Health Insurance Price Hike Angers Californians

American consumer groups are calling on California legislators to pass new legislation limiting price increase on health insurance premiums. Since the passage of new federal health care legislation, Californian insurance companies have tended to hike the prices of their private medical insurance policies. The increases apply not only to new customers, but some insurers have also sought to increase revenue by increasing the premiums of existing policyholders. One insurer – Anthem – has recently attempted to increase premiums by 38 per cent for 800,000 Californians.

Californian legislators have tried five times in the last seven years to set limits on the size of price increases on health insurance policies, but has been unsuccessful each time as the insurance industry successfully battles against regulation on price setting powers. Until now, regulators have relied on audits to expose legal weaknesses which undermine price increases, as was the case in the recent Anthem increases, as Insurance Commissioner Steve Poizner ordered an audit and succeeded in forcing the company to withdraw its price increases.

It is, however, only a short term means of delaying price increases, and Assembly Speaker John Perez must this week deal with calls to force through new legislation.