Intervenor Role Now Politically Charged
Source: Ventura County Star
The latest volley in the war over Proposition 45, the November ballot initiative to regulate health insurance rate hikes, is over intervenors who play an obscure role in the state’s process for overseeing insurance.
Opponents of Proposition 45 last week threw out a word few Californians have heard before: intervenors.
Prop. 45 on the November ballot would regulate health insurance rate hikes. It has been a hot-button topic with $4.7 million in campaign money for Consumer Watchdog, which sponsored the measure, and eight times that much — $37.6 million — raised by health insurance companies and underwriters against the measure, as of Sept. 8, according to Ballotpedia.
Steven Maviglio, a political consultant in Sacramento, raised the issue of intervenor fees by pointing out that the California Department of Insurance headed by Commissioner Dave Jones awarded $2.3 million in fees to Consumer Watchdog, a consumer advocacy group. That’s a conflict of interest, Maviglio said, because the ballot measure would increase the power of Jones and the initiative was sponsored by Consumer Watchdog.
“Intervenor fees?” Maviglio asked rhetorically. “Why do you even need a third party to intervene on behalf of consumers? Isn’t this what the insurance commissioner says he should be doing, intervening on behalf of consumers?”
That’s exactly what the commissioner is doing, said officials from CDI, because the intervenors are part of the process that helps CDI do its job.
“We have a couple of thousand rate filings every year,” said Chris Shultz, deputy commissioner at CDI. “It puts another set of eyes on these rate filings. It becomes a three-way negotiation between the department, the insurers and the intervenors about what is the right rate.”
The threat of possible intervention has an impact on the rates insurers propose, Shultz said.
“The Public Utilities Commission runs a similar program,” Shultz said, “only they have more intervenors over there, covering a variety of issues. The intervenors [in Prop. 45] would only cover rates.”
“I think people should question when a group writes a ballot measure and it’s almost exclusively to benefit a single group,” Maviglio said. “This will benefit one group that will profit from it handsomely. And I think that’s just wrong.”
Consumer Watchdog was the only consumer advocacy group to benefit in 2013, but there have been two other groups to receive intervenor fees this year — including the Consumer Federation of California. Richard Holober, director of CFC, said intervenors save consumers money by pointing out where some rate hikes don’t add up and their actions help lower insurance rates.
“There are a number of good policy reasons for intervenors, including the public interest,” Holober said. “There should be a role or opportunity for the public to participate, independent of the regulator, in this case CDI.”
Filed Under: California Watch