Health Insurance and You!

As of July 7, Gov. Arnold Schwarzenegger stands poised to fully execute an essential portion of the national healthcare overhaul by bolstering California’s review of health insurance rates, as reported by the LA Times.

In the past Schwarzenegger has opposed regulating rates and, as part of the healthcare overhaul, has proposed a program to evaluate and publicize the rates. Any changes in the costs of healthcare services would also be publicized on state sites before implementation.

Schwarzenegger has sought a million-dollar federal grant to implement this program. A large portion of the money would be allotted to actuaries for the appraisal and evaluation of any premium hikes, a key requirement of the healthcare law. They would ensure that any increases in rates “reflect increases in the core cost of providing health care”, according to healthycal.com. Some of the money would also aid in educating consumers on the rate-setting process.

The Legislature is also considering allowing regulators authority to reject “unreasonable” premiums. While Democrats have supported a full regulation of rate hikes, Schwarzenegger has not indicated in his grant proposal that this is likely to happen. The requested grants will be announced in August of this year.

Once applied, Schwarzenegger’s interpretation of the healthcare overhaul law will greatly increase the transparency of insurers’ rate-setting processes and policies. It will further educate consumers and provide them a greater say within the marketplace. On the whole, the playing field would be made more level to some extent, with consumers more savvy to insurance companies’ workings.

What do you think: would you rather see the rates be capped and regulated by the government, or would you prefer greater transparency in rate changes and prices determined by the free market?