INTRODUCED BY   Assembly Member Feuer

                        DECEMBER 6, 2010

   An act relating to health care coverage.


   AB 52, as introduced, Feuer. Health care coverage.
    Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of
health care service plans by the Department of Managed Health Care
and makes a willful violation of the act a crime. Existing law also
provides for the regulation of insurers by the Department of
Insurance, including health insurers. Existing law makes the
violation of a final order by the Insurance Commissioner relating to
rates imposed by certain insurers, other than health insurers,
subject to assessment of a civil penalty and makes the willful
violation by those insurers of specified rate provisions a
misdemeanor. Under existing law, no change in premium rates or
coverage in a health care service plan or a health insurance policy
may become effective without prior written notification of the change
to the contractholder or policyholder. Existing law prohibits a plan
and insurer during the term of a group plan contract or policy from
changing the rate of the premium, copayment, coinsurance, or
deductible during specified time periods.
   This bill would declare the intent of the Legislature to enact
legislation to require approval from the Department of Managed Health
Care and the Department of Insurance for increases in health care
premiums, copayments, or deductibles.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


  SECTION 1.  The Legislature finds and declares all of the
   (a) California consumers are facing excessive health insurance
premium increases, placing health insurance out of the reach of
millions of families.
   (b) Consumers are experiencing significant insurance rate
escalations: 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 (according to a
report by the Kaiser Family Foundation).
   (c) More than 8.2 million Californians are uninsured, or one in
four Californians under 65 years of age.
   (d) Uninsured individuals delay preventative care, leading to
worse health outcomes and costly visits to overcrowded emergency
   (e) The State of California should have the authority to minimize
families' loss of health insurance coverage as a result of steeply
rising premium costs.
   (f) The federal Patient Protection and Affordable Care Act (Public
Law 111-148) allows the federal government to work with states to
examine "unreasonable increases" in the premiums charged for some
individual and small group health plans, and has allotted two hundred
fifty million dollars ($250,000,000) for state insurance departments
to improve their process for reviewing proposed rate increases.
   (g)  According to a Kaiser Family Foundation report on state
insurance department rate regulation, states with robust and
transparent rate review and approval processes have greater power to
protect consumers from large rate increases.
   (h) It is the intent of the Legislature to enact legislation to
require approval from the Department of Insurance or the Department
of Managed Health Care before health care premiums, copayments, or
deductibles may be raised by health insurers or health care service