B.S. Alert: Health Insurance Robber Barons Spend $56 Million vs. Prop 45’s Rate Regulation in California Without a Single Public Comment

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Four health insurance companies are spending $56 million to defeat California Proposition 45, a ballot measure to be decided Tuesday, which I wrote, that bans excessive insurance rate hikes. The insurance companies have unleashed a torrent of deceptive advertising but have remarkably refused to issue a single comment to the news media on Prop 45, including in today's New York Times.

Like the railroad robber barons of old, the health insurance company CEOs control their business in California from back rooms with an iron fist that keeps competition away. The four companies control 84% of the market and, not surprisingly, health insurance rates in California have climbed five times faster than inflation over the last decade. Even when a California state regulator finds a rate unreasonable, as California's insurance commissioner did last week, it has no power to reject it.

We all have to buy health insurance in California, but, unlike in 35 other states, no regulator can stop the rates the insurance barons choose to charge until Prop 45 passes.

The dirty secret of the insurance companies opposed to Prop 45 is that they are funding the opposition. The companies never comment in the news and don't acknowledge their opposition in their advertisements, but instead send phony lab coats, scrubs and policy analysts to cover up the insurance companies' 100% funding of the opposition. The health insurance company executives have, in short, been missing for the last many months.

Except Thursday night. The CEOs reared their heads briefly, in the shadow of the World Series, to fete Kaiser former's CEO George Halverson on Nob Hill at San Francisco's Fairmont Hotel. Kaiser has contributed $18.7 million against Proposition 45, backed by the California Nurses Association, whose member confronted Halverson in front of the hotel.

A group of California nurses picked the driveway of the Fairmont while Kaiser Chief Halverson's guests arrived Thursday night. "Hey, hey. Ho, ho. Halverson's Premium Theft Has Got To Go!"


Nob Hill is where the railroad robber barons made their home at the turn of the twentieth century. The railroad barons' corrupt practices and hold over the statehouse were the impetus for Governor Hiram Johnson giving Californians the gift of the direct democracy of the ballot initiative process. This is the very process that brought Proposition 45's rate regulation to the voters after an insurance-controlled legislature failed in the legislature for more than a decade because of the insurance barons' grip.

The $56 million campaign against Prop 45 is all lies — outrageous claims that government will play doctor with your health insurance and that a independent commission already exists to stop unreasonable rate hikes when it doesn't. Meanwhile the insurance companies stay mum on the record. Their $56 million in advertising flows to television and radio stations that don't demand their comment.

That's why the group of price-gouged policyholders, nurses and consumer advocates descended on the Fairmont Monday night with a truck load of steer manure to give back to the CEOs feting Kaiser's chief what they have been shoveling to Californians in their advertising.

The $750 per plate gala honoring Halverson benefited a group providing cover for the insurance barons' silence, the Bay Area Council, comprised of corporate chieftains, including Kaiser's and Blue Shield's. The Council is one of the groups that comments in the media for the insurance companies that fund it so the robber barons don't have to speak.

The buckets of manure didn't make it past the Fairmont's lobby door, but polls show California voters are catching on to the insurance robber barons' B.S. A Hoover Institute poll this week found Prop 45 has a 12% lead.

The insurance industry advertising against Prop 45 is escalating. But voters are smarter than the insurance companies want to admit.


Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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