Health insurance rates are on the rise in California, again

California health insurance
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Insurance premiums have grown by 88% so far this year

Health insurance rates in California are growing rapidly. Over the past few years, insurers have been raising premiums, trying to offset the financial impact of increasingly expensive medical care and the provisions of the Affordable Care Act. Since the health care reform law was passed in 2010, rates  for health coverage have been growing at a rapid pace. According to the state’s Department of Insurance, health premiums have grown by as much as 88% so far in 2014.

Higher rates were offset by subsidies offered by the federal government

Rate increases vary throughout the state depending on numerous factors, including age and medical condition, but most of these increases were hidden behind federal subsidies being offered through the Affordable Care Act. Some 80% of those that have purchase insurance coverage through the state’s exchange currently receive subsidies from the federal government. Because these consumers are not paying for the bulk of their insurance coverage, they were unaware that this coverage was more expensive.

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Insurance Commissioner Jones campaigns for more authority

California health insuranceInsurance Commissioner Dave Jones is again campaigning for more power over the health insurance sector. Jones is advocating Proposition 45, which will provide the state’s Department of Insurance with the authority it needs to regulate rate increases coming from insurers. The measure will provide Jones with the power to outright reject rate increase proposals coming from insurance companies. Insurers seeking rate increases would have to justify higher premiums, providing information regarding the need for higher rates to the state agency before their proposals can be approved.

Advocacy organization opposes Proposition 45

Californians Against Higher Health Care Costs, a consumer advocacy group, is opposing Proposition 45. The organization notes that its extensive network of health care professionals are uncomfortable with the idea that a single politician would have so much authority over the insurance industry. In some cases, higher rates could beyond the control of insurance companies due to changes in federal regulations and the growing cost of medical care. Insurers may need to raise rates in order to remain capable of providing services to their policyholders.

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