As consumer advocates celebrate their successful signature gathering effort to place on the November ballot a measure intended to regulate medical insurance rates in California, others are warning voters against the Consumer Watchdog-sponsored initiative.
Called the Insurance Rate Public Justification and Accountability Act, the 800-word initiative requires health insurance companies to justify any rate increases before they go into effect, much in the same way California now regulates auto insurance.
California Insurance Commissioner Dave Jones supports the initiative, saying that it's necessary to curb runaway medical insurance rate increases.
"We've had increases on average of 153 percent since 2003," said Jones. "Some families and individuals have had 300, 400, even 500 percent increases. They just can't sustain that anymore; we need to do something about it."
But opponents, such as Bill Barcelona, say this initiative is not the way to control health insurance rates. Barcelona is the senior vice president of governmental affairs for the California Association of Physicians Groups — a trade association of 155 doctor groups that practice managed care in the state.
"The ballot measure would create this overly rigid system of regulation for the way health insurance is designed and marketed to the public," said Barcelona. "This is ill-conceived. We should have given federal health reform the ability to be implemented in California and to have run for a few years."
The federal Affordable Care Act does not regulate insurance rates. Barcelona says his group fears the proposed state initiative will stymie innovation in health insurance plans and make existing ones more expensive.
"The only thing this initiative stymies is exorbitant and outrageous health insurance and HMO rate hikes," he said.
The health care initiative is now awaiting certification by each California county by June 28 before it qualifies for placement on the November ballot.