Cal­i­for­nia con­sid­ers bill to im­pose new rules on in­sur­ance merg­ers

Modern Healthcare - - REGIONAL NEWS - —Maria Castel­lucci

The Cal­i­for­nia State Assem­bly is con­sid­er­ing leg­is­la­tion that would re­quire in­sur­ance com­pa­nies re­ceive state ap­proval be­fore they can merge or ac­quire other health plans.

The bill passed the Assem­bly Health Com­mit­tee last week and was in­tro­duced in Fe­bru­ary, shortly af­ter fed­eral judges blocked the mar­riages of An­them-Cigna and Aetna-Hu­mana.

The com­pet­i­tive im­pact of health plan merg­ers and ac­qui­si­tions are cur­rently scru­ti­nized by Cal­i­for­nia In­sur­ance Com­mis­sioner Dave Jones.

The bill would al­low the state’s Depart­ment of Man­aged Health Care to ap­prove any merg­ers or ac­qui­si­tions of health plans that op­er­ate in the state based on their com­pet­i­tive im­pact, in ad­di­tion to the in­sur­ance com­mis­sioner sig­noff. Un­der ex­ist­ing law, the Depart­ment of Man­aged Health Care ap­proves health plan merg­ers and ac­qui­si­tions to en­sure com­pli­ance with con­sumer pro­tec­tions and fi­nan­cial re­quire­ments. The pro­posed law would re­quire in­sur­ers to ap­ply for a li­cense as a new health plan as part of the merger ap­proval process. The depart­ment would de­cide whether to ap­prove that new li­cense.

The depart­ment would also have to hold pub­lic hear­ings on pro­posed merg­ers; pro­vide cus­tomers and pa­tients with data on the deal’s im­pact to cost, qual­ity and ac­cess to care; and de­ter­mine if the in­surer is of “rep­utable and re­spon­si­ble char­ac­ter.”

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