A bill on the California Assembly floor Thursday would give health insurance regulators the power to reject a rate increase they consider unreasonable.
When a health insurer wants to raise premiums in California, current law requires it to justify the increase to state regulators. But Assemblyman Mike Feuer says the law stops there.
“Even if they determine that those rate increases are unjustified, unreasonable, excessive, the most they can do is to say ‘please don’t do this’ to the health insurance companies,” said Feuer. “Under my bill, state officials can say, you can’t justify those increases so they can’t take affect.”
But Patrick Johnston of the California Association of Health Plans says the bill doesn’t remedy the underlying causes of escalating medical costs.
“A rate can be unaffordable, but reasonable,” said Johnston. “It’s reasonable because doctors, hospitals, medicines, devices, tests, and an aging population with chronic disease costs that much.”
About half of all US states already have such health insurance laws on the books.