Amid contentious political maneuvering and posturing, the California Assembly passed AB 52, a bill that would give the California Insurance Commissioner the power to reject or change health insurance rate increases that are deemed excessive.
The bill was passed on June 2 by a vote of 47 to 28, largely along party lines, and now goes to the State Senate for final approval.
For California Insurance Commissioner David Jones, the passage of AB 52 puts him one step closer to having the power he has long sought for his office, pre-dating his tenure as commissioner.
"As a member of the Assembly, I introduced this legislation three times, and the need for it has only grown, as health insurance continues to become unaffordable for more and more Californians and businesses," Jones said. "This bill levels the playing field for California's consumers and businesses, and I look forward to continuing this effort to ensure that it becomes law."
[See also: Blue Shield of California asked to justify rate increases for 70,000 members; California: Anthem Blue Cross rate increase for 120,000 members 'unreasonable']
The measure has generated strong support across the state, especially from those representing small businesses and minority business owners, which continue to struggle with the pressures of staying in business amid rapidly increasing costs to provide health benefits.
"Currently, high insurance premiums are bleeding African-American, Asian and Latino communities of jobs and healthcare. The bleeding won't stop until AB 52 becomes law," said Samuel Kang, general counsel for The Greenlining Institute, a multi-ethnic public policy research and advocacy institute, when the bill passed out of committee in the Assembly in April.
Others aren't so sure the bill is the right medicine for the rapidly increasing costs of healthcare in the state.
"AB 52 is a misguided effort that will limit access to health services and increase costs," said Patrick Johnston, president and CEO of the California Association of Health Plans. "AB 52 offers no relief from the underlying cost pressures that drive up insurance premiums. This bill will ultimately result in higher costs and less access to health services for Californians. Rather than focusing on the arbitrary price controls offered by AB 52, we need to focus on solutions that address the unrelenting cost pressures that are driving up insurance premiums."
Momentum for support of the bill may have come from a number of high-profile rate increases proposed by health plans in California over the past 15 months. Early last year, Anthem Blue Cross proposed a rate increase of more than 39 percent for some policy holders, and in January Blue Shield of California proposed rates that would have hit some of its individual policy holders with increases as high as 59 percent. While Jones didn't have the legal authority to reject the increases, he and consumer advocacy groups were not shy about shining the spotlight on the companies as a means to gather public support.
Both insurers eventually backed off on their requests, in some measure spurred by public backlash.
Paul Markovich, Blue Shield of California's COO, said the company pulled its rate increase because the issue "was becoming an enormous distraction from the mission we are passionate about as a non-profit, which is to assure that all Californians have access to quality care at an affordable price. We are committed to reform and we felt that we couldn't show that simply with words. It required a bold action and this is the action we took."