Consumer Group Pushes CA Rate Review Ballot Measure

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A California stakeholder tells Inside Health Policy that although legislation that would grant the state Insurance Commissioner authority to deny premium increases has passed the state Senate appropriations committee, it is very unlikely that the bill (AB52) will pass the Senate floor, at least not in its current form. A source with Consumer Watchdog — a California-based consumers advocacy group — says the Senate needs seven more votes to pass, and to get those votes the sponsors would have to agree to several changes that would severely weaken the legislation.

Consumer Watchdog has launched a ballot initiative that says that even if a law granting the California Department of Insurance the authority to deny proposed premium increases passes the state Senate, the group would still move forward with its effort to get rate review authority, require a 20 percent premium rollback and allow consumers to choose a public health plan administered by the CALPERS — California Public Employer Retirement System — rather than having to purchase insurance from a private carrier.

The Consumer Watchdog source says that if the Senate has a change of heart and mind and does pass AB52 in its current form, the ballot measure would be tweaked to acknowledge that, but it would not otherwise impact the effort. The goal is to have the ballot measure filed by November 2011 in order to get on the 2012 ballot.

The measure is called Proposition 103: Part Two, which refers to a 1988 initiative that required automobile insurers to roll back rates and get permission for premium increases.

Consumer Watchdog President Harvey Rosenfield told Inside Health Policy in May that there could be a ballot measure if AB 52 failed, but there were no further details at the time.

According to Consumer Watchdog, the ballot measure would:

* Implement a 20 percent rate rollback in health insurance rates to reverse five years of unwarranted double-digit price gouging;
* Require health insurance companies to seek permission from the elected insurance commissioner before raising rates, as auto insurance companies must, and application of other Prop 103 protections to health insurance companies;
* Prohibit all insurance companies from raising rates or refusing to renew because of credit score, claims or insurance history;
* Allow consumers to join a non-profit public health plan administered by CALPERS instead of having to buy insurance from private insurance companies;
* Correct court rulings that have misinterpreted the law to benefit the insurance industry;* Create a "three strikes and you're out of California" law for insurance companies that repeatedly violate the state's consumer protection laws
* Prohibit health insurance companies from forcing a consumer to sign arbitration agreements as a condition of enrollment.

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