While health insurance rates have more than doubled over the last six years, the 3 biggest health insurers in the state of Washington are sitting on a budget surplus of nearly $2.5 billion.
According to Washington’s Insurance Commissioner, Mike Kreidler, the 3 health insurance companies – which are all non-profit – raised health insurance premiums sharply for individual and small-group policies while collecting a considerable reserve of cash. He is asking the Washington legislature to give him the power to factor in the health insurers surplus before he agrees to any future insurance rate increase for consumers.
Senate Bill 5247 would require the Washington insurance commissioner to review a health insurance company’s surplus levels in determining whether any proposed insurance rate is reasonable. A similar law was passed in Oregon in 2009.
The insurance companies claim that the surplus funds are needed to protect their companies from unexpected costs – particularly those that may result from the federal health care overhaul. The insurance commissioner says that the insurers now have at least $1 billion more than they need to pay claims and meet contingencies.