Individual health care coverage: premium rates.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Under existing law, no change in premium rates or coverage in a health care service plan contract or health insurance policy may become effective without written prior notification of the change to the contractholder or policyholder. Existing law prohibits a plan or insurer during the term of a group contract or policy from changing the rate of the premium, copayment, coinsurance, or deductible during specified time periods. This bill would prohibit a health care service plan or health insurer from increasing the premium rate it charges a subscriber or policyholder of an individual contract or policy for a period of 90 days beginning with the date this provision becomes operative. Thereafter, this provision would become inoperative and the bill would prohibit a plan or insurer from increasing premium rates for individual contracts or policies by more than the average percentage increase in the medical care component of the consumer price index for the immediately preceding calendar year, as calculated by the United States Bureau of Labor Statistics. The bill would require any plan or insurer filing with the Department of Managed Health Care or the Department of Insurance containing a proposed premium rate increase for an individual contract or policy to comply with all other state and federal laws. The bill would also prohibit a plan or insurer from increasing the premium rate it charges a subscriber or policyholder of an individual contract or policy during the 12 months following the last premium rate increase. The bill would authorize the Department of Managed Health Care and the Department of Insurance to adopt regulations implementing these provisions, as specified. Because a willful violation of the bill's requirements with respect to health care service plans would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as an urgency statute.