Health insurance regulators in California not awarded more power

California health insurance
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California Proposition 45 has been defeated by voters amidst strong opposition to the measure

Voters in California have decided to deny the passage of Proposition 45, which would have provided the state’s Insurance Commissioner, Dave Jones, and the state’s Department of Insurance, with the power to review health insurance rate increases. Under current law, state regulators cannot reject rate increases coming from insurers before these increases have been implemented. Commissioner Jones has been advocating for more regulatory power for some time, claiming that tougher regulations would be a benefit to consumers.

Measure would have provided state regulators with the authority to deny rate increase proposals from the state’s insurance companies

Those that supported Proposition 45 claimed that it would have given state regulators the ability to require insurance companies to provide justification for the rate increases they wanted to see. Opponents of the measure, however, many of whom come from within the insurance industry, argued that it would actually make health insurance coverage more expensive. The measure would have introduced more bureaucracy to the insurance market and may have imposed new costs on insurance companies, from which they would have to recover.

Prop 45 seen as too aggressive for its own good, taking regulatory power further than that which can be found in other states

California health insuranceSeveral states have laws in place that require insurance companies to provide justification for rate increases. These laws also provide regulators with the authority to approve or deny rate increase proposals coming from insurers. Few of these states, however, have measures in place that are as ambitious as California’s Proposition 45. Opposition to the measure had focused on its aggressive nature, with opponents suggesting that it would be expensive to implement and enforce.

California Proposition 46 has also been voted down

California’s Proposition 46 was also defeated during recent elections this week. The measure would have raised the cap on medical malpractice awards to over $1 million. Insurers suggested that this would have led to a dramatic increase in rates for medical malpractice customers, placing health care organizations under more financial pressure and having some impact on the market.

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