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Calif. bill would require insurance M&A to obtain additional reg approval

The California Assembly Health Committee has approved a bill that would require insurance companies seeking to merge or acquire other health plans to obtain approval from the state's Department of Managed Health Care, Modern Healthcare reported.

The current law does not require the department to consider the impact of a merger on premiums or improvements in healthcare. Rather, mergers must receive the approval of the state insurance commissioner.

Under the new bill, the Department of Managed Health Care would also need to sign off on a merger that involves insurance operations in California. The regulator would consider whether a merger would lower healthcare costs or improve access to care. It would also examine whether a deal would reduce competition.

Assembly Member Jim Wood, who introduced the bill, said consolidation in the health insurance industry often leads to fewer choices and lower competition.

The bill would need to be passed by the legislature and signed by Gov. Jerry Brown to become law.