Obamacare, Ballot Initiative Could Make California Most Insurance-Friendly State

The soft launch of the Affordable Care Act on October 1, has been met with vehement opposition by House Republicans and criticism over glitches with the government’s website. California, however, have been all-systems-go not only for the ACA, but also a potential new state law that will place even more power into the hands of consumers.

Paul Torrigino, a Sacramento resident, went to the Covered California insurance-exchange website on the day it opened. He told Al Jazeera that after a couple hours of surfing around the site and providing pertinent information, he secured a “disaster policy” that would cost him only $1 per month. His coverage will begin on January 1. California has staunchly supported “Obamacare” since it was signed into law by the president in March of 2010. Thus the state was fully prepared for its launch, unlike most other states reporting backlogs and malfunctions.

Torrigino pointed out that his policy is said to be worth $500 per month, but got the low premium because of Obamacare. The Insurance Rate Public Justification and Accountability Act, a November 2014 ballot-initiative, will further curtail outrageous premiums and place more control of healthcare in the hands of the people.

The Law’s Intent

The people of California voted to enact Proposition 103 on November 8, 1988. This initiative created the position of an insurance commissioner who approves all rates for homeowners and car insurance before they go into effect. Harvey Rosenfield, founder of ConsumerWatchdog.org and the initiative’s author, said the law would stop insurers from considering unreasonable factors when setting premiums. California went from having the third-highest auto insurance rates in the country when the law was enacted, to 18th in 2005, according to the Consumer Federation of America.

The 2014 initiative would basically expand Prop. 103 to include medical insurance. Providers would no longer be able to factor in credit history nor prior coverage when determining the rate they will charge a customer. It also gives consumers the right to challenge unfair premiums and requires public hearings for insurance officers who proposed hikes in premiums. The law statutorily obligates insurance companies to pay for the legislation’s administration. The latter portion has caused major backlash from insurers. Michael Mattoch, a USAA auto insurance executive, told the LA Times that opposition groups will likely spend more than $100 million to defeat the initiative.

Where Obamacare and Insurance Rate Act Clash

Despite the mostly good news about Obamacare’s launch in the Golden State, some residents are not happy about the changes. Resident Deborah Cavallaro told CBS Los Angeles that her premium with Anthem Blue Cross went from $292 to $484 as a direct result of Obamacare, according to the company. But critics say this is just one example of insurers taking advantage of all the confusion and unfairly gouging prices upwards. If the Insurance Rate Public Justification and Accountability Act is enacted next year, consumers would have the right to challenge these types of premium hikes.

Anthem Blue Cross referred media and bloggers to a third-party industry trade group when asked for comment.


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