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.
- By nature, most insurance agents and agencies are conservative. They never really support any government regulation or intervention unless it helps them.
- 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.
- 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