Prop. 45 Gives State Power To Veto Health Insurance Rate Increases

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Prop 45 would give the state's insurance commissioner the power to veto rate increases on health insurance, just as he can now for auto insurance.

Currently, only 39 percent of voters say they'll vote for it.

The proposition asks voters if they think the state should regulate the price people pay for health insurance. And although it is on this year's ballot, it is a question that stretches back decades.

Those in favor of the proposition have raised $3 million dollars and those who are opposed raised 10 times that. U.S. senators Diane Feinstein and Barbara Boxer back the proposition, but Governor Jerry Brown is opposed.

Back in the 1980s, the government required all drivers to buy auto insurance. There were no price controls and rates went up.

Consumer Watchdog jumped in and put Prop 103 on the ballot and it passed.

Consumer Federation of America estimates California drivers have saved more than $100 billion dollars because of that vote.

It has happened again. The government is saying people need to buy insurance, this time health insurance, but there are no strict price controls. Again, Consumer Watchdog jumped into the fray.

"We all have to buy health insurance in the state of California, it is the law, but there is no one who says health insurance is unaffordable," said Jamie Court, head of Consumer Watchdog.

Consumer Watchdog put Prop. 45 on the ballot.

"So what Prop 45 does is it forces health insurance companies to open up their books, be transparent about why they are raising rates, and requires health insurance company CEOs to certify, under penalty of perjury, why they need a rate hike and the elected insurance commissioner gets to reject the rate hike if he finds it is not necessary," Court said.

There is a major difference between Prop 45 today and Prop 103. With auto insurance, consumers were completely on their own. With health insurance there is a board set up to negotiate rates.

"We have to remember that the Affordable Care Act was really health insurance reform," said John Maa, a health care advocate with the San Francisco Medical Society.

"The Insurance industry actually made a number of concessions," Maa said. "Do you recall the phrases: your children can stay in their parents plan to the age of 26? No denial for preexisting conditions, no lifetime caps, the medical loss ratios. And so at this moment in time the insurance industry should be credited with the number of reforms they have agreed to and we need to give that time to succeed."

The Affordable Care Act as run through Covered California negotiates with health insurance companies.

He says we should give Covered California time to work.

"We need to search for what is best," Maa said. "We need to be patient. It takes time to reform the health system."

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