Consumer Watchdog to Obama: Use Regulatory and State Ballot Measures If You Don't Want Health Insurers to Play Politics With Lives Via Rate Hikes

WASHINGTON, Sept. 14 /PRNewswire-USNewswire/ -- The California consumer group that pioneered the nation's toughest property casualty insurance regulation called on President Obama today to use his federal regulatory authority and state ballot measure processes to stop health insurers from arbitrarily raising rates on Americans.

"The health insurance industry is playing a dangerous game of politics with Americans' lives," Consumer Watchdog's leaders wrote the president today. "The industry is blaming a fresh round of indefensible premium increases on federal health reform in a cynical attempt to swing the balance of power in the mid-term election toward the GOP."

Read the letter here: http://www.consumerwatchdog.org/resources/LtrObamaratereg.pdf

Consumer Watchdog's letter to the White House said: "If these unjustified rate hikes go unchallenged by you, insurers will strengthen those who would repeal health reform, and your reforms will slowly self-destruct as consumers and employers are forced to drop insurance they can no longer afford."

"Insurers' unconscionable bullying tactics are the predictable result of a law that will require all Americans to purchase health insurance by 2014, but fails to regulate what health insurers can charge.  While Congress failed to regulate rates under federal health care reform, you cannot ignore the crisis Americans face now."

The group urged the strongest possible federal regulations to ensure review of any questionable rate increase:

• HHS regulations must define "unreasonable" in a way that allows for the broadest possible review of rates.
• Regulations must ensure full public disclosure of the justifications insurers file for unreasonable increases.
• Insurer disclosures must include robust data for rate reviews to shine new light on questionable rate hikes.
• HHS should limit grant funds to states that demonstrate concrete movement toward prior approval premium regulation in the second round of rate review grants.

The letter called on the president to take the fight to the states if Congress fails to act:

"A true 'zero tolerance' policy for health insurers' scare tactics and misinformation will ultimately require that regulators have full authority to modify or deny rate hikes through prior approval rate regulation. If Congress and state legislators fail to act, a ballot option remains in 24 states and the District of Columbia. Your leadership on state ballot measures will not only let the public know you are fighting for affordable insurance in every venue possible but bring crucial resources to these fights."

California's landmark insurance regulation for property casualty insurance, known as Proposition 103, is a model for national health reform. The law requires insurance companies to justify their data and get rates approved by the elected insurance commissioner, and gives any member of the public the right to object to unreasonable increases and demand hearings on those objections. According to a 2008 analysis by the Consumer Federation of America, the law has saved drivers $62 billion since it was enacted in 1988.

"Insurance companies are willing to play dirty on every front in health reform, putting millions of lives at risk. Their actions are full proof of the need for the strongest rate regulation possible and, ultimately, a public option to the private market which can be enacted on the state level and at the ballot box. You have the power to make it happen if you and your strongest surrogates step outside Washington and bring the fight directly to the public," said the letter to the president.

SOURCE Consumer Watchdog