Regulation as a Cost Containment Strategy in California

This presentation will focus on California's proposed insurance premium rate regulation legislation, AB 52 (Feuer), which will give authority to the state insurance commissioner and the director of the Department of Managed Health Care (California's two insurance regulators) to deny insurance rate increases requested by insurers. Currently, these regulators have authority to review rate changes sixty days prior to the effective date, but have no ability to deny them. The discussion will focus on the details of the rate regulation law and how they might be effective in reducing premium increases, and if rate regulation laws can be expected to help bend the cost curve. The session will use California as a case study in understanding and critiquing the role of rate regulation in systematic cost containment efforts in our health care system.