He was an early supporter, but that hasn’t prevented Insurance Commissioner Dave Jones from finding plenty of fault with President Barack Obama’s new health care program and its rollout in California.
Jones wasn’t happy the state’s health insurance exchange told insurers not to include pediatric dental care as a standard benefit in their plans. He criticized the exchange, Covered California, for rejecting Obama’s offer to let insurers grant extensions to more than 1 million customers with policies set to terminate at year’s end.
But perhaps his biggest issue with the program has been that, as the state’s elected insurance regulator, he is unable to reject health insurance premium increases.
“This is one of the critical missing pieces of national health care reform,” he said in his inaugural speech in 2011.
Jones, at 51 preparing to seek re-election next year, is trying to accomplish something that has thwarted him for nearly seven years: vastly increasing the power of his office to regulate health insurance rates. A 2014 initiative advanced by Jones, a Sacramento Democrat, and Consumer Watchdog would give the insurance commissioner the authority to deny health insurance rate increases his department deems excessive.
A self-described “activist” commissioner who maintains close ties to consumer organizations and trial lawyers, Jones has made a habit of singling out insurance companies for rate increases he has called “excessive” and “unreasonable.”
Under Proposition 103 in 1988, the state insurance commissioner was given authority to regulate rates for car, homeowner, property and casualty insurance. Jones repeatedly reminds audiences that he lacks the authority to regulate health insurance rates. As a state lawmaker, he authored three unsuccessful bills to bestow the authority on insurance commissioners and supported another as commissioner.
It’s appropriate, he says, for the government to intervene to protect consumers and businesses, just as it does for water, electricity and natural gas.
Consumer advocates say 25 years of data based on Proposition 103 shows the change would result in large savings for policyholders. Jones said the initiative has about 80 percent in polls but anticipates that well-heeled opponents will spend between $50 million and $60 million to defeat the measure.
“The health insurers and HMOs will do everything in their power to crush this, including attacking me and attacking the initiative,” he said. “This is the last thing in the world they want to see happen.”
Others say the health overhaul should be given an opportunity to work before imposing what they see as potentially costly new regulations that could undermine it. They say it would create more bureaucracy that would reduce access to care and drive up rates. Kim Stone, president of the Civil Justice Association of California, said the measure would be a bonanza for organizations that intervene in rate cases and increase costs.
“This initiative isn’t about improving health care for millions of Californians,” said Tom Scott, executive director at California Citizens Against Lawsuit Abuse. “It’s really about putting money in the pockets of trial lawyers who could file costly legal challenges that will end up ultimately costing patients and consumers more money.”
A lonely voice
As Jones has worked to expand his power and influence, he’s developed a reputation as a publicity-seeking opportunist at times more interested in political advancement than public policy.
He has carefully cultivated media attention even as he’s pushed for changes in the law to expand his regulatory authority. Jones has personally invited reporters, via telephone, to attend his press events, an unusually hands-on approach among statewide office holders with large public-relations staffs. Over three years, his office issued about 450 press releases, considerable output for a statewide post that last garnered major attention in 2000, when Chuck Quackenbush resigned in scandal.
Jones’ adversary in next year’s re-election campaign opposes the federal health care changes. But when Republican Sen. Ted Gaines of Rocklin criticizes Jones’ support for the law, he also argues that Jones has changed his emphasis to match the public mood.
After “grandstanding” about the virtues of the health care law, Gaines said, Jones has freely hammered the health-insurance industry rather than hold accountable those who are responsible – politicians, including the president.
“When it started going sideways, he’s repositioned himself,” said Gaines, president of Gaines Insurance in Roseville.
Steve Maviglio, a Democratic political consultant who has long sparred with Consumer Watchdog, said Jones is largely doing the bidding of a group funded by trial lawyers, to which he awarded a yearlong contract worth up to $88,000 to review health-insurance rate hikes. (Consumer Watchdog said it expects to bill less than $30,000.)
Maviglio casts Jones as a progressive’s progressive who stands to the left of most elected California Democrats. He suggested Jones is working to transform the post into an activist position to give himself more influence and to use the job as a stepping stone to higher office.
On opposing the expiring health cancellations, he said Jones’ was a “lonely voice because it was the wrong thing to do for the state and right thing for him politically.”
“It was the world against Dave Jones and Consumer Watchdog,” Maviglio said, adding that few of the party’s stalwarts are likely to stand up to him. “He’s the incumbent, and everyone shrugs their shoulders and says, ‘There goes Dave Jones again.’”
Officials at Covered California weren’t interested in talking about Jones. Executive Director Peter V. Lee declined to discuss the commissioner through spokesman Roy Kennedy, who said the questions were not productive for its enrollment efforts.
Several insurers and their trade organizations also declined to respond to The Sacramento Bee’s questions about Jones. Those who would talk publicly praised the commissioner for engaging in the complexities of his job.
Mark Sektnan, president of the Association of California Insurance Companies, said in an email that the organization worked with the commissioner’s department on a bill to modernize insurance laws and allow consumers to opt in and renew their policies electronically. What’s more, Jones has been wise when it comes to regulating workers’ compensation, Sektnan said.
“He understands the need to manage the solvency of workers’ compensation carriers and he is aware of the rising costs in the system, and he is working with insurers and employers to find ways to manage the escalating costs,” he said.
Tom Epstein, the vice president of public affairs at Blue Shield of California, said Jones is a vigilant regulator who puts the interests of consumers first. “He is accessible and willing to engage on issues of importance to us,” Epstein said.
And representatives for automobile and homeowner insurers praised his tenacity. Rex Frazier, president of the Personal Insurance Federation of California, said Jones was “extraordinarily hardworking.”
“I’ve seen a few commissioners in my time, and Commissioner Jones is by far the most committed to understanding the details of this very complicated industry,” Frazier said.
The job at hand
In an interview, Jones said it’s his responsibility to point out flaws in the system. He also has criticized the health insurance exchange for not adopting comprehensive anti-fraud measures to prevent identity theft. He contends the law isn’t always a boon to young adults because efforts to control costs for older customers could mean young people pay more.
“The Affordable Care Act is not a perfect law. It’s a compromise law that relies on a private market health insurance system that is very inefficient and monopolistic in terms of the nature of the underlying market,” Jones said. “So where there are defects in the law, or where there are problems with implementation, I have been very clear that we should do everything we can to remedy those defects and avoid mistakes in the implementation.”
Jones said he would prefer a single-payer, universal health care system. Meanwhile, he leavens his criticism of the new law with a rapid-fire list of what he deems positive elements: It prevents health-insurance companies and HMOs from denying coverage for pre-existing health conditions, booting customers off policies and setting prices based on individual health circumstances. Insurers cannot institute lifetime caps or collect copayments on certain preventive-care services.
He brushes aside inquiries about his motives and any political calculation, each time returning to advice from former U.S. Attorney General Janet Reno, his mentor and boss when he served as her special assistant in the 1990s.
“Focus on the job at hand,” he quoted her as saying. “Do a good job. Do the right thing. And let the appointing office or the electorate decide what they are going to do.”
Without rate-setting ability, Jones has sought to crack down on the health care industry in other ways. In November, Sutter Health announced it would pay $46 million to settle a whistle-blower lawsuit that Jones said exposed a practice of double-billing for anesthesia services. During a national outcry over canceled health-insurance policies, he pushed Blue Shield of California to issue three-month extensions to about 113,000 customers, threatening legal action if policyholders were not allowed to retain their plans until March 31. The next week, after reviewing its own records, Anthem Blue Cross permitted more than 100,000 consumers with canceled policies to retain their coverage through February.
Jones’ record of consumer protection makes him a good ambassador for the measure giving the insurance commissioner more power, said Harvey Rosenfield, the founder of Consumer Watchdog and author of Proposition 103.
But even the group with which he is allied believes Jones hasn’t used his existing powers aggressively enough to rein in the automobile-insurance industry. The group opposed him in a recent case in which he allowed Allstate Insurance Company to use occupation and education level as a factor in setting car-insurance rates.
“He’s really been David fighting the Goliath health-insurance industry,” Rosenfield said. “But when it comes to auto-insurance companies, he really hasn’t picked up the slingshot.”