Senate panel backs state power over health insurance rate hikes

by Darrell Smith, Sacramento Bee

Assembly Bill 52, the controversial bill that would impose rate regulation on health insurers, passed out of the state Senate’s Health Committee by a 5-to-3 vote Wednesday along party lines.

The bill, authored by Assemblyman Mike Feuer, D-Los Angeles, generated intense lobbying that pitted health care advocates against medical associations and business groups.

The advocacy groups support the bill, saying regulation of insurance premiums would protect consumers from paying excessive rates and make care more affordable.

Opponents call the legislation costly and misguided.

Lowering health care costs by regulating rates is "a strategy largely doomed to failure," said Sen. Sam Blakeslee, R-San Luis Obispo, who voted against the bill. "The smarter approach in the long term is to focus on the underlying cost drivers" that push up premiums, he said.

But Feuer said the bill is a pocketbook issue for families making critical choices about how to pay for care.

"Why this matters is that people are choosing between paying the mortgage and paying for health insurance," Feuer said outside the hearing. "This bill will make a big difference for folks."

In the days leading to the Wednesday vote, opponents were pushing amendments that state Insurance Commissioner Dave Jones, a chief advocate of the legislation, feared would gut the bill.

"We remain concerned that the insurance industry, in an effort to protect its excessive profits, will continue to push for poison-pill amendments to weaken the bill," Jones said Wednesday.

On Wednesday, Democrats on the committee called the bill a work in progress. Sen. Elaine Alquist, D-Santa Clara, called the bill "constantly evolving." Sen. Michael Rubio, D-East Bakersfield, spoke of "substantial amendments." "The bill could change drastically," he said.

And, committee Chairman Ed Hernandez, D-West Covina, said he supports the concept of rate regulation but has "formulated thoughts on how to make this a better bill."

Patrick Johnston, president of the California Association of Health Plans, was dismayed that the bill is now moving on to the Senate Appropriations Committee, as yet untouched. The association has vigorously opposed the rate regulation bill.

"The bill that went into the Health Committee is the same one that came out," Johnston said. "AB 52 remains a misguided piece of legislation, and we’ll continue to present evidence that 52 will not address the problem of affordability for the consumer."