How California Health Insurance Companies Fight Rate Review
Would a health insurance company join forces with those who fought to keep carcinogenic pollution in public places
? Californias largest insurer, Kaiser, did hire a lobbying firm associated with fighting legislation to limit smoking in public places. Principals of that firm were also involved in support of marketing cigarettes to children for more than a decade. Kaiser, in fact, spent more on lobbying to kill AB 52 ($4,955,503) than any other CA health insurance company.
AB 52 would have given regulators the authority to block California health insurance rate increases may be dead for another year, but regulators got another chance to make a difference. Kathleen Sebelius, the Health and Human Services Secretary, announced that HHS is awarding California a federal grant to the tune of $4,324,242 to review California health insurance rate hikes.
State officials are ultimately responsible for how they will implement the rate reviews, but the HHS grants were given to provide California more resources to make insurance companies accountable. California officials have already embarrassed CA health insurance companies into backing down on rate hikes by finding errors in their requests.
California Health Insurance Rate Hikes Are Still Subject To Review
As of September 1, 2011, the health care reform law required California health insurance providers wanting to increase their rates by more than 10 percent to submit rate increases for review. Insurance companies will also be required to publicly justify excessive increases in California health insurance plan premiums.
Even though California obtained more than $4.3 million in federal grants, the state commissioner said that California potentially missed out on more funds. Though elated to get the funds, Insurance Commissioner Dave Jones was a little upset by the missed potential for more money. Other states that have the authority to regulate rate hikes were given an additional $600,000.
Health Insurance For California May Face New Battle In 2012
As one of the biggest markets, California health insurance companies have more to lose from rate review than insurers in most other states. They still don't need permission to raise premium rates there, but Insurance Commissioner Dave Jones wants CA health insurance to have the same type of regulation that auto and home insurance already has.
He says that Proposition 103, which set up rate regulation for other kinds of insurance, has saved Californians tens of billions of dollars. He plans to push for the same type of regulation on health insurance in 2012.
Blue Shield of California Is Returning $283 Million To Millions Of Customers
According to the Los Angeles Times, BS of California said it will return a total of $283 million to be split among almost 2 million policyholders because it did not spend what it expected to on their health care. BS of California had previously promised to only take in two percent, although the same company has threatened to raise premiums by up to 59 percent.
What prompted this generous change of heart? Federal health care reform requires CA health insurance companies to return excess money when they do not spend at least 80 percent (individual plans) or 85 percent (group plans) of every dollar they take in on members' health care needs.
Blue Shield of California is unlike most major health insurers because it's a non-profit. Proactively returning money to policyholders is a much better public relations strategy than being seen as forced to issue refunds.
by: Wiley Long
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