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CA Assembly passes bill to rein in insurance rates

June 2, 2011

California Assembly Passes Bill to Rein in Health Insurance Rate Hikes

AB 52 Would Give California the Power to Modify or Reject Rate Increases

SACRAMENTO, CA – The California Assembly approved legislation today that will help California rein in excessive health insurance rate hikes. AB 52, sponsored by Assembly member Mike Feuer, will help protect consumers by giving California the power to deny or modify unfair rate increases.
“California families and small businesses are struggling to keep up with rising premiums at a time when many health insurers are raking in big profits,” said Betsy Imholz, Special Projects Director for Consumers Union, the nonprofit publisher of Consumer Reports. “This bill will help ensure that health insurance rates are fair and subject to the kind of state oversight necessary to protect consumers from being gouged year after year.”
Current law requires insurers to file often sparse information about proposed rates with state regulators and essentially relies on self-policing to hold down rates. While state regulators now have the power to declare rate increases unreasonable, they have no authority to prevent them from going into effect.
AB 52 requires approval from the Department of Insurance or the Department of Managed Healthcare before health insurance premiums, copayments or deductibles may be raised. It would give the regulators the authority to approve, deny or modify rates that are excessive, inadequate, unfairly discriminatory or otherwise in violation of the law and to do so prior to the rates taking effect.
Michael McCauley (mccami@consumer.org) 415-431-6747, ext 126