FTCR Calls for Health Care Rate Regulation
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NEWS RELEASE
Oct 04, 2002


CONTACT: Jerry Flanagan - (415) 633-1320

FTCR Calls for Health Care Rate Regulation

The "Perfect Storm" of the Health Care Crisis Will Result in More Uninsured Californians

The "Perfect Storm" of the health care crisis -- increasing premiums, employers passing on more of these costs to their workers, and unemployment growth -- all but guarantees that the number of uninsured Californians will dramatically increase in the next several years. A census report released this week found a slowing national economy and increasing costs have resulted in a precipitous drop in employer-based health benefits. The Foundation for Taxpayer and Consumer Rights (FTCR) has renew its call for legislation that would require health insurers to petition a state regulator for approval of rate increases before such increases could be passed onto employers and consumers.

"The only thing that free market has done is given health insurers the freedom to raise health care rates beyond the reach of average consumers," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. "Health insurers should be required to get prior approval for rate increases similar to systems in place for the auto and home insurance markets."

While employers and consumers face steep premium increases, health insurers are realizing increasing profit margins. A recent Goldman Sachs release cited evidence that health insurers will continue to experience profit growth over the next two years because though premiums are increasing, the amount of money spent by insurers on patient care is decelerating.

"The next Governor of the state of California must make health care cost control a top priority," said Flanagan. "Without State leadership, our irrational health care system will continue to put employers and consumers at the mercy of health insurers."

The census report found that the number of uninsured Americans rose to 41.4 million -- up 1.5 million. The report also showed that the largest increase in uninsured rates occurred for families whose household incomes exceeded $75,000. Small business were hit hardest by increasing health care costs where, according to the report, less than a third of workers are provided with health benefits. The number of those who receive health coverage through their own job or that of a family member dropped by 1.2 million.

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