Politics

Election 2014 FAQ: Prop 45 — health insurance rate changes

In this file photo, Covered California Executive Director Peter Lee speaks during a press conference regarding the number of new healthcare enrollees through CoveredCA.com, the health insurance exchange for the state of California. Prop 45 would give new authority to the insurance commissioner to accept or reject health insurance rates in the state, and opponents argue more time is needed to see what effect Covered California, which already negotiates with insurance providers on rates, would have on its own before adding another layer to the process.
In this file photo, Covered California Executive Director Peter Lee speaks during a press conference regarding the number of new healthcare enrollees through CoveredCA.com, the health insurance exchange for the state of California. Prop 45 would give new authority to the insurance commissioner to accept or reject health insurance rates in the state, and opponents argue more time is needed to see what effect Covered California, which already negotiates with insurance providers on rates, would have on its own before adding another layer to the process.
Max Whittaker/Getty Images

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Proposition 45 is an initiative statute placed on the ballot by voter petition. It is also referred to as the Insurance Rate Public Justification and Accountability Act.

Who's behind this ballot measure?

The advocacy group Consumer Watchdog has led the effort to pass Prop 45.

In 1988, voters passed Proposition 103, creating the elected position of insurance commissioner to help oversee and regulate rates for automobile and homeowner's insurance. Prop 45 seeks to add health insurance to the list.

What would it do?

If approved, Prop 45 would:

How is this different from existing laws?

According to the Legislative Analyst's Office, currently:

How much will it cost taxpayers?

The overall impact on state and local governments is not likely to exceed the low millions of dollars annually, and those costs would be funded by the fees paid by insurance companies, according to the LAO. However, the LAO does lay out how Prop 45 could potentially impact other agencies, including:

More: Read the full LAO analysis here

How much money's being spent on the campaigns?

Who's supporting it and why?

As of September 24, Consumer Watchdog had contributed more than half the total funding for Prop 45, with $500,000. Personal injury law firm Greene Broillet & Wheeler and National Nurses United, a labor union representing registered nurses, also donated substantially to the Yes on 45 campaign.

Supporters argue that the measure is needed to stop a steady increase in health insurance premiums and that 35 other states already have the authority to regulate rate hikes.

Arguing in favor of Prop 45 on the ballot are Deborah Burger, president of the California Nurses Association; Jamie Court, president of Consumer Watchdog; and Dolores Huerta, the civil rights leader who marched alongside Cesar Chavez.

More: Yes on 45 campaign

Who's opposing it and why?

Three health insurance companies have contributed nearly all of the funding to the No on 45 campaign — Kaiser Permanente with nearly $15 million, WellPoint with $12.5 million and the Blue Cross Blue Shield Association with nearly $10 million.

Opponents argue that too much power is being placed in the hands of one elected official — the insurance commissioner — and that more time is needed to see how effective Covered California will be in helping to regulate costs.

Making the arguments against Prop 45 on the ballot are Monica Weisbrich, president of the American Nurses Association of California, an advocacy group; Dr. José Arévalo, chair of Latino Physicians of California; and Allan Zaremberg, president of the California Chamber of Commerce.

More: No on 45 campaign

…a YES vote means…

You accept the proposed changes: the insurance commissioner will have the power to approve or reject health insurance premiums, insurance companies will cover the administrative costs of regulation through fees, and credit history and lack of prior coverage will not be permissible factors in determining rates and eligibility for health, homeowner's or auto insurance.

…a NO vote means…

You reject the proposed changes: the Department of Managed Health Care and the California Department of Insurance will continue to have the power to review but not to approve or reject health insurance rates.

What else is being reported on this measure?

And there's this explainer put together by SeePolitical, a nonprofit organization that aims to help voters by decoding complicated political issues with accessible video content:

Video

Para ver en español, haz clic aquí.

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