Sen. Feinstein backs health insurance rate controls

By Marc Lifsher

Feb. 1, 2012 12 AM PT

A high-stakes ballot measure to give state regulators the power to approve health insurance rates in California has landed a heavyweight supporter: U.S. Sen. Dianne Feinstein.

One of California’s most respected politicians, Feinstein has come forward as the chief spokeswoman and No. 1 booster of a proposed initiative to regulate hikes in health premiums.

“I am proud to tell you that I was the first person to sign a new ballot initiative petition that will reform the health insurance industry in California,” Feinstein, a San Francisco Democrat, wrote in an email sent to about 2 million registered voters.

The Senator urged recipients to print out the petitions and sign their names to help get the 505,000 signatures needed to qualify the measure for the November ballot. Efforts to pass similar laws in the state Legislature were opposed by the insurance and healthcare industries and failed repeatedly over the last five years.

The initiative, if it gets before voters, is likely to generate one of the most fierce and expensive battles of the 2012 electoral season.

The proposed ballot question is backed by the political arm of Consumer Watchdog, the Santa Monica activist group that passed California’s landmark Proposition 103 automobile insurance rate control initiative in 1988.

The health insurance initiative, Feinstein said, “would require health insurance companies to publicly justify their rates before rate hikes take effect.”

The measure is needed, she added, to protect people who buy individual health insurance coverage from soaring premiums. Large group policies usually provided by employers are not affected by the proposed measure, dubbed the Insurance Rate Public justification and Accountability Act.

California is one of only 17 states in the country that do not give officials some authority to approve the setting of individual health insurance rates.

Controls are needed to keep healthcare coverage affordable for buyers of individual policies, Feinstein said.

“Their profits are unprecedented. They are huge,” she said referring to health insurers in a telephone interview from the Capitol in Washington. “In the first quarter of 2011, the five largest made net profits of $5.95 billion, a 16% increase.”

The Consumer Watchdog ballot measure is similar to legislation that Feinstein attempted to get through Congress that was related to President Obama’s Patient Protection and Affordable Healthcare Act of 2010.

A spokesman for the health insurance industry said he wasn’t surprised that Feinstein entered the fray. “She’s historically supported rate regulation,” said Patrick Johnston, president of the California Assn. of Health Plans.

Passage of the proposed initiative would create “misguided, onerous rate regulation,” Johnston said, and make it more difficult and expensive for individuals and small businesses to purchase coverage. Added bureaucracy would do nothing to address the “cost drivers” in healthcare, he said.

The Consumer Watchdog measure, if passed, would be the most stringent health insurance rate regulation in the country, said its author, Jamie Court, the president of Consumer Watchdog.

“The public wants accountability and transparency for the skyrocketing rates being charged,” he said. “Rates have been rising five times faster than the rate of inflation.”

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