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CA Department of Insurance

Insurance Commissioner Jones Applauds Support In Fight Against Excessive Premium Increases

News: 2011 Press Release

For Release: February 25, 2011
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Insurance Commissioner Jones Applauds Support In Fight Against Excessive Premium Increases

Insurance Commissioner Dave Jones today applauded the U.S. Department of Health and Human Services (HHS) after it announced the availability of roughly $200 million in new health insurance rate review grants that will go toward helping states create programs aimed at making health insurance premiums more transparent. Some of the grant funding is available specifically to support states in their efforts to stop excessive premium increases from being implemented. California is currently not eligible for this portion of the grant funding because California's Insurance Commissioner does not have the statutory authority to reject excessive health insurance premium increases. 

"I would like to commend Secretary Sebelius and her staff at HHS for making these critical funds available to combat excessive premium increases," Commissioner Jones said. "While California is eligible for some of the grant funding through this program, we would be eligible for more federal funding if California law provided the Insurance Commissioner with the authority to reject excessive premium increases. This again brings to light the need to change the law and provide the Insurance Commissioner with that authority. I am working with Assembly Member Mike Feuer to pass AB 52, which would give me the authority to reject excessive health insurance premium increases."

Approximately $149 million in funding is intended to assist states in developing or improving health insurance premium rate review programs, with an emphasis on enhancing transparency in the process. This funding is available to states through baseline grants. The other pot of available funding to states that qualify totals about $50 million, with "Workload" grants of $22.5 million that will be distributed to states with larger populations and more health insurers and "Performance" incentives of $27.5 million that will be awarded to states that already have - or enact - the authority to approve or disapprove rate increases.

"I have every intention of securing California's fair share of these funds," Commissioner Jones said. "However, we will miss out on some of these federal funds unless rate regulation legislation is passed this year. Californians want and need the protections already in place in other states where insurance commissioners can reject excessive premium increases. I strongly urge the Legislature to pass this important legislation, not only to increase the level of federal funding available to California, but to increase consumer protections as well."

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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