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State Assembly OKs Regulation Of Health Policy Rates

SACRAMENTO (AP) — Democrats in the California Assembly on Thursday narrowly approved giving state regulators the power to reject proposed rate hikes by health insurers, voting after Republican lawmakers walked out of the chamber in protest.

The Assembly voted 42-1 to approve the measure, with one Democrat voting no and others speaking against it. Some of those opposing Democrats did not vote. The bill now goes to the Senate.

AB52 allows the state insurance commissioner or the Department of Managed Health Care to reject increases in health insurance rates if they are deemed excessive. The commissioner already can reject rate hikes for other kinds of insurance.

Assemblyman Mike Feuer, a Los Angeles Democrat, said more than 30 states have similar rules to protect consumers from rates that are rising faster than health care costs. "Let's remember who we're here to represent," he said.

Assemblyman Bill Monning, a Monterey Democrat, said the bill wouldn't give regulators a free hand to reject rate increases, but would require that they be supported by financial data.

"We do it for other forms of insurance in this state," he said. "Rates should be based on objective criteria," he said, not the assertions of a profit-making company.

Opponents said it would warp the market, be subject to politics and undercut other cost-control efforts. Assemblyman Charles Calderon, D-Whittier, said he couldn't support the bill in its present form and noted that some of the states that allow regulators to reject rates have among the highest fees in the nation.

In addition, Calderon said, politics should be separated from regulation.

"What politically elected representative is going to make an unpopular decision on what the rate is going to be?" he asked.

Insurance Commissioner Dave Jones, a Democrat who elected into office, said in a statement that "since I took office, Californians have made it exceedingly clear that they want me to reject excessive rate increases, but I do not have this authority."

"As a member of the Assembly, I introduced this legislation three times and the need for it has only grown, as health insurance continues to become unaffordable for more and more Californians and businesses," he said.

The debate did not include any Republican lawmakers, who requested a recess for a caucus just before the bill came up. When it was denied, they left the floor for about 30 minutes.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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