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SB 51 (Alquist) —Support

SB 51 (Alquist) —Support
June 1, 2011

Contact: Betsy Imholz 415-431-6747

Consumers Union, nonprofit publisher of Consumer Reports, strongly urges your “aye” vote for SB 51, which would codify in state law the federal requirements that insurers spend a specified percentage of premium dollars on providing healthcare, known as the “medical loss ratio” or “MLR.”

Ever rising health insurance premiums are a huge and growing concern of consumers and small businesses alike. Medical loss ratio requirements are one way to rein in those rising costs that threaten family, and overall economic, security and to cap the proportion of health insurance medical premium dollars spent on administrative expenses and profits. Current California law has some modest requirements — a 70% medical ratio for individual market plans — but federal law provides broader protection: 80% for small group and individual market policies and 85% for large group market. SB 51 adopts the more protective standards for California consumers.

Also similar to federal law, SB 51 would require annual rebates to consumers in the event an insurer slips below the required minimums. SB 51 bill further establishes how the rebates shall be calculated.

Consumers Union, therefore, strongly urges you to pass SB 51.