Health Insurance May Get Rate Review

Health insurance has faced some major changes over the last two years. The most major of which was the change in law, known as Obamacare, which requires that everyone carry major medical insurance, whether through work or individually. Though many are still not covered due to the high rates that health insurance brings. However, in the next change brought about for healthcare solutions, rates may be facing a change as a new chance for Californians to vote may reform rates for groups and individuals.

Proposition 45 has now been introduced to the state of California and if voted in favor it could mean rate changes for health insurance. The Proposition gives residents of California a chance to vote and make it so that the state insurance commissioner would regulate the rates for groups and individuals. As many hear about the proposition it seems like it could be a great thing, but only if the rates were regulated in a way that helped more of the masses be able to afford to have health policies. However, the issue is much more complicated than this and that is why it is important to fully understand it.

Voting in favor of the proposition may not be beneficial for California residents. Though the purpose of the proposition is to for health insurance companies to justify the reasons for their rates and prove that the prices are well worth the cost, opponents say that this proposition would actually make it harder for California residents to get affordable rates. These opponents include doctors, firefighters, and a coalition of hospitals who have major funding from health plans. They state that this proposition would actually give the insurance commissioner too much power and that health insurance companies would no longer be able to provide affordable rates under the Affordable Care Act.

The market place for California's healthcare reform in know as Covered California, which is responsible for directing patients to the best healthcare for them and also helping them determine if they are eligible for subsidies, in which the government will help pay for their healthcare if they do not make over a certain percentage of the poverty level. This system is currently set up to work independently, as is every other states marketplace. However, a report released by the staff showed that Proposition 45 would actually disrupt the independence of the marketplace and cause delays in people finding affordable healthcare. Though the board that runs Covered California has not commented on this, staff do believe that if Proposition 45 is voted in favor of, many of the insurers would remove themselves from the marketplace in California and refuse to provide coverage to groups and individuals, if forced to prove their rates are legit.

This could prove detrimental to the marketplace this year, as open enrollment begins November 15th, and last years open enrollment brought around 1.4 million people to the marketplace to purchase health insurance. Though in order to provide affordable rates for every individual it is essential that there are many options to choose from, from many different carriers.

These reasons are exactly why many are worried that passing Proposition 45 will only bring harm to California's health insurance market.

But President Jamie Court, of Consumer Watchdog, says that all the proposition does is 'bring health insurance under the rate regulation we have for auto, home and business insurance...'

Companies in favor of the proposition believe that it will reduce insurance rates because it will require carriers to prove that paying, for example $1000 per month, is a justified expense in comparison to how much it would end up costing the health insurance company to cover any charges.

As well, many residents are not concerned with the challenges that may face them regarding the marketplace if the proposition is passed, as many are still too concerned with the rates they are paying. One man writes about his experience in the California Progress Report. He writes of how he was paying over $2000 per month to provide his family with insurance, as a person without group coverage. Many residents who are paying a high amount each month for major medical believe that the cost does not justify the healthcare results, or the amount that they use their healthcare. This is causing many voters to lean toward voting in the regulations on health care rates.

So far the vote is set to be on the ballot on November 4, 2014.

By Crystal Boulware