The loud collision expected at today’s Senate hearing — between health insurers and those who want to regulate them — was expected to generate some serious verbal wreckage, and more than its share of media rubbernecking at the impact crater.
But committee chair Sen. Ed Hernandez (D-West Covina) put the brakes on the rhetoric a bit, by making it a testimony-only hearing.
It’s an unusual move, hearing testimony one week and expecting to put the vote over to the next week. “It’s a little unusual to do that in advance,” Patrick Johnston of the California Association of Health Plans said. “Bills do get put over, of course, but doing it as a planned two-stage process is different.”
It means there won’t be a vote today, and that could possibly ease some of the tension in the room. Staffers from several offices all said Hernandez felt it was important for everyone to feel heard, and wanted to ensure there was enough time for stakeholders to have their say.
AB 52 would require health insurers to submit an application for a health insurance rate increase, and the state could reject any increase it determines is excessive or unfair.
Proponents argue that it’s the same level of regulation faced by every other insurance industry, and that the recent spate of double-digit increases in some premiums cries out for state intervention.
“We have had thousands of people contact our offices this year about excessive rate increases,” Janice Rocco of the Department of Insurance said. “And we don’t have the authority to do anything about it, to prevent those excessive rate increases, and we certainly need that.”
Opponents say Californians don’t need anything of the kind, and that the billÂ scapegoats health insurers for the high cost of medicine by playing off of the emotional issue of recent steep increases in the volatile individual insurance market.
“AB 52 is misguided legislation,” Johnston said. “Health plans are in the business of arranging for or providing their members with medical treatment through doctors, hospitals, medication, diagnostic testing and durable medical goods … AB 52 focuses on the price of a premium, and ignores the fact that 87% of premiums goes to health care costs.”
The high cost of medicine has so many causes, Johnston said, from the enormous capital costs of seismic retrofits to higher medication costs to changes in the way people use health care now. “The rising chronic disease patterns, increase in aging, the obesity epidemic, these all are factors that contribute to premium increases. AB 52 ignores them all.”
Cost is exactly what concerns Rocco, who said that medical costs have certainly risen, but still at a slower rate than premiums.
“This is a bill that’s gotten a good deal of attention because of the enormous rate increases year after year, at a much higher increase rate than medical costs would warrant,” Rocco said. “The message isn’t new, but the problem becomes more important every year.”