California Health Rates Initiative Qualifies for 2014 Ballot

The California Secretary of State announced on Thursday that a ballot initiative to require health insurance companies to publicly justify and get approval for rate increases before they take effect has qualified for the 2014 ballot.

Santa Monica, Calif.-based-Consumer Watchdog’s Insurance Rate Public Justification and Accountability Act made the ballot after county registrars of voters certified that more than 549,380 valid signatures from California voters were submitted by the campaign.

The initiative would require health insurance companies to refund consumers for “excessive rates” charged as of Nov. 7, 2012.

“Californians can no longer afford the outrageous double-digit rate hikes health insurance companies have imposed year after year, and often multiple times a year,” Consumer Watchdog spokesman Jamie Court said in a statement. “This initiative gives voters the chance to take control of health insurance prices at the ballot by forcing health insurance companies to publicly open their books and justify rates, under penalty of perjury. Health insurance companies are on notice that any rate that is excessive as of November 7th 2012 will be subject to refunds when voters pass this ballot measure.”

Sen. Dianne Feinstein is an honorary co-chair of the ballot initiative campaign, which is also supported by California Insurance Commissioner Dave Jones.

The health rate measure was targeted for the upcoming November ballot, and would have been a competing initiative against Proposition 33, which would establish automobile insurance portable persistency. That measure, backed personally by Mercury Insurance George Joseph, would allow consumers to take their auto insurance discounts with them to other insurance companies. However its detractors say it unfairly punishes those who haven’t been insured for a period of time.

The ballot initiative builds on California’s successful model of rate regulation for auto, home and other property and business insurance, according to the measure’s backers. That law, Proposition 103, was enacted by the voters in 1988.

According to Consumer Watchdog it has saved California drivers $62 billion since it was enacted, however its detractors said it wasn’t business friendly, and it has stymied competition by insurance companies to the detriment of consumers.

Insurance Rate Public Justification and Accountability Act, according to its supporters, would:

• Require health insurance companies to publicly disclose and justify proposed rate changes before they take effect;
• Make every documents filed by an insurance company to justify a rate increase a public record;
• Require public hearings on proposed rate increases;
• Give Californians the right to challenge “excessive and unfair” premium rate increases;
• Prohibit 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 rate increases.