New California rule aims to limit health care cost increases to 3% annually
Associated PressSACRAMENTO, Calif. — Doctors, hospitals and health insurance companies in California will be limited to annual price increases of 3% starting in 2029 under a new rule state regulators approved Wednesday in the latest attempt to corral the ever-increasing costs of medical care in the United States. “We want to be aggressive,” board chair Dr. Mark Ghaly said, while acknowledging that the cap “really translates into a major challenge” for the health care industry. California’s health care industry has supported the idea of a statewide cost target but argued a 3% cap is too low and will be nearly impossible to meet. What makes California’s cap different, experts say, is both the staggering size of the state’s health care industry and its plan to enforce the limit with fines. “This action is a crucial first step forward in our efforts to reign in outrageous heath care costs and make health care more affordable.” Wednesday’s vote was the state’s first foray into tackling health care spending in California, which reached $405 billion in 2020, or $10,299 per person — the 22nd highest in the nation.
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