Insurance Commissioner Can’t Stop Premium Increases

Published on

Click here to listen to the podcast of this story.

Clamor over an insurance company's decision to increase premiums by as much as 59 percent could lead California lawmakers to consider pre-approving such increases.

Last session, a bill that would have authorized the state insurance commissioner to approve rate hikes failed by four votes in the state Senate. Almost every lawmaker representing the Inland area voted against the bill.

The legislation, by former Assemblyman Dave Jones before he was elected insurance commissioner, was introduced last year after Anthem Blue Cross announced it would raise rates as much as 39 percent. The company withdrew its proposal after an audit revealed that the rate increase was based on flawed data.

This session, Assemblyman Mike Feuer, D-Los Angeles, has introduced legislation with the intent to give the insurance commissioner and Department of Managed Health Care the authority to regulate rate increases. He submitted his bill shortly before Blue Shield of California announced premium hikes of up to 59 percent that were slated to take effect March 1.

Blue Shield, and at least two other insurers, decided they would wait 60 days before implementing rate increases because of public outcry.

"In this economic climate, staggering rate hikes like those proposed by Blue Shield will make health care unaffordable for many Californians," Feuer said in a statement. "Health insurers should be required to justify their reasons for raising rates that could cause even more families to lose their coverage. If insurers can't sufficiently justify increases, then state regulators should have the authority to reject them."

In California, the Department of Managed Care oversees HMOs. The insurance commissioner regulates other types of health plans. Neither the department nor the insurance commissioner can stop health insurers from raising rates. Twenty-nine states and Washington, D.C. have the authority to pre-approve rate increases.


Bill Ellis, of Hemet, said he was stunned when he discovered that no one could intervene. On Jan. 1, Ellis' Aetna monthly premium increased $105, from $242 to $347, he said.

His wife, Joyce, a 77-year-old retired real estate agent, is considering trying to get a job to ensure the couple can make ends meet, Ellis said.

"I'm 84. Nobody will hire me," he said. "Everything is going up. But Social Security hasn't gone up. People can't afford it. It's like the wild West. They can make any changes they want."

Aetna spokeswoman Anjanette Coplin said privacy laws prevented her from discussing Ellis' situation. Typically, she said, premiums increase to stay in line with health care costs.

Jamie Court, of the Santa Monica-based advocacy group Consumer Watchdog, said health insurer rate increases are "de facto denials. They are forcing people out who they don't want to cover," he said. "There's no cap on how much they can charge. They are creating conditions for a patients' revolt."

Court said he thinks the time is right for a ballot measure that would give voters the chance to decide whether the insurance commissioner can regulate health insurer rates increases. It happened in 1988 when voters passed Prop. 103, which gave the commissioner authority to approve auto insurance rates, he said. Voters were outraged when they were mandated to have auto insurance, yet no one would protect them from rate increases, Court said.

"It's war," he said of the fight he perceives against health insurers. "The Legislature is the last hope for a truce."


Ellis said he contacted offices for Assemblyman Paul Cook, R-Yucca Valley, and Senator Bill Emmerson, R-Hemet, to complain about his premium increase. He said no one told him that Cook and Emmerson voted against the bill that would have given the insurance commissioner the authority to regulate health insurers.

"(The commissioner) ought to have the say-so," Ellis said.

Cook's chief of staff, John Sobel, said Cook is concerned about premium increases but hasn't had many constituent complaints about the issue.

Emmerson's spokeswoman, Kayla Williams, said the senator had received five constituent calls about insurance rate increases. He wouldn't comment on the issue or discuss Feuer's bill.

"The Feuer bill is still waiting to be heard in committee and has not yet been analyzed," Williams said in a written statement. "In addition, Blue Shield is having an independent actuarial review of their rates to determine if the rate increases are justified. Senator Emmerson would like to wait to see the outcome of that review before he comments on the need for legislation."

Reach Lora Hines at 951-368-9444 or [email protected]


Call the California Department of Insurance at 800-927-4357 for questions about health insurance premiums or contact your state assemblyman or senator.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases