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SENATE

HE
ALTH

COMMITTEE

ANALYSIS

Senator

Ed

Hernandez,

O.D.,

Chair



BILL

NO:


AB

52

A

AUTHOR:


Feuer

and Huffman

B

AMENDED:


June

1,

2011


HEARING

DATE:


June

29
,

2011

5

CONSULTANT:


2

Chan
-
S
awin






SUBJECT


Health

care

coverage:

rate

approval



SUMMARY


Effective

January

1,

2012,

requires

health

care

service

plans

(health

plans)

and

health

insurers

to

apply

for

prior

approval

of

proposed

rate

increases,

under

specified

conditions,

and

imposes

on

the

California

Department

of

Insurance

(CDI)

and

Departmen
t

of

Managed

Health

Care

(DMHC)

specific

rate

regulation

criteria,

timelines,

and

hearing

requirements.



CHANGES

TO

EXISTING

LAW


Existing

federal

law:

Requires,

under

the

federal

Patient

Protection

and

Affordable

Care

Act

(PPACA)

(Public

Law

111
-
148),

th
e

federal

Secretary

(Secretary)
of

the

Department

of

Health

and

Human

Services

(
DHHS
)
,

in

conjunction

with

states,

to

establish

a

process

for

the

annual

review

of

unreasonable

increases

in

premiums

for

health

insurance

coverage,

beginning

with

the

2010

pla
n

year.


Requires

the

rate review
process

to

require

health

insurance

issuers

to

submit

to

the

Secretary

and

the

state

a

justification

for

an

unreasonable

premium

increase

prior

to

the

implementation

of

the

increase.

Requires

health

plans

and

insurers

to

prominently

post

such

information

on

their

websites
. R
equires

the

Secretary

to

ensure

the

public

disclosure

of

information

on

such

increases

and

justifications

for

all

health

plans

and

insurers.


Existing

state

law:

Provides

for

the

regulation

of

health

p
lans

and

insurers

(collectively

referred

to

as

carriers)

by

DMHC

and

CDI

(collectively

referred

to

as

regulators)
.


Establishes the California Health Benefit
Exchange
(Exchange)
within state government,
and specifies
the duties and authority of the Exchang
e.

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
2




Prohibits any
provision

of

the

Knox
-
Keene

Act

to

be

construed

to

permit

the

D
irector

of
DMHC
to

establish

the

rates

charged

subscribers

and

enrollees

for

contractual

health

care

services,

and

prohibits

the

D
irector
’s

enforcement

of

the

requirements

of

t
he

state’s

small

group

health

law

from

being

deemed

to

establish

the

rates

charged

subscribers

and

enrollees

for

contractual

health

care

services.


D
oes

not

limit

the

premiums

for

individuals

in

the

individual

health

insurance

market,

except

for

individual
s

eligible

under

federal

law

who

previously

had

18

months

of

group

coverage

and

who

have

exhausted

COBRA/Cal
-
COBRA

coverage.


Requires

health

plans

to

fairly

and

affirmatively

offer,

market,

and

sell

health

coverage

to

small

employers.

This

is

known

as

"g
uaranteed

issue."

Requires

health

plans

to

offer,

market,

and

sell

all

of

the

health

plan's

contracts

that

are

sold

to

small

employers

to

any

small

employers

in

each

service

area

in

which

the

plan

provides

health

care

services.

This

is

known

as

an

"all

p
roducts"

requirement.


Limits

administrative

costs

for

DMHC
-
regulated
health

plans

to

15 percent
and

establishes

minimum

medical

loss

ratios

(MLR)
for

CDI
-
regulated
health

insurers

for

specified

individual

indemnity

dental

and

vision

policies

(50 percent
),

and

MLRs
for

individual

health

insurance,

excluding

indemnity

payout

policies

(70 percent
).

Establishes,

through

regulation,

minimum

MLRs
for

individual

health

insurance

products

regulated

by

CDI.


Authorizes

regulators
to

charge

fees

associated

with

reg
ulatory

filings

and,

in

addition,

requires

that

the

regulatory

enforcement

programs

be

entirely

paid

for

by

carrier
fees

and

assessments.



Establishes

the

Consumer

Participation

Program

within

DMHC,

which

allows

for

the

awarding

of

reasonable

advocacy

an
d

witness

fees

to

any

person

who

meets

specified

criteria

and

who

has

made

a

substantial

contribution

on

behalf

of

consumers

to

the

adoption

of

a

regulation,

order,

or

decision

made

by

the

Director.


Rate review

requirements

Requires prior written notifica
tion of a change in premium rates

or coverage in a health
plan or insurance policy to the contract or policyholder before such a change may become
effective. Prohibits a carrier, during the term of a group contract or policy, from
changing the premium rat
e, copayment, coinsurance, or deductible during specified
periods.


Requires

carriers
,

for

individual

and

small

group

contracts,

to

disclose

to

regulators

information

regarding

identifying

and

contact

information,

contract

forms,

product

and

segment

type,

enrollment,

annual

rates,

earned

premiums,

incurred

claims,

average

rate

increases

and

effective

date

of

increase,

review

category,

number

of

affected

subscribers/enrollees,

overall

annual

medical

trend

factor

assumptions,

amount

of

the

projected

trend

att
ributable

to

the

use

of

certain

factors,

claims

cost

and

rate

of

changes,

enrollee/insured

cost
-
sharing,

changes

in

benefits

and

administrative

costs,

actuarial

certification,

consumer

inquiries

and

complaints,

and

any

other

information

required

to

be

repo
rted

under

PPACA.



STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
3




Requires

carriers, for
large

group

contracts

only
, to disclose to regulators
filings

for

unreasonable

rate

increases,

as

defined

by

PPACA,

prior

to

implementing

any

such

rate

change.

Increases,

from

30

days

to

60

days,

the

amount

of

ti
me

that

a

carrier
provides

written

notice

to

an

enrollee

or

insured

before

a

change

in

premium

rates

or

coverage

becomes

effective.



Requires

carriers

that

decline

to

offer

coverage

to

or

deny

enrollment

for

a

large

group

applying

for

coverage

or

that

of
fer

small

group

coverage

at

a

rate

that

is

higher

than

the

standard

employee

risk

rate

to,

at

the

time

of

the

denial

or

offer

of

coverage,

provide

the

applicant

with

reason

for

the

decision,

as

specified.


Requires

health

plan
s,

as

specified,

to

disclose

s
pecified

aggregate

data

for

all

rate

filings

in

the

individual

and

small

group

markets

related

to

the

number

and

percentage

of

rate

filings

and

the

plan’s

average

rate

increase

by

the

categories,

as

specified.



Requires

rate

filings

to

be

actuarially

soun
d

and

to

include

a

certification

by

an

independent

actuary

or

actuarial

firm

that

the

rate

increase

is

reasonable

or

unreasonable

and,

if

unreasonable,

that

the

justification

for

the

increase

is

based

on

accurate

and

sound

actuarial

assumptions

and

methodo
logies.



Requires

carriers

to

contract

with

an

independent

actuary

to

comply

with

rate review
filing requirements
.

Prohibits

the

actuary

or

actuarial

firm

from

being

be

an

affiliate
,

a

subsidiary,

or

in

any

way

owned

or

controlled

by

a

carrier

or

a

trade

association

of

carriers
.

Prohibits

a

contracted

actuary

or

actuarial

firm

board

member,

director,

officer,

or

employee

from

serving

as

a

board

member,

director,

or

employee

of

a

carrier
.

Prohibits

a

carrier

or

a

trade

association

of

health

plans


board

member,

director,

or

officer

from

serving

as
a

board

member,

director,

officer,

or

employee

of

the

actuary

or

actuarial

firm.



Requires

all

rate filing
information
,

including

any

public

comment,

to

be

made

publicly

available

by

regulators


and

carriers’

w
ebsites,

as

specified,

60

days

prior

to

the

implementation

of

the

rate

increase
,

except

for

contracted

rates

between

a

carrier

and

a

provider

or

a

large

group

subscriber,
which

are

deemed

confidential

information.



Exempts

a

number

of

programs

and

contrac
ts

from

the

rate

review

provisions,

including

specialized

health

plan

contracts,

Medicare

supplement

plans
,

Medi
-
Cal

managed

care,

Healthy

Families

Program,

Access

for

Infants

and

Mothers

Program,

the

California

Major

Risk

Medical

Insurance

Program,

the

Fe
deral

Temporary

High

Risk

Pool,

and

health

plan

conversion

contracts.



Permits

regulators,

whenever

it

appears

that

any

person

has

engaged,

or

is

about

to

engage,

in

any

act

or

practice

constituting

a

violation

of state rate review requirements
,

including

the

filing

of

inaccurate

or

unjustified

rates

or

inaccurate

or

unjustified

rate

information,

to

review

the

rate

filing

to

ensure

compliance

with

the

law.



This

bill:

Prohibits

any

health carrier
rate

from

being

approved

or

remaining

in

effect

that

is

fou
nd

to

be

excessive,

inadequate,

unfairly

discriminatory,

or

otherwise

in

violation

of

the

standards

established

by

this

bill.


STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
4




Defines

“rate”

as

the

charges

assessed

for

a

contract

or

policy

or

anything

that

affects

the

charges

associated

with

such

a

cont
ract

or

policy,

including,

but

not

limited

to,

premiums,

base

rates,

underwriting

relativities,

discounts,

copayments,

coinsurance,

deductibles,

and

any

other

out
-
of
-
pocket

costs.



Prohibits

carriers

from

implementing

a

rate

for

a

new

product

or

change

th
e

rate

it

charges,

unless

it

submits

an

application

and

the

application

is

approved

by

regulators.


Permits

the Insurance Commissioner and Director
to

approve,

deny,

or

modify

any

proposed

rate

for

a

new

product

or

any

rate

change

for

an

existing

product,

as

specified.

Specifies that the presence of competition in the market shall not be considered in
determining whether a rate change is excessive, inadequate, or unfairly discriminatory.


Makes

this

bill’s

provisions

applicable

to

contracts

and

policies

offered

in

the

individual

or

group

market

in

California,

but

exempts

specified

plans

and

policies,

including

specialized

health

plan

contracts,

Medicare

supplement

contracts,

and

contracts

offered

in

the

Medi
-
Cal

Program,

the

Healthy

Families

Program,

the

Access

for

Infants

and

Mothers

Program
,

the

California

Major

Risk

Medical

Insurance

Program
,

the

Federal

Temporary

High

Risk

Pool, health plan conversion contracts, or health plans offered to a
federally eligible defined individual.


Requires

regulators

to

review

rate

applications

pursuant

to

regulations

they

promulgate

to

determine

excessive,

inadequate,

or

unfairly

discriminatory

rates
. Requires the review to
:



C
onsider, but not be limited to, medical expenses and all nonmedical expenses,
including, but n
ot limited to, the rate of return, overhead, administration, surplus,
reserves, investment income, and any information submitted under the rate filing
;
and



T
ake into account established actuarial principles.


Requires

regulators,

in

promulgating

such

regul
ations,

to

consider

whether

the

rate

is

reasonable

in

comparison

to

coverage

benefits
, and p
rohibits the Director or Insurance
Commissioner from approving any rate that does not comply with the requirements of
this bill.


Requires

carriers

to

file

a

comple
te

rate

application

60

days

prior

to

the

effective

date

of

any

proposed

rate

change

or

rate

for

a

new

product

that

would

become

effective

on

or

after

January

1,

2012.



Prohibits

carriers

from

implementing a rate change

within

one

year

of

the

date

of

impl
ementation

of

the

most

recently

approved

rate

change

for

each

product

in

the

individual

or

small

group

market.


Requires

carriers,

for

individual

or

small

group

rate

applications,

to

disclose

18

specified

data

elements

beyond those currently required under

rate review,

and

for

large

group

rate

applications
,

44

specified

data

elements

beyond those currently required under rate
review
,

in

addition

to

submit
ting

any

other

information

required

pursuant

to

any

regulation

adopted

and

related

regulations.

Permits

regulators

to

request

from

a

carrier,

and

requires

carriers

to

provide,

any

information

required

under

this

article

or

PPACA.


STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
5




Requires

the

regulators

to

review

for

compliance

with

the

requirements

in

this

bill,

all

rate

increases

which

bec
a
me

effective

J
anuary

1,

2011.

Requires

regulators

to

order

the

refund

of

payments

made

pursuant

to

any

such

rate,

to

the

extent

the
regulator

find
s

the

rate

to

be

excessive,

inadequate,

or

unfairly

discriminatory.


Requires

the

rate

application

to

be

signed

by

the

chie
f

executive

officer

and

chief

financial

officer

of

the

carrier
,
and

requires

those

officers

to

certify

that

the

representations,

data,

and

information

provided

to

support

the

application

are

true.



Imposes the burden to
provide

evidence

and

documents

est
ablishing,

by

a
preponderance

of

the

evidence,

the

application’s

compliance

with

the

requirements

of

this

bill
, on
the

carrier.


Requires

carriers

to

submit

all

information

electronically
. Requires such information
to

be

made public and posted no less tha
n 60 days after the date of public notice, as
specified.
Requires

the

entirety

of

the

rate

application

to

be

made

available

upon

request

to

regulators,

except

as

specified.

Requires

regulators

to

accept

and

post

to

their

w
ebsite
s

any

public

comment

on

a

proposed

rate

submitted

during

the

60
-
day

period.


Requires

that

all

information

submitted

in

a

rate

application
,

and

all

information

submitted

in

support

of

the

application
,

be

subject

to

the

California

Public

Records

Act,

except

for

financial

data

relate
d to contracted rates between carriers and providers or
large group subscriber
s
.


Requires

regulators

to

notify

the

public

of

rate

applications

submitted

by

carriers

through

a

posting

on

the

regulator
’s

w
ebsites
,

and

distribution

to

the

major

statewide

med
ia

and

to

any

member

of

the

public

who

requests

placement

on

a

mailing

list

or

electronic

mail

list

to

receive

the

notice.



Requires

regulators

to

issue

a

decision

within

60

days

after

the

date

of

the

public

notice,

unless

the

regulator

and

the

applicant

agree

to

waive

the

60
-
day

period

or

the

regulator

notices

a

public

hearing

on

the

application.

Requires

the

regulator,

if

a

hearing

is held
on

the

application,

to

issue

a

decision

and

findings

within

100 days
after

the

hearing.

Requires

regulators

to

ho
ld

a

hearing

on

any

of

the

following

grounds:




An enrollee
,

or

his

or

her

representative,

requests

a

hearing

within

45

days

of

the

date

of

the

public

notice,

and

the

regulator

grants

the

request

for

a

hearing.




The

regulator

determines

for

any

reason

to

h
old

a

hearing

on

the

application;

or



The

proposed

change

would

exceed

10 percent

of

the

amount

of

the

current

rate,

or

would

exceed

15 percent

for

any

individual

subject

to

the

rate

increase,

in

which

case

a

hearing

upon

a

timely

request

for

a

hearing

is

r
equired

to

be

held.


I
f

a

hearing

request

is

denied
, requires the regulator to i
ssue

written

findings

in

support

of

a decision to deny a hearing.


Requires

all

hearings

to

be

conducted

in

accordance

with

laws

governing

state

administrative

hearings,

includ
ing

that

the

hearing

be

conducted

by

an

administrative

law

judge

(ALJ)

in

the

Department

of

General

Services

Office

of

Administrative

Hearings.
Requires

regulators

to provide notice of hearing
,

and

provides

that

the

decision

of

the

ALJ

is

subject

to

revie
w

by

the

regulators.

Requires

the

right

to

discovery

to

be

liberally

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
6




construed

and

requires

discovery

disputes

to

be

determined

by

the

ALJ.


Specifies that, for the purposes of judicial review, a decision by the regulator to hold a
hearing on the applicat
ion is not a final order or decision.

Makes a decision not to hold a
hearing on an application a final order or decision for the purposes of judicial review.


Makes any final finding, determination, rule, ruling or order made by the Director or
Insuranc
e Commissioner subject to review by state courts. Requires review proceedings
to be in accordance with the provisions of the Civil Code of Procedure. Authorizes and
directs the court to exercise its independent
judgment

on the evidence and

provides that
,

unless the weight of the evidence supports the findings, determination, rule, ruling, or
order of the Director or Insurance Commissioner
,
it

shall be annulled
. Requires any
petition for review of any such findings, determination, rule, ruling, or order t
o be filed
within 60 days of the public notice of the order or decision.


Authorizes

an enrollee
to

initiate

or

intervene

in

any

of

the

proceedings

related to this
bill.
Requires

compensation

to

be

provided

for

reasonable

advocate's

fees,

reasonable

exper
t

witness

fees,

and

other

reasonable

costs

to

enrollees

or

policyholders

for

participation

or

intervention,

as

specified.

Defines

an

"enrollee"

or

"policyholder"

as

a

representative

of

one

or

more

enrollees,

subscribers,

or

member

of

any

health

plan

or

po
licyholders

of

a

health

insurer;

or

a

group

or

organization

authorized

pursuant

to

its

articles

of

incorporation

or

bylaws

to

represent

the

interests

of

consumer

enrollees,

subscribers,

members,

or

policyholder
s
. R
equires

the

carrier

to

pay

those

fees.


S
ubjects

carriers

to

penalties

for

violation
s

of

the

provisions

in

this

bill.


A
uthorizes

the

regulators

to

charge

fees

to

cover

costs

of

applications

filed,

and

establishes

two

new

state

special

funds

to

receive

those

revenues

for

the

sole

purpose

of

imple
menting

this

bill.



Permits

regulators,

o
n

or

before

July

1,

2012,

to

issue

guidance

regarding

compliance

with

this

bill,

as

specified.

Exempts guidance from the Administrative Procedure Act.
Requires

regulators

to

have

all

necessary

and

proper

powers

t
o

implement

this

bill

and

requires

the

adoption

of

regulations

no

later

than

January

1,

2013.



Requires the regulators to consult

with the other department
,

regarding the issuance of
guidance, adoption of necessary regulations, in posting information on
the regulator’s

website, and in taking any other action related to implementation of this bill.


Authorizes the regulators to review any rate to ensure compliance with this bill whenever
it appears to the regulator that any person has engaged, or is about
to engage, in any act
or practice in violation of this bill.


Requires

regulators

to

report

to

the

Legislature

at

least

semiannually

on

all

rate

applications

approved,

modified,

or

denied,

as

specified.



Requires

regulators

to

post

the

following

on

thei
r

w
ebsites:




Any

changes

submitted

by

a

plan

to

a

rate

application,

including

any

documentation

submitted

by

the

plan

supporting

those

changes;

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
7






Whether

the regulator

approved,

denied,

or

modified

a

proposed

rate

change;

and



A

finding that a

proposed

rate

i
s

excessive,

inadequate,

or

unfairly

discriminatory,

or

that

a

rate

application

contains

inaccurate

information.


Adds to the list of reasons for which the Director or Insurance Commissioner

may

suspend or revoke any license
,

or assess administrative penal
ties
,

if
the carrier does not
comply with the provisions of this bill.


Makes

various

legislative

findings

and

declarations

related

to

health

insurance

rates.



FISCAL

IMPACT


According

to

the

Assembly

Approp
riations

Committee

analysis:


1)

Annual

fee
-
support
ed

special

fund

costs

of

at

least

$30

million

to

regulators
combined,

to

process,

review,

approve,

post,

and

monitor

activities

related

to

rate

increase

approvals.

Workload

to

regulators
includes

data

collection,

actuarial

analysis,

consumer

services,

rat
e

enforcement,

legal

analysis,

administrative

law

hearings,

and

continued

oversight.

This

estimate

is

subject

to

significant

uncertainty,

as

workload

would

depend

on

plan

behavior

with

respect

to

the

timing

and

number

of

proposed

rate

increases.


2)

A

signif
icant

increase

in

fee
-
supported

special

funds

may

be

required

for

several

years

and

especially

during

major

coverage

expansions

in

several

years

per

requirements

of

the

PPACA
.

Actual

costs

may

subside

earlier,

depending

on

patterns

of

health

coverage

expa
nsions

and

related

changes

in

insurance

product

pricing.


3)

PPACA

includes

some

support

for

states

to

conduct

general

rate

review

and

report

to

the

federal

government

about

unjustified

rates.

California

has

received

a

$3

million

grant

each

year

for

the

next

three

years,

and

may

be

eligible

for

an

additional

$2

million.

This

federal

funding

would

offset

any

fee
-
supported

special

fund

costs

generated

by

this

bill.



BACKGROUND

AND

DISCUSSION


According

to

the

author,

excessive

health

insurance

rate

increases

place

health

insurance

out

of

the

reach

of

millions

of

families.

The author asserts that
skyrocketing

increases

force

business

owners

and

employees

to

absorb

major

costs

or

search

for

less

expensive



and

less

comprehensive



coverage

options.

Small

busi
ness

owners

need

the

stability

that

this

measure

provides

through

ensuring

that

rates

cannot

be

raised

more

than

once

per

year.

The

author

states

that

insurance

rates

continue

to

escalate

at

a

remarkable

pac
e, and
points to a Kaiser Family Foundation repo
rt that found,

from

1999

to

2009,

health

insurance

premiums

for

families

rose

131

percent
,

while

the

general

rate

of

inflation

increased

just

28

percent

during

the

same

period
.

The

same

report

concluded

that

states

with

robust

and

transparent

rate

review

and

approval

processes

have

greater

power

to

protect

consumers

from

large

rate

increases.

The

author

argues

that

this

bill

would

bring

California

in

line

with

35

other

states

that

require

some

form

of

prior

health

insurance

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
8




rate

approval

by

state

regulato
rs, give regulators
the

power

to

protect

Californians

from

excessive

rate

increases
,
and

help

to

keep

insurance

premiums

affordable.



According to the author,

regulators currently have

the

authority

to

review

whether

or

not

proposed

rate

increases

are

re
asonable
.


If

regulators
find

that

a

rate

is

unreasonable,

the

carrier

must

provide

a

justification

for

the

rate

increase.

The author contends that neither
regulator has the authority to modify or reject rate changes found to hurt consumers
.
The

author

f
urther

states

that
California
should

have

the

authority

to

minimize

families’

loss

of

health

insurance

coverage

as

a

result

of

steeply

rising

premium

costs.

That author
believes that

AB

52

would

ensure

crucial

consumer

protection

by

granting

regulators

th
e

authority

to

approve,

deny,

or

modify

rate

increases

that

are

found

to

be

excessive,

inadequate,

or

unfairly

discriminatory
.



Rate regulation and rate review

Many states use “prospective” regulation of rates, while others use “retrospective”
regulation.

Prospective regulation

includes prior review and/or approval of rates, while
retrospective regulation includes “file and use” where the rates go into effect
immediately, but the regulator can take action if the rates are later determined to be
unreasonabl
e under a standard such as one of the above.
When carriers wish to change
their rates in a prior approval system, they must file a rate application for approval of
their rate changes from the regulator before they can put the new rates into effect. Many
states with prior approval of rates also have statutory clauses that “deem” a rate approved
if it is not acted on within 30 or 60 days by the regulator.
Retrospective regulation often
relies on consumer complaints to indicate a problem with a company’s ra
tes.


In 2004, the California HealthCare Foundation commissioned a RAND study to analyze
the likely effect of premium regulation on the California health insurance market. RAND
researchers found no compelling need to regulate health insurance premiums in
California and noted that such regulation could have unintended, adverse consequences
on consumers, such as reduction in the quality or quantity of care, stricter utilization

management,

and

discouraging

expensive

technologies

from

coming

to

market

while

m
otivating

the

introduction

of

cost
-
saving

technologies.

The

study

recommended

a

number

of

steps

to

mitigate

the

potential

adverse

consequences

of

rate

regulation

by:



Monitoring

coverage

and

the

quality

of

care

that

enrollees

and

insureds

receive;



Using

ob
jective

indicators,

such

as

insurers’

profits,

over

a

two
-

or

three
-
year

period

to

judge

whether

premium

increases

are

appropriate;



Monitoring

market

participation

among

insurers;

and



Monitoring

technology

adoption

in

California

and

in

states

without

premi
um

regulation.


Rate

regulation

in

other

states

States vary greatly in their approach to regulation of health insurance rates
.

Some states
review proposed increases in health insurance rates and disapprove them if they are
excessive. Other states lack the

legal authority or resources to effectively review and/or
disapprove rates.
In December 2010, the Kaiser Family Foundation released a report on
the
rate review/approval process in all 50 states
.
Key findings include:



A state’s statutory authority often
tells little about how rate review is actually
conducted in the state.

The report found that

having
prior
approval authority does not

necessarily protect consumers from large rate increases
, and often t
he rigor and

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
9




thoroughness
of the regulator’s

review va
r
ie
s

widely, depending on motivation,

resources, and staff capacity.

Conversely, some states that
do

not have rate regulation

have been

able to get carriers to agree to

rate
reductions through informal
negotiations.



Few states regulate large group rates a
nd most concentrate on individual and small
group markets.

A number of states only require certain carriers (i.e., non
-
profit Blue
Cross

Blue Shield plans or HMOs) to undergo rate review, and exempt other
commercial

carriers.

Other state
s

regulate rates t
hrough other mechanisms
such as a

medical loss ratio (
MLR
)

standard
, which allow
s

carriers to avoid a state review of
their rates

as long as they meet the standard
.

In
most

states, rate regulation or review
is limited to the individual and small group mar
kets.



Most states use a subjective standard to guide the review and approval of rates.

Common standards are that rates cannot be “excessive, inadequate,

or unfairly
discriminatory,” or that “benefits are reasonable in relation to premiums

charged.”
The rep
ort found that s
uch subjective standards allow states to regulate rates with
more flexibility,

but can make the process appear arbitrary and opaque to consumers
and the public.



Few states make rate filing information publicly available.

Generally, states r
equire
the public to physically visit the
regulator

to access the documents in a rate filing.
M
any states allow carriers to

designate some portions of the rate filing to be “trade
secret” and thus not available to

the public
, and two states have

statutes t
hat explicitly
label all information in a rate filing as proprietary. Only a few states allow a

policyholder to

request a public rate hearing. There is
no
precedent for

policyholders

or third party representatives to
participate in the informal back
-
and
-
f
orth between
regulators

and carriers

that underpins the actual practice of rate review
, but

a number
of states have

proposed using federal grant funds to make rate filings more accessible
and

understandable to the public.



Many states lack the capacity and
resources to conduct an adequate review
.
R
ate
review is not a mechanical function, and requires significant expertise and

nuanced
judgment calls.

Many

states do not have a sufficient number of trained actuaries to
review all filed rates.

S
tates that do n
ot have adequate resources or staffing

may miss
those judgment calls or even mistakes made by a carrier in its filing.

S
tates
often
don’t have enough resources to review all rates in a timely way and even in fairly
vigilant states, like Colorado, only 25 p
ercent of rate increases are reviewed
.


The report concludes that
states with prior approval authority over rates appear to be
better positioned to negotiate reductions in rate requests filed by carriers.

In states that do
not have this type of authority,

it generally
took

an egregious and unjustified rate increase
for them to ask for reductions.

The report also points out that
regulatory resources and a
culture of active review may be equally important.


The
National Association of Insurance Commissioner
s (NAIC)
, in a written response to a
federal request for information regarding rate regulation, made the following points:



M
ost states do not review or approve rates for large employers.

NAIC also points out
that mo
st states review rates separately for ea
ch licensed entity, even though affiliated
insurers often operate as one

organization, charging the same rates and even covering
one group through two different licensed entities.

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
10






Typically, the fully insured medical plans are negotiated based on the emplo
yer’s past
experience and the insurer’s administrative expense for that employer. Self
-
insured
plans are not subject to state authority.



Stringent review of rate increases might lead to greater variability. Carriers often try
to keep their rate increases s
table over time, even though that means losing money in
bad years and making more money in good years. If a rate increase is categorized as
unreasonable, carriers might reduce it to meet the standard of reasonableness,
resulting in the need for a higher in
crease the next year than would have
occurred
.



Those states that regulate rates usually review all rate increases, not just the ones that
fail some test such as those listed above. Many states require annual rate filings for
comprehensive health insurance,

even if the rates are not changing. These
requirements can provide a history of a company’s rates, and help preclude rate
“catch
-
up” when a company has neglected to increase the rates for a long period.


Most states have different types of prospective or
retrospective rate regulation for
different comprehensive medical markets,

such as individual, small employer, association
group, employer
-
paid, blanket coverage, mini
-
medical coverage and

state/local employee
plans.


Health insurance regulation in Califor
nia

Regulation

and

oversight

of

health

insurance

in

California

is

split

between

two

state

departments,

the

DMHC

and

CDI.

DMHC

regulates

health

plans,

including

health
maintenance organizations (
HMOs
)
and

some

Preferred

Provider

Organization

(PPO)

plans.

CDI

regulates

multiple

lines

of

insurance,

including

disability

insurers

offering

health

insurance,

generally

PPO

plans
,

and

traditional

indemnity

coverage.



Although

DMHC

and

CDI

both

regulate

carriers

providing

health

coverage,

each

department

approach
es

that

regulation

very

differently.

At

the

heart

of

the

difference

between

health

plans

and

health

insurers

is

the

“promise

to

pay”

versus

the

“promise

to

deliver

care.”

DMHC
-
licensed

plans,

often

referred

to

as

Knox
-
Keene

Health

Care

Service

Plan

Act

o
f

1975

(Knox
-
Keene)

health

plans,

arrange

for

and

organize

the

delivery

of

health

care

and

services

through

contracted

or

owned

providers

and

facilities

and

are

required

to

cover

all

medically

necessary

services.

Disability

insurers

protect

against

(indem
nify)

the

expense

or

charges

(losses)

associated

with

illness

or

injury

and

typically

provide

coverage

for

defined

benefits

that

may

be

specifically

limited

in

the

policy,

such

as

number

of

visits

or

annual

dollar

limits.



The

distinction

between

the

two

regulatory

frameworks

has

blurred

over

time

because

of

the

historical

exceptions

made

for

two

large

PPO

carriers,

Blue

Cross

and

Blue

Shield,

who

offer

PPO

products

under

both

regulators
,

but

fundamental

differences

remain

in

the

expectations

and

regulato
ry

oversight

by

each

regulator.

In

general,

DMHC

has

greater

authority

and

responsibility

to

review

and

approve

health

plan

products

and

benefit

designs

than

CDI

has

to

review

health

insurance

products

under

its

purview.



In

California,

health

insurance

is

generally

not

subject

to

rate

regulation,

with

few

exceptions.

Medicare

supplement

policies

and

contracts

sold

by

both

health

plans

and

insurers

are

subject

to

prior

approval

and

regulation

of

their

MLR.

Carriers
are

subject

to

specific

marketing,

und
erwriting,

and

rating

rules

relating

to

health

coverage

sold

to

small

employer

groups

of

2 to
50.

Both

regulators

ensure

compliance

with

the

small

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
11




group

rating

rules

primarily

in

response

to

complaints.

CDI
-
regulated

insurers

are

subject

to

filing

and

re
view

of

rates,

and

must

meet

minimum

MLR

standards,

but

only

for

individual

products.

DMHC
-
regulated
plans

are

limited

to

no

more

than

15 percent
administrative

costs,

but

DMHC

does

not

include

profit

as

an

administrative

cost.



According to a July 2011
California Hea
lthCare Foundation report, DMHC
-
regulated
health plans cover 21.6 million
individuals
, compared to 2.6 million under CDI
-
regulated
health insurers.

Share of Commercial Covered
Individuals
, 2009


DMHC

CDI

Individual

35%

65%

Small Group

67%

33%

Large Group

96%

4%


The report also indicated that 93 percent of the covered
individuals

under CDI are
enrolled in health insurance products sold by eight national companies. These eight
companies also have affiliates with some products licensed un
der DMHC. In contrast,
direct commercial enrollment accounted for 55 percent (roughly 11.8 million) of the lives
covered by DMHC
-
regulated plans, with the remainder 45 percent enrolled in plans
contracting with Medi
-
Cal or other public programs.


Rate rev
iew enacted in
California

SB 1163 (Leno), Chapter 661, Statutes of 2010,
enacted legislation requiring
carriers
to

submit

detailed

data

and

actuarial
justification

for

rate

increases

at

least

60

days

in

advance

of

increasing

their

customers’

rates.

The ca
rriers also must submit an
analysis

performed

by

an

independent

actuary

who

is

not

employed

by

a

plan

or

insurer.

It also
required
regulators to review rates
, determine if the rate increase is justified, and provide
such information
online. Regulations i
ssued
May

2011

by CDI and DMHC imposes such
rate filings for individual and small group contracts. DMHC’s regulations specify that
health plans are not required to file premium rate information for large group contracts.
CDI’s regulations are silent on l
arge group contracts.

Although neither department has
the authority to modify or reject rate changes found to hurt consumers
, rate review has
increased transparency on rate increases in the individual and small group market.


Both regulators use the same
five
basic factors in considering if a rate is “unreasonable,”
which include
(
1) MLR;
(
2) if the assumptions is supported by substantial evidence;
(
3)
whether the assumptions themselves
are

reasonable;
(
4) if the information submitted in
the filing is inco
mplete, inadequate, or fail to provide sufficient clarity and detail; and
(
5)
whether the filed rates results in premium differences between similar enrollees or that do
not reasonably correspond to differences in expected costs. In addition to these five

factors, CDI also requires
compliance
an additional
ten factors, while DMHC’s
regulation state that DMHC may consider nine of those ten factors in its review.


Rate

review

requirements

in

federal

health

reform

On

March

23,

2010,

President

Obama

signed

PPA
CA

into law
.

Among

other

provisions,

the

new

law

makes

statutory

changes

affecting

the

regulation

of

and

payment

for

certain

types

of

private

health

insurance.

The

law

also

significantly

expands

health

care

coverage

to

currently

uninsured

individuals

thr
ough

public

program

expansions,

a

mandate

to

purchase

coverage,

a

temporary

high
-
risk

pool

program,

and

by

requiring

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
12




guaranteed

issue

of

coverage.

Millions

of

currently

uninsured

people

in

California

will

obtain

coverage

under

the

provisions

of

PPACA.



Section

2794

of

PPACA

requires

the

Secretary

of

DHHS,

in

conjunction

with

states,

to

establish

a

process

for

the

annual

review,

beginning

with

the

2010

plan

year

of

unreasonable

increases

in

premiums

for

health

insurance

coverage.

This

process

requires

he
alth

insurance

to

submit

to

the

Secretary

and

the

state

a

justification

for

an

unreasonable

premium

increase

prior

to

the

implementation

of

the

increase.

Carriers
must prominently post such information on their Internet websites, and the Secretary
must en
sure the public disclosure of information on such increases and justifications for
all health insurers.
Federal regulations issued in 2011

require

rate review in two phases:



In 2011
,

all
carriers

seeking rate increases of
10 percent or more in the indiv
idual
and small group markets

are required to
publicly disclose
to states
the proposed
increases
and the justification for them.


Such increases are not presumed
“unreasonable
,

but will be analyzed to determine whether they are unreasonable.
Information
about all such reviews done by the states and
D
HHS, along with
unreasonable justifications provided by insurance companies, will be posted on
the
D
HHS website.

The
carrier

will also have to make its justification for a rate
increase available on its own w
ebsite.



After 2011
, a state
-
specific threshold will be set for disclosure of rate increases,
using data and trends that better reflect cost trends particular to that state
. Any
carrier seeking increases above that state
-
specific threshold is required to u
nder
rate filing and public disclosure.


Under the
federal

regulation
s
, states with effective rate review systems would conduct the
reviews.

If a state lacks the resources or authority to do thorough actuarial reviews,
D
HHS would conduct them.

A formal f
ederally recognized definition of “unreasonable”
increases has

yet to be established.


PPACA
also
makes available $250 million to states in grants for health insurance
premium review from 2010 through 2014.
In

August

2010,

state regulators

received

federa
l

funds

available

under

PPACA

for

rate

review

activities

(DMHC

received

$607,998

and

CDI

received

$392
,002)

to:




Enhance

the

DMHC’s

and

CDI’s

information technology (
IT
)

infrastructure

to

support

data

collection

and

public

disclosure

of

premium

rates

throu
gh

the

NAIC’s

System

for

Electronic

Rate

and

Form

Filing

(SERFF);

and



Hire

actuaries

or

obtain

contractual

actuarial

services

to

develop

premium

rate

review

process

and

review

rate

filings.


According

to

DMHC,

the

grant

funds

will

allow

both

departments

to

improve

the

collection

of

premium

rate

information,

to

enhance

the

depth

and

breadth

of

current

rate

reviews,

and

to

build

the

infrastructure

necessary

to

enable

each

department

to

perform

the

expanded

range

and

significantly

greater

volume

of

rate

review
s

required

by

PPACA.



Prop

103:

r
ate

regulation

in

property
-
casualty
insurance

market

This

bill

proposes

to

confer

direct

rate

regulation

authority

for

health

coverage

on

both

regulators,

using

language

similar

to

that

enacted

when

the

voters

passed

Prop
osition

103

in 1988
(Prop

103).

Prop

103

currently

applies

to

auto,

homeowners,

and

other

forms

of

property
-
casualty

insurance

and,

generally,

requires

extensive

examination

of

any

rates

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
13




proposed

by

insurers.

CDI

requires

that

proposed

rates

meet

one

tes
t
:

that

they

are

not

excessive,

inadequate,

or

unfairly

discriminatory

if

the

rates

produce

a

return

on

surplus

(generally

analogous

to

Tangible

Net

Equity

for

carriers
)

of

between

-
7

and

+15 percent
.



It is worthwhile to note that Prop 103

regulations

w
ere

finalized

in

2006,

nearly

20

years

after

Prop

103

passed
.

During

that

time,

CDI
-
regulated

rates

were
under

draft

regulations

that

were

the

subject

of

persistent

legal

challenges

and

litigation

by

insurers.

Also, under
the property
-
casualty insurance
markets, the coverage is purchased on an individual or
family basis, and not in groups, which is common in health insurance. Lastly, DMHC
-
regulated health insurance is based on a “pre
-
paid service” model and not an “indemnity”
model which is common in all

insurance types regulated by CDI. Health insurance
coverage also contains a significantly higher number of claims compared to other
insurance types, where claims are generated primarily based on adverse events.


Consumer

advocates

point

out

that

during

t
he

decade

after

Prop

103

was

adopted,

auto

insurance

rates

in

California

went

down

by

4 percent

while

auto

insurance

products

remain

broadly

available

and

competitive,

and

the

uninsured

motorist

population

declined

by

38 percent
.

Nationally,

auto

insuranc
e

rates

rose

over

25 percent

during

this

period.

However, during that same period, a number of other events occurred

to lower auto
insurance rates, including strong anti
-
fraud statutes in 1989,
passage of
seat belt laws,
changes in case law, and
passage o
f Proposition 213 (which, among other things,
eliminated punitive damages in situations where the injured party does not themselves
have auto insurance). Significant innovations in auto technology have also been made,
such as anti
-
lock brakes, airbags, an
d electronic stability control.


Health insurance costs

For

many

years,

health

spending

growth

has

outpaced

inflation.

The

United

States

spends

a

larger

share

of

its

gross

domestic

product

(GDP)

on

health

care

than

any

other

major

industrialized

country.

Expenditures

for

health

care

represent

17 percent
of

the

nation’s

GDP
, compared to 5 percent i
n

1960.

By

2019,

the

federal

Centers

for

Medicare

and

Medicaid

Services

project

health

care

expenditures

will

account

for

19

percent
of

GDP.

As

costs

have

risen
,

health

care

coverage

has

become

more

unaffordable.

The

2010

California

Employer

Health

Benefits

Survey

(CEHBS)

found

health

insurance

premiums

increased

8.1

percent
in

California

in

2010.

Other

key

findings

from

CEHBS

include
:



Since

2002,

premiums

have

increased

134.4 percent
,

more

than

5
times

the

25.4
percent
rise

in

California’s

overall

inflation

rate.



Single
-
coverage

premiums

in

California

averaged

$5,463

in 2010
annually,

significantly

more

than

the

national

average

of

$5,049.

Premiums

for

family

coverage

were

$14,396.

California workers contributed $725 annually for single
coverage in 2010, and $3,632 for family coverage. The contribution for single
coverage in California is less than for workers nationally ($899), but increased
from 12 percent o
f the premium in 2009 to 15 percent in 2010.



Enrollment

in

plans

with

a

deductible

of

$1,000

or

more

for

single

coverage

has

increased

significantly

for

workers

in

small

firms

(at

27

percent
versus

7 percent
in

2006).



Twenty
-
eight

percent

of

California

fir
ms

either

reduced

benefits

or

increased

cost

sharing

for

employees

as

a

result

of

the

economic

downturn

in

2010,

up

considerably

from

the

fifteen percent
who

did

so

in

2009.

Cost

sharing

may

continue

to

increase

for

California

workers.

Just

under

half

of

large

firms

(200

or

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
14




more

workers)

are

“very”

or

“somewhat”

likely

to

increase

the

amount

workers’

pay

for

coinsurance

or

copayments

in

the

next

year.

Sixty
-
eight

percent

are

“very”

or

“somewhat”

likely

to

raise

the

amount

workers’

pay

toward

premiums.


Re
lated

b
ills

SB

51

(Alquist)

would

require

carriers

to

meet

federal

annual

and

lifetime

limits

and

MLR

requirements

in

specified

provisions

of

the

federal

health

care

reform

law,

as

specified.

Would

also

authorize

the

Director

and

the

Insurance

Commissione
r

to

issue

guidance,

as

specified,

and

promulgate

regulations

to

implement

requirements

relating

to

MLRs,

as

specified.

Set for hearing on July 5, 2011 in Assembly Health Committee.


AB
1
083
(
Monning
)

would, e
ffective January 1, 2014,
make

a number of cha
nges to
state laws governing the sale of small group health insurance products to conform state

law to PPACA
. Also r
equires solicitors to notify the small employer of the availability of
coverage through the Exchange, makes premium rates established by car
riers in effect for
12 months
.

Set for hearing on June 29, 2011 in Senate Health Committee.


Prior

l
egislation

SB

890

(Alquist)

of

2010

would

have,

among

other

things,

required

carriers
to

meet

federal

annual

and

lifetime

limits

and

MLR

requirements

in

PP
ACA
.

Vetoed

by

the

Governor.


SB 900 (Alquist)
,
Chapter 659, Statutes of 2010
,

establishe
s

the California Health
Benefit Exchange as an independent public entity within state government, require
s

the
Exchange to be governed by a board composed of the Secr
etary of
the
California Health
and Human Services

Agency
, or his or her designee, and four other members appointed
by the Governor and the Legislature who meet specified criteria.


SB

1163

(Leno),

Chapter

661,

Statutes

of

2010,

requires

carriers

to

file,

with

regulators,

specified

rate

information

for

individual

and

small

group

coverage

at

least

60

days

prior

to

implementing

any

rate

change,

as

specified.

Requires

the

filings

for

large

group

contracts

only

in

the

case

of

unreasonable

rate

increases,

as

d
efined

by

the

PPACA,

prior

to

implementing

any

such

rate

change.

Increases,

from

30

days

to

60

days,

the

amount

of

time

that

a

health

plan

or

insurer

provides

written

notice

to

an

enrollee

or

insured

before

a

change

in

premium

rates

or

coverage

becomes

ef
fective.

Requires

carriers

that

decline

to

offer

coverage

to

or

deny

enrollment

for

a

large

group

applying

for

coverage
,

or

that

offer

small

group

coverage

at

a

rate

that

is

higher

than

the

standard

employee

risk

rate

to,

at

the

time

of

the

denial

or

offe
r

of

coverage,

to
provide

the

applicant

with

reason

for

the

decision,

as

specified.


AB 1602 (John A. Pé
rez)
,
Chapter 655, Statutes of 2010,

specifie
s

the powers and duties
of the Exchange relative to determining eligibility for enrollment in the Exchange
and
arranging for coverage under qualified health plans, required the Exchange to provide
health plan products in all five of the federal benefit levels (platinum, gold, silver, bronze
and catastrophic), require
s

health plans participating in the Exchange
to sell at least one
product in all five benefit levels in the Exchange, require
s

health plans participating in
the Exchange to sell their Exchange products outside of the Exchange, and require
s

health plans that do not participate in the Exchange to sell
at least one standardized
STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
15




product designated by the Exchange in each of the four levels of coverage, if the
Exchange elects to standardize products.


AB

2578

(Jones

and

Feuer
)

of

2010

would

have

require
d

carriers

to

file

a

complete

rate

application

with

re
gulators

for

a

rate

increase

that

will

become

effective

on

or

after

January

1,

2012.

W
ould

have

prohibit
ed

a

health

plan

or

insurer
’s

premium

rate

(defined

to

include

premiums,

co
-
payments,

coinsurance

obligations,

deductibles,

and

other

charges)

from

bei
ng

approved

or

remaining

in

effect

that

is

excessive,

inadequate,

unfairly

discriminatory
,

as

specified
.

Failed passage off the Senate Floor.


SB

316

(Alquist)

of

2009

would

have,

among

other

things,

broadened

an

existing

MLR

disclosure

requirement

that

c
urrently

applies

to

individuals

and

groups

of

25

or

fewer

individuals,

to

instead

apply

to

individuals

and

groups

of

50

or

fewer

individuals.

An

earlier

version

of

the

bill

contained

similar

MLR

requirements

to

SB

51.

Failed

passage

out

of

Assembly

Healt
h

Committee.


AB

812

(De

La

Torre)

of

2009

would

have

required

health

plans

and

health

insurers

to

report

to

their

respective

regulators

the

MLR

of

each

health

care

plan

product

or

health

insurance

policy.

Failed

passage

out

of

Assembly

Appropriations

Com
mittee.


AB

1218

(Jones)

of

2009

was

substantively

similar

to

AB

2578

(Jones

and

Feuer)

of

2010
.

Failed

passage

out

of

the

Assembly

Health

Committee.


SB

1440

(Kuehl)

of

2008

was

an

identical

measure

to

SB

316

as

introduced.

Vetoed

by

the

Governor.


AB

15
54

(Jones)

of

2007

was

substantively

similar

to

AB

2578

(Jones

and

Feuer)

of

2010

and

AB

1219

(Jones)

of

2009
.

Failed

passage

out

of

Senate

Health

Committee.


ABX1

1

(Nunez)

of

2007

among

its

provisions,

would

have,

on

and

after

July

1,

2010,

required

ful
l
-
service

health

plans

and

health

insurers

to

expend

no

less

than

85

percent

of

the

after
-
tax

revenues

they

receive

from

dues,

fees,

premiums,

or

other

periodic

payments,

on

health

care

benefits.

The

bill

would

have

allowed

plans

and

insurers

to

average

t
heir

administrative

costs

across

all

of

the

plans

and

insurance

policies

they

offer,

with

the

exception

of

Medicare

supplement

plans

and

policies

and

certain

other

limited

benefit

policies,

and

would

have

allowed

regulators

to

exclude

any

new

contracts

or

policies

from

this

limit

for

the

first

two

years

they

are

offered

in

California.

“Health

care

benefits”

would

have

been

broadly

defined

to

include

the

costs

of

programs

or

activities

which

improve

the

provision

of

health

care

services

and

improve

health

c
are

outcomes,

as

well

as

disease

management

services,

medical

advice,

and

pay
-
for
-
performance

payments.

Failed

passage

out

of

Senate

Health

Committee.



AB

8

(Nunez)

of

2007

contained

similar

provisions

to

ABX1

1

with

regard

to

the

amount

health

plans

and

health

insurers

would

have

been

required

to

expend

on

health

care

benefits.

Vetoed

by

the

Governor.



SB

1591

(Kuehl)

of

2006

would

have

prohibited

health

insurers

from

spending

on

administrative

costs

in

any

fiscal

year

an

excessive

amount

of

aggregate

dues,

fees,

or

other

periodic

payments

received

by

the

insurer.

Would have provided
,

for

purposes

of

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
16




the

bill,

that

administrative

costs

include

all

costs

identified

in

current

regulations

applying

to

health

plans.

Would

have

required

CDI

to

develop

regu
lations

to

implement

the

bill

by

January

1,

2008,

and

would have
provided

that

the

bill

is

to

take

effect

on

July

1,

2008.

These

provisions

were

amended

out

of

the

bill.



SB

425

(Ortiz)

of

2006

would

have

required

carriers

to

obtain

prior

approval

for

a

rate

increase,

defined

in

a

similar

manner

to

rates

under

AB

1218

of

2009.

Failed passage
out of

Senate

Health

Committee.



SB

26

(Figueroa)

of

2004

would

have

required

carriers

to

obtain

prior

approval

of

rate

increases

from

regulators
,

as

specified,

and

would

have

potentially

required

significant

refunds

of

premiums

previously

collected.

Failed passage out of
the

Senate

Insurance

Committee.


Arguments

in

support

This

bill

is

supported

by

a

number

of

consumer,

labor,

and

business

groups.

Supporters

writ
e

that

health

insurers

are

continuously

increasing

rates

on

individual

and

group

policyholders,

and

the

uninsured

often

come

from

the

most

vulnerable

communities

of

the

state.

Currently

seven

million

Californians

still

struggle

to

maintain

their

health

wi
thout

insurance,

and

this

demonstrates

an

urgent

need

to

pass

state
-
level

legislation

that

ensures

strict

regulation

of

health

insurance

rates

in

the

state.

Supporters

contend

that

in

order

to

keep

costs

down

it

is

imperative

that

regulators

have

the

powe
r

to

deny

unreasonable

rate

increases.

Supporters

further

state

that

the

increases

in

health

insurance

premiums

for

individuals

and

small

businesses

revealed

in

recent

months

have

capped

years

of

steady

increases

in

overall

premiums.

Supporters

state

tha
t

recent

rate

filing

under

existing

California

law

suggest

that

HMOs

and

insurers

are

not

accustomed

to

public

scrutiny

of

rates;

they

have

failed

to

produce

substantial

evidence

to

justify

the

proposed

rate

increases

or

even

to

provide

complete

informatio
n

about

the

reason

for

the

rate

increases.

Supporters

state

that

at

the

same

time

rates

have

been

increased,

the

five

largest

health

insurers

saw

their

profits

increased

by

56

percent
.

Supporters

contend

that

35

states

already

require

prior

health

insura
nce

rate

approval

by

state

regulators

that

this

bill

would

protect

Californians

from

unreasonable

and

unnecessary

health

insurance

rate

increases

and

greater

oversight

to

the

health

insurance

industry.



Insurance Commissioner Dave Jones states that the b
arrage of significant health
insurance rate increases


some coming multiple times in the same 12 month period on
the same policyholders


is unsustainable, and underscores why the Insurance
Commissioner and Director of DMHC need the authority to reject ex
cessive rate hikes.
Currently, health insurance companies hold all the cards when it comes to deciding health
insurance rates. Many consumers are now purchasing products with higher deductibles
and many have dropped coverage altogether. The Commissioner

states that consumers
are surprised to learn the Commissioner does not have the authority to reject excessive
health insurance rate hikes.


Children’s

groups

state

that

in

the

midst

of

a

very

difficult

economy,

consumers

and

businesses

struggle

to

pay

f
or

health

insurance

and

that

they

should

have

the

assurance

that

rates

are

fair

and

subject

to

approval

by

in

impartial

regulator;

and

this

is

especially

important

for

6

million

California

children

with

private

coverage.



STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
17




Consumer

Watchdog

writes

that

li
ke

the

auto

insurers

prior

to

Prop

103,

the

health

insurance

industry

is

stashing

billions

of

dollars

in

excess

surplus,

unaffected

by

the

economic

downturn.

Consumer

Watchdog

determined

that

Blue

Shield

of

California

alone

held

$2.9

billion

in

excess

surp
lus,

the

amount

needed

to

assure

financial

stability

under

state

law.

Consumer

Watchdog

asserts

that

regulators

in

California

should

be

able

consider

this

financial

bloat

when

determining

reasonable

rates.



CALPIRG states that while the Exchange will he
lp consumers and small businesses to
find and compare health insurance policies, it does not have the power to force insurers to
modify their rates. All it can do is choose to do is refuse insurers entry into the Exchange
market. While the Exchange can n
egotiate for more affordable rates, the large majority
of Californians will be getting their health coverage outside of the Exchange. AB 52
ensures that all consumers are protected from unreasonable rate increases.


The California Labor Federation (CLF) s
tates that recently passed rate review legislation
will help bring more transparency to the rate filing process, but it falls short of giving
regulators necessary tools to check increases. CLF notes that in May of this year,
DMHC, for the first time, decl
ared a proposed rate increase was unreasonable, yet
Anthem Blue Cross, the carrier, is set to increase rates anyway.
CLF states that
California’s working families need relief from the skyrocketing cost of health care and
AB 52 gives regulators the tools t
hey need to keep health insurance affordable and
accessible, which is important as the PPACA individual mandate takes effect.


The California School Employees Association states that it is not uncommon for
classified school employees to have more than half

of their paycheck taken to pay for
their health insurance premiums. AB 52 will address the escalating costs of health care
by giving the Insurance Commissioner and DMHC the authority to approve, deny, or
modify rates that are excessive, inadequate, or un
fairly discriminatory.


U.S.

Senator

Dianne

Feinstein

states

that

it

is

critical

to

protect

California

consumers

and

businesses

and

this

bill

will

give

regulators

the

authority

to

reject

excessive,

inadequate,

or

unfairly

discriminatory

rate

increases.

Se
nator

Feinstein

further

states

that

insurance

companies

are

driven

by

the

need

to

return

profits

to

shareholders,

and

without

properly

oversight,

will

continue

to

raise

rates

and

drop

people

from

coverage

to

maximize

profits.

Senator

Feinstein

contends

th
at

it

is

clear

that

California’s

state

regulators

need

authority

to

reject

excessive

rate

hikes.


Arguments

in

opposition

Anthem

Blue

Cross

writes

that

because

insurance

rates

are

a

function

of

insurance

costs,

adding

an

additional

layer

of

regulation

will

only

increase

the

cost

of

delivering

health

care

to

Californians.

Blue

Cross

states

that

numerous

studies

conclude

that

the

primary

drivers

of

premium

cost

increases

are

due

to

increasing

consumer

utilization

of

services

and

increasing

provider

prices.



Health

Net

writes

that

they

administer

hundreds

of

product

designs

and

each

change

varies

the

rate

charged

to

the

purchaser,

in

some

cases

a

product

and

its

accompanying

rate

is

unique

to

one

employer.

Health

Net

states

that

under

rate

regulation,

after

negotiating

with

the

single

employer,

the

plan

would

have

to

request

approval

of

a

rate

that

is

already

agreeable

to

the

purchaser.

Health

Net

further

asserts

that

given

the

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
18




responsibility

of

staff

to

review

proposed

rates,

it

is

likely

that

significant

t
ime

will

pass

before

a

plan

and

the

employer

know

whether

the

contract

can

take

effect

and

that

as

a

result
,

carriers

are

likely

to

restrict

variations

in

the

contracts

to

limit

the

number

of

reviews

it

must

undergo.



Kaiser

Permanente

Medical

Program

(K
PMP)

writes

that

supporters

of

this

bill

assert

that

Prop

103

has

lowered

auto

insurance

rates



by

an

astonishing

$23

billion

in

10

years



as

a

reason

to

impose

rate

regulation

on

health

insurance.

KPMP

believes

the

evidence

for

this

claim

is

dubious

be
cause

proponents

give

no

consideration

to

the

much

more

likely

causal

factors

of

dramatically

reduced

accident

rates

and

decreased

liability

costs

after

the

California

Supreme

Court

prohibited

third
-
party

bad

faith

lawsuits.


The California Hospital Associ
ation (CHA) states that AB 52 creates an expensive
bureaucracy that would siphon millions of dollars of critically needed funding away from
direct patient care. While these costs will ostensibly be
borne

by carriers, CHA believes
they will necessarily lea
d to decreased payments to providers and increased cost
-
sharing
for patients. CHA also states that premiums are increasing because the underlying costs
of delivering care continue to increase, and AB 52 does not address the root causes of
those underlying

cost increases, including the number of uninsured, increasing costs for
hospital and physician “inputs” such as pharmaceuticals, biotechnology, new diagnostic
and therapeutic technologies, the aging population, workforce shortages, legislative
mandates, a
nd looming hospital seismic retrofit requirements. CHA also asserts that
providers are shifting costs to private payers due to payment
shortfalls

from Medicare,
Medi
-
Cal and other public programs
, which would be limited under rate regulation.


The Califor
nia Medical Association (CMA) state that physicians, who are already
reimbursed at unconscionably low levels, are very concerned about the myriad
unintended consequences of this bill. CMA asserts that, if AB 52 passes, HMOs will
merely force their provide
rs to bear the burden, leading to lower provider reimbursement,
fewer contracted physicians, reduced access and less time with patients. Physicians will
have very little, if any, leverage against carriers, at a time when millions of people are
expected to

gain coverage in 2014 and the state should be investing in access and robust
networks so that coverage is not a false promise.


The California Association of Physician Groups (CAPG) states that it is unclear how this
bill relates to the pending federal re
gulations on MLR and whether it would require plans
to calculate their administrative ratios by including the overhead of delegated model
groups. If the two are aggregated, CAPG states that the delegated model has been a
major factor in the delivery of lo
wer
-
than
-
average HMO premiums in California over the
last 15 years, and that this advantageous cost
-
control mechanism could be eliminated
overnight. CAPG also states that the NAIC was acutely sensitive to this issue during its
2010 deliberations over the M
LR model regulations and determined that all capitated
payments should be counted as a medical expense.


The California Chamber of Commerce (CalChamber) states that, although they share
concerns about the rising costs of healthcare, often times the only wa
y employers can
afford to offer health benefits is through a cost sharing arrangement. While CalChamber
understands the bill’s intent to reduce these out
-
of
-
pocket expenses that employees must
pay in the form of higher premiums and cost
-
sharing, rate regu
lation does nothing to
STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
19




lower the underlying cau
ses of escalating medical costs and is a distraction that avoids
the difficult task of driving down the cost of medical care. CalChamber asserts that
simply capping rates will not make costs disappear, but wi
ll instead limit choices and
quality for employers and their employees.


The California Manufacturers & Technology Association (CMTA) asserts that
experience in other states clearly demonstrates that the vast regulatory structure AB 52
will impose has not
saved money. Four out of five states with the highest premiums in
the individual market impose rate regulation. CMTA states that it is obvious insurance
prices are dictated by the unique make
-
up of the market in each state, and not as an effect
of rate r
egulation. In addition, CMTA argues that proponents wrongly presume price
controls for auto insurance will work for people, and points to better
-
built cars, safer
roads, tougher drunken driving and seatbelt laws, and a Supreme court ruling limiting
third
-
party lawsuits as reasons for declining auto insurance rates.


The

Civil

Justice

Association

states

that

the

most

troubling

part

of

this

bill

allows

any

person

to

intervene

in

any

proceeding

to

“enforce

any

action

of

the

department

under

this

article,

and

enforce

any

provision

of

this

article

on

behalf

of

himself

or

herself

or

members

of

the

public.”

They assert
that

provision

would

allow

lawsuits

to

be

filed

by

uninjured

parties

who

had

suffered

no

harm.



The California Association of Joint Powers Autho
rities (CAJPA) states that joint powers
authorities set their rates actuarially and first see rate data from their actuary and
underwriters. The underwriter must evaluate claims history, trends, migration factors,
etc. to have their board approve a rate t
hat is fiscally sound for this program. Sometimes
plan changes based on actuarial recommendations are necessary to offset rate increase,
necessitating plan changes in
an

expeditious manner that may be delayed due to rate
regulation. In addition, CAJPA as
serts that AB 52 overrides mid
-
year bargaining
agreements or modifications to existing bargaining agreements between labor and
management to adjust premiums, cost
-
sharing, or any other level of service.


The California Association of Health Underwriters
(CAHU) states that AB 52 imposes
yet another loss ratio on top of multiple MLR requirements and an existing rate review
process. In addition, the prohibition against raising rates no more frequently than once a
year would in reality be much longer, given
the extensive periods set out in AB 52 for
hearing and review. In addition, CAHU believes that the bill’s far
-
reaching public
intervenor process encourages the public to intervene in these adjustments even if the
overall premium rate remains unchanged, an
d that Prop 103’s intervenor provisions have
transferred millions of taxpayer dollars to the very same interveners that sponsored the
Prop 103 initiative years ago.



PRIOR

ACTIONS


Ass
embly

Health:


12
-

7

Assembly

Appropriations:

9
-

7

Assembly

Floor:


45
-

28



STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
20




COMMENTS


1.
Effect of the bill.

This bill would apply to products sold in the individual, small
group, and large group markets. It would also apply to products sold inside the
Exchange, CalPERS products that are not self
-
funded, and commercial co
verage products
purchased by self
-
funded plans,

such as Taft
-
Hartley trusts.
AB 52

also applies
retroactively to rate increases effective January 1, 2011.


2.
Should large group products

be subject to rate regulation?

This bill
applies

to

products sold

in the individual, small group, and large group markets
,
a portion of which
is negotiated on an employer
-
by
-
employer, contract
-
by
-
contract basis
. In comparison,
S
B
1163

(Leno), Chapter 661, Statutes of 2010,

only requires rate review filings in the
indiv
idual and small group market
. U
nless an independent actuary has found a large
group rate increase to be “unreasonable” pursuant to PPACA and related guidance
, large
group products are not subject to rate review
. Federal guidance
applies primarily

to

indi
vidual and small group products.
Although many states have rate regulation in
various forms, few states actually regulate large group rates.

L
arge employers and
associations
frequently

negotiate rates with the insurer based on their

own experience
,
makin
g each plan a unique
product
.


In a February 28, 2011 written response to a federal inquiry regarding the inclusion of
large group in federal rate review requirements, the NAIC stated:


“The NAIC appreciates and strongly supports the decision by HHS to e
xclude
large group from this proposed regulation, because large group rating differs
significantly from individual and small group rating. This business is experience
rated because the number of insured lives makes each group at least partially
credible fo
r rating purposes. This type of rating plan is not amenable to
evaluation on the basis of percentage increases, so a different process will be
necessary if a future regulation addresses large group rates. A large majority of
states do not regulate large gr
oup rates. If HHS decides to develop a review
process for large group rates in the future, some important considerations
include:



Greater emphasis should be placed on the credibility of the experience
used in the experience
-
rated coverage.



Groups as smal
l as 51 employees are considered large employers and yet
these groups are not really large enough to self
-
fund or have fully
experience rated plans. To the extent that large group rates are subject to
review, at a minimum, consideration should be given to
the size of the
group and the degree to which the group is experience rated. “


3.
Direction to regulators on determination of excessive and inadequate rates.

AB 52
directs the regulators to determine whether a rate is excessive, inadequate, or unfairly
discriminatory based on a consideration of several factors including, but not limited to,
medical and nonmedical expenses, the rate of return, overhead, and administration, and
surplus, reserves, and investment income. The bill further directs the review
to take into
account established actuarial principles. A more common standard for review of
insurance rates is whether the rate is actuarially sound, which is usually defined as a rate
that is developed in accordance with generally accepted actuarial prin
ciples. The
STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
21




departments’ guidelines for review of rates under SB 1163 use such a standard. Should
that standard also apply in AB 52?


4.
Should Exchange
products
be subject to rate regulation?
California’s Health
Benefits

Exchange was established as an

active purchaser, with the ability to

negotiate
and selectively contract with insurers that offer a high
-
value product in exchange for a
large volume of enrollees.

The authorizing Exchange statutes also require products sold
within the Exchange to be mad
e available outside of the Exchange at the same rate. This
provides the Exchange
Board
the ability to reject

rates for products in the Exchange as
well as a limited set of products outside of the Exchange. It is unclear how rate
regulation would impact r
ates available to Exchange, but arguably if AB 52 were
enacted,
there could be a conflict between the rates negotiated by the Exchange and those
approved by the regulators
.
A suggested amendment would be

to exempt Exchange
products, while providing the E
xchange authority to request a review by regulators.


5.
I
ndependent review.
The bill gives authority to the elected Insurance Commissioner
and a governor
-
appointed Director of DMHC to regulate health insurance rates and cost
-
sharing. Should an independ
ent entity be authorized to review rate filings and make
determination or recommendations to the regulators?


6.
Underlying health care cost drivers not addressed.
While A
B 52
focuses

on health
insurance premiums, it

does not address the fundamental and
underlying factors drivin
g
health care cost increases. To better address this, s
hould carriers be required to provide
additional information on cost
-
containment effort
s undertaken by the carrier and

results

of those efforts over time
?
Should carriers be
required to implement cost containment
measures

used by large purchasers or
proposed

under PPACA?
Should regulators
be
given

the authority to evaluate and report on disparities in provider rates

underlying the
premium rates
?


7.
Length of time for review
.
The bill directs regulators to make a determination in 60
days but does not address what happens when the regulator does not meet this timeframe.
T
he

further out a carrier must submit a rate for approval, the greater the uncertainty
of

the
actuarial va
lues projected, which may lead carriers to use more conservative assumptions
in
their

rate filing
s
. Should filings not approved or disapproved within a certain
timeframe be deemed approved?


8.
Reliance on legal proceedings
.
The processes established in

the bill
for challenging
and reviewing regulators’ decisions rely heavily on court proceedings
. The author may
wish to consider an alternative approach that uses an arbitration process prior to legal
proceedings to minimize
the costs and delays associate
d with these proceedings
.


9.
Interaction with existing rate review process.
As the bill is drafted, it is unclear if the
proposed rate regulation process will be a separate and additional process
from

the rate
review process proposed under SB
1163

(Le
no)
,

or if it would build upon the existing
rate review process. AB 52 also contains similar reporting requirements to SB 1163.
Staff recommends

amendments to better synchronize
the
rate review and rate approval
processes.


STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
22




10.
Definition of “excessive,

inadequate, unfairly discriminatory” is unclear.
As
drafted, AB 52 intends that regulators develop such definitions. Under Prop 103
regulations, excessive and inadequate are defined to mean:



“Excessive” rates are rates that are expected to yield the rea
sonably efficient
insurer a profit that exceeds a fair return on the investment used to provide the
insurance. In determining whether a rate is excessive, the Commissioner shall
consider the competing interests of consumers in lower prices and of investors

in
prices that yield high returns, and the Commissioner shall consider the fact that
insurance is imbued with the public interest and is sometimes legally required.



“Inadequate” rates are rates under which a reasonably efficient insurer is not
expected to

have the opportunity to earn a fair return on the investment that is
used to provide the insurance. In determining whether a rate is inadequate, the
Commissioner shall consider the competing interests of consumers in lower prices
and of investors in price
s that yield high returns, and the Commissioner shall
consider that insurance is imbued with the public interest and sometimes legally
required.


11.
S
hould regulators have the authority to determine the s
cope of
what an
interven
o
r

may intervene on?

The
bill contains broad
definitions

of who can be an intervenor and
what an intervenor may intervene on (i.e. regulations, filings prior and after a regular
makes a finding, etc.).
Under DMHC’s existing Consumer Participation Program, the
department has the a
uthority to determine what an intervenor may intervene on
, which is
not an authority provided under AB 52.


12.
Duplication

of

Consumer Participation Program

under

DMHC.

DMHC

already

has

an

existing

Consumer

Participation

Program
, capped at $350,000 pe
r year
.

The

intervenor

provisions

of

this

bill

may

result

in

two

similar

programs

under

DMHC.

Should the
Consumer

Participation

Program

be consolidated with the intervenor process?


13.
Suggested technical amendment:


(a)

On page
3, strike out lines 11
-
12

i
nclusive and insert:


As of 2009, more than 7.1 million Californians are uninsured, or one in
five Californians under 65 years of age
.


(b)

On page
6, strike out lines 38
-
40

inclusive and insert:


(11) A line
-
item report of medical expenses, including, but not

limited to,
aggregate totals paid to hospitals, physicians and surgeons, and costs
associated with experimental or investigative therapies
.


(c)

On page
8,
line 2
replace “
application
” with

filing



(d)

On page
8, strike out lines 36
-
37

inclusive and insert:


se
rvices, laboratory, radiology, and costs associated with experimental or
investigative therapies. A plan may provide


STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
23




(e)

On page
10, strike out line

16

inclusive and insert:


totals paid to hospitals, physicians and surgeons, and costs associated
with
experi
mental or investigative therapies.


(f)

On page 10, strike out lines 32
-
33 inclusive.


(g)

On page 21, strike out lines 23
-
25 inclusive and insert:


(11) A line
-
item report of medical expenses, including, but not limited to,
aggregate totals paid to hospitals, phy
sicians and surgeons, and costs
associated with experimental or investigative therapies
.


(h)

On page 29, line 29 replace “
application
” with

filing



(i)

On page 23, strike out lines 23
-
24 inclusive and insert:


ancillary services, laboratory, radiology, and cost
s associated with
experimental or investigative therapies. An insurer


(j)

On page 24, strike out line 29 inclusive and insert:


totals paid to hospitals, physicians and surgeons, and costs associated
with
experimental or investigative therapies.


(k)

On page 25,

strike out lines 5
-
6 inclusive.



POSITIONS


Support:

AARP

AFSCME Retirees Chapter 36

Alliance of Californians for Community Empowerment

American Cancer Society, California Division

American Diabetes Association

American Indian Healing Center

AnewAmerica
Community Corporation

Asian Business Association

Association of California School Administrators

Bay Area Black United Fund

Bel Air Beverly Crest Neighborhood Council

Black Business Association

Black Economic Council

Brain Injury Association of California

Brightline Defense Project

California Alliance for Retired Americans

California Black Chamber of Commerce

California Chiropractic Association

California Commission on Aging

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
24




California Communities United Institute

California Conference Board of the Amalgama
ted Transit Union

California Conference of Machinists

California Democratic Congressional Delegation

California Family Resource Association

California Federation of Teachers

California Labor Federation

California Mortgage Association

California National Or
ganization of Women

California Nurses Association

California Pan
-
Ethnic Health Network

California Physical Therapy Association

California Professional Firefighters

California Psychological Association

California Retired Teachers Association

California Rur
al Legal Assistance Foundation

California School Boards2
-

Association

California School Employees Association

California Senior Legislature

California Teachers Association

California Teamsters Public Affairs Council

California Women Lawyers

California Wome
n’s Agenda

CALPIRG

CDF Firefighters Local 2881

Children Now

Children’s Defense Fund California

The Children’s Partnership

City of Los Angeles

City of Sacramento

Coalition for Humane Immigrant Rights of Los Angeles

Committee of Interns and Residents/SEIU He
althcare

Community College League of California

Community Union

Conference of California Bar Associations

Congress of California Seniors

Consortium of Physicians from Latin America

Consumer Attorneys of California

Consumer Federation of California

Consumer

Watchdog

Consumers Union

Council of American Business Associations

Courage Campaign

Democratic Party of Sacramento County

Disability Rights California

Disability Rights Legal Center

The Domar Group

Engineers and Scientists of California

Fresno West Coali
tion for Economic Development

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
25




Friends Committee on Legislation of California

Glendale City Employees Association

Greater Los Angeles African American Chamber of Commerce

The Greenlining Institute

Having Our Say

HCI

Health Access California

Health Care for
All


California

Hispanic Business, Education and Training

Hmong American Political Association

Inland Empire Latino Coalition

International Longshore and Warehouse Union

Korean American Democratic Committee

Korean Center, Inc.

Korean Churches for Communit
y Development

Korean Health Education Information & Research Center

La Maestra Family Clinic

Labor United for Universal Healthcare

Laborers’ Locals 777 & 792

Latino Business Chamber of Greater

Los Angeles

Latino Coalition for a Healthy California

Latino He
alth Alliance

Marin County Board of Supervisors

National Federation of Filipino American Associations, Region 8,
Northern California

National Multiple Sclerosis Society


California Action Network

National Physicians Alliance


California

National Union of

Healthcare Workers

North Valley Democratic Club

Northern California District Council of the International Longshore and
Warehouse Union

Older Women’s League of California

Organization of SMUD Employees

Our Weekly Los Angeles

Peace Officers Research Associ
ation of California

PICO California

Planned Parenthood Advocacy Project of Los Angeles County

Planned Parenthood Affiliates of California

Planned Parenthood Mar Monte

Planned Parenthood of Santa Barbara, Ventura and San Luis Obispo
Counties, Inc.

Planned P
arenthood Pasadena and San Gabriel Valley

Professional and Technical Engineers, Local 21

Professional Engineers in California Government

Sacramento Capitol Older Women’s League

San Bernardino Public Employees Association

San Francisco African American Cham
ber of Commerce

San Gabriel Valley Economic Partnership (if amended)

San Luis Obispo County Employees Association

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
26




Santa Clarita Valley Fair Elections Committee

Santa Cruz County Board of Supervisors

Santa Rosa City Employees Association

Small Business Majo
rity

Teamsters Joint Council 42

TELACU Millennium

UNITE HERE!

United Food and Commercial Workers


Western States Conference

Utility Workers Union of America, Local 132

Vietnamese
-
American Chamber of Commerce of Orange County

Ward Economic Development Corp
oration

Westchester Democratic Club

Barbara Boxer, United States Senator

Dave Jones, Insurance Commissioner

Dianne Feinstein, United States Senator

Sheila Jordan, Alameda County Superintendent of Schools

Teresa Miller, Oregon Insurance Division Administrat
or

Two

individual
s


Oppose:

Altamed Health Services

America’s Health Insurance Plans

Anthem Blue Cross

Association of California Life and Health Insurance Companies

Blue Shield of California

Brea Chamber of Commerce

California Association of Health Plans

California Association of Health Underwriters

California Association of Joint Powers Authorities

California Association of Physician Groups

California Chamber of Commerce

California Hospital Association

California Manufacturers and Technology Association

C
alifornia Medical Association

California Taxpayers Association

Catholic Healthcare West

Civil Justice Association of California

Community College League of California

CSAC Excess Insurance Authority

Folsom Chamber of Commerce

Fullerton Chamber of Commerce

Golden Empire Managed C
are

Greater Bakersfield Chamber of Commerce

Greater Corona Valley Chamber of Commerce

Greater Fresno Area Chamber of Commerce

Greater Stockton Chamber of Commerce

Hayward Chamber of Commerce

Health Net

Howard Jarvis Taxpayers Associ
ation

Irvine Chamber of Commerce

STAFF ANALYSIS OF ASSEMBLY BILL 52 (Feuer

and Huffman
)

Page
27




Kaiser Permanente

Kern County Taxpayers Association

Livermore Chamber of Commerce

Los Angeles County Medical Association

MemorialCare Medical Foundation

Modesto Chamber of Commerce

Monarch Healthcare

Montebello Chamber of
Commerce

North American Medical Management California, Inc.

North Orange County Legislative Alliance

Orange County Business Council

Orange County Taxpayers Association

Oxnard Chamber of Commerce

Pioneer Medical Group

PrimeCare Medical Network, Inc
.

Rancho
Cordova Chamber of Commerce

Regional Chamber of Commerce San Gabriel Valley

San Diego County Taxpayers Association

San Diego Regional Chamber of Commerce

San Francisco Chamber of Commerce

Silicon Valley Leadership Group

Southwest California Legislative Cou
ncil

SynerMed

UnitedHealth Group

Valley Industry & Commerce Association

Ventura Chamber of Commerce

One individual


--

END

--