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Should Insurance Companies’ Rates Be Regulated?

To get a picture of how much political heat AB 52 generates, you only have to look at its last committee hearing.

The bill, which would allow California’s Department of Insurance to review and limit the size of health insurers’ rate hikes, is expected to hit the Assembly floor for a vote today.

Last Friday, AB 52, by Assembly member Mike Feuer (D-Los Angeles) was up for a do-pass in the Assembly Committee on Appropriations. Those affairs are generally quick, without much fanfare — because so many bills go through Appropriations, the actual voting on all of the do-pass bills is rapid-fire.

But this one hit a snag. It was a single vote short of passage, and several Assembly members wanted to tell Feuer just why they had a problem with it.

“I don’t want to stop it, I think it’s a good bill,” Assembly member Charles Calderon (D-Montebello) said. “But I think you need to take an amendment on this bill … that says there will be a review by an independent actuarial in the case of a rate increase disagreement.”

Feuer said he was reluctant to change the policy of AB 52 while standing in the appropriations committee hearing.

“That’s complicated … and the concern I have is, current law is different than that. I can build on existing rules, but I can’t roll them back.”

Assembly member Jose Solorio (D-Santa Ana) pushed back. “I was hoping you’d be agreeable to taking an amendment in a way that says if a rate is justifiable and sound, then the rate would be accepted,” Solorio said. “I’m hoping that we can hear commitment from you that, on the floor, you can take an amendment.”

“What is clear is this,” Feuer responded. “I understand there’s a reaction in this committee, and I’m very committed to responding to it, to that conversation continuing. I’m always open to deep engagement with all stakeholders.”

Solorio snapped back: “I hear you say you’re unwilling to make an amendment,” he said.

There were two primary concerns raised by lawmakers — how to ensure that the state wouldn’t unfairly reject rate increases and how rate regulation might affect the negotiating power of the new Health Benefit Exchange.

Assembly member Bob Blumenfield (D-Woodland Hills) raised a different point.

“This seems to be a policy discussion,” he said. “This is an appropriations hearing. It’s incumbent upon Mr. Feuer to address these concerns at some point, but I’d rather see the debate happen when we get to the floor.”

And then, even when the roll call was taken, the measure was still one vote short of passage for a time. It finally did get that last vote, and cleared committee.

“The measure is out,” committee chair Felipe Fuentes (D-Sylmar) said. “But I heard a lot of concern about the politicization of the rates here.”

And that concern is certain to be aired again — most likely, louder and longer — on the Assembly floor today.

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