Health insurance companies in California spent $13.8 million to defeat a state ballot initiative that would require them to get approval for rate hikes, according to the non-profit Consumer Watchdog Campaign.
The ballot measure would require insurers to publicly justify rate increases under the penalty of perjury, ban excessive rate hikes, allow the public to challenge unjustified rate hikes and require prior approval before a rate increase kicks in.
Under the measure, California's insurance commissioner could order insurers to refund consumers for excessive premium increases that took place during the past year, according to Consumer Watchdog, which sponsored the ballot measure.
The campaign pointed to Anthem Blue Cross' proposed rate increases averaging 16 percent for up to 306,000 Californians with individual "grandfathered" policies. Anthem has been clashing with state Insurance Commissioner Dave Jones, who wanted to prevent Anthem from participating on the state's small business exchange because of its excessively high rates.
To thwart the rate hike justification ballot measure, Anthem has given more than $396,000 in campaign contributions, while its parent company WellPoint has given $12.5 million, the Consumer Watchdog Campaign noted. Other big-name insurers joined the fight against the ballot measure, with UnitedHealthcare contributing more than $196,000, Blue Shield of California giving roughly $306,000 and Kaiser Foundation Health Plan giving about $126,000.
The healthcare reform law's rate review program, which requires insurers to submit and justify any proposed increase of 10 percent or more, boosted state regulators' oversight and scrutiny of rate hikes and cost insurers $1.2 billion in health insurance premiums last year, according to the U.S. Department of Health & Human Services. However, the rate review program stops short of allowing states to block such rate hikes if regulators find them excessive, FierceHealthPayer previously reported.
Meanwhile, insurers' justifications blame more utilization of services and higher unit prices for those services for driving up premiums.
To learn more, read the Consumer Watchdog Campaign announcement.