A political battle looms over whether regulators in the nation's most populous state will have the authority to reject proposed health insurance rate increases, a power that could make a difference in the fate of the Obamacare insurance exchanges.
Supporters of the referendum argue that it's a long overdue mechanism to rein in unreasonable rate hikes and supplement changes that were part of the Patient Protection and Affordable Care Act. The measure, which received enough signatures in 2012 to qualify for this November's ballot, would require a sworn statement by health insurers as to the accuracy of information submitted to the state insurance commissioner to justify rate changes. It provides for public notice, disclosure and hearing on health insurance rate changes, and subsequent judicial review. It exempts employers' large group plans, unless the rate increase exceeds 10%.
It's going to be a multimillion-dollar battle. The insurance industry, which has the support of the California Medical Association and the California Hospital Association on this issue, is pouring resources into a vigorous campaign to defeat the ballot initiative. They argue that it will add unnecessary time and cost to a process that's already regulated by two state agencies. In addition, they note that the state's insurance exchange, Covered California, already has the authority to determine which insurance products are sold through the online marketplace.
