Posts Tagged ‘AB 52’

Consumer savings from the Affordable Care Act so far a mixed bag

December 21st, 2012

There was much fanfare in the mainstream media over news that Americans saved $1.5 billion thanks to the Affordable Care Act, according to a study by the New York-based Commonwealth Fund. Those savings came about as a result of a new ACA regulation requiring health insurance companies to spend at least 80 percent of premium dollars on actual health care. This financial measure is known as the medical loss ratio (MLR). Health insurance companies that didn’t meet the new rule had to send back the $1.5 billion in the form of rebates to consumers. On its face, this sounded like a win for consumers. However, the real effect of the new MLR rule was more mixed, the study concluded. Although consumers with health coverage in the individual market did see some benefit, for those in small and large-group plans, not so much:

Although the MLR rule, along with other market and regulatory factors, prompted reductions in administrative expenses in all three market segments, in the group markets it appears that insurers were able to retain those cost reductions in the form of increased profits, rather than passing them on to consumers in the form of reduced premiums. By contrast, both administrative costs and profits dropped in the individual market, indicating that consumers benefitted in the form of restrained premium increases. Premiums did increase somewhat, because of the growth in medical costs, but the increases were less than medical cost increases.

Los Angeles-based Consumer Watchdog, pointed to the results of the study as proof that the government needs to do more to regulate premium rate increases.

“Absent rate regulation, health insurers are gaming the health reform law to keep premiums high and increase profits. Health insurers should be required to open their books and justify their charges – including why they haven’t passed on to consumers nearly one billion dollars in savings,” said Carmen Balber, Washington DC director for Consumer Watchdog.

Unlike in some other states, California’s insurance commissioner doesn’t have the power to reject unreasonable rate hikes. Assembly Bill 52, authored by Assemblymember Mike Feuer, would give the insurance commissioner that regulatory authority. Unfortunately, the bill could never make it out of the state Senate, and Feuer decided to shelve it last year. Now that state Democrats are on their way to gaining a supermajority in both houses of the state legislature, there may be hope for a revival of AB 52.

But rate regulation isn’t a panacea. It’s great that some consumers are getting financial relief from Obamacare. However, we can do much better. California could do away with insurance rates altogether by providing health care to all residents as a public service rather than as a commodity. The savings to our state would be far greater.

Health Committee Chair’s Questionable Financial Gains From Insurance Industry Lobbyists

September 9th, 2011

When California Senate Health Committee Chair Ed Hernandez’s foot dragging earlier this year nearly killed the single payer bill, SB 810, outright, I wondered whether health insurance industry lobbyists had gotten to him. Hernandez, a Democrat, eventually voted to move SB 810 out of committee, but only after a massive amount of arm-twisting by universal healthcare advocates and a public dressing down by a Democratic Party activist at the state convention. However, weeks after the vote, SB 810 was still placed on ice, to be re-introduced in January.

Hernandez then complained about another popular bill, AB 52, that would have allowed state regulators to pre-approve insurance industry rate increases. He voted that one out of committee too, but said he wouldn’t support a final version unless changes were made. Under industry pressure, AB 52 soon died in the State Senate in late August. Well, turns out there may have been a reason for all of Hernandez’s hemming and hawing. According to an investigation by Think Progress, he’s been on the health lobbyists’ payroll:

State Sen. Ed Hernandez (D), the chair of the health committee, voted for AB 52 but told the press he could not support the bill in its current form. Hernandez’s income is boosted by about $69,000 a year in payments from Kaiser Health Plans, the state’s largest insurer (and one of AB 52′s most prominent opponents) in rent at an office building owned by Hernandez. The unusual arrangement might present a serious conflict of interest, but Hernandez’s spokesman told ThinkProgress that the rent payments began shortly before Hernandez entered the legislature, and that Kaiser maintains a community outreach center in the senator’s building. (emphasis is the author’s)

Hernandez’s spokesman can try to spin this stinky arrangement until he gets dizzy. It doesn’t matter that the rent payments were made before Hernandez became a state senator. What’s problematic is that Hernandez continued this financial relationship with Kaiser while still sitting on the state Senate Health Committee. At the very least, Hernandez should have recused himself from the vote on AB 52. It makes one wonder if there are any other little arrangements the senator has got going with his health lobbyist buddies? The stench of corruption here is just too great to ignore.  It’s no wonder that we, the people of California, and the United States can’t get the kind of legislation passed that will truly address the dire problems we face, which includes replacing a morally bankrupt and deadly healthcare system with one that provides high-quality and affordable care to all. Our democracy has been hijacked by unethical business interests funneling money to our so-called “representatives” by means that may be legal in this country, but elsewhere, such “arrangements” would be called by another name.

Insurance Rate Regulation Bill Passes Senate Health Committee

July 7th, 2011

The Sacramento Bee reported that AB 52, the legislation that would give regulators the authority to review proposed health insurance rate increases, passed the state Senate Health Committee on Wednesday.

Assembly Bill 52, the controversial bill that would impose rate regulation on health insurers, passed out of the state Senate’s Health Committee by a 5-to-3 vote Wednesday along party lines.

The bill, authored by Assemblyman Mike Feuer, D-Los Angeles, generated intense lobbying that pitted health care advocates against medical associations and business groups.

The advocacy groups support the bill, saying regulation of insurance premiums would protect consumers from paying excessive rates and make care more affordable.

The bill now goes to the state Senate Appropriations Committee, which consists of six Democrats (Christine Kehoe, Elaine Alquist, Ted Lieu, Fran Pavley, Curren Price, Darrell Steinberg) and three Republicans (Mimi Walters, Bill Emmerson, Sharon Runner). Below are their contact information:

Senator Christine Kehoe (Chair) – (916) 651-4039
Senator Mimi Walters (Vice Chair) – (916) 651-4033
Senator Elaine Alquist – (916) 651-4013
Senator Bill Emmerson – (916) 651-4037
Senator Ted W. Lieu – (916) 651-4028
Senator Fran Pavley – (916) 651-4023
Senator Curren Price – (916) 651-4026
Senator Sharon Runner – (916) 651-4017
Senator Darrell Steinberg – (916) 651-4006

It’s highly probable that AB 52 could be watered down, given the power of the insurance industry, the intense propaganda war the insurers are engaging in, and the fact that Health Committee Chairman Ed Hernandez says he won’t vote for the bill on the floor unless there are some changes. From the Associated Press:

The bill faced an end-of-the-week deadline for committee approval, but its fate is uncertain. It has drawn no substantive Republican support and Democratic backing is wobbly amid strong lobbying by the politically influential opponents.
Health committee’s chairman, Sen. Ed Hernandez, D-Baldwin Park, pushed for significant changes to the bill before he would support it, but he voted for the measure Wednesday to keep it alive while negotiations over amendments continue.
“While I have had some concerns on your bill, I do support regulation,” Hernandez said.
He said he wants amendments to address concerns about political influence in decision making, whether outside parties could intervene in a rate case, identifying the medical costs that are built into insurance rates, and other matters before he will fully support the bill.

It’s imperative that we keep calling our representatives to overcome the power of the insurance lobby, get AB 52 passed, and onto Gov. Jerry Brown’s desk. Find out your representative by clicking here. AB 52 will give millions of Californians some welcome financial relief until we can get SB 810 through and cut out the insurance industry from health care once and for all.

Where Your Premium Dollars are Going: To Lobbyists

July 5th, 2011

It’s bad enough that much of our hard earned money goes into health insurer CEO pockets. It’s even worse that much of our hard earned money is also going into the pockets of lobbyists the insurance industry hires to fight legislation that would actually save us money. Tomorrow, the state Senate Health Committee is scheduled to vote on AB 52, legislation that would allow the insurance commissioner to review proposed health insurance rate hikes. And the industry is siccing their lobbyists – paid for by their customers’ premiums – to kill the bill: From Think Progress:

The California Chamber of Commerce has announced that AB 52 is on the top of its list of “Job Killers,” meaning they will make killing the legislation a top priority. The Chamber purports to represent all businesses in the state, but its board membership reveals mostly multinational corporations. Health insurers have a seat at the table. California Chamber board members include Greg Adams, a top Kaiser Health Plans official, David Anderson, CEO of UnitedHealthcare of Southern California, and Pam Kehaly, President of Anthem Blue Cross of California. Diamond membership to Chamber requires annual dues of at least $100,000, suggesting that top insurers have funneled hundreds of thousands of their customers’ premium money to a right-wing lobbying group, rather than spending it on actual medical services.

This is more evidence of how the healthcare system in this country has become shamelessly corrupt. We have a situation where companies that are supposed to be looking after the health of their customers, are instead using their customers’ own money against them. No other country allows such an outrage, and we shouldn’t either.