Consumer advocacy groups are taking on California's medical establishment, trying to expand the power of rate review in a ballot initiative that's already drawing a lot of political money.
The group Consumer Watchdog has successfully brought a new proposition question for California voters to answer this November: Should the state insurance commissioner have the authority to reject health plan rate increases and order refunds of excessive increases over the last year?
Dozens of California health and business organizations as opposing the idea through the group Californians Against Higher Health Costs, including the state medical, hospital and health plan associations and the state and regional chambers of commerce.
The debate over the new ballot question has been brewing since 2012, and both sides are stepping up their strategies. Consumer Watchdog recently criticized WellPoint for donating over $12 million to the Californians Against Higher Health Costs group -- the bulk of its initial funding -- at the same time that Anthem, one of the dominant insurers in the state exchange, is proposing an increase as high as 25 percent for about 300,000 members.
California law already requires public justification of auto, home and business insurance, and public disclosures of health insurance, but the state is one of 15 without the authority to reject insurance rate increases.
The new proposition would give authority over rates, deductibles and co-pays to the insurance commissioner, an elected position in California and currently headed by Dave Jones, former Democratic state representative, and also let the public challenge the justification for increases.
Anthem and the rest of the organizations in the Californians Against Higher Health Costs group argue that the proposition goes too far, giving "a single elected politician" "almost total control over our health insurance" and adding adding another layer of regulation over a market sector historically overseen by the Governors' Department of Managed Health Care."
The group also argues that if the target of the ballot initiative is rising healthcare costs, it misses other factors, "such as health care workforce, pharmaceuticals, technology, or issues surrounding an aging population or the surge in obesity or other chronic diseases," said Donald Crane, president of the California Association of Physician Groups.