News Release


Austin Price,
Michael Russo,

CALPIRG Supported Law Saved Consumers $127 Million in Health Care Premiums

For Immediate Release

Rate Review Law Saves California Consumers $127 million on Health Care Premiums in 2011

Sacramento, CA—  In its first year of implementation, a California rate review law has saved consumers with plans managed under the California Department of Managed Health Care approximately $20 million, and the Department of Insurance estimated $107 million in savings.
Thanks to rate review legislation that started January 1, 2011, insurance companies now have to provide justification for rate increases.  In the past calendar year it resulted in 4 plans under DMHC reducing their increases voluntarily and one proposed rate hike being labeled “unjustified”.  The result was an estimated $20 million in savings for consumers.
“Every year insurers like to ring in the new year with premium increases,”  said Austin Price, Health Care Associate with CALPIRG.  “Thankfully, rate review has increased the pressure for that money to go to actual health care and is already saving consumers millions.”
In 2011 more than 2.7 million Californians with plans regulated under the California Department of Managed Healthcare saw their premiums raised, with the average filing increasing by over 10%. These high increases are continuing despite the growth of health care costs slowing in 2010 to 3.9%, according to a new USHHS report. Already, 16 California plans regulated by DMHC have filed to hike rates in the new year.
“It's good news for the consumers who benefited, and with more resources and more experience we expect the DMHC will do an even better job in 2012.” said Price. “But without the power to deny or lower unjustified rate hikes, in some ways it is still like fighting a fire with buckets of water.”  


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