The people behind California’s Proposition 103, which is also known as the insurance premium regulation law, are saying that insurance can be made more affordable if this prior approval would be extended to health insurance. This is yet another development following President Obama’s sentiments regarding how health insurance coverage should be likened to California car insurance, in terms of being mandated by the state.
The consumer group, known as the Consumer Watchdog, are appealing to the President and the members of his administration for the adoption of the insurance rate regulation practiced by the state of California. With the implementation of Proposition 103, rate increases would require prior approval, which allows the insurance commissioner to reject excessive rates, as well as rates that are inadequate and discriminatory in nature. The insurance commissioner has the ability to review proposed rates and reject them as deemed necessary, even before these are implemented on the consumer market.
California’s Proposition 103 has been extremely helpful to drivers all over the state, allowing them to save over $60 billion on car insurance rates since its implementation in the year 1988. More importantly, Consumer Watchdog has helped save $1.7 billion just by challenging premium increases that are deemed unnecessary. With Obama’s administration expressing much concern regarding the similarities of car insurance and health insurance, the implementation of Proposition 103 should also be considered.
Proponents of California’s Proposition 103 claim that it should indeed be a model looked into when it comes to health insurance reform. Considering the large savings incurred in the car insurance industry, the implementation of this proposition just might attract more and more citizens to look into getting health care insurance. More importantly, if the government is moving into the direction of mandating citizens to buy health insurance, then it should also find ways to make the policies and packages affordable and as customizable as car insurance packages are today.
California’s Proposition 103 also provides an intervenor system where the public is allowed to challenge premium hikes that are deemed unnecessary. Consumer representatives are allowed to petition and request for a public hearing should any rate increase take place. If the rate change amounts to more than 7% and more than 15% for personal insurance packages and commercial insurance packages respectively, the Insurance Commissioned is mandated by law to hold a public hearing.
With the Baucus Proposal out for study, many citizens are now expressing worry. Without the implementation of California’s Proposition 103, the Baucus Proposal allows health insurance providers to charge as much as 20% of the annual income of potential policyholders. In the end, without California’s Proposition 103, it would be like allowing insurance companies to charge whatever rates they want for their policies.