Health Insurance Rate Review Has Saved Californians $349 Million

New CALPIRG Analysis Recommends Strengthening and Expanding the Process to Fully Protect Californians from Unreasonable Rate Hikes



SACRAMENTO, CA – Californians have saved $349 million on health care premiums thanks to the California health insurance rate review process established in 2011. However, nearly 1 million Californians have been affected by premium rate hikes imposed by insurers despite those rates being declared “unreasonable.”

Those figures are according to a new analysis by the California Public Interest Research Group (CALPIRG), “California Health Insurance Rate Review: An Analysis of Implementation and Results for Consumers.”

The analysis comes as legislators consider expanding rate review to large group plans, and as California voters prepare for a fall ballot measure to strengthen the program.  

“These numbers show that Californians have already saved millions of dollars on health insurance premiums thanks to rate review,” said CALPIRG Health Care Associate Zach Weinstein. “But they also show that too many consumers and small business are still getting stuck with unreasonable rate hikes.”  

Key findings from the analysis include:

  • As a result of objections raised in the rate review process, health insurance companies voluntarily reduced or withdrew 44 rate hikes;
  • At least 14 times, insurers moved forward with rate increases despite regulators declaring them unreasonable, affecting nearly 1 million Californians;
  • On average, an estimated 1.3 million Californians benefited from reduced or withdrawn rate increases in each of the first three full years of rate review.

The report also includes policy recommendations for how best to strengthen and expand rate review to protect more Californians from unreasonable rate increases.

Under current law, insurers are only required to submit rate filings for review for health insurance plans sold to individuals and small employers. In addition, health insurance companies may impose rate hikes on consumers and businesses even if regulators find the rate unreasonable based on the rate filing. Since 2011, an estimated 923,237 Californians were affected by rate hikes that were declared unreasonable by regulators but still went into effect.

“Millions of Californians and small business owners purchase insurance for themselves or their employees in the large group market,” said Weinstein. “These consumers should be covered by the rate review process as well. Regulators also need additional authority to reject unreasonable rate hikes, in order to protect consumers and businesses from paying excessive premiums.”

Legislation is currently pending to extend the rate review process to the large group market, introduced by state Sen. Mark Leno (SB 1182). In November, California voters will vote on a ballot measure that, if approved, would give the Department of Insurance the ability to reject rate hikes that they find to be unreasonable.

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CALPIRG, the California Public Interest Research Group, is a non-profit, non-partisan public interest advocacy organization that takes on powerful interests on behalf of its members, working to win concrete results for our health and well-being.


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