Today the California Assembly Health Committee will hold a hearing on a bill that would allow state regulators to reject health insurance rate increases deemed excessive or discriminatory. This hearing will come just six days after the first board meeting of the California Health Benefit Exchange. Many hope that the Exchange will take the lead in holding insurance rate increases down through actively negotiating with insurers. Can active negotiation work in tandem with rate regulation?
Mike Russo, health care advocate and staff attorney for CALPIRG, which is a sponsor of the rate regulation bill, believes it can. In an issue brief, he writes that active purchasing and rate regulation, “combine and complement each other to deliver even better value for consumers.” He further points out that “the large majority of Californians will not get their coverage through the Exchange, meaning the Exchange’s negotiating power will not help them.” Continue reading