California consumers should know when their health insurance premium rates have been deemed unreasonable by the state.
That’s the primary purpose of a bill (SB 908) proposed yesterday in the state Senate.
Currently, two state agencies — the Department of Managed Health Care and the Department of Insurance — go through a long actuarial process in reviewing all health insurance premium rate hikes. When state health officials finish that process and find a rate increase to be unjustified, they ask the insurer to retract it.
In some instances, the insurer agrees to alter the increase. In some instances, they go ahead with the rate hike, anyway.
The only way for consumers to be aware of rates deemed unreasonable is to find them on a state agency website. That will change if SB 908, by Sen. Ed Hernandez (D-West Covina), is passed into law.
“Right now most people are surprised that we have this rate review and the only thing that happens is it’s posted on the regulator’s website,” said Anthony Wright, executive director of Health Access California, the bill’s sponsor. “The people impacted should be the ones to know. I mean, most people don’t pore over the Department of Insurance website to find that information.”
And even for those wonky enough or interested enough to navigate that site to find a rate that has gone into effect when it’s been deemed unreasonable, finding out if it applies to your own premium could still be murky, Wright said.
“It’s not always entirely clear if it affects your policy,” Wright said, because of health insurers’ many different product lines. “It’s actually hard to know if you’re in one of those products or not,” he said.
“Consumers don’t know what they don’t know,” said Hernandez in a written statement. And if they actually do find out they’ve been affected by an unreasonable increase, they often can’t get out of that plan for a year. “Many times they get locked into an excessive rate,” Hernandez said, “because they had no idea it was found unreasonable by a California regulator. Consumers should know they could do better by switching plans.”
The bill likely will be heard in committee in April.