Consumer Watchdog’s calls for tough and open health insurance rate regulation are
being echoed and amplified. The latest instance is in Connecticut, the
home state of insurance companies, where Attorney General Earl
Blumenthal recently proposed major reforms that would require the state to review and reject, modify or allow a rate change before it goes into effect.
Blumenthal’s plan would also allow the public and consumer representatives to see all the data and file protests that the state must review as well. That kind of review would have turned up the data fakery that Blue Cross apparently indulged in to raise rates on individual policies in California by up to 39%. A House subcommittee investigation last month found internal e-mails that indicate the company was overstating its risks and padding the premium increase.
Similar regulations of auto and home insurance in California have saved consumers tens of billions of dollars over the last two decades–yet auto insurers in the state are far more competitive than health insurers in the state, and the industry is in robust health. So much for the argument that consumer-friendly regulation kills competition.