Since 2012, health insurance companies have imposed more than $300 million in rate hikes deemed by the California regulators to be excessive and unjustified. In addition to these actual higher premiums, shrinking physician networks, fewer benefits, increasing out-of-network charges and soaring deductibles have become the hidden premium hike for health insurance that an increasing number of consumers simply can't afford.
Will California lawmakers push back and fight for rate regulation?
Their inaction over the last decade to stem higher premiums and make sure policy benefits justified the premiums being charged is why Consumer Watchdog went to the ballot in November 2014 with Proposition 45. The ballot measure would have allowed the state’s elected insurance commissioner to make health insurance companies justify their rate and benefit changes under penalty of perjury, and to reject excessive rate increases. Insurance companies spent $56 million to defeat the measure in the lowest turnout general election in California history.
The argument against Prop 45 was that it was premature and the ACA and Covered California should have been given the opportunity to work first. Is the unregulated health insurance marketplace working?
On Monday, a Kaiser Family Foundation/New York Times survey showed that one-in-five working-age Americans ran into serious financial difficulties trying to pay medical bills despite being insured. A Kaiser Family Foundation survey in June showed that 44 percent of Covered California policyholders had difficulty paying health insurance premiums.
Consumer Watchdog, Capitol Watchdog's publisher, noted this week that PPO health insurance policies with very narrow provider networks and extremely limited out of network coverage are a new form of "junk insurance." Ptients looking for choice in these PPO polices increasingly cannot find competent "in network" doctors then face huge medical bills due to extraordinarily limited coverage for out of network services.
"New PPO policies with very limited providers in-network and extraordinarily low benefits out of network are creating new express lanes to bankruptcy for families," said Jamie Court, president of Consumer Watchdog. "Until insurance companies are forced to justify that their premiums, co-pays and policy benefits are reasonable, too many families will be forced to choose between paying medical bills and other necessities of life, like paying their mortgage. These findings should shake up the statehouse and revive the regulation debate."
Auto, home and small business insurance rates are regulated in California under Proposition 103, which was also sponsored by Consumer Watchdog, which has saved ratepayers over $100 billion since it took effect, according to the Consumer Federation of America.
In the recent Kaiser/NYT survey, 62% of those who had medical bill problems say the bills were incurred by someone who was insured, with 75% saying that the amount they had to pay for their insurance copays, deductibles, or coinsurance was more than they could afford. They reported skipping or putting off other health care in the past year because of the cost, such as postponing dental care, skipping doctor-recommended tests or treatments or not filling a prescription. For out-of-network charges, 69% said they were unaware that the provider was not in their plan’s network when they received the care.
Other findings in the survey include:
• Among the insured with problem medical bills, a quarter (26%) say they received unexpected claim denials; and about a third (32%) say they received care from an out-of-network provider that their insurance wouldn’t cover.
• Among those with private insurance, those in higher deductible plans are more likely to report medical bill problems than those in plans with lower deductibles (26% versus 15%).
• Most (61%) of those with medical bill problems say they’ve had difficulty paying other bills as a result of their medical debt, and more than a third (35%) say they were unable to pay for basic necessities like food, heat, or housing. Almost six in ten of those with problems paying medical bills (58%) say they’ve been contacted by a collection agency in the past year.
Cost is a crisis in health care. The ball is in the legislature's court.