Covered CA dissects Prop. 45, doesn’t oppose it

Covered CA dissects Prop. 45, doesn’t oppose it


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Officials at the Covered California insurance exchange, the state’s implementation of Obamacare, worry passage of Prop. 45 could damage its operations, potentially affecting insurance coverage for millions of Californians. But the board has chosen not to notify California voters of their concerns by formally opposing Prop. 45.

“The initiative could seriously undermine the work that we have underway, our operations, and could compromise the terrific movement and progress that we are making with implementing health reform in California,” said Covered California Board Member Kimberley Belshé at the board’s recent meeting (webcast here).

Board Member Diana Dooley agreed. “I personally have very serious concerns about the interaction of the plain language of this initiative and the work that we’ve invested in making the Affordable Care Act real in California and to some considerable degree somewhat successful,” she said.

Those concerns were confirmed in a report by Executive Director Peter Lee, which found, “Proposition 45 could have a significant detrimental impact on Covered California’s operations….”

Prop. 45

Known as the Insurance Rate Public Justification and Accountability Act, Prop. 45 would require health insurance rates to be approved by the state insurance commissioner, similar to the car insurance rate approval mandated by Proposition 103 in 1988.

Lee’s Prop. 45 analysis cited several concerns:

  • “Covered California’s role as an active [insurance] purchaser could be significantly undermined if health plans negotiating with Covered California are reluctant to consider or negotiate on factors other than price because of uncertainty about the subsequent price that will be approved (or ordered) by CDI [California Department of Insurance].
  • “If for any reason a new rate were not approved in time for open enrollment, plans would ‘default’ to the old rate for the entire next year.
  • “Current timelines under Proposition 103 [if applied to medical care under Prop. 45] would provide significant disruption to the offering of plans for the annual open enrollment.
  • One risk that Covered California needs to be concerned about is the potential of health plans withdrawing in advance of or during the rate regulation process. To the extent a mandatory intervenor hearing process is unresolved in time to meet the open enrollment deadline, a plan’s proposed rate could not go forward.
  • Almost 90% of Covered California’s consumers receive federal subsidies to reduce their net premiums…. [I]f the rate change sets a new ‘second lowest silver’ plan, some consumers could see their costs increase due to the adjustment of the prices used for the tax credit calculation and the potential reduction of the purchasing power of the tax credits.”

Warn voters?

The Covered California board members could have laid out their concerns in a resolution opposing Prop. 45 to help voters make a better informed decision ahead of the Nov. 4 election. But they unanimously declined to do so.

“I think the beauty and the right kind of influence of this board is to remain as apolitical as possible,” said Board Member Robert Ross. “I’m philosophically opposed to taking any formal position on this ballot measure or any other. I think there’s plenty of politics to go around. Let it go on and let’s try to keep it out of the deliberations of this body.”

The board’s decision to remain neutral on Prop. 45 was welcomed by more than a dozen Prop. 45 supporters who spoke at the meeting.

“People will differ in their analysis of whether Prop. 45 will make the world better for consumers or not better,” said Betsy Imholz, representing Consumers Union. “But one thing is indisputable, that the insurance industry is unanimously and vociferously opposed to it. Were you to align with that position, I think it would create a bad public image.

“And were it to pass, I think the public would be watching closely and questioning your implementation of the act. You don’t need that. None of us needs that. We just want to move forward with the very successful work that you’ve been doing over the past several years.”

Elizabeth Pataki, a retired intensive care nurse representing the California Alliance for Retired Americans, agreed.

“Since Covered California is prohibited under California and federal law from spending taxpayer money to campaign for the ballot initiatives, and since you negotiate with the powerful health care industry to ensure Californians must buy health care and have access to that care, as such it’s very important that you avoid taking sides and getting involved in a political fight with consumer advocates on one side and the health care industry on the other,” she said.

“We need Proposition 45 because there have been 185 percent increases in rates, which have caused severe difficulties. Those severe difficulties include working people and retired people going bankrupt. Proposition 45 will apply the same rates as car coverage. It does not undermine the Affordable Care Act. And it’s public, it’s transparent, it’s open. The public can see what’s happening.”


Only one person argued that the board should make its concerns public about Prop. 45.

“We have substantial experience with Prop. 103,” said Steve Young, representing the Independent Insurance Agents and Brokers of California. “From our position, Prop. 45 was a sham. What it is represented to be is not in fact what it would be. We believe and are sure that there is no empirical evidence to suggest that the Prop. 103 rating law, or especially the public intervention process, has done anything to lower insurance costs in property casualty insurance.

“Our view is Covered California itself already has done and will continue to do more to temper and lower insurance costs for California consumers than Prop. 45 ever could. So our view, while we certainly understand your position, is that it would be appropriate for you to call a pig a pig, and take a position against Prop. 45.”

Although the Covered California board has sought to stay above the political fray, it has found itself mired in it anyway.  Consumer Watchdog, which is leading the campaign for Prop. 45, on Monday sent a letter to Attorney General Kamala Harris seeking an investigation of the agency’s no-bid contracts and suggesting Covered California is in collusion with insurance companies against Prop. 45:

“Covered California has refused for months to release information requested by Consumer Watchdog under the Public Records Act concerning the agency’s communications with insurance industry executives about Prop. 45 …. Californians deserve to know the truth about hundreds of millions of dollars in no-bid contracts and industry influence at Covered California before they vote November 4th.”

Dooley responded to criticism at the September Covered California meeting. “I … am deeply troubled by the politicization of the work that we’ve done and the suggestions that necessarily come up in a political campaign,” she said. “And the characterizations that have been made and may continue to be made that we are not a sufficient steward of consumers.

“I kind of take personal offense at that because I’m here because of my consumer commitment. And I think we have established a reputation of openness and evidence of consumer protection.”

Covered CA problems

In other action at the meeting, Lee told the board that many Californians who called Covered California in the previous month were put on hold for as long as 40 minutes while those whose citizenship was in question were moved to the front of the call line.

The number of suspected illegal residents, who were in danger of losing their insurance eligibility, had grown to 148,000. Prioritizing their cases reduced that to just 10,474 clients whose legal residency is still in question, according to a press release.

Lee told the board that, although the law requires illegal residents be dropped from coverage after 90 days, Covered California has extended their coverage “well beyond that.”


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  1. Ulysses Uhaul
    Ulysses Uhaul 15 October, 2014, 16:36

    A health Czar….California needs Czars….so colorful a name….maybe a Czarina here or there too…..maybe people will call their kids Czar……sounds so East Euro Noble………pass the Borst, pumpernickel and Vladimir’s fresh hand churned butter.

    Reply this comment
  2. Nancy
    Nancy 16 October, 2014, 10:40

    What I never hear is how the “new independent commission with the authority to negotiate rates with health plans” gets selected. Any input from citizens? How is this worse than the “evil” politician, who The People can, at least, vote out. These “independent commissions”, like the EPA, are not answerable to citizens and can therefore ride roughshod over them.

    Reply this comment
  3. LetitCollapse
    LetitCollapse 16 October, 2014, 10:56

    I haven’t heard a good argument yet against Prop 45, so I will be voting in favor. The US healthcare system has been out of control for years. The insurance companies have had free rein to increase insurance premiums as much as they desire – to the tune of an AVERAGE of 10% a year, with few safeguards for the consumer. Now, under ObolaCare, we have NO CHOICE but to buy their insurance at their quoted price – or pay the government a large penalty. So what’s so bad about the Insurance Commissioner being an extra layer of protection against unjustified premium increases? The VERY WORST he could do is give the insurance companies the green light and accept their rate increase proposal. OTOH, the Insurance Commission could say “Hold it. Your rate increase proposal appears excessive and unjustified. I will not allow it”. We already spend 20% of our GDP on healthcare in America when most other nations only spend 11%-14%. Something is terribly wrong with our system. Since medical insurance coverage is now MANDATORY under ObolaCare we need another layer of protection.
    But I am willing to listen to counterarguments. And if you offer a strong enough argument I could be convinced to vote “no” on 45. Talk to me.

    Reply this comment
  4. Ulysses Uhaul
    Ulysses Uhaul 16 October, 2014, 11:58

    We are wore out…….no talk to us… mas!

    Reply this comment
  5. LetitCollapse
    LetitCollapse 16 October, 2014, 12:45

    “The number of suspected illegal residents, who were in danger of losing their insurance eligibility, had grown to 148,000. Prioritizing their cases reduced that to just 10,474 clients whose legal residency is still in question, according to a press release.”

    So there are probably 5 million illegals living in California. Are we really supposed to believe that only 10,474 applied for ObolaCare under Covered California and were caught??? lol! I suspect the State is turning a blind eye and signing up hundreds of thousands or millions of illegals for taxpayer funded medical care and claiming that they caught a few to make their story look believeable! lol. NO OTHER NATION ON EARTH ALLOWS THIS CRAP! No other nation is that stupid. The California taxpayers are being taken for a ride. Now you are forced to pay for the medical care for illegal indigents under Covered California!!! Wait until all the foreign ebola infectees start racing across the border to get free healthcare!!! lol! Then whatcha goin’ to do? When are you fools going to stop rolling over and letting the oligarchs have their way with you???

    Reply this comment
  6. Richard Rider
    Richard Rider 16 October, 2014, 15:49

    The Insurance Czar could set rates if Prop 45 passes, but he can’t make insurance companies continue to do business in California. A few companies are already closing up in CA, plus in other states with bad regulation — auto and health insurance companies are the most common departees.

    That death spiral could eventually put us all in government insurance programs. Think VA.

    I LIKE my insurance! The VA? Not so much.

    Reply this comment
    • LetitCollapse
      LetitCollapse 16 October, 2014, 19:46

      VA healthcare gets bad press in isolated places – but overall it is an excellent health care system. Most vets who use the VA healthcare system are very satisified with it. You only hear the bad news. It is more cost efficient and produces better medical outcomes than the private docs do under the Medicare system. In fact, studies have been done that prove it. Don’t believe all the propoganda that you read and hear. Do you own research. How many people have you talked that have said great things about Kaiser Permanente?

      Reply this comment
    • LetitCollapse
      LetitCollapse 17 October, 2014, 09:04

      Chris, you strike me as a guy who likes to dig deep into the weeds on current events and issues. Below you will find a link of a Rand Corp study that examined the efficiency and quality of medical care provided by the VA system as compared to medical care outside the VA network. I think you may be surprised. The VA outranked non-VA care in nearly all categories that relate to health care delivery. I urge you not to fall for all the news bits you read and hear about shoddy VA performance. Keep an open mind and research the facts. I hope this study gives you a new outlook on the VA healthcare system and how it’s performance compares to non-VA medical care.

      Reply this comment
  7. LetitCollapse
    LetitCollapse 16 October, 2014, 21:35

    Why don’t we just expand ObolaCare into Mexico and give all the mexicans heavily subsidized or free health care too? Heck, if we are going to do it for the illegal mexicans who break into our country and steal our jobs we might as well do it for the mexicans who follow the law and stay in their own country. That would be one incentive to keep them in their own country. Give them free ObolaCare!

    Reply this comment
    • T Mind of Ted Your God
      T Mind of Ted Your God 16 October, 2014, 21:47

      “Obola” care? LMAO CWD’s 12 year old thinks its clever! Using a lothsome disease that has killed thousands in western Africa to make fun of the greatest nation’s first African American President!

      Are your mom and Dad home little boy?

      Still can’t answer the question like a grown up?

      Reply this comment
      • LetitCollapse
        LetitCollapse 17 October, 2014, 08:42

        Obola is not the first ‘african american potus’. tedtard. Obola is the ‘first white-black hybrid potus’. His mama was a white woman. Why do I need to constantly remind you of that? And the comparison between Obola and ebola stands. Both are ruthless, reckless, and have complete disregard for all the victims left behind in their wake. Keep asking. You’ll get the same answer. One of these times it might stick between your ears! 😀

        Reply this comment
        • T Mind of Ted Your God
          T Mind of Ted Your God 21 October, 2014, 09:29


          It seems soooo important to you to dissect the RACE of the President. Interesting? No– just typical for your ilk.

          Since we know it’s important to you, we next look to see if your racially centered commentary is driven by any motive you may harbor. Oh wait, you do!

          YOU refer to our Columbia/Harvard trained President using the name of a loathsome west black African disease, what a shock.

          YOU are easy to read little buddy, easy. We ALL see it. Ever notice that NONE of the anti President Obama types out here EVER use your hateful rhetoric? Makes ya wonder huh?

          Ted, your mentor.

          Reply this comment

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