Health Insurance Premium Regulation Moves Forward, But With Invisible Strings Attached

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The much-awaited California Senate Health Committee showdown today over health insurance premium regulation never happened. Instead, Senate Health Committee Chair Ed Hernandez, who had the pivotal vote, moved Assembly Bill 52 forward with the promise that his vote on the Senate Floor was contingent on amendments to come that address his concerns. These include: 1) "politicization" of regulation  2) exempting certain policies from regulation 3) and other technical concerns often raised by the insurance industry.  Without Hernandez and a few others, AB 52 won't pass the Senate.

It's not clear whether Hernandez's strings will strangle reform or merely pull it in a different direction.  The next three weeks will be pivotal. Californians suffering from skyrocketing health insurance rates shouldn't have to accept reform that has insurance industry strings attached. Reform without concessions won't happen now, but the question is whether the compromises taking place behind the scenes in the Senate before August 1 will produce a poison pill or one that Californians can swallow as condition of regulation that protects them.

There's no good reason auto and homeowners insurance companies have to ask permission from the state to raise premiums, but health insurance companies don't. Assembly Bill 52 should only be enacted if it gives our elected insurance commissioner and the Department of Managed Health Care real power to reject excessive rate hikes for all Californians without equivocation. Otherwise the voters are free to take matters into their own hands. Stay tuned for what the next week's talks produce.

Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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