The law would require health insurers to publicly disclose and justify their rates. (Getty Images)
The law would require health insurers to publicly disclose and justify their rates. (Getty Images)

Update, 12:30 a.m.
At first glance, Proposition 45 seemed like a no-brainer for consumers. The measure would have given the state’s insurance commissioner the authority to reject excessive rate hikes in health insurance sold on the individual and small-business markets.

Consumers who had seen their premiums go up by double digits year after year clung to Prop. 45 as the savior.

“I felt like a frog in hot water that got hotter and hotter until it was boiling,” says Josh Libresco, a market researcher who has bought health insurance for his family on the individual market for 20 years.

But consumer voices like this were overwhelmed in the conversation around Prop. 45 by health insurance companies, including Kaiser and Blue Cross Blue Shield, which raised $43.6 million to defeat the measure. The proponents raised just $2.5 million.

“Health insurance companies have a tremendous economic stake in the outcome,” says Daniel G. Newman, president and co-founder of MapLight, a nonpartisan research organization that tracks the influence of money on politics. “There’s also billions of dollars at stake for health care consumers, but consumers don’t have millions collectively to put in favor of a ballot measure.”

The No side was further bolstered by concerns raised by Covered California, the state agency tasked with implementing the Affordable Care Act in California. Board members and staff discussed various complications that could arise from Prop. 45 and complicate Covered California’s ability to carry out its mission, pitting the agency against the current commissioner, Dave Jones, in an unusual dispute between allies.

The agency negotiates rates with insurers directly, and feared that a challenge to those rates under Prop. 45 could undo that work, delay final rates beyond federal deadlines or even cause insurers to withdraw plans from the state marketplace.

Insurance companies made Covered California an unlikely bedfellow, weaving its concerns into the industry’s ad campaign and urging people to vote no on Prop. 45 to “protect the Affordable Care Act.”

The influence of that campaign appears to have worked with voters. A poll from the middle of the summer showed 69 percent of likely voters favored Prop. 45 and giving the commissioner more power to control health insurance rates.

By election night, that support slipped to just about 40 percent.

Prop. 45 Defeated by Health Insurance Industry 5 November,2014April Dembosky

  • typicalvoter

    Gee, now that you mention it, price controls are a no-brainer for a lot of problems! In my opinion, I paid too much for my car, mobile home, gas, beer, and so much else this year. I was definitely overcharged by the guy who sells me the anti-freeze I drink in the morning too. We should cap all those prices – what possible harm could there be? I bet Covered California would support it too!

    • r00zster

      Car insurance and home insurance have had these price controls since 2002…and yet your free market sky didn’t fall down. I don’t understand America…

      • Peter

        Comparing car and home insurance to health insurance is like comparing apples and oranges. Overregulating health insurance companies is the problem. The cost drivers are not being addressed. Only the cost is. Completely backwards. Thank GOD prop 45 did not pass. This will save everyone. The fact that 45 did not pass gives me hope for the future. Everyone who actually understood this flawed initiative will agree with me (accept for those who would directly benefit from its passing, aka. Those who would make $675/hour for intervenor fee filings.) Again, competent Californians pulled it out on this one, saving everyone from prop 45’s flaws.

  • Daniel

    So if you are opposed to any kind of price controls whatever, even when the price of something has risen at 5 times the rate of general inflation, because you are a market fundamentalist, then that is at least internally consistent. What many of us have a problem with are the lies being broadcast concerning what the proposed law actually says. Firstly, there is no ‘Independent Commission’ that can reject rate increases. Secondly, Proposition 45 would not give a ‘Sacramento politician’ the right to make treatment decisions. If the reason you are opposed to this proposition is that you don’t believe in any restrictions on the ‘free market’ then you should at least be honest enough to say so.

    • jr

      Most voters are opposed to Prop 45 because we don’t believe in more legislation to fix a broken piece of legislation (Obamacare / covered CA). More legislation is not the answer because even the dumb voters are beginning to realize our legislators are idiots.

      • Daniel

        The facts simply don’t support your explanation. 69 percent of voters supported this in the middle of the summer and support dwindled to 40 percent after the insurance companies spent almost $50,000,000 to defeat it. Obviously, it was the barrage of ads that led to Prop 45′
        s loss of support, not an imaginary consensus that Covered CA is ‘broken’.

        • jr

          And how was this “middle of the summer” poll conducted? Myself and many others had not heard about Prop 45 until the barrage of ads discussing it. I looked at the legislation and decided it was retarded – not because of what my TeeVee told me…

          • test

            If you didn’t hear about the proposition until there were ads about it, then you are retarded.

  • gardensheila

    This should have been a no-brainer. The health insurance industry wins again. Making obamacare even less satisfying for consumers.

  • That was to happen.


April Dembosky

April Dembosky is the health reporter for The California Report and KQED News. She covers health policy and public health, and has reported extensively on the economics of health care, the roll-out of the Affordable Care Act in California, mental health and end-of-life issues.

Her work is regularly rebroadcast on NPR and has been recognized with awards from the Society for Professional Journalists (for sports reporting), and the Association of Health Care Journalists (for a story about pediatric hospice). Her hour-long radio documentary about home funerals won the Best New Artist award from the Third Coast International Audio Festival in 2009.

April occasionally moonlights on the arts beat, covering music and dance. Her story about the first symphony orchestra at Burning Man won the award for Best Use of Sound from the Public Radio News Directors Inc.

Before joining KQED in 2013, April covered technology and Silicon Valley for The Financial Times, and freelanced for Marketplace and The New York Times. She is a graduate of the University of California at Berkeley Graduate School of Journalism and Smith College.

State of Health Sponsored by

Become a KQED sponsor