The return of rate regulation…

According to various sources, President Obama is slated to post a compromise version of a comprehensive health reform on the White House web site today at 10am East Coast time–7am Pacific.

The big news so far is that the President’s package includes a stronger rate regulation component–a response to the Anthem Blue Cross of California rate hike that he has put such a spotlight on in the last week. (Here’s the Los Angeles Times story. The New Republic’s The Treatment has some analysis, including by yours truly.)

The President is basically adopting a proposal by Senator Dianne Feinstein for a rate authority that would not just review rates, but have the ability to reject them if they were excessive or unjustified.

Both Senator Boxer and Senator Feinstein were working on language for stronger rate regulation well before the Anthem Blue Cross rate hikes came to light, because this isn’t a new issue either in California or the country as a whole.

In our state and most of the United States right now, insurers can unilaterally raise rates without justification–especially for individual families and small businesses with little market power. The pending health reform bills already would have provided indirect relief, from the group purchasing power of the exchanges, to the requirement that insurers needed to justify their rates–that by itself was more than what California has now.

So the health reform has several components that can slow the growth in health premiums, but rate authority provides the opportunity for intervention, to ensure that ratepayers actually see the savings.

As part of a larger reform that provides guaranteed issue, community rating and risk adjustment, rate review and regulation would not just check against unwarranted rate hikes, but such increases being used to target certain products or people.

As we know, Assemblyman Dave Jones has attempted to advance a rate regulation bill at the state level, but face a heavy opposition campaign.

Suddenly, whether at the state or federal level, the political prospects for this issue has markedly improved from a mere month ago.

Health Access California promotes quality, affordable health care for all Californians.

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