Overview
With the costs of health care skyrocketing, and almost one-fifth of Californians currently going without health insurance, major reform is needed to improve public health and protect consumers.
Insurance companies need to change the way they do business.
People buy health insurance for security -- they want to know that it will be there for them if they or their families need it. But as a wave of news stories have shown, some insurers have been waiting until their enrollees get sick, and then retroactively cancelling their coverage, claiming that there were technical mistakes on their application forms. Working Californians should be able to rely on the coverage they pay for, which is why CALPIRG is working to prevent insurers from cancelling coverage over these trumped-up mistakes.
CALPIRG also is working to ensure that insurance companies spend our money on health care, rather than administrative overhead or profits, by requiring them to spend at least 85 percent of premium dollars on patients’ health. HMOs are already required to meet this threshold, but some insurers spend as little as 50 cents per premium dollar on health care, contributing to the rising cost of care.
Consumers need more power and more information.
When consumers buy insurance on their own, it's hard for them to know that they're getting a good value for their dollar. Individual Californians have a hard time navigating the dizzying maze of different plans, benefits, and cost-sharing structures. CALPIRG-backed legislation would give consumers more power by organizing the insurance market into five coverage tiers, with uniform, benchmark plans at each level. These benchmarks will help consumers make apples-to-apples price and benefit comparisons -- and the bill will also weed out the worst kinds of "junk" insurance, that don't provide any real coverage if you read the fine print.
Consumers also need to be taken out of the tug of war between insurers and providers. Right now, Californians can be billed for treatment that should be covered by their insurance, because hospitals hope the bills will help them squeeze more money from the patient or their insurance company. CALPIRG is working to bring this practice, called "balance billing," to an end.
We need to contain the rising costs of health care.
Every year, the price of health care keeps on rising, making it harder and harder for working families to afford. The good news is that we can get those cost increases under control, without having to ration care, by going after wasteful spending. The first step is to collect detailed cost and quality information, so that we can know what kinds of treatments are effective and which are not. We also need to get insurance companies' administrative costs under control, and keep hospitals from billing patients for their own medical errors.
