[San Gabriel Valley EXAMINER, May 5, 2005]

    INSURANCE COMMISSIONER GARAMENDI: HIS P. R. EXCEEDS HIS PERFORMANCE

                                    or

     HAPPY BIRTHDAY! WE'VE INCREASED YOUR LONG-TERM CARE RATES - AGAIN 


Insurance Commissioner John Garamendi, who last summer kicked off his 
campaign for Lt. Governor, has a slogan at the top of his web page: "I am 
proud of the battles we fought - and won - to protect California insurance 
consumers." Well, John, you haven't won a battle with - or even fought - my 
long-term health care insurer, CNA.  

About the time headline-maker Garamendi - a battling knight fighting the 
dragons of the insurance industry - declared his candidacy last year I got 
a birthday greeting from CNA.  They omitted the "happy birthday" part and 
jumped straight to the "gift:" a 25% increase in the cost of my long-term 
health care insurance.  This spring, as Garamendi's campaign announced a 
BBQ, CNA skewered me with an early birthday present: another 25% increase 
in premiums.

Garamendi apparently has his eye on the governor's mansion in 2010, with 
the increasing likelihood that the current governor's many gaffes and 
decline in opinion polls will impel him to seek that office next year.  But 
to get there the commisioner needs to do more than shout platitudes about 
protecting insureds.  He's responsible for the injustice heaped on senior 
citizens who purchased long-term health care insurance under the 
misapprehension that the commissioner held office to protect their 
interests.  It was on his watch that CNA was granted, virtually in secret, 
what is now a 50% increase on many policies that have been in effect for 
years.

The way Garamendi runs his office, policy holders remain in the dark about 
company requests for rate increases.  We are never told - by either the 
company or Garamendi - when hearings (if there are any) are held.  We 
aren't invited to counter the company's cry of poverty.  We only learn of 
the increase when that birthday greeting arrives in the mail. 

When policy holders complain to the state, the Garamendi line is that rates 
have to be high enough to prevent the company from sustaining losses.  
Posing as guardians of the insured, the department argues that it's in our 
interest to keep CNA healthy.  Since the cost of administering these 
policies has exceeded the figure anticipated by CNA - too many people are 
holding on to their policies and at the same time filing claims - it's 
necessary to invoke the clause, stated in each policy, that rates can go 
up.

What Garamendi refuses to recognize is that in the early and mid-90s, when 
CNA sold policies to seniors concerned about paying for long-term care, the 
company proudly stressed that it had thirty years experience in 
administering such insurance.  We contracted for the policies under the 
apparently false impression that this company, with its experience, had 
carefully analyzed future costs and had priced their policies 
appropriately.

Now it appears that they deliberately underestimated the potential cost of 
providing such coverage in order to sucker in as many buyers as possible, 
knowing full well that they could plead poverty down the line and a willing 
commissioner would give approval for enormous rate increases.

Garamendi will no doubt claim that in 2003 he successfully fought CNA's 
request for a 50% rate increase, paring it to 25%.  Now he has quietly 
approved another 25% increase on top of last year's.  My annual premium in 
2003 was $2899.  Last year it was $3623.  This year CNA demands $4529.  

While the commissioner's office stonewalled requests for a reversal of last 
year's increase, it was already secretly approving this year's increase.  
No one even hinted that another increase was up for approval.  Next year's 
rate increase may already be working its way through the commissioner's 
office.  We'll never know.

John Garamendi's race for Lt. Governor opens the door to a new insurance 
commissioner.  Perhaps Chuck Quackenbush will make a comeback.  At least 
during his murky reign my rates didn't go up.

- - -

[Ralph E. Shaffer, 74, professor emeritus of history at Cal Poly Pomona, 
can be reached at reshaffer@csupomona.edu]