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Assembly panel OKs new insurance regulation

By Josh Richman
Wednesday, April 27th, 2011 at 2:41 pm in Assembly, Dave Jones, healthcare reform.

Health-care reform advocates are pleased that the Assembly Health Committee voted 12-7 yesterday to approve AB 52, which would give the state Insurance Commissioner the power to reject excessive health insurance rate increases.

Insurance Commissioner Dave Jones – who sponsored the bill carried by Assemblyman Mike Feuer, D-Los Angeles – said health insurers regularly announce premium increases that far surpass the rate of medical inflation, sometimes several per year. Regulators in 20 states have authority not only to review rate hikes but to reject the excessive ones, and Jones and Feuer believe it’s time California joins them.

“Since I took office, Californians have made it exceedingly clear that they want me to reject excessive rate increases, but I do not have this authority as Insurance Commissioner – AB 52 can change this,” Jones said in a news release today, noting he had introduced this legislation three times while serving in the Legislature.

Feuer said the Assembly Health Committee “recognized that Californians should not have to depend on the whim of an insurance company to halt a major rate increase. This was a crucial first step toward getting AB 52 signed into law, but until that happens, California families will continue to live in fear that they are just one rate hike away from no longer being able to afford health insurance.”

Health Access California Executive Director Anthony Wright called the committee’s approval of the bill “a good first step toward the rate relief that Californians so desperately need, as we continue to stuggle with the one-two punch of an economic recession and rising health care costs.” California needs this authority especially to keep insurers from gaming the system before other consumer protections are put in place in 2014, he added.

Carla Saporta, health program manager at The Greenlining Institute, said the claim that patients will lose access to care if state regulators stop insurers from price gouging “is a classic robber-baron mentality.”

“Groups that truly represent healthcare consumers and small businesses – including minority small businesses which have been badly hurt in the current economy – can see through the spin,” she said. “That’s why community clinics such as La Maestra in San Diego and the Korean Health Education Information & Research Center in Los Angeles have joined with many ethnic chambers of commerce and business organizations to support this bill. Small business owners and organizations have told us that they want us to fight for AB 52, and we will.”

Assemblyman Richard Pan, D-Natomas – a pediatrician by trade – joined with the committee’s Republicans to oppose the bill.

“Dr. Pan has dedicated his life to building a healthier California by making real, on-the-ground improvements to our health care system,” Brian O’Hara, Pan’s press secretary, said today. “He knows that if we’re going to actually improve health outcomes and reduce costs, we need more innovations, not regulations, so at this point AB 52 does not make for a balanced approach.”

The bill now goes to the Assembly Appropriations Committee.

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  • RR, Uninvited Columnist

    It would be more realistic to state the bill will allow the commish to delay rather than “reject” increases.