Health Insurance Premium Regulation Bid Draws Criticism


Barger & Wolen partners Richard De La Mora and Richard Hopkins were both quoted in a Nov. 14, 2013, Daily Journal article, Hospital insurance premium regulations bid draws criticism, about a proposed ballot initiative intended to regulate insurance premiums and how it could actually end up leading to narrower networks and fewer choices for consumers.

The ballot initiative proposes to give California's Insurance Commissioner Dave Jones the ability to regulate health insurers' premiums by expanding Proposition 103 to include health insurers. Passed in 1988, Proposition 103 currently applies to property and casualty insurers.

Some attorneys are concerned that in an effort to create more affordable healthcare, the initiative could lead to insurers having to leave the market and hospitals having to drop out of networks.

“Hospitals are constantly pushing for higher and higher [compensation],” De La Mora said.

De La Mora told the paper he was also concerned that the proposition would lead to a complicated process for determining how to best regulate the industry.

“When Prop. 103 [went] into effect, it took years to figure out what it meant, and the result was a formula” for rate regulation, he said.

Hopkins told the paper that plans on California's health exchange, which was developed in response to the passage of the federal Affordable Care Act, indicate that insurers have developed more tightly brokered relationships between themselves and providers.

“If everyone can buy insurance regardless of preexisting conditions [which Obamacare requires], you have to find a way of managing the cost of health care being provided,” including closer payer/provider arrangements, he said.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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