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California Insurance Commissioner Ricardo Lara to Governor Newsom: Department of Insurance ready to expedite health care subsidies and drug cost savings

News: 2019 Press Release

For Release: January 10, 2019
Media Calls Only: 916-492-3566
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California Insurance Commissioner Ricardo Lara to Governor Newsom: Department of Insurance Ready to Expedite Health Care Subsidies and Drug Cost Savings
Praises Wildfire Mitigation to Save Lives and Reduce Losses

SACRAMENTO, Calif. - California Insurance Commissioner Ricardo Lara attended Governor Gavin Newsom's first budget release, pledging to support his health care and fire mitigation initiatives.


"When California passed the Health4All budget plan almost four years ago to cover undocumented children, we did the right thing for our state," said Commissioner Lara. "Extending Medi-Cal coverage to all those eligible up to age 26 is the right action today. Governor Newsom's budget will tackle the cost crisis of prescription drugs, strengthen Covered California and make health care more affordable for all."


Commissioner Lara announced that the California Department of Insurance is prepared to expedite any changes needed to implement expanded subsidies and prescription drug cost savings for Covered California plans that it regulates. The Department issued its first Prescription Drug Cost Transparency Report on January 2, showing that prescription drugs are 13.4 percent of premium costs in the state.


Governor Newsom's health care proposal builds on efforts to expand health coverage through Health4All that Commissioner Lara led as a legislator.


"The long-term success of our state depends on healthy young people and a strong workforce. Our policies should be driven by the needs of Californians, not the rhetoric from Washington," added Commissioner Lara. "California has the right to determine our own future, and we will do that. As I said to Governor Newsom the day I was sworn in -- I am excited to be your partner in expanding affordable health care for every Californian."


Wildfire mitigation proposals will save lives and reduce losses.


Commissioner Lara also praised the plan to boost wildfire-mitigation measures using $200 million from the state's signature climate cap and trade initiative. More than 85 Californians died and communities experienced $9 billion in insured losses due to last year's firestorms. Insurers are expected to report updated loss numbers to the Department of Insurance this month.


"By investing in wildfire mitigation and early warning, Governor Newsom's budget will save lives," said Commissioner Lara. "We will need sustained funding to succeed in our fight against wildfire."


The federal shutdown has affected prescribed burn projects that reduce fuels in high-risk federally owned areas.


"With the federal shutdown limiting prescribed burns in the state, the winter weather window is closing to reduce wildfire risk for next year," said Commissioner Lara. "California's mitigation measures are critical to limiting future risk to homes and property. We cannot afford to miss these opportunities."


Commissioner Lara authored SB 30 (Chapter 614, Statutes of 2018) as a member of the California Senate, the nation's first climate insurance law that seeks to safeguard natural infrastructure such as forests and wetlands that can act as a barrier to disasters linked to global warming.


Budget boosts funding for Department of Insurance fraud investigations and long term care mandate.


Commissioner Lara also thanked Governor Newsom for providing $2,805,000 to fund workers' compensation fraud investigations and prosecution workload increases for local district attorneys. This increase is consistent with the increased assessment approved by the state's Fraud Assessment Commission last September.


The budget also includes $756,000 to comply with the mandates of AB 2395 (Chapter 651, Statutes of 2018, Calderon) requiring insurers with long term care contracts to file annual financial disclosure reports to the California Department of Insurance, among other requirements.


The California Department of Insurance anticipates collecting approximately $2.5 billion in premium tax revenue -- of which all insurance companies are subject to a tax on gross premiums -- that is to be remitted to the state's General Fund.

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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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