Will Health Coverage Premium Hikes See More Regulation?
July 2011
Thirty four states in the US allow insurance regulators to deny
health coverage premium hikes
that seem excessive. Now, if bill AB52 is passed, California health
insurance will also fall into that category.
It's been a hotly contested debate punctuated by emotional testimony
from men and women who cannot bear the economic burden of health
coverage today. Rate hikes for
California
health insurance first gained notoriety last year, when a proposed
increase in coverage costs of almost 40% gained national attention and
fueled the passage of the
health care bill.
This year rate hikes of 16% were instituted by major insurance
companies, even as regulators called it excessive and unnecessary.
Many of these same health insurance companies also posted record
profits both last year and the year before, even as Americans struggle
with a sagging economy and job loss.
The bill would allow insurance regulators to veto a health coverage
premium hike that seems far above the rate of medical inflation,
currently predicted at about 9%.
Critics of the bill argue that limiting the ability of health
insurance companies to charge what they see fit will lead them to cut
back on reimbursements to doctors. Doctors, in turn, will not be able
to treat the poor, who are often subsidized by medical costs paid by
those with insurance.
Facts on:
California Health Insurance
Did you know...
insurance companies can raise premiums for health coverage to any amount they want?
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There is also concern that insurance regulators would wield too much
political power. The health coverage industry in California accounts
for a large percentage of insurance profits across the US, making the
stakes high for insurance companies who sell coverage there.
Supporters of the bill argue that California health insurance costs
should be regulated by someone
other than the health insurance
industry.
Whether or not the bill passes will also be influenced by the
so-called "poison pill" amendments that could weaken regulatory power
over insurance agencies.
The bill is set for the vote this Wednesday
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