Maybe California should put a measure on the ballot every year to give the state Department of Insurance commissioner power to reject excessive health insurance premium increases.

After years of in-your-face double-digit premium hikes, insurance companies indicated they are aiming for an average 4.2% annual increase next year for people insured through Covered California, the state’s version of Obamacare.

The announcement last week was greeted with relief by some, enthusiasm by others and skepticism by those who think insurance companies are just laying low until after November’s election, when California voters will have a chance to tip the balance of power in the health insurance market.

Lawmakers put a measure on the ballot, Proposition 45, which will let the insurance commissioner reject rates found to be unreasonable. Thirty-five states already let regulators have that control, which is similar to that already exercised in California over auto and home insurance.

“Health insurance companies know better than to spit in the eyes of voters before they decide whether to enact greater accountability for the industry,” Jamie Court wrote on his Consumer Watchdog website.

Commissioner Dave Jones welcomed the announcement on rates but agreed with Court. “This is merely a pause in the double-digit rate increases we've seen historically,” he told the Los Angeles Times.

The rates would vary by region and insurance company. Anthem Blue Cross said it would bump up its rates an average of 6%, but premiums could top out at 14% in San Francisco and 16% for some restrictive plans. Kaiser Permanente, on the other hand, said it would lower rates in much of Southern California.

Voters will go to the polls just as what could prove to be a chaotic Covered California open enrollment begins for coverage in 2015. Enrollees, who still have not seen any lists of doctors allegedly participating in Covered California, will have the added burden of guessing what their rates might really be like.

Insurance companies and doctors are reportedly feuding over participation. A call to Blue Cross of California last week elicited assurances from a company representative that “all” Blue Cross doctors take Covered California exchange patients. She requested that any doctor who refuses be reported to the insurer.

But publicly, the insurance companies concede that they have much smaller doctor networks, perhaps 40% smaller, for exchange patients. Doctors and insurers apparently don’t agree on whether contracts between them mandate participation and the state is taking no steps to resolve the dispute.  

The Los Angeles Times reported last week that Anthem Blue Cross claims 6,300 more doctors have joined their smaller exchange network. Other insurance companies make similar claims, while maintaining they can’t publish a list of exchange doctors.

So, patients looking for a doctor are directed to cold call physicians listed by their insurer and ask if they will take Covered California insurance. Hopefully, their doctor will then be affiliated with a hospital covered by their plan.    

–Ken Broder

To Learn More:

California's Proposed 2015 Obamacare Premiums to Rise 4 Percent in 2015 (by Sharon Begley, Reuters)

Obamacare Premiums to Rise a Modest 4.2% in 2015 (by Stuart Pfeifer, Chad Terhune and Soumya Karlamangla, Los Angeles Times)

Health Insurance Companies Facing Prop 45’s Protection against Rate Hikes Temper Premium Hikes for Covered California … What About Next Year? (Consumer Watchdog)

Covered California: Cheaper, Better Insurance, but Good Luck Finding a Doctor or Hospital (by Ken Broder, AllGov California)