California Proposition 45 - how will it affect Individual and Small Group Plans?

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What is Proposition 45?

There has been a lot of debate over California Proposition 45, the Public Notice Required for Insurance Company Rates Initiative. Essentially, the initiative would give the elected Insurance Commissioner, Dave Jones, authority to either approve or disapprove anything affecting health insurance. This not only includes rates but also coverage for individuals or small group plans.

If approved, Proposition 45 would:

  • Demand that any changes regarding health insurance rates be approved by the California Insurance Commissioner before taking effect.
  • Require that the public be notified of any health insurance rate changes.
  • Prohibit health, auto, and homeowners insurance from denying coverage or determining enrollment eligibility based on credit history or previous coverage.
  • Health insurers would be required to submit a sworn statement to the Insurance Commissioner regarding the accuracy of their proposed rates and justification of any changes.
  • This proposition only applies to small group business and individual policies. Large group employer health plans would be exempt.

Why are people opposed to Proposition 45?

  • Individuals and organizations would be able to collect fees and challenge insurer rates in front of a court room - similar to how Consumer Watchdog does this to keep home and automobile rates down.
  • There are concerns that the Insurance Commissioner will change over time and thus may side differently (either with consumers or with the insurers).
  • The Insurance Commissioner will be an elected official who can receive funding for his or her campaign from insurers or people with special interests which may cause bias.

What your vote means:

  • By voting Yes, rates for individual and small group health insurance would need to be approved by the Insurance Commissioner before taking effect.
  • By voting No, state regulators would continue to have the authority to review, but not approve, rates for individual and small group health insurance.

Before you vote, please research and review all the information relating to Proposition 45 so that you can cast an informed vote. Here are a few links to refer to:

  • An interesting video from the Sacramento Association of Health Underwriters: https://vimeo.com/105180557
  • NAHU and CAHU are working to help band agents together to take real action. For information on how you can get involved in your area, go to: www.agentsofaction.org
  • This is a fundraising arm that is helping to fund a lot of NO on 45 efforts: www.cahupac.org

Sources of information: