Industry Groups Oppose Insurance Rate Review Bill

Industry and economic groups say giving California insurance regulators authority to deny rate increases deemed excessive is unnecessary and would jeopardize the quality of health care. The California Association of Health Plans lists dozens of organizations that have joined together to oppose Assembly Bill 52, the bill introduced by Assemblyman Mike Feuer that would make way for the new authority. If the bill is passed, California’s Department of Insurance and its Department of Managed Health Care would be able to deny rate increases that are found to be “excessive, inadequate, or unfairly discriminatory,” according to the legislation. Groups listed as opponents include the California Medical Association, the California Hospital Association, the California Chamber of Commerce, a few local chambers in the greater San Fernando Valley region and many other groups. “Rate regulation is misguided,” said Nicole Evans, spokeswoman for the California Association of Health Plans. “It will limit access to health care services and increase costs by arbitrarily suppressing rates rather than addressing the root cause of rising health care costs.” Medical cost inflation is only a small factor in what is driving up costs, Evans added. She said other factors include the amount of services people are using, costly changes in medical technology, and demographic changes, such as a growing aging population. The California Association of Health Plans says passage of the bill would create costly new bureaucracies while other programs are being cut, and it would also hinder patients’ access to medical care. “Doctors and hospitals will be even more pressed in their ability to treat patients,” Evans said, adding that the health care professionals rely on private insurers to fill government funding gaps for public insurance programs. Meanwhile, the organization cites that there are already state and federal legislation in place that requires actuarial reviews of rate increases and that monitor insurers’ profit levels. Insurance Commissioner Dave Jones spoke in North Hollywood Wednesday about the need for the bill, adding that it would help policyholders by keeping excessive rate increases in check. Assembly Bill 52 is currently in the Assembly’s Appropriations Committee.