Yes on 45: Consumer Watchdog Warns Public Of Insurance Industry’s Deceptive No On Prop 45 Radio Advertising

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Santa Monica, CA – Consumer Watchdog said today that a one-minute radio advertisement released by health insurance companies opposed to Prop 45's health insurance rate regulation provisions fraudulently misrepresents the advertisement’s backers, the ballot measure, and the current state of the law governing regulation of health insurance.

The advertisement deceptively obscures the insurance industry’s funding for the commercial and confuses the public about having to make a false choice between the state’s bulk purchasing pool for some health insurance consumers and rate regulation for 6 million individuals and small businesses. Prop 45 retains both.

Rick Claussen, maker of the infamous industry-funded “Harry and Louise” advertisements that torpedoed federal health reform during the Clinton era, made the advertisement.

“California’s health insurance companies cannot win a honest debate about Prop 45 so they have resorted to lies and hiding their role as the funders of the No On 45 campaign,” said Jamie Court, proponent of Prop 45 and president of Consumer Watchdog.  “Health insurance companies call their coalition Californians Against Higher Healthcare Costs when it is their profiteering that is driving up our costs. That’s how phony this is. The only reason insurance companies have spent $37.6 million against Prop 45 is because it will put the brakes on their runaway rates. “

Consumer Watchdog noted the advertisement misleads the public in the following ways:

• Radio ad narrator Candy Campbell claims to represent California nurses in favor of the insurance companies’ cause. In fact, she sells herself on her website as the “Florence Nightingale” of healthcare communications, offering her services as an “actor and filmmaker, author and educator” with nursing credentials.  The 85,000 member strong California Nurses Association is a sponsor of Prop 45.

• The ad proclaims that Covered California, the state’s new health benefit exchange, can “reject plans that are too expensive.” In actual fact, Covered California negotiates with insurers – behind closed doors – but cannot reject unreasonable rate hikes. No federal or California state agency has the power to do so.  Four health insurance companies control 92% of the Covered California market, so there is no leverage for negotiation and no ability to reject a plan. Prop 45 would give the insurance commissioner authority to reject excessive rate hikes and order refunds.

• Covered California is not an "independent commission" as the ad describes. Governors and legislative leaders who take significant contributions from the insurance industry appoint board members to this new healthcare insurance exchange, which conducts its negotiations behind closed doors.  A bevy of healthcare “consultants” and “advisors” with extensive histories representing some of the industry’s biggest insurers were temporarily hired to shape the exchange. Some of them have since returned to the companies that they left.  The exchange is a bulk purchasing pool, much like an insurance broker, that describes the insurance companies as its “partners.” Its negotiations are not subject to the Public Records Act.

• The ad implies that the “commission” helps all voters, when its purchasing decisions only affect its 1.2 million enrollees.  Prop 45’s requirement that rates be justified and approved before taking effect applies to 6 million individuals and small businesses in the state and will protect them from health insurance company price-gouging while lowering health insurance premiums. 35 other states have instituted similar requirements.  

• The ad says “keep the commission and reject the special interests.”  Proposition 45 does not alter Covered California or its role. The ad falsely implies that Prop 45 means California loses its health benefit exchange. It doesn’t. In fact, Prop 45 helps Covered California by making insurers justify rate increases and allowing California to reject hikes deemed excessive. This gives Covered California enhanced clout with insurers to keep rates down.  No “special interests” are behind Prop 45, which is backed by the nonprofit Consumer Watchdog and California Nurses Association.

• The ad claims that Prop 45 “lets politicians take millions in campaign contributions from special interests.” No California insurance commissioner since 2002 has taken a campaign contribution from an insurance company.

In 2010, insurance companies spent $5 million trying to defeat current Insurance Commissioner Dave Jones. To date, they have contributed more than $37 million dollars in policyholder premiums to defeat Prop 45. In contrast, in the last 18 months, Jones has raised $1.2 million, mainly from individuals and small businesses, for his campaign. He has also accepted spending limits.

• The ad’s disclaimer states the coalition is made up of "doctors, nurses, and healthcare clinics.” In fact, nearly 100 percent of the funding for this ad campaign comes from five insurance companies: Blue Shield, Kaiser, Wellpoint/Anthem, United Healthcare, and HealthNet, who are profiteering off captive consumers who are now required by law to buy health insurance.

• By placing the state required campaign disclosure at the beginning of the ad instead of the end, using a “chime” sound effect, and switching the speaker from a man to a woman the disclosure mentioning health insurance company funding sounds as though it applies to the advertisement that proceeded this industry ad.

A nationally recognized actuary and Consumer Watchdog found that Proposition 45 could save Californians $200 million or more per year in excessive premiums, which is why the insurance industry is resorting to deceptive ads against Prop 45.

The radio ad copy follows:


“Paid for by No on 45, Californians Against Higher Healthcare Costs. Major funding by Kaiser Foundation Healthplan Inc., Wellpoint Inc, and Blue Shield of California; with a coalition of doctors nurses, hospitals, health plans and California employers. (chime)

I’m Candy Campbell of the American Nurses Association of California. As a nurse I know how important it is to control health care costs. And this year we have a clear choice.

On one hand we can keep the new independent commission established last year to negotiate rates and benefits for consumers and reject plans that are too expensive.

On the other we have Prop 45 that will give one politician the power to override the rates and benefits negotiated by the commission and at the same time lets the politician take millions in campaign contributions from special interests.

The choice is clear. Keep the independent commission and reject the special interests.

Vote no on 45.

Man’s Voice: Join doctors, nurses and health care clinics and vote no on 45.

Get the facts at NoOn45 .org and stop the politician power grab.”



For more information on Prop 45 see

Paid for by Consumer Watchdog Campaign – Yes on 45, a coalition of consumer advocates, attorneys, policyholders, and nurses. 777 S. Figueroa St., Ste. 4050, Los Angeles, CA  90017.  Major Funding by Consumer Watchdog Campaign and Thomas Steyer.

Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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