Scrutiny matters….

Blue Shield of California is withdrawing their March rate increases, increases that would have been the third in six months.

This latest withdrawal by Blue Shield shows that scrutiny matters. The new spotlight on rising health insurance rates, placed by the new federal health law and aggressive implementation at the state level, is having the desired impact of saving consumers money. This shows why California needs to take the next step of passing rate regulation, so regulators have the explicit authority to deny unjustified rate hikes.

Let’s remember that this is the third insurer that has withdrawn or reduced rates as a result of additional scrutiny and requests that they justify those rates. New federal and state laws now make these rate hikes public, but we need to take the next step, to pass the rate regulation bill now pending in the California legislature. Blue Shield says they want a focus on the medical costs driving health care costs–but that’s what rate regulation can help do.

New consumer protections and rate review processes just kicked-in on January 1. The California Department of Managed Health Care (DMHC) and Department of Insurance (DOI) will have new powers under both state and federal law to regulate insurers. Starting in 2011, health insurance rate hikes must go through a public rate review, including making public both the rate hike request and its justifications to be actuarially sound, under the federal health law and SB1163(Leno) at the state level.

A bill to institute rate regulation over health insurance, AB52(Feuer), which Health Access California and other consumer advocates support, is currently pending in the California Legislature. It would take the next step of allowing regulators to explicitly deny unreasonable or unjustified rate increases.

Health Access California promotes quality, affordable health care for all Californians.
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