California insurers lost $349 million in potential premium dollars in 2011 because of state officials' ability to review insurers' proposed rates, according to a report from the California Public Interest Research Group (CalPIRG).
The report found insurers voluntarily lowered or withdrew 44 proposed premium increases after California regulators objected to them. It also noted that insurers implemented rate hikes 14 times even though they were deemed unreasonable, affecting almost 1 million consumers.
The amount insurers lose in premium revenue could be even more dramatic under a new proposal (SB 1182) California legislators are considering, which would authorize the state insurance commissioner to reject unreasonable premium increases.
"We wanted to do this analysis now in part because there is legislation proposed to expand rate review and because of the ballot measure," Emily Rusch, state director of CalPIRG, told California Healthline. "The more information we can get into people's hands, the better."
Insurers have been spending millions to stop the state ballot initiative that would require them to get approval for rate hikes, with WellPoint providing $12.5 million, FierceHealthPayer previously reported.
The CalPIRG report also suggested California regulators should require insurers to report which strategies they use to improve care and reduce waste, including encouraging their networked providers to use preventive medicine and coordinate care as well as negotiating lower reimbursement prices.
"With that information, California can use rate review as a tool to ensure insurers are doing everything they can to cut waste and improve care before they raise premiums," the report concludes.