One Passes, the Other Doesn’t

The best thing that happened to health insurance rate regulation was the last thing its proponents wanted to see.

When Anthem Blue Cross announced it planned to raise individual rates by as much as 39% back in February, it was the type of steep rate hike regulation proponents had been warning against for many months.

The public scorn and outrage prompted by that rate hike proposal was insurance regulation’s best friend — but, it turned out, was not enough to propel legislation.

On the last day of the session, AB 2578  by Dave Jones (D-Sacramento) failed on a 16-19 vote in the Senate.

On the same day, though, another bill did make it through the Legislature. SB 1163 would require state regulators to review premium increases and report unreasonable rate increases to the federal government.

That legislation differs substantially from the rate regulation of AB 2578, according to Janice Rocco of Dave Jones’ office.

“AB 2578 would have given the [California] insurance commissioner authority to review rate increases before they’re made,” she said. “This one has disclosure provisions in it.”

SB 1163 was intended to work alongside AB 2578, she said, not replace it. Rocco said that Jones plans to keep raising the issue, whether he wins the November election for insurance commissioner or not. Jones is the Democratic candidate for commissioner.

“I can tell you, there’s no issue that our office has gotten more contact calls about,” Rocco said. “We get so many letters and emails and phone calls about this. People have made charts for us, I swear — to show us how dramatic the increases have been.”

And if legislation continues to stall in Sacramento to pass health insurance rate regulation in the next year or two, she said, this is the kind of issue Jones feels could have a groundswell of support in a general election, just the way voters passed a car insurance regulation initiative back in 1988.

“If the Legislature and governor don’t sign this kind of bill into law by 2014 [when the federal health care reform law kicks in], then I’m sure consumer groups would certainly consider an initiative like Proposition 103,” she said.


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