Protecting Patients by Reforming HMOs

As Governor, Angelides will crack down on HMOs to require quality care and protect families and businesses from excessive costs. The annual average cost of family health care coverage in California is now over $10,010 - about the annual wage of a minimum wage worker.  Where are those bigger premium dollars going? Too many of them are going right into health plan bureaucracy, HMO profits and CEO pay.

While Governor Schwarzenegger sided against patients when he green-lighted two huge HMO mergers - which poured nearly $1 billion into the pockets of HMO executives even while premiums continued to soar - Phil Angelides stood up for families and opposed the two mega-mergers. Angelides' comprehensive HMO reform package will:

• Protect families and businesses from excessive HMO overhead, salaries and profits. California law prohibits health plans from spending an "excessive" amount on administration and under existing regulations, the Department of Managed Health Care is supposed to hold HMOs to account when those administrative costs, including profits, exceed 15% of premiums. But the big for-profit health plans routinely have excessive administrative costs. As Governor, Phil Angelides will crack down on HMOs, regulating these excessive administrative costs as California's law intends, and seeing that Californians get their money's worth from their health plans.
• Ensure timely access to care. In 2002, the Legislature passed a bill (AB 2179 Cohn) requiring the Department of Managed Health Care to write regulations to ensure that HMO patients get timely access to care. While the law said the regulations were supposed to be in place at the beginning of 2004, the Schwarzenegger administration still hasn't produced them, leaving patients without the protection they need. As Governor, Phil Angelides will regulate HMOs so that families get the timely care they are already paying for.
• Require maternity coverage. On Arnold Schwarzenegger's watch, the Legislature passed Sen. Jackie Speier's bill (SB 1555) requiring all health insurers to provide maternity coverage, so that expectant mothers get the coverage they need and there is gender equity in health coverage. Governor Schwarzenegger vetoed the bill - Phil Angelides would sign it into law.