{mosads}”Californians have no reason to believe that insurance companies will stop ripping us off voluntarily,” Doug Heller, executive director of the nonprofit Consumer Watchdog, said in a statement. “State regulators should have the power to block excessive health insurance rates, and, today, California lawmakers took a huge step in that direction.”
The insurance industry, for its part, argues that regulating premiums will do little to reduce rising healthcare costs, which are linked to the rising price of medicines, devices and procedures.
“Review of premiums should be based on objective actuarial data that takes into account all of the factors that contribute to premium increases, including soaring medical costs, changes in the risk pool, and new benefit mandates. It is important to avoid an arbitrary and subjective rate review process that can easily become politicized,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans. “Artificially capping premiums while allowing medical costs to continue to soar will destabilize the market and put at risk the coverage that families and employers rely on today.”
Democrats’ healthcare reform law calls for health plans to justify rate hikes deemed “unreasonable,” but it doesn’t give federal regulators the power to reject such increases.
This post was updated at 12 p.m. with comment from AHIP.