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May 31, 2007

Health insurance regulation proposed

An effort to regulate California's health insurance premiums like auto coverage faces a key challenge today in the state Assembly.

A bill authored by Assemblyman Dave Jones, D-Sacramento, would require state regulators to approve increases in premiums, co-payments and deductibles proposed by insurers.

Gov. Arnold Schwarzenegger's health care reform proposal would require all Californians to obtain health insurance. As part of the governor's plan to control the costs of coverage, insurers would have to spend at least 85 percent of all premium dollars on medical care.

But a number of consumer and labor groups say the governor's plan doesn't go far enough to control costs. Californians who do not receive coverage through an employer or qualify for government subsidies would be required to purchase individual insurance. Rates for such coverage have been far outpacing inflation for years.

Jones' bill faces stiff opposition from the insurance industry. It needs enough votes to move out of the Assembly Appropriations Committee to stay alive.

"This is the big showdown," said Jerry Flanagan, health care advocate for the Foundation for Taxpayer and Consumer Rights, a consumer group supporting the bill. "The insurers want to kill it ... because the cost savings are huge for California consumers and they don't want that fact to be public."

The California Association of Health Plans, which represents the state's health insurers, doesn't believe rate regulation is the right way to control costs.

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Posted by healthinsurance at May 31, 2007 06:24 PM

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