Here we go again. Although California health insurers cannot justify raising premiums, rates continue to grow faster than underlying costs. Premiums for hundreds of thousands of individual policyholders are to increase at 8% to 14%. This is a significant chunk of change. My policy is $1,000 monthly. So a 14% increase is $140.
The cost of goods and services associated with medical care grew just 3.6% over the last 12 months nationally, government figures show. This accords with the national average rate of increases. Yet California insurers’ justification is based on these same projected increases in medical costs which have no basis in past experience. The burden on consumers is enormous – premiums have been increasing five times faster than inflation.
Note that California is one of only 17 states that do not have some kind of oversight over the setting of individual health plan rates. Senator Dianne Feinstein is spearheading the effort to impose accountability and transparency of premium increases. Feinstein noted that the initiative “would require health insurance companies to publicly justify their rates before rate hikes take effect…. Their profits are unprecedented. They are huge…. In the first quarter of 2011, the five largest made net profits of $5.95 billion, a 16% increase.”
As healthcare becomes increasingly expensive, patient advocates encourage California voters to implement legislation that would authorize the state insurance department to approve or reject insurance premiums. 505,000 signatures are needed on a petition to place the measure on November’s ballot.