This week's large rate hike announcement by Blue Shield makes the perfect backdrop for debating an Assembly bill to regulate those kinds of rate increases, according to Assembly member Mike Feuer (D-Los Angeles), who introduced AB 52 last month.
"It sure adds fuel to the significance of AB 52," Feuer said. "I am optimistic that the day is coming when insurers will need to justify increases like this."
Feuer's bill was eligible to go to committee yesterday.
Earlier this week, Blue Shield proposed raising its premium rates an average of 30% to 35%, with some increases rising as much as 57%. The public outcry over those hikes mirrors the backlash that hit Anthem Blue Cross early last year when it proposed premium rate hikes that averaged about 25%, with some increases costing as much as 39% more. (Anthem Blue Cross eventually trimmed those numbers down to an average of about 14%, with some increases reaching as much as 20%.)
"This bill is important, especially now with the dramatic increases made by Blue Shield," Feuer said. "It's imperative to give the Insurance Commission the means to keep insurance costs reasonable."
Feuer's bill, AB 52, is currently worded in "intent language" -- which means the details will be fleshed out as it gets closer to being heard in committee, which is expected to happen sometime in March. The new bill is similar to last year's AB 2578 by Feuer and Sacramento Democrat Dave Jones, now the state's insurance commissioner. AB 2578 was defeated by a few votes in the Senate in literally the final hour of the 2010 legislative session.
Feuer said he's reviewing all of the opposition's comments on that bill, to make sure this version of the regulatory proposal gets broad acceptance.
"I'll be going over each of those documents over the next couple of weeks," Feuer said. "As I remember it, people said that it might impede consumer choice. And some felt that giving regulatory authority to the Insurance Commission might not work."
The flip side to not passing health insurance rate regulation, Feuer said, has already been seen in California.
"I think we'd all be a little more outraged about this if we hadn't seen this before. If we don't pass this, then we're going to continue to see huge double-digit rate increases, with escalating health care costs for everyone," he said. "And that's a real problem."