Businesses across the US State of California are bracing themselves for an increase in health insurance costs. It’s expected that any business which employs over 1 million people could pay as much as 24% extra to cover health insurance. Costs are expected to rise in July and August.

Unfortunately, the Californian State legislature is legally bound to accept this change as they are unable to reject anything that is considered justified.

Speaking with reporters, Carmen Balber a consumer rights campaigner (whose organisation the Consumer Watchdog Campaign is proposing a change in the law) said: “Health insurance companies will continue increasing rates at a pace that far outstrips the cost of medical care until California finally has the power to say no when increases are excessive and can’t be justified.”

She added: “This ballot initiative gives voters the power to make health insurers publicly justify their repeated price hikes and make health insurance more affordable for struggling small business owners and individuals across California.”

With health insurance being an on going battle between the medical profession, health insurance companies and politicians, it will be interesting to see how this pans out. President Obama introduced changes to health insurance law to prevent anyone with a medical problem being refused access to insurance cover. This caused much consternation even though the health insurance providers eventually accepted the situation.

Could this be their way of fighting back by focusing on companies who provide insurance for their employees?

Research in the USA found that since 2002 health insurance costs have risen by a massive 153%, which apparently is 5 times the rate of inflation. With many US households dependent on their company’s help in providing health cover this latest increase could potentially be damaging with small businesses eventually stopping the employee benefit.