• ← Back to INVESTOR TIMES
  • Investing Articles
  • Financial Markets News
  • Tech News
  • Cryptocurrencies News
Progress Report
No Result
View All Result
No Result
View All Result
Progress Report
No Result
View All Result

Prior Approval of Health Insurance Premium Increases Legislation Passes Committee–First Time in California History

INVESTOR TIMES by INVESTOR TIMES
April 18, 2007
in California Progress Report
0

Yesterday evening, the Assembly Health Committee on a 10-5 vote passed AB 1554 by Assemblymember Dave Jones regulating health insurance premiums. The bill requires that prior approval be obtained before health insurance rates can be increased. According to the author, this is the first time that legislation on this topic has passed a California legislative committee.

Voting for the bill were Assemblymembers Karen Bass, Patty Berg, Hector De La Torre, Kevin de Leon, Loni Hancock, Mary Hayashi, Ed Hernandez, Dave Jones, Sally Lieber, and Fiona Ma, all Democrats. Those voting against the measure were Assemblymembers Alan Nakanishi, Bill Emmerson, Ted Gaines, Bob Huff and Audra Strickland, all Republicans. Not voting were Democratic Assemblymembers Mary Salas and Mervyn Dymally.

Rates requiring approval include premiums, co-payments, coinsurance obligations and deductibles. HMOs and health insurers would need to receive approval from the California Department of Managed Health Care (DMHC) or the Department of Insurance (DOI) for increases.

Proposed rate increases would be denied if they were deemed excessive or unfair. Any proposed rate that is not challenged by a consumer within 45 days of it being posted on the Department website and not acted on by the Department on its own discretion within 60 days would be deemed approved. This rate regulation would begin January 1, 2009.

“Californians face skyrocketing health insurance premiums. Increasingly, Californians cannot purchase health insurance because it is unaffordable. This measure will require health insurers to justify their premium increases and seek approval for their rates. I look forward to working with my colleagues in the Legislature to ensure that this proposal becomes part of the health care reform package that is sent to the Governor,” explained Assemblymember Jones.

Jones emphasized that this bill is critically important to Californians, especially as the legislature considers health care reform proposals by the legislative leadership and the Governor. More than 6.5 million Californians are uninsured, while others are underinsured.

Polls show that the majority of people with health insurance fear that ongoing premium increases will cost them their health insurance coverage. Health insurance premium increases are soaring far above the rate increases for wages and inflation. According to the Kaiser Family Foundation, health insurance premiums for employer-sponsored policies have increased by an average of 87% over the last six years. That far surpasses the 20% rise in wages and the 18% rise in overall inflation during that time period.

The legislation is similar to requirements in the auto insurance market under Proposition 103 that have saved drivers $23 billion since 1988. The measure would control the type of administrative waste and profiteering that allowed Blue Cross of California to keep, as overhead and profit, 50% of every premium dollar collected from individual policyholders.

Jerry Flanagan, the Health Care Advocate for the Foundation for Taxpayer and Consumer Rights (FTCR), hailed the committee’s approval of AB 1554. He said: “The legislature has taken an important first step to provide health care affordability for Californians by reining in waste and profiteering.”

In addition, Flanagan said that AB 1554 would provide the public more information about where health care dollars are spent. For example, California’s most profitable insurer, Blue Cross, reported $1.3 billion paid to a subsidiary company for “claims processing” as a medical expense. FTCR said that such transfers most be scrutinized to determine that companies are not claiming unjustified medical expenses, or overpaying affiliated companies for services as a strategy to move profit out of California.

He compared Jones’ bill to Proposition 103, authored by consumer activist Harvey Rosenfield, founder of FTCR, and approved by voters in 1988, which established a similar “prior approval” system for many lines of insurance. During the decade after Proposition 103 was adopted, the uninsured motorist population declined by 38%. Between 1989 and 2004, California auto insurance premiums decreased 7% while premiums in the rest of the country increased 47%.

He said that since just 2003, the Foundation for Taxpayer and Consumer Rights has saved homeowners, motorists and doctors $800.95 million in premiums under Proposition 103 by challenging proposed rate increases. A similar process for challenging rate increases would be provided for health rates under the Jones bill.

Mark Leland, a small business owner from Santa Monica, endured a 264% increase in his health insurance rates in the last five years, including a 69% increase when he turned 40 and another 15% increase this year.

“To find out where my 69% premium rate hike went, I looked into the financials of the Big 5 HMO’s in California and I found something the public should be aware of: administrative expenses increased 23% this year. But enrollment in these HMO’s is declining, so how can you have these yearly 23% administrative cost increases?” asked Leland.

Steve Blackledge, legislative director CalPIRG, the California Public Interest Research Group, said: We’re pleased with those who stood up to the insurance industry and their lobbyists and voted for the bill. And since the bill is still alive, we’ll have new opportunities to persuade those who aren’t yet on board that the policy is a strong and needed one.”

AB 1554 is supported by individuals who have been the victim of dramatic health insurance rate increases and organizations such as California Public Interest Research Group (CALPIRG), Consumer Federation of California, Foundation for Taxpayer and Consumer Rights, California Federation of Teachers, California State Employees Association (CSEA) and Gray Panthers California.

Previous Post

Chuckling with Schwarzenegger Before We Get Real on Global Warming

Next Post

Kuehl’s “Medicare for All Californians” Passes Senate Health Committee Before Standing Room Only Crowd

Next Post

Kuehl's "Medicare for All Californians" Passes Senate Health Committee Before Standing Room Only Crowd

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

About Progress Report

The content of this site has been restored on a non-profit basis to preserve knowledge and serve as a historical archive. All articles were originally published on californiaprogressreport.com and belong to their respective authors.

California Progress Report was an independent journal published to cover vital public policy issues and offer a public service.

Latest posts

  • Who’s to Blame for Oil Waste in Californians’ Drinking Water?
  • The Unintended Side Effects of Fighting Prescription Drug Abuse
  • The Year in Sustainable Food: Much Progress, and More Work to Be Done
  • Can We Have Bank and Regulator Hearings in California Too?
  • Massive Dumping of Wastewater Into Aquifers Shows Big Oil’s Power in California

InvestorTimes.com

InvestorTimes.com is a privately funded financial publication particularly created for professional and personal investors and intellectually restless individuals.

Our raison d'être is to provide insightful information to any citizen willing to understand global economical markets and the most relevant current affairs.

Contact us: [email protected]

WE ARE LOOKING FOR TALENT

INVESTOR TIMES is always open to the incorporation of talent in its team of journalists and editors. If you would like to be part of our project as a collaborator, we invite you to submit your application.

Contact us: [email protected]

INTERNATIONAL EDITIONS

Investor Times en Français

Investor Times in Deutsch

Investor Times in Italiano

Investor Times em Português

Investor Times po Polsku

Investor Times на русском языке

El País Financiero (edición en Español)

DMCA.com Protection Status

  • ← Back to INVESTOR TIMES
  • Investing Articles
  • Financial Markets News
  • Tech News
  • Cryptocurrencies News

© INVESTOR TIMES

No Result
View All Result
  • LoginPress

© INVESTOR TIMES