Angelides Calls for ‘Crack Down’ on HMO Earnings
Democratic gubernatorial candidate Phil Angelides said Gov. Arnold Schwarzenegger (R) has not used existing state law that holds HMOs accountable when administrative costs, including profit, exceed 15% of premiums, the San Diego Union-Tribune reports. Angelides said if elected, he will "crack down" on excessive HMO administrative costs to make health care more affordable for families and businesses.
According to Angelides, the $10 billion in HMO premiums in California that is going to overhead and profit is enough to provide health insurance for all Californians.
A spokesperson for Schwarzenegger's campaign said he understands the law as authorizing the governor to ask for an investigation if overhead and profit exceed 15%, the Union-Tribune reports. The spokesperson said he did not interpret the law as providing the governor with authority to cap profit margins.
The California Association of Health Plans did not comment on Angelides' statements.
Angelides also criticized Schwarzenegger for not writing regulations under a 2002 law to ensure HMO patients get timely access to care and not opposing the mergers of WellPoint/Anthem and UnitedHealth Group/PacifiCare (Mendel, San Diego Union-Tribune, 8/3).