BAM! POW! WHAM! Insurance Companies take cover. CA Insurance Commissioner Dave Jones has changed into his spandex and cape! (Play superhero theme music.) And, with the help of his sidekick (Proposition 45), he’s ready to challenge his arch nemesis (aka insurance companies) and protect the good people of Gotham (California) from their tentacles and stinging rate increases. (Aside: Isn’t anyone concerned that there are no more phone booths for Superman to change in?)
Proposition 45 is an attempt by ConsumerWatchdog.org, the authors of Prop 45, and Commissioner Jones, to give the commissioner sole authority to approve individual and small group rate changes requested by health insurance companies. This includes any changes that would affect costs such as copays, deductibles, premium financing and more. So, in essence, one elected politician would have the power to determine insurance premiums and coverage. Are you as concerned as I with the consequences of such a dramatic power grab? What’s the motivation behind this?
We already have CoveredCA, California’s version of ObamaCare, which determines plan benefits and rates. A five-member board currently oversees and negotiates rates and plan changes with insurance carriers. Is it any wonder why CoveredCA higher-ups have serious concerns with Prop 45? Talk about your buzz kill. If passed, the proposition would give the commissioner individual authority to overrule CoveredCA’s Board decisions on rates and coverage, and lawyers would get the final say in the event of disputes.
So, a new bureaucracy would be created (yes, there will be more of that) to oversee another bureaucracy to protect you from insurance rate increases. Never mind that healthcare reform already determines the percentage of premium insurance companies must spend on claims, what they can make, benefits covered, and how much financial exposure consumers face. This villain has already been pummeled. Is the masked Commissioner chasing after rate increases in pursuit of justice or something more? What would be the purpose of interfering in the initial and delicate stages of our new healthcare system? I have a theory what’s behind the disguise.
Healthcare reform requires that all legal CA residents obtain health insurance. There is no requirement that health insurers must offer it, and it’s pretty clear to me that Commissioner Jones would not be sweeping off his welcome mat for insurers if Prop 45 passes. Some major insurance carriers have already chosen not to offer plans in California and more will follow suit if the proposition triumphs. With the carriers that remain, limiting provider access further will be necessary to stay price-competitive. The result will no doubt be a chaotic mess and major disruption in healthcare delivery, and (dun-dun-duh) the best opportunity for a single-payer initiative to pass; something Commissioner Jones would like to champion all the way to the Governor’s mansion, another of his likely objectives. A single-payer system is one in which the government (CA in this case) negotiates with providers and pays for all healthcare costs eliminating insurance carriers. Note: Both ConsumerWatchdog.org and the Commissioner are advocates of a single-payer system.
CoveredCA may have spoiled single-payer chances initially, but this brash effort to seize control of the health insurance market in California will renew the cause soon enough and find its way back on a future ballot. Just when we thought we understood how health care reform was going to work in the future, POW! things could change, again.
Proposition 45 is a means to a single-payer end, and it’s not a superhero, but an opportunistic Commissioner Jones who would like to make it happen. Even if you’re an advocate for single-payer, Prop 45 is not the solution. Instead, it would fracture our developing health insurance marketplace and irreversibly damage the future of California’s healthcare delivery.
Stay tuned. We’ll keep you updated at the same bat-time and this same bat-channel.
Phil Dougherty
OnlyHealthInsurance