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Proposition 45:
Public notice required for insurance company rates initiative (2014)

Proposes to enact health care insurance rate regulation similar to that now in place for auto and homeowner’s insurance.

Specifics from Ballotpedia:
If approved by voters, the initiative would:

  1. Require changes to health insurance rates, or anything else affecting the charges associated with health insurance, to be approved by the California Insurance Commissioner before taking effect.
  2. Provide for public notice, disclosure, and hearing on health insurance rate changes, and subsequent judicial review.
  3. Require sworn statement by health insurer as to accuracy of information submitted to Insurance Commissioner to justify rate changes.
  4. Exempt employer large group health plans under any circumstances.
  5. Prohibit health, auto, and homeowners insurers from determining policy  eligibility or rates based on lack of prior coverage or credit history.

Reasons for UPTE to support

  1. Health insurance rate increases would have to be justified to and approved by the CA Insurance Commissioner
  2. Public notice, disclosure, hearings on rate changes would be required
    1. UPTE has lobbied to know more about proposed rate changes UC negotiates with its providers every year. This provision institutes a mechanism for all Californians to learn about potential rate increases.
  3. Although employer large-group health plans are exempt, if rate increases are kept reasonable for all other insurance and health plan providers, it may put additional pressure on UC’s plan to maintain similar low rate increases – certainly makes larger rate increases harder to justify for UC.

Additional reading
LA Times Article on Prop 45

  • The article notes that, while the ACA provides for rate regulation for states to be ‘grand-fathered’ in, CA did not have rate regulation in place before the ACA took effect, so there is no provision in place for CA to regulate rates.

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