How many times have you been financially jeopardized or nearsighted by that fine print on your policy, notifying you of a substantial insurance rate increase? I’m almost positive that we have all faced a situation in the recent years of Insurance peaks, without being fully aware of the change beforehand.

Like me, a 26 year old grad student, financially dependent on loans, has unfortunately been a victim to insurance changes and substantially large medical bills. However, without the implementation of insurance regulations, aside from Proposition 103, we are forced to deal with the sneaky rate and policy changes put forth by the companies that we pay monthly to, “cover” us.

Lucky for us Californians, this could all be changing with our November midterm elections.

The Proposition 45:

Proposition 45, of the state of California is proposing that all Insurance companies issue a public notice, prior to rate and policy changes.

Companies will be required to submit their changes to the California Insurance Commissioner, who will do a thorough review of the “necessary” changes prior to approval. And, to insure accountability, insurers will be required a sworn statement on the information submitted, justifying their actual “need” for the change.

The exception to the rule, as most would understand, are the health plans of large group employers. Additionally, it will prohibit insurers of homeowner, auto and health, to determine rates based on prior policy absence or the history of ones credit.

Proposition 45 vs. Proposition 103:

Supporters of Proposition 103, approved in 1988, would have some direct impositions to proposition 45.  Proposition 103, which only limits insurers to avoid using prior policies, or lack thereof in determining rates. Whereas Proposition 45 will limit them from accepting whoever they want. Without a prior policy, insurers would still be required to allow you the privilege of having insurance and your rates will still not be affected by your past.

The Proposition 45 argument:

As the typical opposition, it all starts with money and the financial concern of maintaining the new law. What are the costs of obtaining the new policy and is it actually needed?

The opposition claims a higher state administrative cost to maintain the approval process of new rates, the hearings and review of new policies. Although these numbers have not yet been projected, they state that the costs would vary year-to- year, dependent on the insurance changes put forth.  And, although they state high administrative costs on the CDI and DMHC, they too are “unclear” and can only predict “potential” costs.

Alicia’s Opinion:

As with most propositions, dealing with billion dollar corporations, like insurers, I see the typical “financial Concern” argument as just a ploy. After decades of insurers being allowed to do what they want with their policies, all for benefits to their bottom line. I see Proposition 45 as a great way to not only review their policies, but limiting the changes. And as they limit changes, the so-called “financial concern,” will then hold no weight.

Let’s put a stop to the hike! I want to actually feel covered by my insurance not copped!

Within the past 10 years our insurance premiums have gone up 185 percent, which totals rates of  $250 million. For the 5.8 million of us that have been directly affected by these rates, Proposition 45 is now asking to justify the reasoning behind the millions of dollars that Californians are subject to and sometimes without warning.

As someone who is in the middle of a transition between insurance policies, I am tempted to just avoid insurance altogether. I have been the individual speaking with the insurers, confused about my plan and wondering why my written policy is different from the one they are referring to on the other line. Or better yet, discovering that your medical bill is double the amount because you used the wrong provider, because you weren’t aware of the policy changes.

This happens all too often, with individuals and small business owners. Insurers need to be required to justify their premium increases, by allowing the state to review their books and publicly displaying an actual demand and reasoning behind their rate changes.

If we don’t demand justification, Insurers will continue profiteering against helpless citizens. Leaving Californians with a constant fear of going to the doctors, the inability to pay their medical bills and the continuous debt-scare.