Consumer Watchdog: Lack of CA Rate Regulation Leads To Double Digit Premium Increases At Covered California

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Santa Monica, CA — Consumer Watchdog said the 13.2% rise in health insurance premiums for 2017 announced by Covered California is the result of the state’s failure to enact health insurance rate regulation like nearly 40 other states.

“These outrageous premium hikes are the consequence of California’s failure to adopt health insurance premium regulation like the majority of the states and the disappearance of federal subsidies for insurance companies to even out bumps in the road ,” said Jamie Court, president of Consumer Watchdog, which sponsored rate regulation initiative Prop 45 in 2014. The ballot initiative failed to pass in a record-low turnout election but garnered 41% of the vote despite a $57 million insurance company campaign against it. “When three health insurance companies control 90% of the market there is no bargaining with them absent a hammer. Rate regulation is the hammer. California consumers cannot continue to pay more for very limited doctors and hospital networks. Rate regulation needs to move to the top of the legislature’s list.”

Consumer Watchdog said it would revive its proposal to force health insurance companies to justify rate hikes and get approval before rate hikes take effect.

Auto insurance companies have to justify their rate hikes in California before they are approved.  The system, enacted under insurance reform Prop 103, has saved drivers more than $100 billion according to a 2013 report by the Consumer Federation of America. No such system yet exists for health insurance rates.

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Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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