Health insurance regulation bill stalls for the year

Published Thursday, Sep. 01, 2011

A controversial push to give state regulators the power to reject proposed increases in health insurance rates stalled in the state Senate on Wednesday.

Assembly Bill 52, by Assemblyman Mike Feuer, D-Los Angeles, would let the state insurance commissioner or the director of the Department of Managed Health Care reject or modify proposed rate increases found to be "excessive," "inadequate" or "discriminatory."

The bill cleared the Assembly on a party-line vote in June. But Feuer pulled the plug Wednesday on this year's effort, saying he does not have the votes to win approval from the Senate before next week's deadline for approving bills.

"Despite an outpouring of strong support from small business, working families and consumers throughout (California), the bill has hit a temporary roadblock in the Senate," Feuer said in a statement. "Right now, not enough senators are prepared to vote for any form of health insurance rate regulation."

Local governments, pension funds and Gov. Jerry Brown's Department of Finance had come out against the bill in recent weeks for reasons that included projected costs and complications for public employee health plans.

Opposition from the Finance Department signals that the measure could face a veto if it got to Brown's desk.

A spokeswoman said Feuer will work for the bill's passage next year, when the Legislature returns for the second leg of its two-year session.

AB 52 sparked one of this year's biggest battles, attracting intense lobbying that pitted consumer activists and health advocacy groups against the health insurance industry and business groups. Supporters, including Insurance Commissioner Dave Jones, argued the change was needed to protect consumers from skyrocketing rates.

"This is a huge setback for Californians who can't afford another rate hike," said Austin Price, a health care associate for the California Public Interest Research Group, which supported the bill.

Industry opponents argued that there are sufficient consumer protections on the books and that the change would not address the root cause of rising costs.

The measure only needed support from majority Democrats to pass the upper house, but even clearing that hurdle was expected to be tough in the wake of growing opposition.