Phil Angelides, the Democratic candidate for governor, said yesterday that he would curb excessive HMO health plan administrative costs, making care more affordable for families and businesses.
The state treasurer said his Republican opponent, Gov. Arnold Schwarzenegger, has failed to use existing law that holds health maintenance organizations accountable when administrative costs, including profits, exceed 15 percent of premiums.
"The governor has the authority to do it, and I'm going to do it," Angelides said as he proposed a "crack down" on HMOs during a campaign event at the Clairemont Community Services Center in San Diego.
Angelides said health plan premiums nationwide have been increasing 12 percent a year, four times the rate of inflation, as health plan profits have tripled since five years ago, setting records.
In California, he said, the $10 billion in HMO premiums going to overhead and profits, not to health care, is enough to provide health insurance for every Californian.
"It's just not right that the governor is not cracking down on this - that may have a lot to do with the amount of money that he is getting from the HMOs," Angelides said.
His remark drew a laugh from the audience.
The California Association of Health Plans, an organization that represents HMOs, had no response to the remarks by Angelides, who said some reports show HMO overhead, salaries and profits reaching as much as 20 percent.
A spokesman for the Schwarzenegger campaign said his understanding of the law is that the governor does not have the power to mandate profit margins, but can ask for an investigation if overhead and profits exceed 15 percent.
"Phil Angelides has yet to give any health care proposals that are new," said spokesman Matt David. "He continues to recycle failed policies that will cost taxpayers billions of dollars."
Angelides also criticized the Schwarzenegger administration for failing to write regulations implementing legislation signed four years ago to ensure that HMO patients get timely access to care.
He also criticized the governor for failing to oppose two huge HMO mergers that gave HMO executives nearly $1 billion - Wellpoint/Blue Cross with Anthem and UnitedHealth with Pacificare.
