Insurance Policyholders and Patients Lack A Voice in Insurance and Healthcare Ratemaking and Policy Proceedings
Insurance companies spend millions to advocate for higher rates and weaker consumer protections by hiring accountants, lawyers, auditors and other experts that critically outnumber and drown out the voices of consumer advocates at key regulatory and policymaking proceedings.
In 1999, for example, the California Department of Insurance addressed 175 rate filings for personal auto insurance plans and 219 requests for changes to classification plans that determine who pays how much for auto insurance. Additionally, insurers made 59 rate change filings for personal homeowners insurance. These rate change filings directly impact the pocketbooks of millions of Californians whose interests should be well-represented.
Most insurance policyholders and patients, however, simply do not have the financial resources nor the technical expertise to match the industry when it comes to advancing their interests effectively before the Department of Insurance and other regulatory agencies, the legislature and the courts. Consumers need a mechanism through which they can pool their resources, energy and voices to create that ability collectively.
The Department of Insurance Has a Poor Record of Helping Consumers
The Department of Insurance has either not had the authority, the resources or the political resolve to aggressively advocate on behalf of consumers’ interests related to lower rates and improved quality of insurance services. For example:
The Insurance Policyholder and Patient Association Will Effectively Advocate Consumer Interests and Hold Government Oversight Agencies Accountable
The most effective way to make the insurance industry and government oversight agencies more accountable to consumers is for the California Legislature to pass legislation, SB 1738, that will establish an Insurance Policyholder and Patient Association (IPPA). IPPA will be a non-profit, public benefit corporation based on the Nader-conceived Citizens Utility Board (CUB) model. Membership will be open to all California citizens who will democratically elect a board of directors. IPPA will assist in establishing adequate and affordable insurance coverage for all California policyholders by providing the following services:
To carry out its duties, IPPA’s volunteer board will hire a staff of advocates, attorneys, and policy experts that will effectively watchdog the insurance industry and the Department of Insurance. IPPA would be fully self-supporting by its own membership contributions. Through a simple form and business reply envelope added to DMV and insurer mailings, policyholders will be informed of the existence, function, and goals of the Insurance Policyholder and Patient Association–a voice for real insurance reform.