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Jones: Fearful of voters, insurers will temper health rate hikes

07/29/2014 2:54 PM

07/29/2014 2:56 PM

California Insurance Commissioner Dave Jones, who is pushing a ballot measure to give him the power to regulate health insurance rates, released an analysis Tuesday showing that health insurance costs for individuals increased dramatically over the last year.

But Jones said he suspects health insurers and the California health exchange, Covered California, will temper premium increases for the coming year in an effort to to avert possible public outcry as the Nov. 4 election approaches.

“I fully anticipate that the degree of increases will be modest at best … because Proposition 45 is on the ballot and they are very concerned about creating any sort of backlash from Californians,” Jones said Tuesday. “But after 2015, I think, essentially, the sky is the limit.

“Unless Proposition 45 or some other law gets enacted to provide for health-insurance rate regulation and the requirement that health insurers and HMOs justify their rates, we are going to continue to see dramatic year-to-year increases.”

Covered California spokesman Dana Howard said it would be inappropriate to engage in a public debate or discussion ahead of the exchange’s rate announcement, which is expected Thursday.

“We believe it will be good news and people will be able to see then what our rates are looking like,” Howard said.

A spokeswoman for the opposition campaign questioned the timing of the commissioner’s comments and noted that the initiative he’s advancing with Santa Monica-based Consumer Watchdog was written before the exchange and its consumer protections took hold.

“Prop. 45 was drafted and filed in 2011, long before Covered California was finalized, giving the insurance commissioner unprecedented new power over health care decisions,” Robin Swanson said. “The information he released today seems to be as outdated and misleading as the initiative he is promoting.”

Jones’ remarks came as he unveiled the study comparing 2013 and 2014 rates that he said his department conducted in response to consumer complaints. The study found that – despite claims to the contrary – rate hikes in 2014 were “significantly higher” than in previous years. Jones said rates increased on average by 22 percent to 88 percent for those with insurance in each of the last two years. The number varies depending on a customer’s age and where the customer lives.

Jones added that the magnitude of rising rates was “masked” for most of the exchange’s 1.4 million customers because of the taxpayer-supported subsidies provided in the federal health care law.

Charles Bacchi, a vice president with the California Association of Health Plans, said health plans are focused on working with the exchange to provide affordable premiums during the upcoming open enrollment period “while Commissioner Jones is looking backward, releasing an analysis that doesn’t take into account subsidies, enrollees who are benefiting from the ACA or acknowledge how the ACA has substantially expanded coverage and benefits while also changing the way premiums are priced.”

“The ACA ushered in a new era of health care coverage, opening up access to comprehensive health care to millions who previously could not obtain or could not afford it, and California has seen tremendous success in implementing the law,” Bacchi said. “And, while some paid more for this expanded health care coverage, many Californians paid less and benefited from subsidies.

“The analysis released (Tuesday) is not only old news, it only tells one part of the story,” he added.

Enrollment for next year’s exchange plans is scheduled to open Nov. 15 and run through Feb. 15.

Capitol Alert staff

Amy Chance
Political editor

Dan Smith
Capitol bureau chief

Jim Miller
California policy and politics
Capitol Alert editor

David Siders
Brown administration

Christopher Cadelago
California politics and health care

Jeremy B. White

Alexei Koseff
Insider Edition editor


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