Insurers Weigh in on Democratic Races

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SACRAMENTO, CA — Big insurers are targeting a handful of Assembly races
in an effort to send business-friendly Democrats to Sacramento as they
gird for a renewed push for regulations and consumer protections that
might come if Jerry Brown is elected governor.

The insurance industry has poured millions of dollars into four
Democratic primary races, including $367,000 into the Bay Area’s 20th
Assembly district to support Garrett Yee, an insurance industry
professional who is challenging the state Democratic Party’s favorite,
Bob Wieckowski.

“It’s pretty obvious the industry is trying to elect one of its own,”
said term-limited Alberto Torrico, D-Fremont, who has endorsed
Wieckowski to succeed him. The district includes Fremont and surrounding
cities in Alameda and Santa Clara counties.

Three insurance political action committees have combined to spend
$329,000 in independent expenditures on behalf of Yee.

Yee, a 44-year-old Republican before he switched his registration in
2002 to “Decline to State” and then to Democrat in 2008, has also
received $37,800 in direct contributions from insurance PACs.

Yee said he has the backing of the insurance industry because “I
understand the principles of insurance. It’s a very complex subject. If
elected, I would be understanding of the ramifications or complexities
of insurance issues.”

Wieckowski, an attorney who has received $331,000 from labor groups
and trial attorneys, more traditional allies of Democrats, said Yee was
“speaking industry code for ‘don’t touch us, don’t regulate us.’ ”

Yee downplayed his ties to the insurance industry, saying his role as
manager of the quasi-state Workers’ Compensation Insurance Rating
Bureau has been as a data collector and watchdog over information he
gathers from insurance corporations.

But on his campaign website, Yee boasts that he worked “directly with
employers and insurers,” and as policyholder ombudsman, he “assisted
hundreds of employers with problems and disputes involving their
workers’ compensation insurance.”

Just as important to his insurance backers, he is on their side on
one of the most high-profile issues that is vigilantly guarded by the
industry: the $250,000 cap on pain and suffering jury awards, a
controversial portion of the Medical Injury Compensation Reform Act
(MICRA) of 1975, which could be a central battleground issue in the next
legislative session.

Under MICRA, patients can collect unlimited economic damages,
unlimited loss of income, unlimited medical expenses and unlimited
punitive damages. Pain and suffering is the only area of medical
malpractice that is capped in California, which attorneys say hurts many
women, the poor and elderly, who end up with the lowest recovery totals
because of their limited earning power.

But Yee said the limits on pain and suffering damages have “kept the
cost of health insurance under control, to the extent that medical
malpractice costs are passed onto patients.”

Lisa Maas, executive director of the Californians Allied for Patient
Protection, which has made $184,000 in independent expenditures in
support of Yee, said her PAC wanted a candidate “who would be a problem
solver when it comes to meeting health care challenges.

“We think it’s very important to make sure we have legislators who
are going to be strong on health care, who understand health care
issues, who understand the importance of protecting access to health
care,” Maas added.

The Californians Allied for Patient Protection’s executive board
consists of medical malpractice insurers, the California Hospital
Assocation, California Medical Association, California Dental
Association and others.

Critics say insurers and large businesses are trying to maintain the
anti-regulatory mood that’s thrived under Gov. Arnold Schwarzenegger
and, until 2009, ex-President George Bush.

“I do think the insurers and others in the corporate community have
had somewhat of a free ride under Schwarzenegger and Bush and,
certainly, they’re afraid of change,” said Lea-Ann Tratten, the
political director for Consumer Attorneys of California. “They don’t
like regulation and don’t like to be accountable when they hurt people.”

Wieckowski, Yee’s opponent, accused insurance industry PACs of not
clearly disclosing to voters their motive behind backing pro-industry
candidates in the Democratic races. Campaign fliers sent to thousands of
homes by the industry PACs steer clear of the issue of medical
malpractice insurance and other regulatory issues which are driving the
big push for pro-industry candidates.

“He’s a Boy Scout, he’s close to the Chinese American community here,
he’s on the Ohlone Community College board, he’s a colonel in the Army
Reserve, he’s apolitical, everything but what he does for a living,”
Wieckowski said. “They’re OK with being silent on insurance issues, with
having it a nonissue. They know that when I get to the Assembly, I’ll
be interested in insurance reform. I believe in consumer protections.”

In addition to the effort by Californians Allied for Patient
Protection in the 20th District, another $125,000 in independent
expenditures on behalf of Yee came from the Cooperative Of American
Physicians, the PAC of the medical malpractice insurer known as Mutual
Protection Trust.

The Civil Justice Association of California, whose board of directors
is dominated by insurers, has weighed in with $1.75 million in three
races, including one in which a former Democratic lawmaker-turned
insurance company executive, Juan Vargas, is challenging Assemblywoman
Mary Salas, D-San Diego.

In one “hit piece” against Salas, she is accused of taking
contributions from health insurers — an attack made all the more rich by
the fact that it was funded by the insurer-backed Civil Justice
Association of California, said Tratten.

“Insurers are spending millions of dollars to influence the outcome
of Tuesday’s election, but most voters don’t know insurance companies
are out there propping up initiatives and attacking candidates,” said
Doug Heller, executive director of Consumer Watchdog, which is virtually
single-handedly taking on Mercury Insurance Corp.’s Proposition 17.
Mercury has outraised Consumer Watchdog’s PAC $15.9 million to $1

Contact Steven Harmon at 916-441-2101.

Consumer Watchdog
Consumer Watchdog
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