreasonable” and not supported by data. Consumer Watchdog Campaign says this demonstrates the urgency of voters passing its proposed ballot measure to make health insurance companies justify their rate hikes and get permission before raising rates. The initiative, which is currently being circulated for signatures to place it on the November 2012 ballot at grocery stores and online at JustifyRates.org, would allow the Insurance Commissioner to reject a rate hike such as Aetna’s if state experts find it unreasonable.
“Until the Commissioner is allowed to say no to unjustified and excessive rate hikes, small businesses and families in California will continue to pay more than they should for health insurance,” said Jamie Court, proponent of the proposed allot measure and a director of Consumer Watchdog Campaign. “Aetna’s rate hike is the poster child for why health insurance should be required to get approval before rate hikes take effect.”
According to the Department of Insurance, the Aetna subsidiary that sells health insurance in California earned huge profits in 2011 and paid a $1.7 billion dividend to its parent company last year. Additionally, while the insurance company claims that it needs the rate increase to cover increasing medical costs, Aetna’s own data and documents don’t support that claim, which also conflicts with national data about medical cost inflation.
The ballot initiative being circulated by Consumer Watchdog Campaign would require insurance company CEOs to justify under penalty of perjury that rate hikes are necessary and allow the Insurance Commissioner to reject any hike determined to be excessive. Similar rules have applied to auto and home insurance in California and have saved motorists in California over $62 billion since 1988 when that law took effect. The initiative also prohibits the use of unfair rating factors in health, home and auto insurance.
“Insurance companies like to say that there is already regulation of health insurance in California, because insurers are required to make their rate increase plans public. But if a company can ignore official findings that a rate hike is unreasonable and jack up rates whenever they want, then the law needs to change,” said Court.
The petition to place the initiative on the ballot can be signed outside supermarkets or by going to www.JustifyRates.org and downloading the one-page petition.
It’s interesting to see the “nonprofit” ConsumerWatchdog attack insurance companies and spending hundreds of thousands of dollars trying to put its sloppily-written measure on the ballot with telling voters who is paying for it.
ConsumerWatchdog refuses to reveal its donors — making it no better than any SuperPAC. It also is paying signature gatherers and sending out mail pieces despite reporting less than $400,000 in expenditures to the Secretary of State for its campaign. Something is indeed fishy.
Let’s remember that Consumer Watchdog OPPOSED President Obama’s health care plan (you know, the one the rest of us are trying to defend) because it was paid by special interests to do just that.
ConsumerWatchdog is also mocking the Massachusetts health care plan for being too expensive, yet that is a state with just the same regulation it is pushing for in its initiative.
What ConsumerWatchdog doesn’t say is that it will rake in millions of dollars from this ballot initiative because it contains a provision allowing “intervenor fees.” CW has been the SOLE recipient of these fees from car insurance cases since 2007 — more than $6 million worth.
The insurance commissioner does get to regulate raises in the auto-insurance rates. If my health insurance rates rose as little and as slowly as my auto policy, I’d be a happy woman.
When that provision passed, some auto insurers pulled out of the California market. Most predicted the others would go out of business. Not only did the remaining companies not fail, the others have returned to the state and also appear to be maintaining sufficient profits to stay afloat. I suspect the same would be true for health insurers.
One of the reasons the auto market still works is that everybody has to buy car insurance if they want to drive. Though I know not everybody does, the penalties are pretty steep if you get caught. So most do. This spreads the risk for drivers and for insurers. Which explains why the feds tried to do the same thing for health insurance.
is a poster child for vulture capitalism. Try not to insure with them. They are unregulated and have no values beyond their Wall Street supporters and Wall Street ethics. At least if health care survives they would be regulated some in the exchanges. If health care fails, get active politically or try to live without health care like many other millions in the US. Vote against propositions unless you are sure you are not being conned.