Proposition 45: Campaign Funds Continue To Increase

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Campaign funds are rising for those supporting and opposing Proposition 45, the "Insurance Companies Required to Justify Their Rates to the Public Initiative." This proposition allows the insurance commissioner — currently Dave Jones — to regulate health care insurance premiums. It will be on the November 4 ballot.

As of July 11, $37,303,550 has been raised for the opposing side's ballot, "No on 45 – Californians Against Higher Healthcare Costs," headed by the campaign group, Californians Against Higher Health Care.

In support of the proposition is the Santa Monica-based group, Consumer Watchdog, led by the group's president, Jamie Court. The group has raised $1,112,423 for the passing of the initiative, which is also endorsed by the Democratic Party.

The measure — which was first attempted for submission during the November 6, 2012 ballot, but whose signatures were not counted in time — is described on the Secretary of State's website:

"Requires health insurance rate changes to be approved by Insurance Commissioner before taking effect. Requires sworn statement by health insurer as to accuracy of information submitted to Insurance Commissioner to justify rate changes. Provides for public notice, disclosure and hearing on health insurance rate changes, and subsequent judicial review. Does not apply to employer large group health plans. Prohibits health, auto and homeowners insurers from determining policy eligibility or rates based on lack of prior coverage or credit history."

Also on the Secretary's website is a statement explaining the measure's estimated costs by the Legislative Analyst and Director of Finance concerning its fiscal effect on the state and local government:

"Increased state administrative costs ranging in the low millions to low tens of millions of dollars annually to regulate health insurance rates, funded with revenues collected from filing fees paid by health insurance companies."

On the opposing side, which mostly comprises health insurers, concerns for the passing of the Proposition include the complications of additional insurance rules, claiming it will increase consumer costs, and they take issue with the amount of power of the commissioner would obtain.

"It's clear the initiative will almost immediately make our healthcare system a mess," Charles Beach, executive vice president at the California Assn. of Health Plans, told the LA Times.

Opposition to the measure believes it is incompatible with the Affordable Health Care Act. However, Jones stated the opposite during a July 2 legislative hearing.

"This is the missing piece of the Affordable Care Act," said Jones. "Without health insurance rate regulation, we will continue to see excessive rates."

Similar to the 1988 statute, Proposition 103, which allows the Insurance Commissioner to regulate auto, property and causality insurance rates, Prop 45 would require the same for health insurance.

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