Health insurance bill facing intense pressure for amendments

By CMTA Staff

Capitol Update, July 8, 2011

The Senate Health Committee heard testimony on AB 52 (Mike Feuer, D-Los Angeles) on Wednesday.  It would allow the Department of Insurance and the Department of Managed Health Care to modify, deny or approve health insurer rate hikes after an independent review of the increase is performed by an actuary.  The bill has been heavily supported by Democratic Insurance Commissioner Dave Jones who claims such direct regulatory oversight is necessary to protect consumers against excessive healthcare rate increases.

Although the bill was voted out of Committee 5-3, it was clear that members – Chairman Roger Hernandez (D-Baldwin Park), in particularly – are expecting major amendments in order to continue their support for the bill on the Senate Floor.  Amendments currently in circulation would purportedly take direct oversight authority away from State regulators and require a 90-day review process.  The review process would require regulators and insurers to work together to agree on a rate increase submission for the first 60 days. If negotiations fail, the approval decision would be left to a three-member panel of independent healthcare experienced actuaries.

In its current form, the bill has been met with heavy opposition from insurance, hospital and doctor groups claiming the bill does not address the issue of increasing medical costs that ultimately lead to higher rates.  Opponents also argue that, if passed, low income patient access to care could be reduced since doctors would receive reduced payments from insurers.

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