Emergency regulation gives California teeth to enforce health insurance payouts

From: Fresno Bee

By Bobby Caina Calvan

Insurance Commissioner Dave Jones has won approval for an emergency regulation that gives him authority to enforce a new federal rule requiring health insurers to spend at least 80 percent of premiums on medical care.

Until now, state regulators were limited to enforcing a 70 percent “medical-loss ratio.” But as of Jan. 1, California’s standard has been superceded by the federal health care law that requires insurers to comply with the higher level.

Under the new law, insurers who fail to comply with the minimum medical-loss ratio this year must issue refunds next year to customers who buy insurance on their own.

Jones, a former Sacramento assemblyman, took a combative tone against insurers when he took the reins of the Department of Insurance on Jan. 3 and vowed to be an “activist” commissioner.

During his inauguration speech, he issued a request to the state Office of Administrative Law to approve the emergency regulation.

Jones wanted the regulation to establish that his office has standing to enforce the federal law as it had enforced the previous state standard.

The regulation “doesn’t change policy, but there’s now a cop on the beat,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

Even before taking office, Jones has repeatedly clashed with health insurers. As an assemblyman, he sought to give the Department of Insurance the authority to reject premium hikes.

In his new role, he has called on some of the state’s largest health plans to delay implementation of rate hikes to see if they comply with state and federal rules covering medical-loss ratios.

“The OAL’s ruling to approve the emergency regulation I proposed on my first day in office is an important step in ensuring that consumers are getting the best deal possible for their premium dollars,” Jones said in statement.

“This emergency regulation will give me the legal authority to enforce the new federal 80 percent medical-loss ratio for the individual health insurance market in California, even if Congress prevents the federal Department of Health and Human Services from enforcing it,” Jones said in a statement.

Last week, the new Republican majority in the U.S. House of Representatives voted for a repeal of the federal health law signed by President Barack Obama in the spring.

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