Legislation in California raises questions about health insurance coverage

California Health Insurance

Regulations targeting insurance rates could put Covered California in a precarious position

California Health InsuranceNew regulations targeting health insurance rates in California are raising questions about the state’s insurance exchange, Covered California. The Insurance Rate Public Justification and Accountability Act is set to be included on the November ballot. If approved by voters, it would go into effect on November 5 this year, 10 days before the state’s insurance exchange begins its second open enrollment period. The legislation would have an impact on the cost of the policies sold through the exchange, but whether or not insurers will have enough time to comply with the law’s regulations is unknown.

Covered California voices concerns regarding new legislation

Covered California operates as an independent state agency, which allows it to have some influence on the state’s political dealings. The exchange’s staff have raised questions about the impending law and what it aims to accomplish. The legislation is meant to require insurance companies to provide clear justification for raising rates on the coverage they provide. The law is designed to give the state’s insurance regulators more authority in the health sector. Currently, California regulators do not have the power to deny rate increase proposals coming from health insurance companies. These regulators do have this authority in other insurance sectors, however.

Commissioner Jones continues to fight for more regulatory power

For years, Insurance Commissioner Dave Jones has highlighted the imbalance in the state’s regulatory structure, noting that insurance companies have been able to institute excessive rate hikes on health policies without having to justify why they are doing so. Commissioner Jones has been campaigning for more regulatory power in the health sector, hoping to mitigate this issue, or at least require insurers to provide justification for their rate hikes.

Legislation could make it difficult for Covered California to provide policies to consumers

Rate regulations could have a major impact on consumers, and the impact that this particular legislation will have is not entirely certain. One of the primary concerns regarding the legislation is how it could affect Covered California. If rates being proposed by insurers were denied by regulators, for example, insurers would have little time to propose new rates before the open enrollment period began again. Those that miss the open enrollment period would be unable to sell their policies through the exchange. This would seriously limit the options that consumers have available to them.

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