CA ASSEMBLY PASSES BILL TO MAKE HEALTH INSURERS GET STATE APPROVAL BEFORE HIKING RATES; REPUBLICANS WALK OUT IN PROTEST

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Updated June 3, 2011

June 2, 2011 (Sacramento) – Car insurance and homeowner insurance companies have long been required to get state approval before raising rates. But not health insurers. Some have hiked up rates multiple times a year; Blue Cross sought to jack up rates 59% with three increases in six months.

Gouging consumers with unjustifiable rate hikes will no longer be allowed if AB 52 becomes law. The bill would require health insurers to provide justification and get permission from state regulators before imposing increased costs for health care premiums, copayments, or deductibles on consumers.

 

Consumer Watchdog representative Doug Heller says heath insurance companies in California “can pretty much do whatever they want.” Consumer Watchdog supports the bill.
 

So does Insurance Commissioner Dave Jones. “On a regular basis, health insurers announce significant premium increase that far surpass the rate of medical inflation,” he said.  In other words, insurers are hiking rates more than costs have risen.  “Since I took office, Californians have made it exceedingly clear that they want me to rejet excessive rate increase," Jones added, "but I do not have this authority as Insurance Commissioner. AB 52 can change that.”
 

Today, Assembly Democrats passed AB 52. Republicans walked out in protest after Democrats refused to grant their request for a recess, the Sacramento Bee reported. Democrats said Republicans were only trying to run out the clock, since tomorrow is the deadline for action on bills this session.
 

“The Republicans walked out on their job and on the consumers of California, but managed to come back to work 30 minutes later when it was time to get autographs from a famous football player,” said Speaker John Perez, according to the Sacramento Bee. 

 

Editor's note:  The official State Legislative website has updated the vote count, which was originally reported as 42-1, later changed to 42-7, and most recently updated as 45-28.  An earlier version of our article included the early vote counts.

 

San Diego County's Democratic delegation--Marty Block, Toni Atkins, and Ben Hueso--voted for the bill.  Local Republicans Brian Jones, Kevin Jeffries, Martin Garrick, and Nathan Fletcher joined their party in walking out, but later voted against the bill.
 

Assemblyman Jeffries' has offered the following explanation for the Republican walk-out.   "The Democrats sought to circumvent the adopted Rules of the House when they decided to take up the agenda item (AB-52) out of file order (aka-not filllowing the agenda) and catch the Republicans off-guard," he wrote in an e-mail to ECM.  He added that Republicans objectied to a violation of the adopted rules and that Democrats voted by majority to waive those rules.  The Republican leader requested to hold a 15-minute caucus and the Democratic leader put the request to a vote of the full Assembly, which Jeffries said had never been done in recent history. After the majority refused to allow the minority GOP to caucus before proceding with debate, Republicans chose to caucus without permisison of the majority and met in the Rules room nearby to discuss what they viewed as disrespectful treatment. They later returned to the floor and resumed voting.

 

The bill was opposed by the insurance industry and by business groups that have insurance industry members, as well as by the Republican party, which claim the measure poses an undue burden on the insurance industry  

 

The measure is supported by consumer and watchdog groups, as well as affordable healthcare advocates.
 

AB 52, authored by Assemblyman Mike Feur (D-Los Angeles), now goes to the Senate. If passed by the Senate, it will go to Governor Jerry Brown for signature.