California bill would cap healthcare administration

San Francisco Chronicle, August 20, 2008

The California Assembly has approved legislation that attempts to rein in spending on administration—one of the fastest-growing cost factors in healthcare. The measure would require that 85% of premiums and fees received by health insurers and health plans be spent on treatment and other benefits for patients. Administration, profits, broker commissions and other costs would be capped at 15%, starting in 2011.