Baucus Co-Op Plan Would Gut State Laws; Consumer Watchdog Report Calls for 'Prior Approval' Rate Regulation in Health Reform, Not Deregulation of State Consumer Prote...( WASHINGTON Sept. 8 ...),Health

WASHINGTON, Sept. 8 /PRNewswire-USNewswire/ -- The consumer group that pioneered the most successful insurance premium regulation law in the nation, which has saved California drivers $62 billion on auto insurance rates since 1988, released a report today outlining the deep flaws in the proposed Senate Finance Committee health reforms. The report calls on Congress to adopt "prior approval" health insurance rate regulation and block insurance industry efforts to gut state consumer protection laws.

A "framework plan" released today by the so-called "Group of Six" Senators negotiating a health reform bill headed by Senator Max Baucus (D-MT) would open the door to gutting state laws. The plan would result in a "race to the bottom" in health care regulation by allowing insurance companies that participate in "health care compacts" to choose the weakest state law to govern all their policies, regardless of which state the policies are sold in. Currently, insurance companies must abide by the state laws of any state where they sell insurance. The Baucus plan resembles an industry proposal carried by Mike Enzi (R-WY) in 2006 discussed below.

Consumer Watchdog said that health insurance reform must include strengthened oversight of insurance companies and an assurance that consumers will be protected from price gouging, junk insurance and other unfair practices.

Download Consumer Watchdog's report, "Regulation, Not Deregulation: The Prescription for Lowering Health Costs Without Cutting Coverage (With or Without a Public Option)," at http://www.ConsumerWatchdog.org/resources/Regulate_Not_Deregulate.pdf.

The components of California's landmark property and casualty insurance regulation law, Proposition 103, include: