Backers of California Prop. 45 try to turn insurance industry opponents’ huge spending lead into a liability

Do voters really care who’s paying for the campaign ads that are filling their mailboxes and the airwaves?

Plenty of big donors certainly think so. Otherwise, why would they be pouring so much money into “social welfare” nonprofits that can run ads without identifying their contributors? According to the Center for Responsive Politics, the 2014 midterm elections are set to be the most expensive in U.S. history, and close to $1 billion of the money spent could come from groups that don’t reveal the source of their funding.

In California, however, health insurers aren’t going to any such lengths to hide their opposition to Proposition 45. A direct attack on the insurers’ bottom lines, the measure would give the state insurance commissioner the same veto power over rate hikes for individual and small-group health plans that Proposition 103 gave the commissioner over auto and home policies. Blue Shield, Kaiser and other health insurers have contributed more than $55 million directly to the No on 45 campaign fund, which reports its receipts and expenditures to the California secretary of state.

Now, proponents of Proposition 45 are trying to turn the insurers’ opposition into a selling point for the measure. Their first commercial, which started airing this week, talks about little else.

“The health insurance industry has unleashed armies of money to mislead you about Proposition 45,” the ad says as anthropomorphic $100 bills march across the screen. “They’re afraid of 45 because it ends runaway rate hikes.”

The industry’s monetary shock troops seem to have badly damaged Proposition 45’s prospects. Before the campaign got going in earnest, a Public Policy Institute poll in early summer found that 61% of the likely voters surveyed were in favor of the measure. But by mid-October, after the No on 45 side had blanketed the airwaves and filled voters’ mailboxes with ads, that support had dropped to 39%.

So it would be quite the feat of political jiujitsu to use the opponents’ huge spending advantage to reverse the measure’s sagging fortunes. Nevertheless, the deck isn’t completely stacked against Proposition 45.

The main proponent of the measure is Consumer Watchdog, the same organization that overcame fierce insurance-industry opposition to enact Proposition 103 in 1988. And just as the public resented the rapid rise in auto insurance premiums in the 1980s, so, too, do many Californians resent the big jumps in health premiums. For those voters, the phrase “greedy insurer” is redundant.

It shouldn’t surprise voters that an industry targeted for regulation by a ballot measure would fight to kill it. Still, the more insurers spend to stop Proposition 45, the more credibly Consumer Watchdog can argue that the industry is making excessive profits that it’s desperate to protect.

There are three new elements in this year’s debate, however, that complicate Consumer Watchdog’s effort to replicate the success it had with the Proposition 103 campaign.

First, Proposition 103 included a 20% rollback in auto premiums, but Proposition 45 wouldn’t mandate any immediate changes to health insurance rates. So the measure offers voters no guaranteed, calculable benefit.

Second, while all drivers were affected by Proposition 103, most Californians with health insurance wouldn’t be touched by Proposition 45. That’s because the measure has no effect on large group plans that employers set up for their workers.

And third, the battle over the measure hasn’t been a head-on fight between proponents and health insurers. Intead, much of the debate has been about the measure’s potentially deleterious effects on Covered California, the insurance exchange that the state created to implement the 2010 Affordable Care Act. Opponents of Proposition 45 have contended that it would undermine the Affordable Care Act, endangering one of President Obama’s most important achievements.

The latter problem led numerous newspaper editorial boards, including the Los Angeles Times’, to oppose Proposition 45. But it also makes the opposition seem less like a single industry fighting to protect its interests, never mind the fact that said industry is providing the vast majority of the campaign cash.

Regardless of how you feel about Proposition 45, its passage would be a reassuring sign that industries can’t win a vote just by throwing a ton of money at the campaign. If it fails, it would be a reminder of why interest groups spend so much money on elections.

Follow Jon Healey’s intermittent Twitter feed: @jcahealey