California Voters Have Their Say on Health Insurance Rates Today

The coalition says that the insurance commissioner will have "sweeping new power over rates, co-pays and benefits for millions of business employees and could force many small businesses to lay off workers, drop coverage, or even go out of business."

The initiative will cost tens of millions of dollars for bureaucracy without actually doing anything to control the costs that are driving health care premiums, and create confusion and overlap with other state and federal laws and regulations, the opponents claim.

Opponents say they are particularly concerned with the measure's potentially harmful effects on Covered California, the insurance exchange created by the state to implement the 2010 Affordable Care Act.

The ballot measure "would conflict with the newly reformed marketplace and the consumer empowerment implemented through Covered California" by undercutting Covered California's authority, taking a different regulatory approach toward premium review and disrupting its deadlines for offering plans to consumers, according to a report by Dr. Jon Kingsdale with Wakely Consulting Group, which was commissioned by the opposition to Prop. 45.

"The result for consumers would be to slow or block the development and offering of new benefits, the entry of new competitors and additional choices for consumers, and even the calculation of premium subsidies for the uninsured of low and moderate incomes. By introducing uncertainty into buying individual and small-group coverage, the Initiative would undermine the transparency at the heart of Covered California," the report states.

Covered California's own analysis of the proposition and its broad definitions of rates found that it could have a significant detriment on the exchange's operations. One risk is the possibility that health plans will withdraw before or during the rate regulation process, according to the analysis, written by executive director Peter Lee in August.

Covered California's consumers could see a reduction or rise in their rates as a result of the measure, which could disrupt Covered California's marketing and operations, though not any differently from what happens when plans bid rates that change their price position relative to other plans in a given region, Lee wrote.

The scope and nature of the impacts on Covered California's operations are subject to the interpretation and implementation of the Act by the Commissioner and potentially the courts, Lee said.

In the end, the Covered California board decided to steer clear of politics and remained neutral on Prop. 45.

Another problem with the measure, opponents say, is that it includes a provision that would allow consumer groups and other interveners to file lawsuits over rates even after they have been approved by the commissioner.

Californians Against Higher Health Costs calls Consumer Watchdog, one of the major supporters of Prop. 45, a front group for trial lawyers, and claims that the measure is not really about regulating health care, but about lining the sponsors' pockets through lawsuits.

"Proposition 45's sponsors are lawyers who made over $14 million off costly legal 'intervener' challenges allowed by the last measure they sponsored (Proposition 103). Now, they've hidden the same provision in this measure," the coalition claims.

Attorneys stand to make tens of millions of dollars from health-care lawsuits if Prop. 45 passes, the coalition claims, and says those costs will be passed on to health care consumers.

On opposing sides of the debate over the measure are two nurses associations, with the American Nurses Association of California saying that the measure will threaten nurses' ability to provide needed patient care by giving a single politician too much power.

"The important decisions about benefits and treatment options should be made by health care professionals and patients - not someone with a political agenda. ANA California urges nurses and all voters to oppose Prop 45," executive director Tricia Hunter said in a statement.

The California Nurses Association, the largest nurses organization in the state, supports Prop. 45.

The association says that the campaign against the measure includes the "misleading use of a miniscule group of nurses with close ties to the hospital industry and other health industry sources to create the false impression that nurses actually oppose cracking down on insurance industry pricing abuses."

The expensive campaign against Prop. 45 could account for the dramatic decline of voter support. The latest Field Poll shows that only 30 percent of likely voters are in favor of Prop. 45, while 42 percent are opposed and 28 percent remain undecided.

A Field Poll in early July showed that 69 percent of voters favored the measure.

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