Jan. 10--State Insurance Commissioner Dave Jones says President Barack Obama's Affordable Care Act will make for a healthier California, but some parts of the law may prove ineffective unless his office is given the power to reject unreasonable health insurance rate increases.

Jones told The Bee's editorial board Wednesday that not having that power is a "glaring loophole" in the law, which is widely known as Obamacare.

The controversial federal law will do many good things, Jones said. It will cover between 4 million and 5 million of the state's 7 million uninsured residents. The other 2 million are undocumented residents, he said.

It also lets parents keep children on their coverage until age 26 and will eliminate lifetime benefit coverage caps and prohibit insurers from canceling coverage for preexisting conditions.

But without the power to review rate increases, Jones said, health insurers and health maintenance organizations would be free to hand large premium hikes to consumers required to buy coverage -- or pay a penalty if they don't.

Jones is backing a November 2014 ballot measure that would grant the insurance commissioner the power to approve health insurance rate changes. It is a power that 37 states already have, he said.

Insurance companies could challenge any rate-increase rejection by the commissioner, Jones said. The legal appeal would be heard by an administrative law judge.

The power to reject rate increases would not apply to employer large-group health plans, according to a summary on the secretary of state's website.

In addition, the state's legislative analyst and the director of finance estimate there would millions of dollars in increased state administrative costs to regulate health insurance rates. The costs would be funded by filing-fee money paid by health insurance companies.

The insurance commissioner, Jones said, already has similar authority under Proposition 103 for automobile and homeowner insurance rate increases.

Jones has tried four times -- three during his time in the Assembly and once while insurance commissioner -- to pass a bill giving the insurance commissioner that power. Each time, the bill has passed out of the Assembly only to be killed in the state Senate. Jones blamed the health care lobby for the legislation's demise.

With that avenue seemingly closed, a ballot initiative was the only option, Jones said.

The reporter can be reached at (559) 441-6320, jellis@fresnobee.com or on Twitter @johnellis24

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