Daily News Editorial: Insurance commissioner needs more power over medical insurance rates

Californians are required by law to buy auto insurance. You can't register your car without it; if you get pulled over, proof of insurance is one of the first things an officer asks for. If you don't have it, you get a ticket.

Because Californians are compelled to have the minimum auto coverage, insurance companies would have us over a premium barrel without the protections of Proposition 103, which gives the state some authority in keeping rates reasonable.

Some may think their auto insurance rates are pretty astronomical, as it is. But it could be worse - much worse. Proposition 103, passed by voters in 1988, regulates how much profit insurance companies can make on a guaranteed market. In fact, the Proposition 103 protections apply to most every policy you might own - home, boat, business liability, etc. - with one major exception: health care insurance.

A bill by Los Angeles Assemblyman Mike Feuer working its way through legislative committees at the moment, aims to change that. AB 52 would extend Proposition 103 protections to health insurance, and give the insurance commissioner the ability to nix rates that are deemed excessive.

As it is, the state's elected insurance commissioner has very little power other than the bully pulpit when insurance companies raise health care premiums by

high margins. That's what happened last year when WellPoint announced a 39 percent increase for California customers. Even though then- insurance commissioner Steve Poizner said the increase was higher than needed to cover rising health care costs, there was little he could do other than bring attention. That did some good, as WellPoint withdrew the rate increase.

But that didn't last. Just this month, WellPoint's California arm, Anthem Blue Cross, raised its premiums by between

16 percent and 25 percent - despite a review by the state's Department of Managed Health Care, which found the increase unreasonable. It's not as if the company can cry poor. WellPoint posted $1 billion in profits for the first quarter of 2011.

Customers can choose to simply end their policies. But when health insurance becomes compulsory in 2014 under the Affordable Care Act, the insurance companies are going to be handed millions of new customers - and millions more in potential profits. There must be some protection that these new customers aren't going to be gouged.

Health insurance companies correctly argue that the rising cost of health care drives up premiums. Until California and the country as a whole figure out a way to slow the cost of providing medical services, health insurance will get more expensive.

Yet, the public is justifiably skeptical of insurers' claims that these increases are simply recouping expenses, especially when insurance companies continue to rack up healthy profits and state authorities call such increases "unreasonable."

A healthy profit is the American way, but excessive profits on the backs of people already digging deeper for every basic need is unseemly. California's insurance companies have figured out how to make a profit on auto and home and all the other insurance products currently regulated by the state under Proposition 103. Why should health insurance be any different?

A Los Angeles Daily News editorial. To read more editorials from the Daily News, go to www.dailynews.com/opinions.

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