Triple-A has been American drivers’ friend almost since U.S. roads linked the nation together. It has rescued families from flat tires and worse. It has planned millions of family vacations and sold well-regarded auto insurance. It has always skewed toward older drivers and welcomed their devoted renewal of memberships. Its employees got good benefits and stayed with the organization.

For all those reasons, it’s a shock to hear that-at least in Northern California-AAA is dumping senior employees like so much excess baggage, according to a lawsuit filed by 10 of them. At AAA’s California State Auto Club branch, successful veteran insurance agents report being fired or forced out and replaced with younger, cheaper hires and call center employees.

Drivers who have kept up their AAA memberships for decades should be steamed about this on principle. But there are practical reasons to be angry, especially for drivers with AAA auto, home or boat insurance.

The laid-off AAA insurance agents are the people you would have called if you had a policy question or problem with a claim. Or if you wanted to add your child to a policy. Or maybe just for advice-for instance about whether a rental car is covered or whether your auto insurance is good in Canada.

Where are you going to get that help now? Who you gonna call?

Your file would likely become a “house account,” often with no agent assigned. Maybe the call center kid can find your file, put you on hold and hunt for a manager to help him figure it out. The hourly workers answering the phone won’t know you from Adam.

If the same thing is going on at other AAA chapters, it’s not likely the public will know unless more lawsuits emerge.

The “why” of these dismissals is not complicated. Insurance agents get bonuses when they sell new policies and smaller yearly payments from the insurance company as policies are renewed. The agents are expected to earn your loyalty and keep you in the fold.

The senior agents service up to thousands of policies built up by sales over the years. This takes time, so they may sell fewer new policies.

By dismissing the agents, CSAA gets to keep their yearly servicing payment.

CSAA’s bet is that you won’t care enough to endure the thrash of taking your business elsewhere. The fact that anyone laid off at age 50 is unlikely to ever find a comparably paying job? Not AAA’s problem.

Layoffs off of older, higher-paid employees are nothing new in modern corporate culture. But this is a case when the fallout also harms the customer in a direct way. It’s worth thinking about before you dial the number on the AAA insurance brochure you got in the mail.

Posted by Judy Dugan, Research Director Emeritus for Consumer Watchdog

Dan Shea’s Aunt Kay was 83, vibrant and healthy in 2011, when she suffered terrible injuries in a head-on accident. Kay spent five months in the hospital rehabilitating and being repaired with so many metal parts that the family dubbed her “Iron Kay.”

Then the real fight began-one that changed Dan, a San Diego civic booster and Republican notable, into an implacable foe of insurance company tactics. He’s told Kay’s story in a short, even charming, video, “The Iron Lady,” that calmly exposes corporations trying to outwait Kay’s lifespan to preserve their profits.

Farmers and two affiliates of Nationwide have been resisting a settlement for more than two years and counting. It’s costing the corporations a bundle, but if Kay dies before their legal options run out, they’ll save a bundle. It’s a perfectly legal tactic, which Dan is determined to change. The fight is Kay’s reason for living through her pain.

Kay will never be the same: She can’t drive and can barely walk. She’s living with family and dependent on them. But she’s fully determined to get as far back to normal as possible.

Kay expected to at least recover financial independence, even after $800,000 in hospital bills. Both Kay and family of the 17-year-old boy in the truck were very well-insured by major companies. The boy was at fault, but there was no rancor between the families.

Then they encountered the insurance lawyers. It ultimately dawned on them that the insurance companies would benefit by delaying until Kay died, to make most of their liability disappear.

Kay originally did not want to sue, so Dan asked for mediation. Farmers Insurance, the boy’s insurer, agreed but stalled for months. Then the insurers offered a ridiculously low settlement–barely over half of the medical bills, much less her ongoing medical costs. Then they stalled some more and tried intimidating Kay with a long deposition about her life since adolescence.

When the case got to court in October of last year, within a few days a jury spurned the insurers’ argument that they really owed little, and awarded Kay $2.1 million dollars.

Kay hasn’t gotten a penny. The insurance companies stalled again, and on January 7 they demanded a new trial. When it’s denied, they can file for an appeal. That could string out for a year or two.

Dan Shea found that having plenty of insurance, no matter how much it costs in premiums, doesn’t mean the company will protect you when you need it. And that everything the insurers have done is within the law.

Dan and his family have the determination and resources to keep fighting, and Dan is calling on state legislators to fix these interminable delays.

The fix shouldn’t stop at auto and property insurance. There are also horrible insurance company incentives embedded in state medical malpractice law. For instance, if an infant is severely disabled by medical negligence, insurers for the doctor and hospital could have to pay millions for a lifetime of expert care.

If the baby somehow dies, its economic value dies, too. The law in California restricts dead-child lawsuits to such a low payout that grieving parents usually can’t even get a lawyer to take their case. So what incentive does an at-fault hospital or doctor have to keep that baby alive?

The same is true if the wronged patient suffers a terminal illness-why pay now if you can stall until the problem literally goes away?

We need more people with Dan’s determination to change this.

Posted by Judy Dugan, Research Director Emeritus for Consumer Watchdog.

I’m truly humbled.

It was a big deal when, 25 years ago this month, you and other California voters joined with me to pass Proposition 103, the toughest auto insurance regulation in the nation. But I had no idea exactly how big.

Today, in downtown Los Angeles, the Consumer Federation of America released the findings of a new report: Prop 103 has saved California drivers over $100 billion dollars since 1988. That’s about $8,125 per California household. In fact, California is the only state in the country where auto insurance rates actually went down over the last 25 years.

Back in 1984, the California Legislature passed a law requiring drivers to have auto insurance…but didn’t limit how much insurers could charge. Predictably, insurers hiked prices by double digits. Voters revolted against the price gouging by passing Prop 103, and the result was billions in savings.

Now, the federal health reform law is requiring everyone to buy health insurance. But Obamacare doesn’t limit what insurers can charge. It’s déjà vu all over again. Not surprisingly, insurance companies are hiking prices by double digits.

We Californians have been through this before, and with your help we’ll revolt again next year. Consumer Watchdog has put an initiative on the November 2014 ballot that will apply Prop 103’s money saving reforms to health insurance companies. Health insurers will have to open their books and justify any rate increase before it takes effect.

This will be another David v Goliath battle like the one we won together twenty-five years ago.

Auto insurance in California is a $20 billion a year industry. Health insurance is more than a trillion. Imagine the savings we’ll be celebrating 26 years from now once voters regulate the health insurance industry at the ballot next year.

Thanks for all of your support.

Posted by Harvey Rosenfield – Founder of Consumer Watchdog and author of Proposition 103. For more on Consumer Watchdog and Prop 103 visit our website

State to begin enrollment in “Obamacare” plans for 2014

by Brian Leubitz

House Republicans look like they are willing to shut the government down to put the brakes on ObamaCare, but that won’t actually change Covered California’s plan to open up shop tomorrow.

Indeed, Covered California – the state’s version of the federal health care law – is preparing to begin enrolling customers in its health insurance exchange on Tuesday. Parts of the government would close on the same day if lawmakers in Washington don’t act on legislation to extend discretionary spending. …

California, one of 14 states rolling out its own marketplace, will mark opening day with a series of events in Sacramento, Fresno, San Francisco, Los Angeles and San Diego. The federal government will oversee the launch in the remaining states.(SacBee)

In fact, if you want to see how much, roughly, your health insurance will cost under the new law, it is already available. Just head over to CoveredCA.com and click on “Shop and Compare” to get a few quotes for ACA-eligible plans.

If you have employer insurance, this won’t really change much for you. However, for those of us with individual plans, the new exchange will open up new options.

Starting this week one million Californians will pay hundreds of millions of dollars more for their health insurance. It’s a plot right out of Groundhog Day, only it happens every Spring, Winter, Summer and Fall.

Health insurance rates in California are like a runaway train and there’s no police force or firefighting squad with the power to stop them.  Thirty five states require health insurance companies to get permission before raising rates, but not California.

So Hollywood’s fighting back with a short movie trailer preview of an alternative future. This short preview is of the impact of a real ballot proposal – which only needs another two hundred thousand signatures to qualify for the November ballot. With enough signatures, Californians can then decide their own fate and stop outrageous rate hikes.

In Studio City, CA a self-employed, single mom watched her health insurance premium triple over the last decade. On May 1st the price will climb by 16%. She asks,” If I have to get pre-approval from my insurance company every time I want my health care paid for, shouldn’t they have to get approval when they want me to pay more?”

For a decade the legislature has answered no,  following the health insurance industries’ line that the market and federal health care reform can be trusted to moderate rates. Tell that to the million Californians hit with rate hikes on May 1st.

Over the last decade health insurance premiums  have shot up 153% — growing five times the rate of inflation (29%). Four companies, including Anthem Blue Cross, control 71% of the health insurance market – competition isn’t in the cards. As a result Californians don’t just move to cheaper plans, they also drop insurance. California has one of the nation’s highest uninsured rates.

Since 2003, the California legislature has refused to pass a law requiring that health insurance companies get approval before raising rates in the same way that auto insurance and home insurance companies have to today.  That’s why consumer advocates like myself have joined with Senator Dianne Feinstein and Insurance Commissioner Dave Jones to qualify the ballot measure  that requires health insurance companies to live up to the same standards as other insurance companies.

More than 600,000 voters have signed our petition to make health insurance companies publicly justify their rates, as we rush toward the deadline to qualify for the November ballot. The preview of different future isn’t just a Hollywood story. It’s within our sights if 200,000 more Californians sign our ballot measure in the next two weeks.

Consumer advocates and patients facing May 1 rate increases delivered a blank check to health insurance companies representing the hundreds of millions more that one million Californians will pay for their insurance, today in Santa Monica and outside Anthem’s San Francisco offices. They called on voters to sign the official ballot initiative petition to require health insurance companies to get permission before raising rates.

One million Californians – the “May Million” – will pay premium increases as high as 20% for their health insurance with Anthem Blue Cross, Health Net and UnitedHealthcare on May 1st.

This week, Anthem Blue Cross parent company CEO Angela Braly told investors that California doesn’t need the health insurance rate regulation initiative because federal law adequately protects patients. Braly made $13.2 million in compensation in 2011. Anthem Blue Cross will raise rates by more than $100 million for over 700,000 Californians even as it delivers rebates for overcharging consumers last year and raked in $856 million in profits in the first quarter of 2012.

Harvey Rosenfield, author of insurance reform Proposition 103 which has saved drivers $62 billion since 1988, said: “CEO Angela Braly told investors that California already has plenty of oversight of health insurance prices and doesn’t need our ballot measure. She should tell that to the 700,000 customers of Anthem Blue Cross in California who will pay over $100 million more when their health insurance premiums go up on May 1st. A CEO who made $13 million last year is completely out of touch with patients who can’t afford double-digit rate increases because premiums are rising at five times the rate of inflation.”

Jessica Blacher from Santa Monica is one of the “May Million” who was faced with a rate increase on May 1st. The proposed 23% hike in Jessica’s premiums was the fourth in just two years, and she was forced to trade her coverage for a catastrophic plan with lower benefits and higher out of pocket costs, including $9500 she must pay out of pocket every year on top of her premium.

Alison Heath, a self-employed mother from San Francisco, is also one of the “May Million,” and will pay a 19.7% rate increase on May 1st. Alison’s increase will be the third in less than two years, hiking the monthly premium on the Anthem policy that covers her and her husband to $1767 a month.

In her comments to investors Braly said California’s rate review process was “effective,” yet just last month a rate increase was implemented even though state Insurance Commissioner Dave Jones found it was unreasonable, because no one in California has to power to prevent unreasonable rate increases.

Wellpoint’s 1st quarter financial report notes that medical costs increased just 4.8%, but California patients will see rate increases of up to 19.9%, more than four times that amount.

Consumer Watchdog Campaign, and supporters including U.S. Senator Dianne Feinstein, AARP, Insurance Commissioner Dave Jones, Courage Campaign and Consumer Federation of California, have emailed millions of voters across the state, asking them to download, print, sign and return the petition at www.JustifyRates.org. The campaign has gathered more than 500,000 of the 795,000 signatures needed to qualify for the November ballot, with just three weeks of signature-gathering remaining.

Jamie Court, president of Consumer Watchdog and proponent of the ballot initiative, with Jessica Blacher of Santa Monica.

The ballot initiative, the “Insurance Rate Public Justification and Accountability Act:”

• Requires health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect.
• Makes every document filed by an insurance company to justify a rate increase a public record, and requires public hearings on some proposed rate increases.
• Gives Californians the right to challenge excessive and unfair premium rate increases.
• Prohibits health, auto and home insurers from considering Californians’ credit history or prior insurance coverage when setting premiums or deciding whether to offer coverage.
• Gives the insurance commissioner authority to reject unjustified health insurance rate increases.

Ballot Measure to Regulate Health Insurance Prices Will Let Voters Decide Whether To Regulate Health Insurance Prices

A new analysis at followthemoney.org finds that health insurance companies gave $11.6 million in campaign cash to California politicians, including $7.4 million to candidates for the California legislature, between 2000 and 2010. The largest health insurance donor in California over the last decade was Wellpoint, the parent company of Anthem Blue Cross, which will increase health insurance premiums as much as 20% for nearly 600,000 California policyholders on May 1.

Click here to find the report, “Health Insurance Interests Invest Heavily in California Campaigns.”

Health insurance companies have wielded their influence in Sacramento to kill legislation introduced every year for the last decade that would have required health insurers to get approval before increasing patients’ insurance premiums. The largest recipients of health insurer money were lawmakers that voted against or blocked reform. They include: Lou Correa ($119,967), Gloria Negrete-McLeod ($135,610), Ron Calderon ($65,700) and Juan Vargas ($42,122).

A ballot measure proposed for the November ballot will go around the insurer roadblock in the legislature to let California voters decide whether to regulate health insurance rates, said Consumer Watchdog Campaign today. Dario Frommer, who received $150,388 from health insurers while in office, now works for the industry and wrote the industry’s analysis of the ballot measure for the Legislative Analyst’s Office.

“Health insurance companies paid California politicians an $11.6 million bounty to kill rate reform over the last decade. But we’re lucky in California, because when compromised politicians stand in the way of reform the voters can take charge. This ballot measure will let voters decide if it’s time to force health insurers to rein in skyrocketing rate hikes,” said Carmen Balber with Consumer Watchdog Campaign.  The analysis issued at followthemoney.org also found:

• The top four health insurance industry contributors, Wellpoint, Kaiser, Blue Shield and Health Net, gave $5.5 million to candidates. (These companies are also the four largest health insurers in California.)
• More than half, $5.3 million, of the money given by health insurers to candidates went to members of the Health or Insurance committees responsible for bills that regulate the industry.
• Health insurance companies also contributed $2.9 million to support and oppose ballot measures.

The ballot measure to regulate health insurance rats can be downloaded to print and sign at JustifyRates.org. It would require health insurers to publicly justify rate changes, under penalty of perjury, and give the state insurance commissioner the ability to modify or deny excessive rate increases. Health insurance premiums in California have gone up at 5 times the rate of inflation over the last decade.  

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.