Calif. Lawmakers Weigh Options for Scrutinizing Health Plan Rate Hikes

Next month, the Legislature will work to develop a strategy for reviewing "unreasonable" increases in health insurance premiums, as mandated under the federal health reform law, the Los Angeles Times reports.

Insurance analysts predict that Gov. Arnold Schwarzenegger (R) and lawmakers will move quickly to create oversight initiatives because the Legislature is schedule to adjourn on Aug. 31. All pending legislation that does not pass by the end of August likely will be discarded.

Legislative Proposals

Lawmakers are considering three separate proposals to increase scrutiny of health insurance rate hikes. The proposals include:

• A measure that would bar insurers from increasing rates without regulators' approval;
• Another measure that would require insurers to provide justification for withholding coverage or charging unusually high rates; and
• A measure that would establish a temporary moratorium on rate hikes and require insurers to obtain permission before significantly increasing premiums.

Schwarzenegger's Plan

The governor has introduced a separate plan that calls for insurers to post their proposed rate hikes online and hire independent actuaries to review their rate filings.

Schwarzenegger has asked HHS for $1 million to fund the plan (Helfand, Los Angeles Times, 7/30).