This issue brief analyzes the potential effects of proposed premium regulation in California and its likely impact on the state's health insurance market.
Should California Regulate Health Insurance Premiums? (169 K)
In response to several years of double-digit health insurance premium inflation, California Senate Bill 26 (SB 26) was introduced in 2003 to curtail insurance premium growth. Although SB 26 did not become law, the idea of premium regulation will likely persist as health care costs and premiums continue to rise.
This issue brief evaluates why health insurance premiums are rising and examines the potential long-term consequences of regulating premium costs, using examples from other insurance products such as automobile coverage and workers compensation. The findings underscore that if health care costs continue to rise while premiums are frozen, stringent rate regulation could lead to undesired consequences. These include:
See the complete issue brief under Document Downloads below.
Press Release 3/18/04