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June 09, 2007

Regulation of rising health insurance rates passes US Assembly

The US California Assembly approved a bill that would bring health insurers in line with other kinds of insurance in California, requiring companies to defend and get permission for increases in their premiums.The bill, AB1554 by Asm. Dave Jones, will protect Californians against double-digit yearly health premium increases and outrageous fees and co-pays, said the Foundation for Taxpayer and Consumer Rights.

The bill faced ferocious opposition from insurance companies, said FTCR, congratulating the Assembly majority that stood up to the corporate pressure, as well as attempts by Gov. Arnold Schwarzenegger to ki ll the bill before it proceeds to the Senate. AB1552 faces the same opposing forces in the Senate, but if passed intact by both houses it will be difficult for Schwarzenegger to veto.

"California insurance companies are funneling billions of dollars to out-of-state corporate owners, even as health insurance premiums increase at a rate far ahead of medical inflation in general," said Jerry Flanagan, health policy director of the nonprofit, nonpartisan FTCR. "Without enactment of this bill, companies like Blue Cross, which mailed off nearly $1 billion of its California profits to a parent company in Indiana over three months, will keep using California health insurance purchasers as their corporate ATM."

Public review and regulation of rate increases is the underpinning of other proposed health care reforms, said FTCR. The group noted that when Californias auto insurance rates became the second most expensive in the nation, Proposition 103 cut rates and California fell to 21st in the pack even as costs soared in other states. The rate regulation of AB1554 would do the same for health insurance, while preserving the kind of vibrant, competitive market that rules auto insurance.

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Posted by healthinsurance at June 9, 2007 08:58 PM