Skelton on rate regulation…

Annoyed by double-digit health insurance rate hikes? Venerable LA Times columnist George Skelton took a break from reporting on the budget and Governor Jerry Brown to focus on insurance rates, and to support the legislative push for rate regulation–AB 52 (Feuer). It even mentions our national partner organization, Health Care for America Now. It’s worth a full read, but here are excerpts:

Insurance companies inadvertently have been making that case against themselves recently by announcing staggering double-digit rate increases, then backing off in the face of government scrutiny and public outrage.

Aetna Inc. and Anthem Blue Cross scaled back planned premium hikes, and Blue Shield of California canceled one altogether after new state Insurance Commissioner Dave Jones denounced the increases as excessive. In total, 865,000 policyholders got lucky.The insurers didn’t have to cave. It was strictly voluntary.

In fact, Anthem planned to proceed Sunday with a rate hike averaging 16%, plus higher deductibles and co-pays, for nearly 151,000 customers. This despite the state Department of Managed Health Care — a separate entity from the insurance commissioner — proclaiming Friday that the increase was “unreasonable.”…

Jones is sponsoring a bill (AB 52), carried by Assemblyman Mike Feuer (D-Los Angeles), that would require insurers to obtain approval from state regulators before increasing medical insurance rates.

The rates could be modified or denied by the managed healthcare department or the insurance commissioner. Generally, the department assesses HMO plans and the commissioner oversees other policies, including PPOs. Currently both entities can review rates but can’t reject them….

Citing federal government data, he adds that healthcare costs nationally rose 3.4% last year, while California insurers were proposing rate hikes of up to 39%. His bill cleared its first committee hurdle last week, but with only Democratic support. One freshman Democrat — Richard Pan, a Sacramento County physician — joined Republicans in voting against it.

The medical profession largely opposes the measure because it would curtail the flow of money into the healthcare industry. Insurance and healthcare lobbyists worked the hall outside the committee room. They are two of the most powerful interests in the Capitol. Health and accident insurers contributed around $1.4 million to legislators’ political kitties during the last election cycle, according to MAPLight, a nonpartisan group that researches money’s influence on politics. The medical profession kicked in at least $4 million.

[S]upporters of the rate-control bill… point to large profit increases reported by insurers last year, including 21% for UnitedHealth, 13% for WellPoint — parent of Anthem — and 38% for Aetna, according to a national activist organization called Health Care for America Now…

As an assemblyman, Jones carried three similar bills, progressing further each time. Last year, his measure was killed by the Senate on the final night of the legislative session.

The bill’s time has come. We don’t hear much controversy about auto or homeowner policies these days, not like what we heard before voters gave strong regulatory powers to an elected insurance commissioner. We shouldn’t be leaving medical coverage costs solely to the whim of the insurance industry.

Health Access California promotes quality, affordable health care for all Californians.
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