“Until the Insurance Commissioner has the authority to reject excessive health insurance rate increases, consumers face the constant threat that the next outrageous health insurance rate increase will deprive them of access to health care,” commented Assemblymember Dave Jones.  “Today, some people pay more for health insurance than for their mortgage payments and insurers are free to raise rates without the state authority to prevent excessive rate hikes.  Over 8 million Californians were uninsured this year, while others feared they would lose their health insurance coverage.  I have been fighting to pass this critical consumer protection measure for the last five years and I will continue this fight.  We pushed this bill further than it had ever gotten before.  Thousands of Californians took the time to advocate for the passage of this bill.  This fight is not over,” explained Jones.

Anthem Blue Cross began notifying 800,000 policyholders of rate hikes of up to 20% this week and acknowledged that they intend to raise rates again early next year.  Blue Shield will be raising premiums up to 29% for 250,000 of their California policyholders and the state does not have the authority to prevent these rate hikes.  Earlier this year Blue Shield implemented health insurance rate increases of up to 75% on small businesses.  The U.S. Department of Labor’s Consumer Price Index Summary reports that medical care costs have increased approximately 4% per year in recent years. Health insurance premium increases are soaring far above the rate increases for wages, inflation and medical costs. 

The new federal health care reform law signed by President Barack Obama encourages states to increase oversight of health insurance rates and provides grant funding of up to $5 million annually to states that conduct annual rate review to protect consumers from excessive rate increases.  New York passed a “prior approval” law like AB 2578 earlier this summer and more than twenty states now have the authority to prevent excessive rate increases.  California is not yet among them. 

AB 2578 is supported by individuals, families and businesses that have been victims of dramatic health insurance rate increases, U. S. Senator Dianne Feinstein and organizations such as the California Labor Federation, Consumer Watchdog, the California Nurses Association, California NOW, AARP, California Public Interest Research Group (CALPIRG), Consumer Federation of California, and Consumers Union.