New Ballot Initiative to Stop Rising Premiums in California
As always, our San Francisco insurance attorneys have their eye on insurance news. We are aware that perhaps the insurance that causes the most stress and worry is health insurance. No one wants to face a serious illness with no insurance or not enough coverage. And health insurance is something that everyone will have to use at some point in their lives, no matter how careful a person is.
Another cause of significant stress is how to pay for health insurance, since it is so critically important. Health insurance companies do not make this easy for consumers, jacking up premiums at every opportunity. Even by industry standards, though, the recent premium hikes have been extreme. Consumer Watchdog, a non-profit advocacy group focused on insurance issues, claims that California’s largest insurance companies have increased premiums 20 percent since April 1, and are set to increase another 20 percent on May 1. These higher rates will affect more than one million Californians. Californians are already struggling with these costs. Premiums have increased 153.5% since 2002, more than five times the rate of inflation.
To combat this problem, Consumer Watchdog has proposed a new ballot initiative for the upcoming election stopping these rising premiums. Currently, insurance regulators do not have authority to modify or deny rate increases. Last week California’s Insurance Commissioner Dave Jones called insurance giant Aetna’s rate hikes, which were as high as 21% for some customers, “unreasonable.” He told the Los Angeles Times that he supports this ballot initiative to give him power to modify or deny these outrageous rate hikes. "Like the recent unsustainable rate increases imposed by other health insurers on Californians," he said, "Aetna's rate increase proves again that we need to close the loophole in California law which denies the insurance commissioner the authority to reject excessive health insurance rate hikes." The Insurance Commissioner already has this power with regards to automobile, homeowners, and other types of property and casualty insurance.
The ballot initiative, if passed, would require insurance companies to disclose information about their rate increases. The companies would also have to justify these higher rates to the public and gain the approval of insurance regulators for their rate increases. Policyholders would have an opportunity to ask questions of the insurance companies and will be able to get more information, both from the companies and from the state regulators. As of last week, the organizers of this ballot initiative claimed to have 300,000 signatures in support of the initiative, out of 800,000 required to get the issue on the ballot in November.
This is a critical issue for this fall’s election. Our San Francisco insurance claim attorneys know this issue is also tied to the nightmare scenario of being denied a health insurance claim at the worst time possible. At that point, when time is of the essence, insurance companies will want to deny coverage for any little thing possible, one single missed or delayed payment, even while you struggle to have the money every month as the insurance costs more and more. If your health insurance company is trying to play this game with your health, contact our San Francisco insurance attorneys as soon as possible. And keep watching for news on this latest, and potentially beneficial, ballot initiative.
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