See bolded material for what mandates with no price controls accomplishes.
http://www.opednews.com/articles/A-Determined-Dog-Goes-Afte-by-Wendell-Potter-111114-246.htmlIf Rosenfield could go back and do anything differently, he probably would have written the proposition to apply to health insurance as well as auto insurance. Because it didn't, health insurers are still able to get away with charging Californians pretty much whatever they want.
But Rosenfield and his colleagues at Consumer Watchdog have now taken the first steps to rectify that situation. Last week they filed a new ballot initiative with the state that will force health insurance companies to open their books and justify proposed rate hikes before they take effect. If the organization and its army of volunteers can collect half a million signatures over the coming months, California voters will be able to vote on the Insurance Rate Public Justification And Accountability Act a year from now.
Consumer Watchdog embarked on this new effort because Californians will soon be facing the same predicament with health insurance they experienced with auto insurance prior to 1988.
Two years before that ballot initiative was adopted, California lawmakers passed a law mandating that all drivers be insured, which meant that insurance firms would get billions of dollars in new revenue. Lawmakers did not see fit, however, to make insurers submit their rate requests to regulators for review and approval. Because there were virtually no restrictions on what the insurers could charge drivers, California soon had some of the priciest and fastest increasing auto insurance rates in the country.Thanks to Proposition 103, California auto insurance rates since 1988 have been increasing at a far slower rate than the national average. The Consumer Federation of America's 2008 analysis of rate increases in all 50 states found that Californians have enjoyed the lowest rate of auto insurance increase of any state since the adoption of Proposition 103. During the two decades it's been in effect, auto insurance rates have increased 50 percent nationally but only by 12.9 percent in California.