Consumer Watchdog Campaign: Health Insurance Companies Will Hike Rates As Much As 24% for Small Businesses With More Than One Million Employees

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Santa Monica, CA – Health insurance companies will increase rates as high as 24% in July and August for small business customers with more than one million employees, but state regulators currently have no power to reject those increases that can’t be justified. A pending ballot initiative would require health insurance companies to publicly justify rate increases and get approval before they take effect.

In April, the Department of Insurance found that another rate hike proposed by Aetna for small business policyholders was excessive, but Aetna imposed the increase despite the Department’s finding.

“Health insurance companies will continue increasing rates at a pace that far outstrips the cost of medical care until California finally has the power to say no when increases are excessive and can’t be justified. This ballot initiative gives voters the power to make health insurers publicly justify their repeated price hikes and make health insurance more affordable for struggling small business owners and individuals across California,” said Carmen Balber with Consumer Watchdog Campaign, the sponsors of the proposed ballot measure.

The ballot initiative is awaiting verification of the 800,000 signatures submitted by patients and consumer advocates last month to qualify the insurance rate reform measure for the November ballot. Consumers can sign up for initiative updates and join the campaign for fair insurance prices at

The six largest health insurance companies in California – Anthem Blue Cross, Kaiser, Blue Shield, Aetna, UnitedHealthcare and Health Net – propose raising rates for small business policyholders this summer. The cost of health insurance has increased 153% since 2002 – five times the rate of inflation – according to the California HealthCare Foundation.

Existing insurance law in California, called Proposition 103, requires home, auto and other property and liability insurance companies to publicly justify and get rate increases approved. The Department of Insurance announced this week that it has used the law to save physicians and other medical providers $44 million on their  medical malpractice insurance premiums this year. It has also saved drivers $62 billion in premiums since 1988 according to a study by the Consumer Federation of America. The proposed ballot initiative would make health insurers comply with the law that already applies to most other insurance companies in California.

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.

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Consumer Watchdog Campaign is chaired by insurance reform Proposition 103 author Harvey Rosenfield. Consumer Watchdog Campaign is the campaign affiliate of Consumer Watchdog, which was founded by Rosenfield and whose president, Jamie Court, an award-winning consumer advocate and author, is the proponent of the proposed ballot initiative.

Carmen Balber
Carmen Balber
Consumer Watchdog executive director Carmen Balber has been with the organization for nearly two decades. She spent four years directing the group’s Washington, D.C. office where she advocated for key health insurance market reforms that were ultimately enacted into law as part of the Affordable Care Act.

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