Bill Would Require Health Insurers To Receive Permission From State Regulators To Change Rates
Sen. Liz Figueroa (D-Fremont) today will introduce a bill (SB 26) that would require health insurers in California to obtain permission from state regulators to raise copayments, coinsurance rates, deductibles or premiums, the Contra Costa Times reports. Under the bill, modeled after Proposition 103, which regulates car and homeowners insurance in the state, the Department of Managed Health Care, which regulates the state's HMOs, and the Department of Insurance, which regulates the state's preferred provider organizations, would approve all health insurance rates in the state retroactively from April 1, 2000. Proponents of the bill say it would reduce health insurance premiums in the state. Premiums paid by large employers for a family of four rose 12.5% in 2002, while small businesses' premiums for the same coverage rose between 15% and 20%, according to the Kaiser Family Foundation and the Health Research and Education Trust. But state health plans' profits have increased substantially during the same time period, according to Jerry Flanagan, a health care advocate at the Foundation for Taxpayer and Consumer Rights. PacifiCare reported a $36 million profit in the fourth quarter of 2002, and WellPoint Health Networks' profits increased 64% in the fourth quarter of 2002 compared to the same period in 2001. Figueroa said, "The premium increases are far above what's required to control costs. There's no reason to make that kind of profit when we know there are seven million uninsured in California" (Silber, Contra Costa Times, 4/8). Figueroa said she believes the legislation would help reduce the number of uninsured people in the state, the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 4/8). However, health insurance officials say the bill could be "devastating" to the industry, the Times reports. "Health care costs are not predictable. If we're not allowed to adjust those rates as is necessary, it could jeopardize the financial stability of the whole system," Michael Chee, a spokesperson for Blue Cross of California, said (Contra Costa Times, 4/8). Senate President Pro Tempore John Burton (D-San Francisco) has expressed support for the bill. Gov. Gray Davis (D) has not yet taken a position on the bill, according to his spokesperson, Hilary McLean (San Diego Union-Tribune, 4/8).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.