California Assembly Bill Gives Authority to Reject Health Insurance Rate Hikes

A California assembly bill giving health insurance regulators authority over rate hikes has advanced. The bill, AB52, which was approved by the state Assembly on Thursday, brings regulators one step closer to having the power they’ve wanted to reject or modify excessive health premium increases in California.

Bill’s Author Says Measure is Necessary

Assemblyman Mike Feuer (D-Los Angeles), who is also the bill’s author, said the measure is necessary because rates for California policyholders were skyrocketing and regulators could not control the increases.

For instance, in March 2011, Blue Shield of California had planned to increase premiums by as much as 59 percent for some policyholders. While the insurer eventually decided to cancel the premium hike, regulators would have had no power to stop the increase.

Feuer explained that policyholders had been living in fear of premium increases for years. He hopes that giving regulators control over the rate hikes will ease those fears and establish the control they already have over home and auto insurance premiums.

Republicans Protested the Vote

In protest of the vote, which ultimately passed 47-28, Republican legislators walked off the floor when the measure was first taken up. Democrats accused the Republican caucus of trying to stall the vote with the move. Ultimately, the bill passed with no Republican support along with a number of Democrats refusing to vote.

The reason for the opposition from both parties is that health insurance, hospital trade groups and doctors organizations have all contested it in fear that regulation could lead to lower reimbursements for their services.

They have also said that it could result in higher costs and less access to health services in the state because the underlying cost pressures that drive up insurance premiums still remain.

The Insurance Commissioner, Dave Jones, along with several consumer groups, have expressed their support of the bill, however. The next step for AB52 is a move to the state Senate.