A new California rule tries to hold down your health care costs. Here’s how it works

BY KRISTEN HWANG | CALMATTERS (CALMATTERS) – You won’t notice it right away, but a new California state agency took a major step this week toward reining in the seemingly uncontrollable costs of health care. The Office of Health Care Affordability approved the state’s first cap on health industry spending increases, limiting growth to 3% by 2029. This means that hospitals, doctors and health insurers will need to find ways to cut costs to prevent annual per capita spending from exceeding the target. Between 2015 and 2020, per capita health spending in California grew more than 5% each year, according to federal data. A board appointed by Gov. Gavin Newsom and the Legislature on Wednesday approved the new regulations in a 6-1 vote. Health and Human Secretary Dr. Mark Ghaly, who chairs the board, said the regulations recognize that Californians are struggling every day to pay for health care and the state has a role in helping them. “We have a place in making sure it becomes more affordable,” Ghaly said. Hospitals, doctors and insurers battled over the regulations for months, arguing that rising inflation and labor costs would make the target impossible to achieve. An earlier proposal would have...