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  • Bill Increasing Health Care Costs Advances in Senate; Business Leaders Express Concerns

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    July 08, 2019

    A California Chamber of Commerce-opposed bill that will further increase health care-related expenses for California businesses passed the Senate Health Committee last Wednesday.

    AB 731 (Kalra; D-San Jose) threatens employers with higher premiums by driving up administrative costs and imposing a burdensome rate review process for health plans and insurers in the large group market.

    Health care costs are rising, and employers and their employees are finding it more difficult to afford quality, accessible care. Last week, two business leaders weighed in on AB 731, stressing that the bill will increase health care costs for employers in California.

    Increased Bureaucracy

    In an op-ed for The Fresno Bee, Fresno Chamber of Commerce President and CEO Nathan Ahle points out that if the bill passes, potentially 17,000 large group contracts would be subject to review each year. Companies have already carefully negotiated these contracts with health care providers, balancing benefits and pricing to create a contract that best serves their employees.

    “The review process created by AB 731 would inflate the role and budget of the DMHC [Department of Managed Health Care] and CDI [California Department of Insurance],” Ahle said. “To suddenly review and comment on thousands of businesses’ health plan rates would force new, massive costs on these agencies and on health plans. These new costs will be passed onto consumers, directly increasing the cost of health care.”

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