Health insurance agents support unfettered rate increases


When your health insurance rates rise quickly, this agent's commissions also rise.

The California Association of Health Underwriters (CAHU) announced on Friday, May 18, 2012, that they had joined Californians Against Higher Health Care Costs, a coalition of health care advocates, to fight the Consumer Watchdog sponsored Insurance Rate Public Justification and Accountability Act (IRPJAA) . Subsequently, the Sacramento Chapter of CAHU put out an e-mail supporting CAHU’s fight against health insurance regulation and providing a link to make a contribution to the California Association of Health Underwriters Political Action Committee.

Who doesn’t like rate oversight for necessary consumer services?

CAHU was motivated to announce its membership with Californians Against Higher Health Care Costs because Consumer Watchdog filed 800,000 signatures with the Secretary of State to put IRPJAA on the California November 2012 ballot. Californians Against Higher Health Care Costs purports to be a coalition of doctors, hospitals and California employers. But you will find at the bottom of the “About” page, “Major funding by United Healthcare Insurance Company, Anthem Blue Cross, Kaiser Foundation Health Plan, Inc., Health Net, Inc., and Blue Shield of California. 12711 Ventura Blvd., Suite 280 Studio City, CA 91604″.

What’s in a name?

It almost seems contrary for an association of insurance agents, like CAHU, to openly advocate for unfettered rate increases by health insurance companies that can so drastically impact their client base. This is especially perplexing when they state in their mission statement, “CAHU will improve its member’s ability to meet the health, financial and retirement security needs of all Californians through education, advocacy, legislation and professional development.” One would infer that CAHU is a consumer advocacy group. Or at the very least, an association that puts their client’s best interests first.

What is the motivation to be anti-consumer?

CAHU has several reasons not to support legislation that may slow the rate increases to health insurance that have out stripped inflation.

  1. By nature, most insurance agents and agencies are conservative. They never really support any government regulation or intervention unless it helps them.
  2. Health insurance companies comprise their major sponsors for meetings and events at the local chapter, state and national level. Most of their main sponsors are also major founders to the poorly named Californians Against Higher Health Care Costs.
  3. When ever consumers get a rate increase, the agent gets a small bump in the commission received. So what agent would want to retard his income by supporting rate regulation?

Who are the nefarious sponsors of this rate regulation initiative?

The sponsors of the initiative, Consumer Watchdog Campaign, is chaired by insurance reform Proposition 103 author Harvey Rosenfield. In 1988, Rosenfield authored the landmark reform of auto and home insurance that has saved California drivers $62 billion on their auto insurance, according to a 2008 report by the Consumer Federation of America. 

We already have the Insurance Commissioner reviewing the rate proposals and increases for auto and home insurance. It would not be new territory to have the Insurance commissioner to review health insurance rates as well. Both the auto and home insurance market seems to be competitive with plenty of insurers sending me advertisements to switch everyday in the mail. I doubt that the IRPJAA will have the catastrophic effects that the anti-consumer coalition suggests. It might actually save consumers money.

Next time you happen to talk to your health insurance agent, ask him or her if they support the oversight of rate increases as proposed by the Insurance Rate Public Justification and Accountability Act? It should be an interesting conversation.

My blog supporting IRPJAA -> Why I support the rate regulation initiative

  • Rosemary

    Thanks, Kevin. I hadn’t heard of this yet. You did confuse me for a moment with, “It almost seems contrary for an association of insurance agents, like CAHU, to openly advocate against unfettered rate increases by health insurance companies …” because they aren’t arguing “against” unfettered rate increases, but instead, defending them, right?

    I do agree that one of the most irritating things these days regarding not only associations, but political groups, are the way in which their names suggest something quite different than their actual goals or advocacy beneficiaries.

    Until rates were subjected to approval by state oversight agencies, insurance and even utility industries ALWAYS let greed and profit drive the costs. It needs to happen for health insurance as well. Wasn’t there something about that in the Healthcare Reform Act? I thought there was. Maybe it doesn’t start till 2014?

    Anyway, thanks again for the heads up. As always, great insight and purposeful consumer information.

    • Kevin Knauss

      You are right, I am trying to pack too much into the sentence. It would seem to be against their mission to support unfettered rate increases.

      • Rosemary

        Right …it would “seem” to be against their mission, given their mission statement, but even that is misleading and vague, ultimately mattering little when their actions are taken into consideration. It wouldn’t bother me if their mission and public persona indicated self-interest, as that’s business and capitalism, just be honest about it rather than dress yourselves in consumer protection clothing with daggers and knives underneath it all.

        You, as an agent, Kevin, are a rare jewel.

        • Kevin Knauss

          I appreciate the comments. Now if I could only get my writing to shine the same way, I’d be a happy guy :)

          • Rosemary

            Don’t worry, Kev. You’re out in front on all counts!