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Senate Committee on Health Passes AB 52

On Wednesday, the Senate Committee on Health passed AB 52 (Feuer) with a 5-3 vote and one abstention from Senator Michael Rubio (D-Bakersfield).

AB 52 would authorize state regulators to reject excessive health insurance rate increases. Current state law only allows the Department of Insurance (DOI) to review rate increases and declare them excessive. Under the new bill, health insurers would need approval from state regulators before raising insurance rates. If DOI or the Department of Managed Health Care finds the rate hike “excessive, inadequate or unfairly discriminatory,” the proposed increase could be rejected. Proponents of the bill hope the improved authority would slow the rise of premium increases, which, according to Feuer, have outpaced health care cost. However, the California Association of Health Plans (one of the bill’s opponents) feels the bill does not address the underlying factors contributing to rising health care cost. Committee Chair, Sen. Ed Hernandez (D-West Covina), requested a number of amendments to the bill that would address political influence on decision making from outside parties before he lends his full support.

An analysis by the Assembly Appropriation Committee estimates that implementing provisions of the bill would cost the state $30M annually.

AB 52 (Feuer) will now move onto the Senate Appropriations Committee.

For further discussion on rate regulation, check out ITUP’s previous post by guest bloggers Betsy Imholz of the Consumers Union of United States, Inc. and Micah Weinberg of the New America Foundation.