A rate regulation for California health insurance that was implemented about two months ago has already managed to save doctors and other medical care and service providers approximately $23 million from excessive premiums for malpractice coverage.
This regulation was put into place by the California Department of Insurance and has managed to decrease the premiums that these medical professionals must pay by eliminating unjustified amounts that were being added to their malpractice coverage costs. The regulation authority put the rule into place by using prior approval.
That said, while it is prohibited by law in that state to charge doctors and medical professionals excessive malpractice coverage premiums, there has – as of yet – been no regulation for the rates that patients must pay for their California health insurance.
There has now been a proposed ballot initiative in the state for November, which has to do with the law regulating the premiums for malpractice insurance that are added to health insurance. Should it pass, it would require health insurance companies to have to justify any increases that they make to their rates before they take effect, or risk a penalty of perjury. According to the Consumer Watchdog Campaign, patients are entitled to the same type of protection as doctors when it comes to being charged excessive amounts by insurers.
Carmen Balber, who is with the organization, explained that “In the last two months we’ve seen rate regulation save California medical providers $23 million they were being overcharged by their malpractice insurance companies. With health insurance premiums increasing at five times the rate of inflation in California, patients need the same protection against unfair and excessive health insurance rates.”
The reform law for California health insurance, Proposition 103, provides the insurance commissioner in the state with the authority to deny or make changes to property and casualty rates, including medical malpractice, which are deemed to be excessive or unfair. Consumer Watchdog Campaign sponsored the ballot initiative, called the “Insurance Rate Public Justification and Accountability Act” which would give this same authority to the commissioner in terms of the health insurance policies that are sold to almost 5.5 million residents of the state.