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California Healthline
George Lauer

Californians have saved $349 million on health insurance under a rate review process established in 2011, according to a report from the California Public Interest Research Group.

However, the report released last month also shows that almost one million Californians paid higher premiums due to rate hikes state officials deemed "unreasonable."

The CalPIRG report, billed as the first comprehensive analysis of the rate review program for the individual and small group markets since the program's inception, comes as legislators consider a new proposal (SB 1182) to expand rate review to large group plans and as California voters begin to hear arguments for and against a fall ballot measure to give California's state insurance commissioner the authority to reject premium increases considered unreasonable.

"We wanted to do this analysis now in part because there is legislation proposed to expand rate review and because of the ballot measure. The more information we can get into people's hands, the better," said Emily Rusch, state director of CalPIRG, a not-for-profit, non-partisan organization based in San Francisco.

Key Findings Show Limited Progress

California's 2011 law calls for health insurers to publicly justify proposed rate increases in small group and individual plans. Depending on the type of insurance, insurers must submit proposed increases to either the Department of Managed Health Care or the Department of Insurance. Agency actuaries review proposals and determine if increases are reasonable. Regulators post proposals online and invite public comment. Regulators can object to increases they consider unreasonable, but they have no authority to prevent insurers from proceeding.

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