Consumer Group Calls for State Ballot Initiatives to Rein in Premium Hikes

Published on

California-based Consumer Watchdog wrote to President Obama on Tuesday urging him to use the powers of his office to get tough on healthcare plans. 

group suggested that Obama "use the full power of your office" to
advocate for tough "prior approval" insurance regulations in Congress.
If that fails, the White House should "take your case to the states" and
try to get prior-approval premium regulations through the state ballot
measure process in the 24 states — and the District of Columbia — where
that’s an option.

Consumer Watchdog added that California’s
property and casualty insurance regulation, known as Proposition 103,
could be "the model for a state-by-state campaign to enact prior
approval regulation of health insurance rates." Proposition 103 was
authored by Consumer Watchdog founder Harvey Rosenfield and requires
that auto insurance rates be approved by the elected insurance
commissioner; it also gives consumers the right to object to
"unreasonable increases" and demand hearings on those objections. The
law was approved by voters and enacted in 1988.

The group also
requests that the administration make the federal regulations granted by
the new healthcare law as tough as possible. The law grants the
Department of Health and Human Services the ability to review
"unreasonable" premium increases and requires insurance companies to
publicly justify such increases.

Consumer Watchdog suggests that: 

HHS regulations must define ‘unreasonable’ in a way that allows for the
broadest possible review of rates, and ensure full public disclosure of
the justifications insurers file for unreasonable increases;

• Insurer
disclosures must include robust data for rate reviews to shine new
light on questionable rate hikes; otherwise the industry will just gain
another way to obscure data and mislead the public;

should address the need for strengthening state regulation in the
second round of rate review grants. Additional funds should be limited
to states that demonstrate concrete movement toward prior approval
premium regulation, where regulators must approve rate increases before
they take effect; and 

• A
state’s promise of increased “review” and transparency is not enough if
the insurance commissioner does not have authority to reject excessive,
even unjustified, rates.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases