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Insurance Law

By Kari Santos | Dec. 2, 2014

Law Office Management

Dec. 2, 2014

Insurance Law

The failure of Prop 45 has done little to stymie discussion about the merits of state health insurance regulation .

California's failed ballot measure to give the state authority over health insurance rate hikes was opposed by insurance companies and many Republicans. But some Democrats also rejected it, saying the Affordable Care Act (ACA) is strong enough to keep premiums in check without help from Proposition 45.

"The economics behind universal health care are that if everybody has insurance, we won't have people using the emergency room as their primary health care provider," said Dario J. Frommer, a former Assembly majority leader, after the November 4 vote. "I think that's what we're beginning to see."

Frommer, now with Akin Gump Strauss Hauer & Feld, is among those who note the announcement in July by Covered California, the state's ACA health insurance exchange, that the average premium would rise just 4.2 percent.

But at the federal level, the election also handed control of Congress to Republicans, and they immediately resumed their war of words against the ACA. Between that and continuing litigation, the health law's strength is not a given.

State Insurance Commissioner Dave Jones says what kept insurers' increases in line last summer was the threat of Prop. 45. Now he fears a return of the double-digit rate hikes seen in the past in California. Exchanges "simply don't have the leverage," he says. "We're not unique. In states where health insurance is regulated [more], they're getting better rates"


Kari Santos

Daily Journal Staff Writer

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