Supporters Of Prop. 45 Predict Health Plan Rate Gouging After The Measure’s Defeat

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Proponents of Proposition 45, which would have given California's insurance commissioner the authority to regulate some health plan rates, say that those rates will continue to skyrocket, following the measure's defeat at the polls.

Commissioner Dave Jones has tried to get this authority into law for almost 10 years, dating back to his days in the state Legislature. He blamed "$57 million worth of false television commercials, radio ads and slick mailers" for the loss Tuesday.

Proposition 45 went down by a margin of 59.8 percent to 40.2 percent, according to figures from the California Secretary of State. Jones, meanwhile, won a second term with 56.3 percent of the vote to challenger Ted Gaines' 43.7 percent.

"I am grateful for the votes of so many Californians," Jones said in a news release Wednesday. "I am disappointed, with the defeat of Proposition 45, that I will not have the authority that 35 other states have to protect Californians from excessive insurance rate increases," he added, calling the loss "a major setback for California consumers and small businesses."

Proposition 45 would have given Jones authority to regulate proposed rate increases for about 6 million people with individual and small-employer health plans — and reject those considered "excessive." Currently, he can review rates and rail against them, but he has no authority to stop them from taking effect.

Opponents honed a message that the measure did nothing to solve the problem of rising health care rates and would have hurt health reform efforts. The measure would give one politician power to determine health care rates and muck up rate negotiations and schedules at Covered California, opponents said.

"Prop. 45 was an ill-conceived measure that would have been a step backwards against the progress made by the Affordable Care Act and our state's health exchange," Dr. John Maa from the San Francisco Medical Society said in a news release Wednesday morning. "California voters saw through this deceptive measure."

Jamie Court, president of Consumer Watchdog, the group that put the measure on the ballot, blamed the loss on false advertising and low voter turnout. Consumer Watchdog, the California Nurses Association and trial attorneys who backed Proposition 45 raised about $4.5 million, but opponents launched an aggressive series of their own television and radio ads.

Insurers — including Kaiser Permanente, WellPoint Inc., Blue Shield of California and Health Net Inc. — were major sponsors of the opposition campaign.

Besides the millions spent by insurance companies to defeat the measure, low voter turnout took a toll, Court said. Five million Californians voted for or against the measure: three million of them said "No" and two million voted "Yes."

"I kept hitting the reset button and waiting for our voters to show up," Court said. He'd expected eight million.

So what's next?

"Insurance price gouging is going to continue without Proposition 45's protection," Court said.

Kathy Robertson covers health care, law and lobbying, labor, workplace issues and immigration for the Sacramento Business Journal.

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