Proposition 45 – Healthcare Insurance. Rate Changes. Initiative Statute.

The Question

Should health insurance rates be regulated by the California Insurance Commissioner?

The Situation (background)

Auto and homeowners insurance is currently regulated by the California Insurance Commissioner in accordance with the California Insurance Code.

The initiative, in general, would expand to health insurance rate regulation system to what Proposition 103 (1988) imposed on automobile and homeowners insurance.

Supporters refer to the initiative as the Insurance Rate Public Justification and Accountability Act.

Its sponsors originally hoped to qualify their measure for the November 6, 2012 ballot. They submitted over 800,000 signatures on May 18, 2012. On June 28, it became evident that election officials would not have adequate time to scrutinize the signatures for validity in time for placement on the November 6, 2012 ballot. On August 23, 2012, it was announced that the measure had qualified for the 2014 ballot.

The Proposal

If approved by voters, the initiative would:

  • Require changes to health insurance rates, or anything else affecting the charges associated with health insurance, to be approved by the California Insurance Commissioner before taking effect.
  • Provide for public notice, disclosure, and hearing on health insurance rate changes, and subsequent judicial review.
  • Require sworn statement by health insurer as to accuracy of information submitted to Insurance Commissioner to justify rate changes.
  • Exempt employer large group health plans under any circumstances.
  • Prohibit health, auto, and homeowners insurers from determining policy eligibility or rates based on lack of prior coverage or credit history. (Emphasis added)

The Official Summary:

"Requires Insurance Commissioner’s approval before health insurer can change its rates or anything else affecting the charges associated with health insurance. Provides for public notice, disclosure, and hearing, and subsequent judicial review. Exempts employer large group health plans."

Fiscal Impacts

(Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's Legislative Analyst and its Director of Finance.)

"Increased state administrative costs to regulate health insurance, likely not exceeding the low millions of dollars annually in most years, funded from fees paid by health insurance companies."

Supporters Say

“Californians are beingovercharged for healthinsurance. Prop. 45 will stopthe price gouging by requiringhealth insurance companiesto be transparent and publiclyjustify rates before premiumscan increase. The sameregulation of auto insurance hassaved drivers billions.” – (Sec. of State Quick-Reference Guide)

Harvey Rosenfield said, "Premiums are going through the roof. A lot of people can't get health insurance at any price. Benefits are going down. Company CEOs are getting rich."

Jamie Court, the president of Consumer Watchdog, stated, "The public wants accountability and transparency for the skyrocketing rates being charged. Rates have been rising five times faster than the rate of inflation."

Dr. Mohammad Gharavi, a heart and lung surgeon in Thousand Oaks, argued, "If I had a choice of insurance companies controlling it or the government controlling it, I'd rather have the government."

For additional information:

Consumer Watchdog Campaign

2701 Ocean Park Blvd., Suite 112

Santa Monica, CA 90405

(310) 392-0522

Opponents Say

“Prop. 45 is a powergrab by special intereststo take control over healthcare benefits and rates fromCalifornia’s successful newindependent commission—and give it to one Sacramento

politician instead. Highercosts, more bureaucracy.Political interference withtreatment options. Exempts bigcorporations. Nurses, doctors,consumers say vote No!” - (Sec. of State Quick-Reference Guide)

Californians Against Higher Health Care Costs issued a "Get the Facts" sheet detailing their reasons for opposing Proposition 45. The main points listed are:

  1. Gives One Politician Too Much Power
  2. Creates More Costly Bureaucracy
  3. Sponsored by Special Interests Who Stand to Make Millions Under the Measure
  4. Interferes With Your Treatment Options

Patrick Johnston, president of the California Association of Health Plans, said the initiative would create "misguided, onerous rate regulation" that would harm consumers.

James T. Hay, president of the California Medical Association, stated, "This misguided measure will cause higher rates and lessen access to care, which is why doctors, hospitals and healthcare providers oppose this measure."

Dr. Paul Phinney, a Sacramento pediatrician, said, "They're gambling that people will submit a knee-jerk vote and create a program that will be a cash cow for consumer attorneys."

Supporters of Covered California argued that the initiative is unnecessary because the Affordable Care Act, also known as "Obamacare," already imposes new rules to protect consumers. Susan Kennedy, a board member, said the initiative could damage healthcare reform in California "permanently, perhaps fatally." She continued, "Even under the best-case scenario, enactment of this measure significantly complicates Covered California's ability to enact healthcare reform. I just think it's the wrong time to add an entire layer of complication and risk to what we are attempting to achieve." Diana Dooley, chairwoman of Covered California, said, "I feel very mother-bearish on protecting the investment we have made in implementing the Affordable Care Act."

For additional information:

No on 45—Californians Against Higher Health Care Costs

455 Capitol Mall, Suite 600

Sacramento, CA 95814

(866) 676-8156


Supporters:

Officials

  • U.S. Senator Dianne Feinstein (D)[7]
  • U.S. Senator Barbara Boxer (D)[8]
  • Insurance Commissioner Dave Jones (D)
  • Superintendent of Public Instruction Tom Torlakson

Organizations

  • California Democratic Party[9]
  • Courage Campaign[8]
  • California Industrial Areas Foundation (IAF)
  • California National Organization for Women (NOW)
  • Consumer Federation of California
  • Consumer Watchdog
  • Consumer Attorneys of California
  • California Alliance for Retired Americans
  • Congress of California Seniors (CCS)
  • San Diego Hunger Coalition
  • Coalition for Economic Survival (CES)
  • California Partnership
  • Campaign for a Healthy California
  • Coalition of California Welfare Rights Organizations, Inc.
  • Los Angeles Alliance for a New Economy (LAANE)
  • Actual Systems Web Services
  • AllCare Alliance
  • Physicians for a National Health Program (PNHP) - California

Unions

  • California Nurses Association (CNA)[8]
  • Northern California Carpenters Union Regional Council
  • AFSCME District Council 57
  • AFSCME District Council 36
  • AFSCME Local 685 - LA County Deputy Probation Officers
  • United Teachers Los Angeles (UTLA)
  • United Food and Commercial Workers (UFCW) Western States Council
  • California Federation of Teachers (CFT)
  • California School Employees Association(CSEA)
  • Orange County Employees Association (OCEA)
  • Labor United for Universal Healthcare

Individuals

  • Harvey Rosenfield
  • Dennis Quaid, actor

Source:

Opponents:

(Partial List)

The organization leading the campaign in opposition to Proposition 45 is Californians Against Higher Health Care Costs

Organizations

  • California Chamber of Commerce
  • California Medical Association
  • California Hospital Association
  • California Orthopedic Association
  • California Association of Health Plans
  • California Association of Health Underwriters
  • California Association of Marriage and Family Therapists
  • California Chapter of the American College of Cardiology
  • California Children's Hospital Association
  • American Academy of Pediatrics, California
  • American Congress of Obstetricians and Gynecologists District IX
  • American College of Physicians California Services Chapter
  • American Nurses Association California
  • Association of Northern California Oncologists
  • Association of California Healthcare Districts
  • Association of California Life and Health Insurance Companies
  • California Association of Rural Health Clinics
  • California Society of Plastic Surgeons
  • California State Oriental Medical Association
  • California Urological Association
  • CAPG
  • Employer Health Coalition
  • NAACP California
  • California Citizens Against Lawsuit Abuse
  • Civil Justice Association of California
  • William Jefferson Clinton Democrats
  • California Taxpayer Protection Committee

Unions

  • State Building and Construction Trades Council of California
  • Imperial County Building and Construction Trades Council
  • Los Angeles/Orange County Building and Construction Trades Council
  • California-Nevada Conference of Operating Engineers
  • United Contractors
  • International Brotherhood of Boilermakers
  • International Brotherhood Of Electrical Workers - 9th District
  • Sailors’ Union of the Pacific

Source:

References:

Sec. of State Quick-Reference Guide

cal-access.sos.ca.gov

Official Voter Information Guide

Ballotpedia

ballotpedia.org/California_Proposition_45_(2014)

ballotpedia.org/California_Proposition_45,_Public_Notice_Required_for_Insurance_Company_Rates_Initiative_(2014)

Consumer Watchdog Campaign

No on 45—Californians Against Higher Health Care Costs

Wellpoint Leads $13 Million California Insurance Battle

Addendum - Full List of Opponents

Organizations

Medical groups

  • California Medical Association
  • California Hospital Association
  • California Orthopedic Association
  • California Association of Health Plans
  • California Association of Health Underwriters
  • California Association of Marriage and Family Therapists
  • California Chapter of the American College of Cardiology
  • California Children's Hospital Association
  • American Academy of Pediatrics, California
  • American Congress of Obstetricians and Gynecologists District IX
  • American College of Physicians California Services Chapter
  • American Nurses Association California
  • Association of Northern California Oncologists
  • Association of California Healthcare Districts
  • Association of California Life and Health Insurance Companies
  • California Association of Rural Health Clinics
  • California Society of Plastic Surgeons
  • California State Oriental Medical Association
  • California Urological Association
  • CAPG
  • Employer Health Coalition
  • Orange County Medical Association
  • Riverside County Medical Association
  • San Diego County Medical Society
  • Santa Clara County Medical Association
  • Southern California Public Health Association
  • Bay Area Council
  • Alameda-Contra Costa Medical Association
  • Butte-Glenn Medical Society
  • Chinese American Physicians’ Society
  • Chinese Community Health Plan
  • Hospital Association of San Diego and Imperial Counties
  • Hospital Association of Southern California
  • Hospital Council of Northern and Central California
  • Humboldt-Del Norte County Medical Society
  • Imperial County Medical Society
  • Latino Physicians of California
  • Los Angeles County Medical Association
  • Kern County Medical Society
  • Kings County Medical Society
  • Marin Medical Society
  • Medical Oncology Association of Southern California
  • Merced-Mariposa County Medical Society
  • Mendocino-Lake County Medical Society
  • Monterey County Medical Society
  • Napa County Medical Society
  • North Valley Medical Association
  • Placer-Nevada County Medical Society
  • San Bernardino County Medical Society
  • San Francisco Medical Society
  • San Gorgonio Memorial Hospital
  • San Joaquin County Medical Society
  • San Mateo County Medical Association
  • Santa Barbara County Medical Society
  • Santa Clara County Medical Association
  • Sierra Sacramento Valley Medical Society
  • Solano County Medical Society
  • Sonoma County Medical Association
  • Tulare County Medical Society
  • Ventura County Medical Association
  • Yuba Sutter Colusa County Medical Society

Business groups

  • California Chamber of Commerce
  • Los Angeles County Business Federation
  • California Asian Pacific Chamber of Commerce
  • California Black Chamber of Commerce
  • California Business Roundtable
  • Bay Area Council
  • United Contractors
  • CA Chapters of the National Electrical
  • Contractors Association
  • CA Legislative Conference of the Plumbing
  • Heating and Piping Industry
  • Los Angeles Chamber of Commerce
  • North Orange County Legislative Alliance
  • Small Business Action Committee
  • Southwest California Legislative Council
  • Valley Industry & Commerce Association
  • Westside Council of Chambers of Commerce
  • Big Bear Chamber of Commerce
  • Buena Park Area Chamber of Commerce
  • Camarillo Chamber of Commerce
  • Chamber of Commerce of the Santa Barbara Region
  • Chula Vista Chamber of Commerce
  • Clovis Chamber of Commerce
  • Corona Chamber of Commerce
  • Elk Grove Chamber of Commerce
  • Fullerton Chamber of Commerce
  • Greater Bakersfield Chamber of Commerce
  • Greater Fresno Area Chamber of Commerce
  • Greater Oxnard Chamber of Commerce
  • Greater Riverside Chambers of Commerce
  • Harbor City/Harbor Gateway Chamber of Commerce
  • Huntington Beach Chamber of Commerce
  • Indio Chamber of Commerce
  • Irwindale Chamber of Commerce
  • Lawndale Chamber of Commerce
  • Lake Elsinore Valley Chamber of Commerce
  • Los Altos Chamber of Commerce
  • North Valley Regional Chamber of Commerce
  • Montclair Chamber of Commerce
  • Murrieta Chamber of Commerce
  • Palm Desert Area Chamber of Commerce
  • Pasadena Chamber of Commerce
  • Rancho Cordova Chamber of Commerce
  • Redwood City-San Mateo County Chamber of Commerce
  • San Diego Regional Chamber of Commerce
  • San Jose Silicon Valley Chamber of Commerce
  • San Mateo Area Chamber of Commerce
  • Santa Clarita Valley Chamber of Commerce
  • Santa Clara Chamber of Commerce
  • Santa Monica Chamber of Commerce
  • Temecula Valley Chamber of Commerce
  • Torrance Area Chamber of Commerce
  • Tuolumne County Chamber of Commerce
  • Wildomar Chamber of Commerce
  • Ventura Chamber of Commerce
  • Vista Chamber of Commerce

Taxpayer groups

  • California Taxpayer Protection Committee
  • Calaveras County Taxpayers Association
  • Placer County Taxpayers Association
  • San Diego Tax Fighters
  • Solano County Taxpayers Association
  • Sutter County Taxpayers Association

Labor groups and unions

  • State Building and Construction Trades Council of California
  • Imperial County Building and Construction Trades Council
  • Los Angeles/Orange County Building and Construction Trades Council
  • Sacramento–Sierra Building and Construction Trades Council
  • San Diego County Building and Construction Trades Council
  • California-Nevada Conference of Operating Engineers
  • United Contractors
  • International Brotherhood of Boilermakers
  • International Brotherhood of Boilermakers Local Union 92
  • International Brotherhood of Boilermakers Local Union 549
  • International Brotherhood of Boilermakers Local Union 1998
  • International Brotherhood Of Electrical Workers - 9th District
  • International Brotherhood of Electrical Workers Local Union 11
  • International Brotherhood of Electrical Workers Local Union 18
  • International Brotherhood of Electrical Workers Local Union 47
  • International Brotherhood of Electrical Workers Local Union 441
  • International Brotherhood of Electrical Workers Local Union 477
  • International Brotherhood of Electrical Workers Local Union 551
  • International Brotherhood of Electrical Workers Local Union 952
  • U.A. Plumbers and Steamfitters, Local 38
  • U.A. Plumbers and Pipefitters Local 78
  • U.A. Plumbers and Pipefitters Local 114
  • U.A. Plumbers and Pipefitters Local 228
  • U.A. Plumbers and Pipefitters Local 230
  • U.A. Plumbers and Pipefitters Local 345
  • U.A. Plumbers and Pipefitters Local 364
  • U.A. Plumbers and Pipefitters Local 442
  • U.A. Plumbers and Pipefitters Local 460
  • U.A. Plumbers and Pipefitters Local 447
  • U.A. Plumbers and Pipefitters Local 484
  • U.A. Plumbers and Steamfitters Local 398
  • U.A. Plumbers and Steamfitters Local 403
  • U.A. Plumbers and Steamfitters Local 582
  • U.A. Plumbers and Steamfitters Local 761
  • U.A. Plumbers, Pipe, and Refrigeration Fitters Local 246
  • U.A. Sprinkler Fitters Local 483
  • Southern California Pipe Trades DC 16
  • Insulators and Allied Workers Local Union 16
  • International Union of Painters and Allied Trades, District Council #16
  • Sheet Metal Workers’ Local Union 104
  • Sheet Metal, Air, Rail, & Transportation Workers’ Local 105
  • Western Line Constructors Chapter Inc., NECA
  • Sailors’ Union of the Pacific

Businesses

Healthcare providers

  • Coachella Valley Physicians of PrimeCare, Inc.
  • Monarch Healthcare
  • Physician Partners Medical Group, Inc.

*Pioneer Medical Group

  • PrimeCare of Citrus Valley, Inc.

*PrimeCare of Corona, Inc.

  • PrimeCare of Hemet Valley, Inc.

*PrimeCare of Inland Valley, Inc. *PrimeCare Medical Network

  • PrimeCare of Moreno Valley, Inc.
  • PrimeCare of Redlands, Inc.
  • PrimeCare of Riverside, Inc.
  • PrimeCare of Sun City, Inc.
  • PrimeCare of San Bernardino, Inc.
  • PrimeCare of Temecula, Inc.
  • Prime Community Care, Inc.
  • Prime Community Care of Central Valley, Inc.

*Primary Care Associated Medical Group, Inc. *Redlands Family Practice, Inc.

  • Scripps Coastal Medical Group, Inc.
  • Sharp Community Medical Group
  • Sharp Rees-Stealy Medical Group *Physician DataTrust
  • Children’s Physicians Medical Group

Source: