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Rate Regulation


Californians are being hammered by health insurance rate increases far in excess of inflation, even as workers’ pay has been flat or declining for a decade.


Health insurance premiums for California families rose 185% between 2002 and 2013, more than five times the rate of inflation.

Only five insurance companies control 88% of the California market, and they set premiums in secret, behind closed doors.

At least 34 states require health insurance companies to publicly justify rate increases and get approval before they take effect. But not in California. Even if the insurance commissioner finds that a health insurer’s rate increase is excessive, he or she has no authority to stop it.

Prop 45 puts the brakes on the runaway train of out-of-control health insurance premiums. It will:

  • Require health insurers to publicly justify all rate increases, under penalty of perjury, before they take effect.
  • Give the insurance commissioner the authority to modify or deny a rate increase that is excessive or unjustified.
  • Allow the public to challenge unfair rate increases.

A 2011 study by Consumer Watchdog “Health Reform and Insurance Regulation: Can’t Have One Without the Other” finds that the ability to scrutinize and approve health insurers’ rate hikes is critical to making health insurance more affordable.

Sen. Dianne Feinstein introduced Consumer Watchdog’s study at a Capitol briefing in Washington DC. She calls for rate regulation and excoriates private insurance companies for creating a costly, unfair system that denies healthcare to millions of people nationally and in California. (Watch Senator Feinstein.)