News CoverageThe San Francisco Chronicle
Bill would regulate health plan increases
by Lynda Gledhill, Chronicle Sacramento Bureau
Apr 10, 2003
Sacramento: California health care plans would have to seek government approval before raising rates under a bill unveiled this week at the state Capitol.
Health plans would have to submit proposed increases in premiums, copayments and deductibles to the Department of Managed Health Care or the Department of Insurance for approval.
Supporters of the legislation believe that controls are needed to reign in skyrocketing rates.
"We can no longer allow the greed of a few companies to cause children to go without health insurance," said Sen. Liz Figueroa, D-Fremont, the bill's author.
The reform would be modeled on Proposition 103, which regulates car insurance.
The Foundation for Taxpayer and Consumer Rights, which is sponsoring SB26, said it would pursue the matter at the ballot box if the legislation isn't passed and signed by the governor.
The hope by sponsors is that more people would be able to keep their coverage and that some of the estimated 7 million uninsured Californians would find an affordable plan. Many HMO premiums have seen double-digit increases this year. The California Public Retirement System, which insures 1.2 million Californians, saw a 25 percent increase.
A spokesman for the California Association of Health Plans said changes in health care have led to increased costs that cannot be regulated.
"You cannot pass a law to get rid of bad weather," said Bill Wehrle, a vice president for the group. "You can't wish things away."
Wehrle said drug research and advances in health care technology have led to the higher costs, not the desire by organizations to make unreasonable profits.
"That is the sad part about the bill. It doesn't engage in the honest conversation we have to have about how much health care we need," he said.
Even though health plans could justify their costs, it would be a waste of time and money to have to go through a state bureaucracy, Wehrle said.
Senate President Pro Tem John Burton, D-San Francisco, said the bill will save the state money in health care premiums it pays for state workers and retirees.
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