How could this have happened? Premium increases between 22 and 88 percent? Let me say this upfront: California Insurance Commissioner Dave Jones is either a dunce who does not know what he’s talking about, or he’s a liberal political hack who can’t wait to get a job in the upcoming government socialized health care operation.
I’m not sure, but he’s certainly complicit in deflecting the blame for increases onto “evil” insurance companies instead of Obamacare and all the mandates. From the Los Angeles Times.
The cost of health insurance for individuals skyrocketed this year in California, with some paying almost twice what they did last year, the state’s insurance commissioner said.
No kidding. Why do you think that is? But it’s worse than that, for the simply fact Jones knew exactly how much the rates were going to go up four to six months before to the public started buying plans. Probably more than a year ago. In California – like every other state – insurance companies are required to inform and justify their rate increases. It’s built right into Obamacare. There is a rate review system in place. In short, the insurance company submits their proposed rates – again, based on costs and mandates – to the Department of Insurance, they get together and argue about the details and eventually they come to an understanding. The Department of Insurance frequently says, “Yeah, you’re right. This works for us and you’ve proved your case.” There is no benefit for the insurance company to ask for too much since the state will just give them a bunch of crap about it and time would be wasted. (California does not regulate costs, but they are intimately tied into the process of what the rates are and their justification.)
An effective rate review system, as described by HHS:
- Must receive sufficient data and documentation concerning rate increases to conduct an examination of the reasonableness of the proposed increases.
- Must consider the factors below as they apply to the review:
- Medical cost trend changes by major service categories
- Changes in utilization of services (i.e.., hospital care, pharmaceuticals, doctors’ office visits) by major service categories
- Cost-sharing changes by major service categories
- Changes in benefits
- Changes in enrollee risk profile
- Impact of over- or under-estimate of medical trend in previous years on the current rate
- Reserve needs
- Administrative costs related to programs that improve health care quality
- Other administrative costs
- Applicable taxes and licensing or regulatory fees
- Medical loss ratio; and
- The issuer’s capital and surplus.
- Must make a determination of the reasonableness of the rate increase under a standard set forth in state statute or regulation.
- Must post either rate filings under review or preliminary justifications on their websites or post a link to the preliminary justifications that appear on the CMS website.
- Must provide a mechanism for receiving public comments on proposed rate increases.
- Must report results of rate reviews to CMS for rate increases subject to review.
To determine whether a state met these standards, HHS reviewed all available documentation, and met with state regulators and their staff to verify the information and obtain any updates. CMS will continue to accept information from states and monitor states in order to ensure correct classification. CMS can reevaluate the status of this list as changes are made in each state.
There is more, with my emphasis.
Since mid-September 2011, consumers in every state can go to HealthCare.gov to view easy-to-access, disclosure information explaining proposed increases that are 10 percent or higher than last year’s rates. Consumers see a summary of the key factors driving rate increases and an explanation provided by insurance companies for why the proposed increase is needed; Consumers also are given the ability to comment on large proposed rate increases.
If that’s not enough for Jones, let’s go look at his own website. As an example, you can look directly at the three filings by Pacificare. Interestingly, the filings from 2011, 2012 and 2013 all had a proposed and implemented rate that were identical. Look at the filings from Aetna too.
Look, don’t worry about the details in the percentages, the fact is the California Department of Insurance – managed by Commissioner Dave Jones – knows exactly what’s going on when it comes to premium rate increases in the state. And now this guy is surprised and concerned? Back to the LA Times.
He said he has authorized a study of health insurance rates after receiving numerous complaints about rising costs.
Oh, thank goodness. Dave’s got this under control. Not really, because we all know Obamacare mandates increased the cost of health insurance significantly. You can’t get around this fact. So what’s good-ole Dave going to do about the mandates? He can’t do a damn thing. He’s just going to go out and tell people he’s going to do everything he can to fix it!
“The rate increase from 2013 to 2014, on average, was significantly higher than rate increases in the past,” Jones said in a news conference in Sacramento.
What the heck could have caused that?
But Insurance Commissioner Dave Jones predicted that insurers will ease up in the coming year to prevent California voters from approving tough new rate controls on the November statewide ballot.
Really? Really? So now we’re going to have state and federal mandates pushed on insurance companies, physicians and other health care providers and the voters of California are going to decide what the prices will be? How the hell is that going to work?
Jones said he expects 2015 increases will be lower. That’s because insurers won’t want to offend voters before they consider health insurance cost regulation, he said.
Again… really? This is a ridiculous explanation. The percentage rate of increase will be down for the simple fact the mandates for Obamacare – for the individual market – were implemented at the beginning of 2014. Most of the mandates for the employer business has already been implemented too.