Insurance Commissioner Dave Jones Tries Again to Expand Power

A reliable maxim of Capitol politics is that big money begets heavy-duty politicking – and in 21st century California, nothing is bigger than health care.

It is now, by a wide margin, the state’s single largest economic activity, with governments, private employers and consumers paying more than $200 billion a year to medical providers, mostly through insurance plans.

The heavyweight stakeholders in health care – doctors, nurses, hospitals, medical insurers, employers and consumer advocates – perennially joust over how that immense pot of money is divvied up.

The state’s voters seemingly settled two skirmishes last year when they rejected two ballot measures that would have altered medical finances, Propositions 45 and 46.

Proposition 45, sponsored by Insurance Commissioner Dave Jones, would have given him and his successors the power to regulate all forms of health insurance, rather than the narrow piece of the market he now oversees.

Proposition 46, backed primarily by personal injury lawyers, was aimed at revising the 40-year-old, $250,000 cap on pain and suffering damages in medical malpractice cases.

Heavy opposition spending by health insurers and other stakeholders doomed both propositions, but Jones apparently hasn’t given up.

At his behest, Assemblyman Kevin McCarty, D-Sacramento, introduced Assembly Bill 1434, which would give Jones rate-setting authority over “preferred provider organization” plans offered by Anthem Blue Cross and Blue Shield.

McCarty’s office says it “would eliminate the loophole that allows only Blue Shield and Anthem Blue Cross to shop regulators for their PPO products” and would generate $300 million more in fees that would go into Medi-Cal, the state’s health care for the poor.

The underlying issue is that California now has, in effect, three health insurance regulators, not only Jones but the Department of Managed Health Care and Covered California, the exchange for insurance under Obamacare. Jones’ slice of the regulatory pie has been shrinking.

The individual health insurance policies he regulates are giving way to group plans such as those from Blue Shield and Blue Cross – a shift accelerated by Obamacare – and they prefer to be regulated by the Department of Managed Health Care and pay corporate income taxes, rather than premium fees.

AB 1434 is co-sponsored by the California Medical Association, which represents physicians in health care politics. The CMA and other providers perennially battle with insurers over reimbursement rates and other financial matters and the bill would give them a new political arena.

Even were the bill to make it through the Legislature, however, a signature by Gov. Jerry Brown is unlikely because it would shift a major financial power from his administration to Jones.

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