Assembly, Senate Hold Hearing on Rate Review Ballot Initiative
During a joint hearing of the Assembly and Senate health committees last week, opponents and supporters testified about a November ballot initiative that would give the state regulatory authority over health insurance rates , KQED's "State of Health" reports (Dembosky, "State of Health," KQED, 7/2).
The initiative -- which is being promoted by state Insurance Commissioner Dave Jones (D) and Consumer Watchdog -- would give the state regulatory authority to monitor and control health insurance premiums, similar to how it controls automobile and property rates.
In June, Covered California officials released a report raising questions about the ballot measure related to:
- Implications for the 2015 plan year;
- Marketing and outreach;
- Rate changes that are not approved by the beginning of open enrollment;
- Standard benefit designs;
- Subsidies for premiums; and
- The timeline for rate reviews.
The report noted, "Under the current timelines, there is very little flexibility in the event there are major delays" resulting from the initiative's proposed rate regulation process (California Healthline, 6/19).
During the joint hearing, Jones defended the ballot measure and rejected claims that it would undermine key components of the Affordable Care Act.
He argued that the proposition is "the missing piece of the Affordable Care Act" because "[w]ithout health insurance rate regulation, we will continue to see excessive rates" (Terhune, Los Angeles Times, 7/2).
Further, he said major delays in rate approvals would be unlikely because of the small number of insurers and health plans -- 40 and 100, respectively -- that the commissioner would oversee under the measure.
Jones also emphasized that the review's scope would be limited to premium rates, adding that Covered California failed to successfully negotiate better rates for consumers in 2013.
Covered California Testimony
Covered California Executive Director Peter Lee told committee members that he is concerned about insurers withdrawing their plans from the exchange if their rates are rejected by the state, which could lead to fewer choices for consumers and complicate how federal subsidies are calculated for consumers in a certain area.
Further, he said that the initiative could harm the exchange's ability to have such conversations with health plans about implementing new care delivery or payment models to promote preventive care.
Lee added, "The only thing we can be sure of is the uncertainty of the products that would be available" ("State of Health," KQED, 7/2).
Lee said the exchange still is reviewing the potential effects of the ballot measure (Los Angeles Times, 7/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.