State Deemed $250M in Health Premium Increases Unreasonable

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About $250 million in planned health insurance premium increases in California during a 15-month period that ended in 2013 were excessive, according to a report released Wednesday by Consumer Watchdog, Reuters reports. Consumer Watchdog is supporting a November ballot initiative that would give the state regulatory authority over health insurance rates.

Details of Report

For its analysis, Consumer Watchdog examined data from the California Department of Insurance and the state Department of Managed Health Care.

According to the report, state regulators deemed unreasonable about $250 million worth of planned insurance premium increases for individual health plans between April 2012 and November 2013.

Debate Over Granting State Authority Over Health Insurance Rates

During a joint legislative hearing last week, state Insurance Commissioner Dave Jones (D) cited the report, noting that DOI's designation of the unreasonable rate increases "is not binding" under current state law. Jones said he would have rejected the increases if he had the authority to do so.

However, the California Medical Association has said that insurers might reduce reimbursements to doctors if the state is granted regulatory authority over health plans.

In addition, Covered California Executive Director Peter Lee said granting Jones the authority to veto rate hikes could result in insurers leaving the state's insurance market (Bernstein, Reuters, 7/2).


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