Nearly one and a half million Californians signed up for health insurance coverage during the first year of health care reform. Consumers can now shop on our new marketplace, Covered California, without fear of discrimination based on pre-existing conditions and they receive financial assistance as needed. It is more important than ever to reject proposals that would turn back the clock on the progress our state has made in implementing federal health reform.
And yet Prop 45 — a poorly-drafted November ballot measure that would give one politician sweeping new powers to override decisions made by Covered California’s independent commission — would do just that.
Prop 45 centralizes the power to determine not only rates but also benefits in the hands of a single elected official. This politicizes the delivery of health care in a way that has drawn the opposition of every major health care provider group in the state. It would cost the state millions to create a bureaucracy that would duplicate the functions of another state agency already overseeing this process.
Worst of all, it would raise health care spending in California through the creation of a costly “intervenor” system that doesn’t exist in any other state in the country. In the scheme proposed by Prop 45, opportunistic attorneys would reap millions in fees through unnecessary lawsuits that would prevent affordable rates from getting to market under the timelines laid out by health reform.
The state’s voters, tired of endless self-serving initiatives, may not be surprised to learn that the attorneys who will profit from these fees are the very same ones that paid to put this measure on the ballot. In fact, they’ve already made millions off of a similar initiative for home and auto insurance.
To really understand why Prop 45 is such a travesty, though, it’s important to understand the factors that have contributed to our state’s success so far.
Two things stand out about California’s experience. First, our state has been the most progressive in the nation in reshaping the insurance market through the “active purchasing” powers granted to the independent board that runs Covered California. In the small number of other states that have chosen this model, “active purchasing” mainly means choosing whether a particular plan participates on the marketplace.
In California, our independent commission has aggressively negotiated rates, standardized product design, and pushed for quality ratings and delivery system reforms significantly ahead of the rest of the nation. Compromising its ability to continue to effectively work on behalf of consumers through shoehorning in an incompatible system such as litigated rate regulation would be a mistake.
The second thing that stands out is that the state of California has made the right decision at almost every step of the way in order to best promote quality and affordability of health insurance. The choice to move everyone into health reform compliant products, the development of a public marketplace with robust competition among private insurers, and the all out, all-hands-on-deck enrollment effort that resulted in the state’s rate of uninsured being cut in half are all factors that are associated with lower rates and lower rate increases.
Coming to this series of decisions has been a broadly collaborative process that has involved gubernatorial administrations from both political parties, an independent expert commission with no insurance industry representation, strong legislative leadership and the engagement of a wide range of stakeholders. Taking these decision-making powers away from these independent bodies and giving it to a single politician is contrary to the collaborative spirit of reform and would undercut our shared success.
Changing California’s successful system now — in the face of the concerns raised by Covered California, the Department of Managed Health Care and broader health policy community — would be worse than unwise. It would short circuit a process that is working to deliver high-quality, affordable health insurance products while radically decreasing the number of people in the state without access to health care.