Guest Commentary: California Health Insurance Rates Need Regulation

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In my 20 years as a practicing oncologist, I have seen way too many of my vulnerable patients fall victim to our current health care system, which has become quite deleterious and very mischievous.

In 2011, there were close to 2.5 million medical-related bankruptcies in the United States. Shockingly, 75 percent of these involved patients who actually had insurance.

Since 2002, the private insurance industry has raised premiums 185 percent while median incomes in the same time rose only 10 percent and inflation totaled 33.3 percent. Meanwhile, the profits for the largest for-profit insurance companies have grown steadily and CEO salaries are now almost 400 times what the average worker makes.

It’s shocking to me, then, that the California Medical Association and its president, Dr. Richard Thorp, are working side by side with the state’s largest health insurance companies to deny patients the affordable health insurance they deserve.

Recently, Thorp criticized a ballot measure on November’s ballot to regulate health insurance rates just as auto and home insurance have been regulated for the last 25 years.

Thorp expresses concern that allowing the insurance commissioner to set rate levels may lead to lower reimbursement to physicians, hospitals and other providers, which will diminish access to care. Sen. Dianne Feinstein, a co-chair of the ballot campaign, calls that “malarkey.”

Thirty-five states currently provide their insurance commissioners with the authority to regulate excessive health insurance rates, but California currently does not. In 1988, the citizens of California voted on Proposition 103 which gave the state insurance commissioner the right to regulate auto and property/casualty insurance. The Consumer Federation of America reported 25 years later that it has saved drivers $102 billion on their auto insurance bills. We are the only state in America where auto insurance premiums have gone down.

The voters of California should approve a similar initiative this year to require insurance companies to open their books, justify their rates, and get permission before raising rates.

Ironically, the CMA now refuses to stand up for patients and protect them from financially crippling annual rate increases, yet it has no problems with the insurance commissioner regulating malpractice insurance premium rates. In 2012, Insurance Commissioner Dave Jones lowered medical malpractice insurance rates using the tools given him by Prop. 103 by $56 million.

Thorp states that this initiative would harm people’s ability to see their doctors and get the care they need and that regulation would come between patients and their doctors. In the 35 other states that regulate rates, there is absolutely no evidence or published study that shows this has decreased access or quality of care.

Also, many physicians, including Thorp, will tell you it is the insurance industry that is constantly coming between them and their patients, dictating what test they can order, what medication they can prescribe, and what procedures they can do. It is not the insurance commissioner.

Having spent the past year as a visiting fellow in the Department of Insurance, I got to see first-hand how this watchdog agency has worked to protect consumers and advocate on their behalf.

I would ask Thorp and the CMA why they are not doing the same, but rather protecting an industry that has issued more than 45 million denials in California in the past nine years, raised rates up to 32 percent in the last two years, continued to make record profits, and already contributed $13.4 million to date to keep the lucrative status quo.

Let’s remember the Hippocratic Oath.

Paul Y. Song is a practicing radiation oncologist and the executive chairman of the Courage Campaign. He served as visiting fellow in the California Department of Insurance in 2013.

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