It is a more lucrative niche for insurers than selling policies through employers because insurers have more leeway to set the terms of individual policies and face fewer regulations about what medical procedures must be covered and which customers must be accepted.
The Senate passed a proposal by the incoming president pro tem, Darrell Steinberg (D-Sacramento), that would make it easier for individual customers to compare competing plans. The bill also would limit maximum out-of-pocket costs for those individuals and force insurers to offer a whole range of policies if they want to do business in the state.
Nicole Evans, spokeswoman for the California Assn. of Health Plans, which represents health maintenance organizations, attributed the rush of bills to "a lot of pent-up interest and energy" generated by last year's focus on a healthcare overhaul.
"We think these bills are going to raise costs and, in the end, make the problem worse, not better," she said. "We think in the end Republicans and Democrats will realize that."
Some insurers that backed the governor's plan have been lobbying against portions that have been revived, such as the Steinberg bill and the cap on profits. Tom Epstein, a spokesman for Blue Shield of California, said the company initially agreed to support those measures because the governor's plan would have required all Californians to obtain insurance -- adding more than 3 million people to the insurance market.
But placing limits on profits, Epstein said, "is not something that we feel comfortable embracing in the absence of comprehensive reform."
Opposition from insurers, however, is not dissuading Republicans -- a traditional ally of the industry -- from supporting some new restrictions. On Thursday, 12 of 32 Assembly Republicans joined Democrats to require insurers to obtain approval from state regulators before canceling coverage for people who have become ill and submitted medical bills.
That bill, by Assemblyman Hector De La Torre (D-South Gate) is one of three measures the Assembly has passed to address that practice, which has prompted state investigations of -- and in some cases led to fines for -- many of the state's biggest insurers. Those companies include Anthem Blue Cross, Blue Shield, Kaiser Permanente, PacifiCare and Health Net.
