California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Senate Panel Approves Health Insurance Rate Regulation Bill

On Wednesday, California's Senate Committee on Health approved a bill (AB 52), by Assembly member Mike Feuer (D-Los Angeles), that would authorize state regulators to reject health insurance rate hikes, the Sacramento Bee reports.

The committee passed the measure with a 5-3 vote along party lines, with Democrats in support (Smith, Sacramento Bee, 7/7). Sen. Michael Rubio (D-East Bakersfield) abstained from voting (Leu, "Health Access Blog," Health Access, 7/6).

Committee Chair Ed Hernandez (D-West Covina) voted in favor of the measure, but called for several changes to the bill. Hernandez said he might vote against the bill on the Senate floor unless certain amendments are incorporated.

Bill Details

Existing state law allows the Department of Insurance to review rate increases proposed by health insurers. However, state law does not authorize regulators to reject rate hikes deemed excessive (Herdt, Ventura County Star, 7/6).

AB 52 would require insurers to receive approval from regulators before raising rates. If officials at DOI or the Department of Managed Health Care find a rate hike proposal to be "excessive, inadequate or unfairly discriminatory," they could reject the proposed increase.

According to an analysis by the Assembly Appropriations Committee, implementing the provisions of AB 52 would cost an estimated $30 million annually.

Support for the Bill

Supporters of AB 52 cite recent increases in health insurance rates and insurers' high profits as reasons why the state needs greater power to regulate premiums.

According to Feuer, recent premium increases have outpaced the rise in health care costs (Buchanan, San Francisco Chronicle, 7/7).

Opposition to the Bill

The California Association of Health Plans opposes AB 52, saying it would not address the underlying factors that have fueled health care cost increases in recent years.

The health insurance industry also contends that premiums in California are on par with national averages, even though California is a high-cost state (Ventura County Star, 7/6).

Next Up

AB 52 now moves to the Senate Appropriations Committee (San Francisco Chronicle, 7/7).

For additional coverage of the bill's passage, see today's Capitol Desk post.

Broadcast Coverage

On Thursday, Capital Public Radio's "KXJZ News" reported on the Senate Health Committee's approval of AB 52 (Bartolone, "KXJZ News," Capital Public Radio, 7/7).

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