Rein In Insurance Companies Fat Rate Hikes

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When it comes to chutzpah, health insurance companies take a back seat to no one.

To hear them tell it, they're barely hanging on as federal health care reforms begin to take hold. But the facts tell a different story.

What they're really doing is raking in profits at a record rate. In 2010, the five largest for-profit insurers — UnitedHealth, WellPoint, Aetna, Cigna and Humana — saw their profits soar by 16 percent.

At the same time, most are asking for massive, double-digit, clearly unjustified premium increases.

Private companies need to be profitable, but when they are, and they still try to gouge millions of captive customers — struggling families and small businesses — the public has an interest in intervening.

California needs to join the 33 states that already have the right to reject unfair rate increases. Sen. Dianne Feinstein wants to deal with the problem nationally through the Health Insurance Rate Review Act — but first she has to get past Republicans in Congress.

That's a high hurdle, since the GOP not only wants to kill off federal health care reforms but also would like to replace Medicare with individual health vouchers.

If that seems like a plot dreamed up by the insurance industry, consider this: Health insurance companies are some of the biggest contributors to Republicans in Congress. The top five firms spent more than $50 million on lobbying over the past three years.

Before Medicare, about the only way seniors got health insurance was if their employers offered it as part of retirement packages. Insurance companies loathed having seniors as policy holders for the obvious reason that they incur higher medical costs than young people. Individual insurance was out of the reach of the elderly. Phasing out Medicare and giving seniors vouchers would put them back in that predicament.

While Republicans seem to be backing off this outrageous idea, it's still the mentality Feinstein has to deal with in seeking regulation. Feinstein notes that premiums have risen three times as much as the rate of inflation for the past decade. Medical costs have jumped as well, but insurance companies have offset some of those costs by dropping clients with expensive medical conditions, among other strategies.

National rules could at least be a baseline for the 17 states that have not implemented their own.

In California, Assemblyman Mike Feuer's legislation to give the state's insurance commissioner the authority to review health insurance rates continues to work its way through the Legislature. When voters passed Proposition 103 in 1987 to regulate auto insurance rates, it ended years of abuses by the insurance industry and actually increased competition, expanding the number of insurers in the state. The same thing can happen with health insurance, as other states have found.

Health insurance companies are proving they can't be trusted to offer reasonable rates to consumers, for whom insurance is literally a life-or-death matter. Congress and the Legislature need to rein them in.

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