- Associated Press - Wednesday, November 5, 2014

LOS ANGELES (AP) - On the heels of an advertising blitz funded by health insurance companies, California voters on Tuesday tanked a proposal to give the state’s insurance commissioner veto authority over health insurance premiums.

About 60 percent of voters cast ballots against the plan to give the elected commissioner expanded authority over small group and individual health plans.

The measure was one of two initiatives defeated after health insurance companies poured in millions of dollars in opposition. Voters dealt an even more resounding blow to a proposal that would have lifted the cap on courtroom damages for medical negligence, which critics said would send medical costs soaring.

Opponents feared the insurance rate initiative would have given the commissioner too much power and meddled with the state’s recently created health insurance exchange, harming California’s ability to deliver low-cost coverage under the federal Affordable Care Act.

“This was a huge threat to health reform in the state, so I’m very, very glad that we’ve batted it back,” said Micah Weinberg, senior policy adviser to the Bay Area Council, which opposed the initiative along with hospitals, doctors and firefighters.



Democratic Insurance Commissioner Dave Jones and Consumer Watchdog, a Santa Monica-based group backed by attorneys, argued the measure would add transparency to the rate-setting process and force health insurers to justify hikes, much like companies that sell auto and homeowner insurance must do in California.

Consumer Watchdog’s president, Jamie Court, said his group made a final push for votes but was outspent by insurance companies. As of late October, most of the $55 million in opposition funding had come from four major health insurers: Kaiser, WellPoint, Blue Shield and Health Net.

“Thirty five other states have enacted this reform, which allows them to reject excessive health insurance rate hikes, and it’s unfortunate that California and Californians won’t have the same protection,” Jones told reporters outside the California Democratic Party headquarters in Sacramento.

In California, about 16 percent of the population has individual or small group health insurance, according to the nonpartisan Legislative Analyst’s Office.

About 1.4 million people signed up for individual health plans through the state health insurance exchange in its first year, and premiums for those consumers are poised to rise by an average of 4.2 percent in 2015. That’s about half the increase the industry has seen over the past three years.

Covered California, the state’s online health insurance marketplace, did not take a formal position on the initiative, but staff members released a report finding it could disrupt the exchange’s work negotiating with insurers, cause delays and risk having insurers leave the market.

Covered California offers private health coverage to those with no access to health care through their jobs.

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Associated Press writer Samantha Young contributed to this report from Sacramento.

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