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Health Insurers’ Spending on Medical Services Target of Increased Oversight in New Measure

In a California Healthline Special Report, advocates for physicians and health plans discussed a proposal by Sen. Sheila Kuehl (D-Santa Monica) to cap administrative expenses for health insurers in the wake of a recent report looking at how insurers spend premium income.

In a recent study, the California Medical Association found that not-for-profit Kaiser Permanente spent almost 91% of its premium income on medical services — the highest among major health insurers. For-profit Anthem Blue Cross spent the least at 79%, according to the study.

The Special Report includes comments from:

  • Richard Frankenstein, president of CMA;
  • Nicole Kasabian Evans, vice president of communications for the California Association of Health Plans; and
  • Kuehl.

Under current California law, the Departments of Managed Health Care and Insurance do not track how health insurers spend premium income.

Kuehl says her bill would start by ensuring that the agencies are tracking the same kind of information across all health plans in hopes of helping consumers make decisions about health insurance options.

However, Kasabian Evans said that CAHP disagrees with the focus of Kuehl’s bill and believes that addressing the costs of medical services would be more useful (Kennedy, California Healthline, 7/9).

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