California Should Regulate Health Care Premiums

Published on

Within a few years, 6 million uninsured
California residents will finally get medical coverage as part of the
newly passed federal health care reforms. But what will they pay? And
who will regulate premiums as insurers angle for customers?

Right now, Sacramento has little control over health care rates,
largely because industry lobbyists have killed efforts to change a
rules-free marketplace. According to the organization Consumer Watchdog,
health insurance interests have given $800,218 over the last three
years to members of the state Senate, where showdown votes on insurance
controls are due this month.

This past spring provided one example of the problem. The Anthem Blue
Cross insurance firm sought premium increases of up to 39 percent for
800,000 policy holders. The firm withdrew the plan after a public
outcry, not because regulations blocked it.

The incident was the backdrop for an intolerable situation. Under the
federal overhaul, more Californians will be afforded coverage, yet
there are no guarantees that the choices will be fairly priced.

On Thursday, a state Senate committee can change this picture. The
appropriations committee is due to vote on a bill to give the state’s
elected insurance commissioner broad powers to approve or deny increases
in health coverage premiums.

The measure, AB2578 by Assemblyman Dave Jones, a Sacramento Democrat,
has failed numerous times in past years after determined lobbying by
health care insurers. This year, Jones, who is a candidate for state
insurance commissioner, believes his proposal has a chance as a new
national health-care policy takes shape.

But it’s not a sure thing. If the panel approves the bill, the full
Senate may balk as lobbying intensifies in the coming weeks. One Bay
Area note: Sen. Leland Yee, a San Francisco Democrat, didn’t vote on the
last version of the bill and he was a top-10 recipient of health care
money. Senator, your vote is urgently requested this time.

Gov. Arnold Schwarzenegger has his own ideas. Instead of review by
the insurance commissioner, he wants health care insurers to hire
actuaries to vet their proposed premium increases. The results would be
made public in the name of sunshine and transparency, which the governor
feels will check abuses.

Jones’ bill, which gives genuine power to the insurance commissioner,
is far preferable. Medical coverage may be within reach of more people
than ever, but its cost should be reviewed for fairness and economic

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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