California consumer advocacy group Consumer Watchdog has submitted a new proposal to the state attorney general’s office regarding health insurance. Last year, the organization was a driving force behind new auto insurance regulations that pout caps on premiums. Now, the group is backing legislation that would require the state’s health insurers to wait for approval from regulators before collecting premiums from higher rates. Consumer Watchdog is awaiting the approval from the state’s attorney general before it begins to collect the 505,000 signatures needed to bring the issue before the state Legislature in 2012.
California lawmakers have already been working on legislation that would requires insurers to wait for approval before collecting money on new rates, but have yet to pass any definitive law. Earlier in the year, the Legislature awarded insurance regulators with more power over the insurance industry, allowing them to require justifications for rate proposals and making changes to these proposals if necessary. This expanded authority has done little to slow the pace of rising premiums, however, which continue to put financial pressure on consumers.
The group has the support of the state’s Insurance Commissioner, Dave Jones, who has long sought for more control over the insurance industry. Insurers argue that higher rates are absolutely necessary to help offset the cost of medical care, which has grown exponentially in the past decade.