California Health Exchange Wants To Analyze Rate Initiative

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California's health insurance exchange pressed for answers Thursday to how an initiative slated for the November ballot would affect its operations.

Covered California board members said they want an expedited analysis of the measure, including its influence on the exchange and its consumers. The as-yet-unnumbered initiative, advanced by Consumer Watchdog and Democratic Insurance Commissioner Dave Jones, would allow the insurance commissioner to reject excessive health insurance rate hikes.

The measure and a separate initiative to raise the $250,000 cap on pain and suffering damages in malpractice cases are expected to produce two of the most contentious and expensive ballot-box fights this fall.

Susan Kennedy, a former aide to Govs. Gray Davis, a Democrat, and Arnold Schwarzenegger, a Republican, said she was "painfully aware" of the agency's hesitation in weighing into the fierce political clash. But she urged officials to act aggressively so voters have time to sort out the findings.

"I am a little afraid that we are tiptoeing around this when the impact from my perspective could be really huge and very negative on our ability to function," Kennedy said. "And that inability to function will trickle down to the risk being padded into the rates on consumers."

Covered California Executive Director Peter V. Lee is scheduled to testify on the rate-regulation initiative at a legislative hearing planned for July 2. The exchange this week released a series of questions about the measure – including whether rate review would produce delays for consumers – that opponents quickly seized on.

Many of the potential concerns that emerged from the board discussion were raised in a recent report by Dr. Jon Kingsdale. It was commissioned by opponents, led by the health insurance giants Kaiser, Wellpoint and Blue Shield of California.

Jamie Court, the president of Consumer Watchdog, said the concerns about delays were unfounded and stressed the measure would not upend the new exchange. Court said he offered to meet with the exchange to answer any questions, but that officials there instead opted to post the questions online.

He questioned the early date of the legislative hearing and characterized the exchange's actions as a political attempt to "dust up rate regulation by raising questions that have easy answers without bothering to get the answers."

"The level of over-thinking without asking us the questions suggests that this is not an unbiased process," Court said. "This is something that is coordinated, and obviously they are trying to orchestrate some statements that opponents could use … in ballot arguments and TV ads."

Court, Jones and their allies have repeatedly asserted that rate regulation of the industry has worked in nearly three dozen other states. A supporter of the Affordable Care Act, Jones at times has been critical of the state exchange's approaches. Last year, he disagreed with its decision to decline a presidential offer to delay the cancellation of policies that did not meet minimum coverage requirements.

On Thursday, Deputy Commissioner Janice Rocco said she also contacted exchange staff and offered to have the insurance department sit down and discuss its 25-year history since the passage of Proposition 103, which gave it rate authority over auto, property and casualty insurance.

"We are confident we can accomplish what's called for in the (measure) in time to meet the open enrollment deadlines if in fact the voters pass the ballot initiative," Rocco said.


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