Sam Sorich recently participated on an A.M. Best podcast where he addressed recent legislation passed by the State of California, and the potential impact of these bills on insureds and the upcoming election.
You can listen to the podcast here.
Originally posted to Barger & Wolen's Insurance Litigation & Regulatory Law blog.
The California Legislature is looking to impose additional health coverage mandates on Californians, forcing insurers to cover such things as acupuncture and tobacco cessation drugs. Insurers are concerned over the costs of these mandates, especially in light of federal reforms.
The state Legislature is considering a bumper crop of 15 bills that would increase what health insurers have to cover - everything from acupuncture to maternity care to autism treatments.
California has a long history of mandating or trying to impose coverage requirements on health insurers. But what's different this year is that insurers are gearing up for a fight based on the year-old federal health care law, which will establish a minimum level of benefits that insurers would have to provide for their products to be sold in the new marketplace.
If California forces its health insurers to cover more than the federal government requires, the state will be on the hook for the extra costs in subsidized policies. And with a budget deficit of $26 billion, that's probably not something the state can afford.
Barger & Wolen will continue to track these bills as they move their way through the legislature. For a list of health care bills introduced in California, please see the California Association of Health Plan's Legislative Update.
Efforts in Sacramento to put a cap on the recovery of punitive damages were stomped out on May 4, 2010, as a party-line vote killed pending tort reform legislation in the Assembly’s Judiciary Committee.
As reported previously, Assembly Bill 2740, authored by Assemblyman Roger Niello (R-Fair Oaks) sought to limit punitive damages to three times the amount of compensatory damages. Because plaintiff’s attorneys routinely work on a contingency basis, this legislation was strongly opposed by plaintiff’s attorneys – arguing it was unnecessary. The bill would have also capped “pain and suffering” awards to $250,000.
Kim Stone, Vice President of the Civil Justice Association of California, testified that these “common-sense reforms would go a really long way towards making California more friendly to business while at the same time protecting the truly injured to make sure they receive their just compensation.”
Niello, a strong-backer of business interests in California, argued that tort reform is necessary to reinvigorate the state as a place for businesses to make their home.
“It's been stated by (the trial lawyers) that there’s no need, there isn’t a problem. There is a need, there is a problem. The problem is the reputation of California as a place to do business in is in the tank, and part of the reason for that is our civil justice system,” Niello told the committee.
Unfortunately, these justifications were not persuasive – or perhaps more pessimistically, not considered – as the bill was defeated on a party-line vote. Democrats unanimously voted against the reform, Republicans unanimously voted for reform. Given the toxicity and divisiveness of California state politics, perhaps little less should have been expected.
Originally posted at Barger & Wolen's Insurance Litigation & Regulatory Law blog.
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