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News: 2011 Press Release

For Release: September 20, 2011
Media Calls Only: 916-492-3566
Insurance Commissioner Jones Announces California Awarded Federal Rate Review Grant, But Denied Funding Available to State That Have the Authority to Reject Excessive Health Insurance Hikes
Denial Reinforces Need to Pass AB 52

Insurance Commissioner Dave Jones today announced that California will receive federal grant money to implement parts of the Affordable Care Act that require health insurance rate review, but is not eligible for the grant funding for states with "prior approval" authority to reject excessive health insurance rates before they go into effect. The U.S. Department of Health and Human Services (HHS) today announced that 28 states and the District of Columbia will receive grants to fight unreasonable premium increases and protect consumers.

California will receive approximately $4.3 million as part of the Cycle II Rate Review Grant awards, which includes $1.24 million given to larger states with higher workloads. But states with prior approval authority over rates received an additional $600,000. Since California does not have that authority it was not awarded the additional funds. A new HHS report, entitled "Rate Review Works", details how previous rate review grants are fighting premium hikes and helping make the health insurance marketplace more transparent.

"While the federal grant funding is important, I am disappointed that California continues to lack the authority to reject excessive rate increases once we review the proposed rates. I'm more determined than ever to see that the California Legislature pass and the Governor sign AB 52, which would give California the authority to reject excessive rate increases."�

The Department of Insurance will use the grant money it did receive to do among other things:

  • Expand scope of rate review - the CDI will use newly-hired staff to shorten the time it takes for reviewing rates, issuing final determinations, and posting and reporting the determinations.
  • Improve transparency and consumer interfaces - The CDI will provide $75,000 per year in grants to consumer advocacy groups to also look at rate filings and submit comments to the Department to help improve public input in the rate evaluation process.

"We will also work tirelessly this fall, encouraging supporters to lobby their State Senators to pass AB 52 which will be on the Senate floor in January," said Commissioner Jones. "Consumers have made it abundantly clear that they want the Insurance Commissioner to have the authority to reject skyrocketing health insurance rates and we intend to make 2012 the year that happens."

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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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