Health insurers spending millions to beat pro-consumer ballot measures

Insurance industry spending against California's consumer ballot initiatives is already stupendous

The latest campaign spending figures on California's two big healthcare ballot initiatives are just in, courtesy of the watchdog group MapLight, and they're mind-boggling.

If you're curious about one significant driver of healthcare costs, here it is: Health insurance companies have so far contributed more than $88 million to defeat two plainly pro-consumer measures.



Nov. 13, 11:36 a.m.: An earlier version of this post identified the Blue Cross Blue Shield Assn. as the source of $10 million in contributions to the campaign to defeat Proposition 45 on the California ballot. The contributions came from Blue Shield of California, which eventually contributed nearly $12.4 million to defeat the measure.


Insurers have put up the bulk of the more than $38-million war chest for the defeat of Proposition 45, which would give the state Insurance Commissioner the authority to regulate health insurance rates. MapLight identifies the biggest contributors as Kaiser Permanente ($14.6 million), WellPoint ($12.5 million), and the Blue Cross Blue Shield Assn., which represents independent blue plans ($10 million). WellPoint is a big commercial Blue Cross Blue Shield insurer.

MapLight's figures come from public filings with California state agencies, and are current through Sept. 24. 

This money is being spent, remember, to fend off rate regulation by an independently-elected insurance commissioner. The commissioner presumably would be inclined to keep a cap on rate increases, so it's no wonder the insurers are against it. (If they thought they could put the commissioner in their pocket, they'd be spending heavily to pass Proposition 45.)

What's the source of this campaign spending? One way or another, it's your premiums. It's quite possible that an insurance commissioner with rate-setting authority would ask tough questions about whether policy-holders should be on the hook for self-serving political spending. These are questions no self-respecting commercial insurance company wants answered. 

The war chest for Yes on 45 side, incidentally, has so far reached $664,000, mostly from Consumer Watchdog, the public advocacy group behind Proposition 45. 

The No on 45 campaign is already slathering over the California airwaves. If you live in the state, you've probably already seen its ads on TV.

We predicted last month that the campaign would be "tarred with the goo of bogus claims and rank misinformation," and the ads seem determined to prove us right: they assert that Prop 45 would give too much "power to one politician," override an "independent commission" in setting rates, and fund "special interests" with millions of dollars.

As it happens, that "one politician" is the insurance commissioner, who is directly accountable to the voters. The "independent commission" is Covered California, which negotiates rates for individual and small-group plans under the Affordable Care Act, has an unelected board, and has functioned more as an insurance company itself than purely as a consumer advocate; as we reported, members of the Covered California board oppose Proposition 45 because they don't want to cede their own authority.

Curiously, the No on 45 ads don't specifically identify this "independent commission" as Covered California--is it possible the insurers don't want voters to completely understand who they're talking about?

As for the "special interests" behind Proposition 45, the insurance companies mean special interests other than themselves. They want to remain the most special of interests, and they're willing to spend $38 million, and more, to be the belles of the special-interest ball.

The other big healthcare proposition on the ballot is Prop 46, also sponsored by Consumer Watchdog. We're of two minds about this measure, which includes a much-needed update to MICRA, an egregious state law that limits malpractice lawsuits in a way that hurts injured patients, especially infants and young children (that is, their parents). The "malpractice crisis" MICRA purports to address is largely a myth, as we've reported; the law benefits mostly insurance companies, by reducing their exposure to liability judgments.

The war chest assembled against Proposition 46 so far has reached more than $50 million, according to MapLight; much of that is contributed by malpractice insurers; if doctors think their malpractice coverage rates are too high, here's a reason. Most of the $2.6 million raised to pass Proposition 46 comes from consumer attorneys. 

MICRA limits pain-and-suffering recoveries to $250,000, a level that was set in 1975 and now is so low it's almost impossible to find a lawyer to bring almost any malpractice case to court. Prop 46 would raise the cap to a more reasonable $1.1 million and index it to inflation. The measure is tied to a provision for drug-testing physicians and surgeons that we think is foolish, but on balance it deserves your vote.

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