Blue Shield's Double-Digit Rate Hike & $3.1 Billion in Excess Surplus Are Exhibit A for Rate Regulation Ballot Initiative Petition, Patients and Advocates Say at Blue Shield HQ

SAN FRANCISCO, Feb. 8, 2012 /PRNewswire-USNewswire/ -- Blue Shield has $3.1 billion in excess surplus, 1400% more than the state requires, but still plans to raise rates on more than 200,000 policyholders by as much as 14.9%, said Blue Shield policyholders and consumer advocates in a protest outside the company's offices today. They returned to Blue Shield of California headquarters one year after backing the company down on a previous rate hike, to sign the petition to qualify a ballot measure that would prevent excessive rate hikes.

The ballot measure will require health insurance companies to publicly justify rate hikes and get permission before they take effect. The petition needs 505,000 signatures to qualify for the November 2012 ballot.

U.S. Senator Dianne Feinstein, who was the first person to *sign the ballot initiative petition, authored an email to California voters asking them to download, sign and return the petition at www.JustifyRates.org. Millions of voters will also be receiving ballot petitions to sign in the mail from Consumer Watchdog Campaign in an all-volunteer signature-gathering effort reminiscent of the volunteer mail effort that qualified insurance reform Prop 103 for the ballot in 1988.

Jamie Court, president of Consumer Watchdog and proponent of the Insurance Rate Public Justification and Accountability Act, said: "When Blue Shield can raise rates in the double digits while sitting on an extra $3.1 billion in excess reserves, there is little question that Blue Shield should be required to get permission and justify increases before raising rates. Blue Shield is the poster child for why Californians should sign this ballot petition. If the legislature won't act to regulate health insurance rates, it's time voters took matters into their own hands."

National radio host Norman Goldman will promote the all-volunteer signature gathering drive on local station 960 KNEW-AM Wednesday afternoon.

Blue Shield's rates will increase an average of 14.8% for patients with policies that Blue Shield files with the Department of Managed Health Care. Patients whose Blue Shield policies are filed with the Department of Insurance face an average 7.9% increase on March 1.

Kerry Abukhalaf of Alameda has a Blue Shield policy that covers her, her husband and their four-year-old son. "The relief was too short after Blue Shield had to back down on its huge rate increase last year. With our latest increase we'll be paying $625 a month, up about 15% from last year and double what it was even three years ago. I'm signing the petition today because my family needs a permanent fix for health insurance rates that are too high," said Abukhalaf.

Marti Conger of Solano County is self-employed and has an individual policy with Blue Shield. "My premiums just went up yet again to $661 per month with the same horrible $5k deductible, 30% co-pay, and $7k out-of-pocket limit. That's a 346% increase since 2005! I'm really struggling to keep this unaffordable insurance but I have no options. After food and housing and a few necessities my income basically goes to health insurance and health care. Health insurance companies – like other insurance categories – should have to get these outrageous prices approved," said Conger.

The all-volunteer initiative campaign is mailing and emailing millions of registered voters directly, rather than paying signature gathers.

View the mailer and email at: http://www.youtube.com/watch?v=IyUi2yXYUto&feature=youtu.be.

Read the initiative and download petitions at: http://www.JustifyRates.org

Health insurance premiums in California have gone up 153% in the last decade, while inflation rose just 29%, according to the California HealthCare Foundation. 35 states have the power to reject unjustified health insurance rate increases but California does not.

The "Insurance Rate Public Justification and Accountability Act":

• Requires health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect.
• Makes every document filed by an insurance company to justify a rate increase a public record, and requires public hearings on some proposed rate increases.
• Gives Californians the right to challenge excessive and unfair premium rate increases.
• Prohibits health, auto and home insurers from considering Californians' credit history or prior insurance coverage when setting premiums or deciding whether to offer coverage.
• Gives the insurance commissioner authority to reject unjustified health insurance rate increases.

Consumer Watchdog Campaign is chaired by insurance reform Proposition 103 author Harvey Rosenfield. Consumer Watchdog Campaign is the campaign affiliate of Consumer Watchdog, which was founded by Rosenfield and whose president, Jamie Court, an award-winning consumer advocate and author, is the proponent of the proposed ballot initiative.

SOURCE Consumer Watchdog Campaign

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