Home Uncategorized Coalition Opposes Health Insurance Rate Regulation Initiative

Coalition Opposes Health Insurance Rate Regulation Initiative

Coalition Opposes Health Insurance Rate Regulation Initiative

An impressive array of trade groups representing business owners, doctors, hospitals, health plans and health insurers launched a campaign Monday to oppose a health insurance rate regulation initiative proposed for the November ballot.

Major funding for the effort comes from the four largest health insurers in the state: Anthem Blue Cross, Kaiser Foundation Health Plan Inc., Health Net Inc. and Blue Shield of California, according to a news release from the group.

Consumer Watchdog, a Los Angeles nonprofit advocacy group for taxpayers and consumers, is gathering signatures for a measure that would regulate health care premiums. The group has until June 4 to collect the 504,760 signatures needed to put the initiative on the November ballot.

Fierce opposition from the health care industry doomed legislation with a similar intent last year. Assembly Bill 52 was withdrawn by its author in the last days of the session but may resurface this year.

For now, the opposition is focusing on the proposed initiative, which they say would add layers of regulation to health care, create a costly new bureaucracy and give one politician nearly total control over health care prices — ultimately leading to higher rates and less access to care for consumers.

“As physicians, we agree that controlling health care costs is important, but this misguided measure will cause higher rates and lessen access to care, which is why doctors, hospitals and health care providers oppose (it),” Dr. James Hay, president of the California Medical Association, said in the news release.

Rate regulation does not address the underlying causes of rising health care costs, added C. Duane Dauner, president and chief executive officer of the California Hospital Association.

Chronic under funding by Medicare and Medicaid — government health care programs for seniors and the poor — prompts cost shifting to private insurers, but the initiative does not address this issue, Dauner said.

The proposed Insurance Rate Public Justification and Accountability Act would:

  • Require health insurance companies to publicly disclose and justify their rates before they can take effect
  • Prohibit unfair pricing based on prior coverage and credit history
  • Require health insurance companies to pay a fee to cover the costs of administering the new law

The measure would amend the state insurance code to give the state insurance commissioner authority to approve rates after Nov. 6; it would make rates in effect on that date subject to refund if deemed too high.

The legislative campaign last year was heated and nasty; the fight over the proposed initiative promises to be the same.

The industry and business coalition release Monday dubbed Consumer Watchdog “a trial lawyer funded special interest group” and called the measure “misguided policy” that’s “bad for consumers.”

Look at the funding, countered Consumer Watchdog President Jamie Court.

“The four largest health insurance companies that control 70 percent of the market between them are fighting an initiative that’s aimed at providing competition and lowering prices,” he said. “They are not out to save consumers.”


Kathy Robertson covers health care, labor/workplace issues, law, immigration, medical technology and biotechnology for the Sacramento Business Journal.