Insurance Rates - New Bill Defeated By Health Insurers

A bill supported by consumer and labor organization (AB 2578- Jones/Feuer) which advocated for strong insurance rate reform was defeated on Tuesday, with an alternative bill proposed by Governor Schwarzenegger and carried by Senator Mark Leno (SB 1163) being supported. Consumer Watchdog points out that the Leno bill potentially allows insurers to charge excessive health insurance premiums, as the new standard merely requires an increase in rates to be “actuarially sound.”

Doug Heller, Executive Director of Consumer Watchdog commented on the proceedings: “While Californians face ever-increasing insurance premiums and a looming requirement to buy coverage, Sacramento politicians sided with health insurance companies to defeat rate regulation and let insurers charge whatever they want. The hundreds of thousands of dollars health insurers spread around the Capitol is chump change compared to the hundreds of millions that insurers will be allowed to overcharge Californians as a result of yesterday’s votes.”

“If you want to summarize what happened in Sacramento last night, you could say: insurance companies won and Californians lost. Since Sacramento politicians won’t take on the health insurance industry, it’s clear voters will have to deal with this issue on their own. We’re committed to getting real rate regulation in California before the federal mandate to buy insurance takes effect in 2014,” added Heller.