On November 4, 2014, after an aggressive and costly, $57 million campaign led by California’s top health insurers, which sought to convince voters that Proposition 45, Public Notice Required for Insurance Company Rates Initiative (2014), would actually have increased the cost of health insurance, California’s proposition 45 was defeated.
The initiative would have given the California Insurance Commissioner powers that regulators in 35 other states already enjoy and exercise. These powers include:
• Requiring 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;
• Providing for public notice, disclosure, and hearing on health insurance rate changes, and subsequent judicial review;
• Requiring sworn statements by health insurers as to the accuracy of information submitted to the Insurance Commissioner to justify rate changes;
• Exempting large employer group health plans under any circumstances; and
• Prohibiting health, auto, and homeowners insurers from determining policy eligibility or rates based on lack of prior coverage or credit history.
Essentially, Proposition 45 would have given the Dave Jones, the California elected State Insurance Commissioner the power to veto some excessive health insurance increases.
Extraordinarily, or rather, ordinarily, the insurance industry ran scare advertisements that made voters think that the government was allowing their health care decisions to be made by the insurance commissioner. Extraordinarily, voters swallowed the bait and the end result was that proposition 45 was rejected by a 60% majority.
So what does this mean? Nothing good! Now instead of the Insurance Commissioner making those decisions, a group of insurance executives will make them. What’s the difference? Accountability; the insurance commissioner is accountable to the voters of California, while the highly paid insurance executives are accountable only to the insurance companies that will profit handsomely as a result of an uninformed voting public.
Proposition 45 was not the solution to all health insurance problems. It applied only to people covered under individual and small group plans in California. Dave Jones stated that he needed the authority to control rates because the insurance companies had raised prices in California by up to 88% since Obamacare was implemented in January 2014. However Proposition 45 would have protected some 6 million Californians, those who need protection the most, from astronomical and unregulated health insurance price increases.