Bill Puts CA Med Insurance in ER

JUNE 6, 2011

By KATY GRIMES

Tough new state medical insurance regulations could pull the plug on the plans held by many California families.

On Thursday, without the help of Assembly Republicans, Democrats in the Assembly passed AB 52, which would give the state’s elected insurance commissioner and the Department of Managed Health Care, the power to reject “excessive” increases in rate hikes. Regulators also could modify rate increases.

This is the fourth attempt by Assembly Democrats to enact rate regulation in California.

The health care bill would require health plans and insurers to gain approval from regulators before raising premiums, copayments or deductibles.

The vote came after Republicans left the chamber in protest after having their request to meet in caucus denied by Democratic Assembly Speaker John Perez.

Supporters of the legislation say that because other forms of insurance are similary regulated in the state, health insurance should also be subjected to the same rate scrutiny. But the argument is weak.  Auto and home insurance are for possessions. But health insurance, because it deals with life and health care, many believe, should be less regulated, allowing cafeteria-style plans to be crafted based on need and cost.

The state has already meddled so drastically in the insurance market that many insurance companies have fled the state or raise rates.

And, at the behest of Speaker Perez, the bill was voted on by the Assembly for immediate transfer to the Senate.

On the Assembly floor as the debate and vote took place was California’s Insurance Commissioner Dave Jones. After the bill was passed, Jones looked very happy as he received congratulations from former Assembly colleagues.

But not everyone was supportive of the bill — nor were all Assembly members pleased with Jones’ presence on the Assembly floor a violation of a no-lobbying rule.

After the Republican caucus walked off the floor of the Assembly, only Democratic Assemblymen Calderon and Solorio spoke against the bill, and then ended up not voting on the measure.

“The California Assembly today recognized that our families shouldn’t have to live in fear that they are just one rate hike away from no longer affording health insurance,” said the bill’s author, Democratic Assembly Member Feuer, in his closing statement. “I am grateful for the broad support this bill has garnered from the business community, as well as organizations representing seniors, consumers and working families. But until AB 52 is signed, California families and businesses will continue to have to depend on the whim of an insurance company to halt an unjustified rate increase.”

Eventually Assembly Democrats passed AB 52 by a 42-1 vote. In a large demonstration of unwillingness to choose sides, the remaining Democratic Assembly members abstained. Democratic Assemblyman Richard Pan of Sacramento, a doctor, was the one vote against the bill.

“This bill levels the playing field for California’s consumers and businesses and I look forward to continuing this effort to ensure that it becomes law,”Jones said in a press release after the vote. “Since I took office, Californians have made it exceedingly clear that they want me to reject excessive rate increases. But I do not have this authority as Insurance Commissioner. AB 52 can change that.”

AB 52 is in the Senate, and is expected to be voted on immediately.