Lawmakers in California are pushing a new bill that would grant the state’s insurance regulators the authority to either reject or approve rate increases imposed on health insurance policies. The issue of rate hikes is not a new one in California. Several months ago, some of the state’s biggest insurers proposed rate increases by as much as 40%.
The debate raged until the insurers withdrew their proposals, but the turbulence left many legislators wondering where the decision making power for these issues should lie.
The bill caused division within the state Senate but was able to garner the 12 votes necessary for it to move on to the appropriations committee. Mike Feuer, Democratic Assemblyman and author of the bill, insists that the measures of the new legislation are far overdue. Currently, regulators in 35 other states have the ability to accept or reject rate increases.
Dave Jones, the state’s Insurance Commissioner, claims that California residents are subject to the most expensive health insurance rates in the U.S. Though he has the authority to deny rate hikes in both the auto and life insurance sectors, Jones has no such power when it comes to health insurance. If changes can be made to the industry, Jones wants them to be in favor of the consumer.
The bill has its opponents, of course. Charles Bacchi, Executive Vice President of the California Association of Health Plans, is championing the state’s insurers in opposition of the bill. Bacchi argues that the legislation does not take into account the rise in medical costs that have forced insurers to raise their own rates.
The bill is scheduled to be reviewed by the appropriations committee before it can move ahead.