Stakeholders Weigh In on Merging California’s Health Plan Regulators

California health care advocates and insurance industry leaders are discussing whether to combine the Department of Insurance and the Department of Managed Health Care into a single health insurance oversight agency, the Los Angeles Times reports.

Debate about merging the two departments was prompted by the release of a new California HealthCare Foundation report outlining the challenges involved in the state's approach to health insurance regulation. CHCF publishes California Healthline (Helfand, Los Angeles Times, 6/24).

Background

California is the only state with two agencies that oversee health insurers.

DMHC oversees health plans -- primarily HMOs -- that cover 21.6 million state residents. DOI regulates most PPOs and traditional indemnity plans, which cover about 2.4 million Californians (California Healthline, 3/14).

Gov. Jerry Brown (D) has oversight over DMHC, and Insurance Commissioner Dave Jones (D) oversees DOI.

The two agencies have different requirements for the level of health benefits that insurers must provide. They also enforce different sets of laws and have separate regulatory authority.

Supporting the Merge

Advocates for merging the two agencies say the two-department system has confused customers, increased costs and could undercut the state's ability to implement the federal health reform law.

They say a single agency would be better poised to serve California residents and tackle new reform law requirements.

Anthony Wright, executive director of Health Access California, said, "At the end of the day, we want a consolidation that takes the best of both," adding, "it doesn't make sense for consumers to have two regulators."

Opposing the Merge

Meanwhile, opponents of consolidating the agencies say such a move would distract from more important issues.

Patrick Johnston, president of the California Association of Health Plans, said a merger would shift focus away from the development of an online health benefit exchange as mandated under the reform law. Johnston said, "We can't afford a distraction when establishing the exchange and the other key elements of the new [health reform law]" (Los Angeles Times, 6/24).