Bill would reject 'excessive' health plan hikes

The Assembly Health Committee has approved Assembly Bill 52 on a vote of 12-7. The measure, authored by Assembly members Mike Feuer (D-Los Angeles) and Jared Huffman (D-San Rafael), would protect consumers and businesses by empowering state regulators to reject excessive health insurance rate increases."[On Wednesday] the Assembly Health Committee recognized that Californians should not have to depend on the whim of an insurance company to halt a major rate increase," said Feuer. "This was a crucial first step toward getting AB 52 signed into law, but until that happens, California families will continue to live in fear that they are just one rate hike away from no longer being able to afford health insurance." Introduced in December 2010, AB 52 would require health plans and insurers to seek approval from state regulators prior to raising health care premiums, copayments, deductibles, or other out of pocket costs. It would build upon newly-implemented federal and state law improving the health insurance rate filing and review process. "Health insurers continue to announce premium increases that far outpace the rate of medical inflation. These significant rate increases come once, twice or even four times within a year's time on the same policyholders. Californians have been calling on me to reject excessive rate increases, but I lack the authority to do so. Since I first introduced this bill in 2007, health insurance has become unaffordable for a few million more Californians. Over 10,000 Californians spoke out in favor of my bill last year. Now, we need to pass AB 52, which would give me the authority I need to reject excessive rate increases.This legislation is supported by families and small businesses because health insurance rate hikes have become unsustainable and they want me to have the authority to reject excessive rate hikes," explained Insurance Commissioner Dave Jones. Recent attempts to increase rates underscore the need for AB 52. This year, Anthem Blue Cross and Blue Shield of California announced rate increases of up to 59 percent for thousands of policyholders in California, igniting a public outcry throughout the state. After repeated requests from state authorities, both companies finally agreed to postpone the increases and submit them to independent review, a requirement already provided by state law. However, the law gives no guarantee that insurers must rescind these or any other rate increases that, upon review, are found to be excessive. "Health insurance rates continue to rise rapidly, straining pocketbooks for California families and businesses. AB 52 will bring an unprecedented level of scrutiny and transparency to health insurance rate increases; protecting consumers from large rate hikes," said Huffman. Kathleen Sebelius, US Secretary of Health and Human Services, has signaled support for the rate approval process, stating in response to the recent Blue Shield announcement to delay its rate increases, "We believe that insurance commissioners should have rate approval authority and will continue to support states' efforts to review premium increases and protect consumers." In 2010, Feuer and then-Assemblymember Dave Jones (D-Sacramento) jointly introduced a far-reaching plan to establish a permanent rate review and approval process after a similar proposed rate increase by Anthem Blue Cross. That measure was ultimately defeated in the Senate. AB 52 will next be heard in the Assembly Appropriations Committee. Submitted by the office of Assemblyman Mike Feuer.

********** Published: April 28, 2011 - Volume 10 - Issue 2