18-Region Plan for Setting Health Insurance Rates Unveiled

On Tuesday, California Insurance Commissioner Dave Jones (D) released a proposal to divide California into 18 geographic regions for setting health insurance rates, the Sacramento Bee's "Capitol Alert" reports.

Jones seeks to use his plan to replace legislative proposals that would establish six regions in 2014 or 13 regions in 2015.

Under the Affordable Care Act, insurers no longer can deny coverage based on pre-existing conditions or place lifetime limits on medical care. They also cannot charge older policyholders more than three times what younger enrollees pay.

Observers say that these restrictions leave geography as one of the only factors that insurers can use to adjust premiums.

The federal government has proposed that states avoid creating more than seven geographic rating areas to prevent insurers from charging excessively high rates in certain regions. However, California's health exchange has proposed using 19 rate-setting regions to accommodate the state's size and diversity.

Consumer advocates are concerned that smaller rate-setting regions will allow insurers to hike rates in areas that are:

•Low-income;

•Rural; or

•Less healthy

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