Health Insurance Rate Plan Attacked

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A coalition of insurers, doctors and hospitals opposes a proposed initiative.

California's doctors, hospitals and insurance companies have launched a united campaign against a proposed ballot measure seeking tighter regulation of health insurance rates, and proponents returned fire.

The proposed ballot initiative seeks to give the California Department of Insurance the same rate-setting authority over health insurance that it already holds over auto and property insurance policies. Calls for greater governmental control over rates have grown amid significant rate hikes for health insurance in recent years.

Consumer Watchdog, the Santa Monica group that in 1988 championed California's Proposition 103 — which enacted rate controls on auto and property insurance — is leading the drive to get 505,000 valid signatures by early May to qualify the statewide ballot measure for the November election. Consumer groups have failed to pass similar laws in the Legislature in the last several years, encountering intense opposition from the insurance industry and other medical groups.

This coalition of doctors, hospitals and insurers announced Monday is called Californians Against Higher Health Care Costs. It also cites support from employers and business groups such as the California Chamber of Commerce.

"This initiative will make it harder to provide care to patients and increase the number of people who cannot afford to buy insurance," said Paul Phinney, president-elect of the California Medical Assn. and a pediatrician who practices at Kaiser Permanente in Sacramento.

In an interview Monday, California Insurance Commissioner Dave Jones reiterated his support for the proposed initiative and criticized the medical providers in the coalition, saying they are trying to protect insurance company profits.

"I'm upset with the doctors and hospitals stumping for the insurance companies. It's unfortunate they are allowing themselves to be used in this way," Jones said. "The opponents dress this up as being about patient access, but it's all about the money for the HMOs and insurance companies."

The coalition criticized the ballot measure as creating a costly new bureaucracy and giving the insurance commissioner too much control over healthcare coverage and prices.

C. Duane Dauner, chief executive of the California Hospital Assn., said chronic under-funding of Medicare and Medi-Cal by federal and state governments was one of biggest reasons premiums keep climbing, because those costs are shifted to private health plans. "This initiative does not address government payment shortfalls," Dauner said in a statement.

Consumer Watchdog shot back at the kickoff of the opponents' campaign, seizing on the coalition's disclosure that four health insurers — Anthem Blue Cross, Kaiser Foundation Health Plan Inc., Health Net Inc. and Blue Shield of California — were primarily funding the campaign. Jamie Court, president of the
consumer group, said those four companies control 71% of the California insurance market.

"The big insurance companies are trying to hide behind the lab coats of doctors and hospitals," Court said in an interview.

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