Insurers out of control

Health insurance must be regulated in the same way as car and property insurance

The increase in health insurance premiums that Anthem Blue Cross decided to impose on its small business customers is an example of why it is necessary for the State Insurance Commissioner to have the same control over the health care sector that he has over cars and properties.

The insurer said its profits are very low, which is why it is increasing premiums by 5.2% for companies with two to 50 employees. Anthem also raised its premiums by 6.5% in another category last January. Low profits apparently forced Angela Braly, chief executive of WellPoint Inc., the parent company of Anthem Blue Cross, into retirement—not before receiving compensation of more than $20 million in 2012. It is obvious that the insurer’s operations include other large expenses, in addition to those related to health care.

Increases in health insurance have become a heavy burden for the business sector, both because of the amounts as well as the unpredictability. It seems as if premium prices are set greedily and at random, just like the same insurer’s thwarted proposal for a 39% hike in individual premiums three years ago.

People say you can fight fire with fire. Therefore, it is reasonable that, under pressure from the industry, Commissioner Dave Jones hired Consumer Watchdog, a pro-consumer group, to help review health insurance premium increases. And it is understandable that insurers are upset about this decision, since they expected less vigilant participation from consumers.

The solution is to give the California Insurance Commissioner the same authority that exists in 37 other states, so that he can efficiently regulate an industry that makes the most of the existing vacuum.