LOS ANGELES (CBSLA.com) — The author of Proposition 103, the landmark bill that regulated auto insurance rates in California, said Tuesday he knows how to replicate its success to fix the Affordable Care Act.
KNX 1070’s Vytas Safronikas reports Prop. 103 author Harvey Rosenfield and the Consumer Federation of America (CFA) marked the 25th anniversary of Prop. 103 in California.
According to a new report (PDF), auto insurance expenditures in America have increased by 43 percent on average, with the median state, Wisconsin, jumping as much as 56 percent. In Nebraska, rates rose by as much as 108 percent, the report found.
Under Prop. 103, auto, homeowners and all property and casualty insurers are required to file their rates and get approval for rates from the insurance commissioner, who has the authority to reject any excessive insurance rate hikes.
Since it took effect in 1988, the amount that drivers spend on auto insurance in California declined by 3 tenths of one percent for more than $102 billion in total savings for California’s motorists, an average annual savings of $345 per household, or $8,625 per family over the entire period, according to the report.
Marking the release of the report at The California Endowment, Rosenfield suggested the model should also be applied to the Affordable Care Act and medical insurance.
“Prop. 103’s success is really good news for California consumers who are confronting the flaws in Obamacare,” Rosenfield said.
Consumer Watchdog has placed an initiative on the November 2014 ballot which will put health insurance under rate controls established by Prop. 103, Rosenfield added.
“The startling savings that Proposition 103 has delivered to motorists will then be replicated for all California consumers who have to buy health insurance,” he said.
In addition to consumer savings, insurers earned above average profits in California — which is the only state where insurance prices fell — during the 25-year study period, according to the report.
Click here to read the full CFA report.