Daniel Zingale, the governor's senior advisor on health, said that although "we need to make the insurance market more user-friendly," too many benefit requirements could lead to price changes for people who already have coverage.
Steinberg said he was "always willing to consider compromise" but that he also would like "the bill to be meaningful to consumers."
Sen. Sheila Kuehl (D-Santa Monica) said she and Schwarzenegger are "very near" agreement on a proposal that insurers be required to spend at least 85% of the premiums they collect on medical care, limiting the amount they keep as profit and for administrative expenses.
The bill, SB 1440, is expected to have the greatest effect on the individual market because insurers tend to spend more on marketing and brokers' fees there than they do with employer plans. The governor's aides have asked that new types of coverage be exempted for the first two years from the 85% rule.
Premiums rose 8.3% in California last year, and backers of Kuehl's bill hope that limiting profits and overhead will staunch that inflation. Supporters include the California Medical Assn., which represents doctors.
But a preliminary analysis by researchers at the Rand Corp., a think tank with an office in Santa Monica, found little difference between the portion of premiums kept by insurers in 24 states that have such limits and in 21 states that don't.
The researchers also said medical expenses were primarily responsible for premium increases, even though profits have risen substantially as well.
Overall, individual health policies will have to change significantly before more consumers are impressed. A national study published in 2006 by the Commonwealth Fund, a New York philanthropy, found that 89% of those who shopped for health coverage on their own never bought a plan, either because all were too expensive, none offered the benefits they needed or their medical histories disqualified them.
Two-thirds of those holding individual policies were dissatisfied with them, the study found, while only half of those enrolled in employer plans were unhappy.
Susan Braig, an Altadena artist, was so displeased with her individual Blue Cross plan, which pays only hospital expenses, that in a fit of creative protest she began designing necklaces out of stethoscopes and syringes, pendants, bracelets and earrings studded with pills and a tiara bejeweled with stool softeners and ibuprofen.
Since being diagnosed with breast cancer in 2004, Braig estimates she has had to pay more than $31,000 for doctors' appointments, blood tests, ultrasounds and prescriptions because they were not covered.
The first time she faced a $500 pharmacy bill, Braig said, "I looked at these little pills and thought: What are these, precious gems?"
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jordan.rau@latimes.com
