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A Proposed Ballot Initiative Will Give Patients The Same Protection Against Unfair Health Insurance Premiums

The California Department of Insurance has saved doctors and other medical providers $23 million in the last two months by reducing unjustified medical malpractice insurance premiums using the state’s prior approval rate regulation authority.  California law prohibits excessive malpractice insurance premiums for doctors, but does not regulate health insurance premiums paid by patients.

A ballot initiative proposed for November in California would apply the law that regulates malpractice insurance premiums to health insurance. Health insurers would have to justify rate increases, under penalty of perjury, before they take effect. Patients deserve the same protection against excessive rates that doctors receive, said Consumer Watchdog Campaign.

The official ballot petition can be downloaded at www.JustifyRates.org.

“In the last two months we’ve seen rate regulation save California medical providers $23 million they were being overcharged by their malpractice insurance companies. With health insurance premiums increasing at five times the rate of inflation in California, patients need the same protection against unfair and excessive health insurance rates,” said Carmen Balber with the Consumer Watchdog Campaign.

California insurance reform law Proposition 103 gives the state insurance commissioner authority to modify or deny medical malpractice and other property-casualty insurance rates that are unfair or excessive. The ballot initiative sponsored by Consumer Watchdog Campaign would apply the same regulations to health insurance policies sold to nearly 5.5 million Californians.

The Department of Insurance announced today that two malpractice insurance companies would reduce premiums by nearly $4 million – an 11.9% reduction for medical providers with Medical Protective Company (MedPro) and a 7.25% reduction at NCMIC. Last month, the Department announced savings of $19 million for physicians and other medical providers at three other insurance companies. A challenge to rates at the Doctors Company, the state’s largest medical malpractice insurance provider, is still pending.

Consumer Watchdog intervened in the MedPro challenge under a provision of Proposition 103 that encourages public participation in rate proceedings. Consumer Watchdog provided the detailed actuarial analysis that formed the basis for the determination to reduce MedPro’s rates by 11.9%. Past rate interventions by Consumer Watchdog have saved $2.2 billion on auto, homeowners and medical malpractice insurance rates since 2003. See the savings chart here:

The ballot initiative, the “Insurance Rate Public Justification and Accountability Act":

  • Requires health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect.
  • Makes every document filed by an insurance company to justify a rate increase a public record, and requires public hearings on some proposed rate increases.
  • Gives Californians the right to challenge excessive and unfair premium rate increases.
  • Prohibits health, auto and home insurers from considering Californians’ credit history or prior insurance coverage when setting premiums or deciding whether to offer coverage.
  • Gives the insurance commissioner authority to reject unjustified health insurance rate increases.

Originally posted to Consumer Watchdog on Thu Apr 12, 2012 at 09:30 AM PDT.

Also republished by California politics, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and Progressive Hippie.

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