One of the leading and most influential consumer advocacy groups in the state of California called on the federal government and the Obama administration to adopt one of the state’s auto insurance laws in tackling health insurance issues. According to representatives from Consumer Watchdog, government officials can learn lessons from the success of Proposition 103, one of the most effective provisions created to protect the rights of policyholders in California.
Insurance experts say that advocates of consumer rights are calling on the Congress and government regulators to implement a similar system of insurance rate regulation already present in California. The state employs the services of an elected insurance commissioner to review the requests of providers who want to increase premiums. By placing the power within the hands of the state’s residents, Californians are able to determine how the state government’s policies on insurance will affect their lives.
While many states have the same system, California has added a new procedure thanks largely to the introduction of Proposition 103. When the provision was introduced two decades ago, it sought the establishment of a new procedure called prior approval before the insurance commissioners could decide on requests for rate hikes. Analysts say that this meant any and all requests coming from the providers would be reviewed and scrutinized by the insurance commissioner before being passed on to the consumers themselves.
Industry experts believe that the said law has saved California’s motorists some $62 billion in insurance costs since its enactment in 1988. Consumer Watchdog point out that if the federal government insists on mandatory health insurance, employing a similar system to that of Proposition 103 can help save Americans billions of dollars each year. The same law also managed to save Californians an estimate $1.3 billion from 2003 because of the provision’s public intervention process. Consumer rights groups from across the U.S. have hailed the said legislation as a landmark, paving the way for the improved protection of consumer rights.
Jerry Flanagan of Consumer Watchdog believes that the “prior approval” policy of Proposition 103 makes it a perfect model for health insurance. He insists that if the Obama administration would continue with its plan to require all Americans to purchase health insurance, the federal government should ensure that insurance remains affordable.
Some experts also believe that Proposition 103 has fostered increased competition among auto insurance companies, making it possible for rates to become more affordable for ordinary policyholders.