Insurance Lawyer Blog

As always, our San Francisco insurance attorneys have their eye on insurance news. We are aware that perhaps the insurance that causes the most stress and worry is health insurance. No one wants to face a serious illness with no insurance or not enough coverage. And health insurance is something that everyone will have to use at some point in their lives, no matter how careful a person is.

Another cause of significant stress is how to pay for health insurance, since it is so critically important. Health insurance companies do not make this easy for consumers, jacking up premiums at every opportunity. Even by industry standards, though, the recent premium hikes have been extreme. Consumer Watchdog, a non-profit advocacy group focused on insurance issues, claims that California’s largest insurance companies have increased premiums 20 percent since April 1, and are set to increase another 20 percent on May 1. These higher rates will affect more than one million Californians. Californians are already struggling with these costs. Premiums have increased 153.5% since 2002, more than five times the rate of inflation.

To combat this problem, Consumer Watchdog has proposed a new ballot initiative for the upcoming election stopping these rising premiums. Currently, insurance regulators do not have authority to modify or deny rate increases. Last week California’s Insurance Commissioner Dave Jones called insurance giant Aetna’s rate hikes, which were as high as 21% for some customers, “unreasonable.” He told the Los Angeles Times that he supports this ballot initiative to give him power to modify or deny these outrageous rate hikes. "Like the recent unsustainable rate increases imposed by other health insurers on Californians," he said, "Aetna's rate increase proves again that we need to close the loophole in California law which denies the insurance commissioner the authority to reject excessive health insurance rate hikes." The Insurance Commissioner already has this power with regards to automobile, homeowners, and other types of property and casualty insurance.

The ballot initiative, if passed, would require insurance companies to disclose information about their rate increases. The companies would also have to justify these higher rates to the public and gain the approval of insurance regulators for their rate increases. Policyholders would have an opportunity to ask questions of the insurance companies and will be able to get more information, both from the companies and from the state regulators. As of last week, the organizers of this ballot initiative claimed to have 300,000 signatures in support of the initiative, out of 800,000 required to get the issue on the ballot in November.

This is a critical issue for this fall’s election. Our San Francisco insurance claim attorneys know this issue is also tied to the nightmare scenario of being denied a health insurance claim at the worst time possible. At that point, when time is of the essence, insurance companies will want to deny coverage for any little thing possible, one single missed or delayed payment, even while you struggle to have the money every month as the insurance costs more and more. If your health insurance company is trying to play this game with your health, contact our San Francisco insurance attorneys as soon as possible. And keep watching for news on this latest, and potentially beneficial, ballot initiative.

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An annual California Employer Health Benefits Survey came out this week with bleak news for California insurance consumers. It polled 770 benefit managers at private companies in the state from July to October 2011. The bottom line of the survey was that fewer companies offered health insurance in 2011 and those that did charged more for it. Those of us who practice insurance law in California are naturally concerned about these newly released statistics and what further impact the numbers could have as the health insurance market feels pressure from the economic downturn.

In California, 63 percent of workers have employer-sponsored health insurance, down from 73 percent two years ago. And premiums for these health plans rose by an astonishing 153.5 percent since 2002, more than five times California’s inflation rate for the same period. About 25 percent of employers either reduced benefits or raised costs on employees in 2011. A large part of this is due to the economic downturn of the last few years coupled with steadily rising costs. And there is no end to this trend in 2012 as 36 percent of California employers stated they are either somewhat or very likely to increase the amount employees pay this year. This upward trend in costs has been present for several decades, but the dramatic upturn in the numbers in this most recent survey are still striking even to experienced San Francisco insurance lawyers.

The numbers are especially alarming considering consumers are getting fewer benefits for their money, as well. The insurance benefits decreased at the same time as co-pays, deductibles, and premiums rose dramatically in cost for the employee-consumers. And employers are paying more than average in California, as well. They contribute, on average, $5,000 per single employee and nearly $12,000 a year for family coverage.

With health insurance squeezed from all sides, Californians should take extra care in being aware of what benefits they are entitled to and informed about their health care policy and what choices they have. A San Francisco insurance attorney can help you understand your insurance and can be your most important resource if you are denied benefits from insurance companies trying to find even more ways to earn more money. As a representative of Consumer Watchdog, a non-profit, stated, the premiums have gone up five times more than inflation and the money is going somewhere. Even accounting for higher costs, the insurance companies’ greed is powerful. Insurance consumers need to be vigilant of their own interests, since the companies’ interest is profit, not your health.

Some of these spiraling costs should be ameliorated, according to industry expectations, in 2014 when the full implementation of President Obama’s healthcare law will go into effect. However, that is still two years away. Also, a measure in the California legislature to regulate health insurance rates failed last year, even though 35 other states have this ability. Remember for now that often being informed is your best option as a consumer in a difficult insurance market.

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