After Aggressive Lobbying From Health Insurance Industry, Premium Rate Regulation Bill Is Dropped In California

In California, Democrats in the legislature proposed a bill to add greater oversight over the health insurance industry. The rate regulation bill, proposed by Assemblyman Mike Feuer (D-Los Angeles), would have allowed the Insurance Commissioner to review rate hikes proposed by insurers, and block hikes if they are without justification.

The bill, which mirrors similar policies for the auto insurance industry and health rate review laws in other states, died a sudden death yesterday as health care industry lobbying intensified:

Groups representing insurers, hospitals and doctors lobbied against the bill, saying the regulations would add bureaucracy and do nothing to address high and fast-rising medical costs that help drive rate increases. Ultimately, they argued, rate regulation could reduce access to care.

As ThinkProgress reported back in June, health insurers mobilized opposition through a number of third party groups funded by health insurers and other health care industry businesses. For instance, the California Chamber of Commerce slated Feurer’s bill, AB 52, as a “Job Killer,” but obscured the fact that Kaiser Health Plans, UnitedHealthcare of Southern California, and Anthem Blue Cross of California are major donors to the Chamber’s political coffers.

Although Feurer’s bill is dead for now, the fight has not yet ended. Next year, advocates will push again for the bill, which passed the Assembly earlier this year and died due to obstruction in the Senate.

Rate regulation might also see momentum in the form a ballot initiative drafted by California Watchdog for the polls next year. According to reports, California Watchdog’s rate review initiative would not only include elements of Feuer’s bill, but also require a 20 percent rollbackof existing rates. “We’re preparing an initiative to be ready to go on health insurance reform if we’re not able to get satisfactory results in the Legislature,” said Doug Heller, executive director of the group.