California Labor Poised to Sell Out Consumers with Unaffordable Mandate
Santa Monica, CA — Massachusetts insurance premiums expected to rise as much as 14% have led a state panel to propose a 5% cap on rate increases for state-sold health plans. The vote came less than a month before every citizen of Massachusetts is required to purchase health insurance or pay penalties that increase monthly, and as California politicians and labor are rumored to be close to making a similar deal.
Developments in both states cast a shadow over whether mandatory purchase of health insurance can ever succeed in America, said the Foundation for Taxpayer and Consumer Rights (FTCR).
The Massachusetts board overseeing the mandatory purchase law will also discuss shifting more costs to low-income consumers by doubling or tripling co-pays for state-subsidized health insurance plans at a meeting on Thursday.
A plan by California Assembly Speaker Núñez and Governor Schwarzenegger to require all Californians to purchase private health insurance may have less affordability protections for consumers than Massachusetts, if rumors about the deal are true.
California labor organizations are expected to meet Wednesday morning to consider a deal that would eliminate any guarantees of affordability for consumers, including out of pocket maximums or exemptions from the mandate. SEIU leader Andy Stern has reportedly cut a deal with Governor Schwarzenegger that he is trying to force all of labor to accept, despite inadequate protections for patients outside the labor movement. The deal is said to include higher employer contributions and to reserve the right to veto benefit reductions for unionized workplaces.
“It’s outrageous that California lawmakers are closing their eyes to the fact that Massachusetts is burdened with out-of-control costs in a program that is just six months old. Massachusetts’ experience shows that higher premiums and eroding benefits are certain under an insurance mandate that does not require health insurers, or the rest of the medical industry, to open their books and justify costs,” Carmen Balber with the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR).
Massachusetts Senate President Therese Murray has proposed requiring all insurers to attend a public hearing and justify premium increases above 7%, and the panel overseeing the health care law voted last week to require insurers to submit explanations if premiums for the state-sold plans exceed the proposed 5% cap. Even the Massachusetts Association of Health Plans, representing many of the state’s insurers, has proposed public hearings on insurance premium increases. Nevertheless, none of the proposals would give regulators the power to deny rate hikes found to be excessive.
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The Foundation for Taxpayer and Consumer Rights is California’s leading non-profit and non-partisan consumer watchdog group. For more information visit us on the web at: www.ConsumerWatchdog.org.