Rate regulation initiative raises big questions for Covered California

A health insurance rate regulation initiative on the November ballot poses big questions about operations at the state health benefit exchange, including whether the measure, if approved, could muck up open enrollment at Covered California this fall.

If the Insurance Rate Public Justification and Accountability Act is approved by voters, it would take effect Nov. 5, 2014, 10 days before kick off of open enrollment for 2015. The measure would give state Insurance Commissioner Dave Jones authority to reject health insurance increases considered 'excessive.'

An independent state agency, Covered California can't weigh in on political issues, so staff and the board raised questions about the initiative at a board meeting Thursday - but didn't take a position. Concern was clear, however.

'What is it and what could it do?' posed board member Susan Kennedy. 'I'm a little afraid we are tip-toeing around this. I'm afraid the effects would be huge and the risk may be felt in rates.'

Some answers may be available at a joint legislative hearing by the Assembly and Senate health committees scheduled for July 2 at 1:30 in Room 4203 at the State Capitol. But there were more questions than answers at the Covered California board meeting last week.

If the commissioner doesn't identify excessive rates, the measure won't have much affect on Covered California, Leesa Tori, interim health plan manager for the exchange, told board members. 'But with rate review hearings, it could change the timeline - and that raises questions about what we do. Quite frankly, some of our rates would have to go to hearing, some not,' she said.

Kathy Robertson covers health care, law and lobbying, labor, workplace issues and immigration for the Sacramento Business Journal.