California’s Proposition 45, which would have endowed the state insurance commissioner to review health insurance rate increases before being implemented, was soundly defeated last night, 1.8 million to 1.2 million with 36% of precincts reporting.
Proponents of the proposition said giving the insurance commissioner this power would force health insurance companies to “justify their decisions.” Carriers and others in the industry opposed the measure, saying the end result would be to hurt the very people it was attempting to protect by adding significant costs attached to bureaucratic functions.
California Association of Health Underwriters spokesperson Neil Crosby also said the proposition would invite “grandstanding” by the state insurance commissioner, a role many have used to increase their profile before going on to run for governor.
Opposition was able to raise $55 million in funding, mainly through major health insurers like Kaiser, WellPoint, Blue Shield and Health Net. They expressed relief after last night’s election results.
“I was holding my breath,” Micah Weinberg, senior policy adviser to the Bay Area Council, told Sacramento’s local CBS station. “This was a huge threat to health reform in the state, so I’m very, very glad that we’ve batted it back.”
The measure was supported by democratic insurance commissioner Dave Jones and Santa Monica-based group Consumer Watchdog.
Crosby noted that while other states have similar measures, none have gone as far as to implement the requirements of California’s Proposition 45.
“There are some states that have a department of insurance that is in charge of auto and homeowners rates, but not one state that has one elected politician that solely has the right to affect everything that’s being changed in the system,” Crosby said.
In other good news for the insurance industry, the state’s Proposition 46—which would have raised the cap on medical malpractice awards from $250,000 to more than $1 million—was also defeated.
Insurance industry advocates say Prop 46 would have resulted in huge rate increases for medical malpractice clients.
