Over Kaiser Opposition, NUHW Helps Pass Bill Designed to Stop Excessive Rate Hikes by Insurers

June 4, 2011

Last Thursday, the state Assembly passed a bill that empowers regulators to reject excessive rate hikes proposed by health insurers like Kaiser Permanente. Authored by Assemblymember Mike Feuer, AB 52 was passed by a vote of 47 to 28.

AB 52 would require Kaiser Permanente and other insurers licensed by the Department of Managed Health Care to apply in advance to the Insurance Commissioner for approval of proposed rate hikes, and would authorize regulators to reject rate increases found to be “excessive” or “unfairly discriminatory”.  Passed by the Assembly, the bill will move next to the Senate for debate.

In the days leading up to the vote, Kaiser played a key role in the insurance industry’s lobbying effort against the bill. The country’s biggest HMO has a significant financial interest in preventing the bill’s passage. Kaiser has announced plans to raise premiums on thousands of individual and small group policyholders in California this summer, despite having recently enjoyed one of its most profitable fiscal quarters on record.

To counter Kaiser’s lobbying offensive and expose the truth behind the company’s “good guy” image, NUHW published a legislative floor alert detailing Kaiser’s booming profits and needless attacks on workers, educating Assemblymembers about Kaiser’s real motives for opposing the bill.  NUHW activists also took on last minute lobbying for half a dozen swing votes that ultimately voted for the bill.

In the first three months of 2011, Kaiser generated $921 million in profits, or over $10 million per day, bringing its combined profits since 2009 to $5 billion. Kaiser’s total revenues are within the range of those of for-profit corporations in the top quintile of the Fortune 500 list, and its top executives enjoy compensation packages worth as much as $7.9 million per year.

Even with such an enviable balance sheet, Kaiser plans to raise premiums on certain policyholders by as much as 23 percent. At the same time, Kaiser is pushing to cut health and retirement benefits for thousands of nurses, social workers, psychologists, dietitians, pharmacists and other healthcare professionals in its Southern California region.

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