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California insurance rate reform bill advances

May 27, 2011

California Bill to Rein in Health Insurance Rate Hikes Advances

AB 52 Approved by Assembly Appropriations Committee;
Assembly Floor Vote Expected Next Week

SACRAMENTO, CA – The Assembly Appropriations Committee approved legislation today that will help California rein in excessive health insurance rate hikes. AB 52, sponsored by Assemblymember Mike Feuer, now moves to the Assembly floor where it must be approved by June 3 in order to move on to the Senate.
“California families and small business are tired of getting hit with double digit rate increases year after year,” said Betsy Imholz, Special projects Director for Consumers Union, the nonprofit publisher of Consumer Reports. “This bill gives California the power to hold insurers accountable when they’re gouging consumers with excessive premium hikes.”
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.
“California regulators currently have little power to protect consumers from excessive insurance rates,” said Imholz. “This bill will help ensure that health insurance rates are fair and subject to the kind of state oversight necessary to protect consumers.”
Michael McCauley (mccami@consumer.org) 415-431-6747