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California's Prop 45: Sticking it to "the Man" or to the People?

Litigation Los AngelesBusiness & Environmental Litigation  


Stephen T. Holzer





Continuing our series covering the various measures Californians will see on the 2014 midterm election ballot, we now turn to Proposition 45, or the Public Notice Required for Insurance Company Rates Initiative.


The crux of the question is this: Should insurance company rate changes for small businesses and individuals be regulated? Here's how regulation would be enforced if Prop 45 passes. The measure will require:

  1. The California Insurance Commissioner to approve rate changes or any other changes that affect charges to policy holders.

  2. Public notices, hearings and judicial reviews regarding rate changes.

  3. Health insurers to submit sworn statements attesting to the accuracy of information they submit to the Insurance Commissioner regarding the need for rate changes.

  4. Exemptions of large group employer health plans

  5. Auto, health and homeowners insurance companies to cease denying policies or raising rates for consumers based on credit history and lack of prior coverage.

Though the question is simple, it appears the answer may be more complicated. The battle lines are drawn almost exactly as you would expect, though there are some surprises on each side.

Supporters of Prop 45 include a variety of consumer watchdog groups; labor unions such as the California Nurses Association and the California Federation of Teachers; the California Democratic Party; and the current Insurance Commissioner, Dave Jones.

These groups argue that the cost of health insurance is running out of control, with no transparency regarding how insurers set their prices. Supporters of the measure claim health insurance premiums have risen 185 percent since 2002, and that one company in particular raised rates nearly 20 percent this year alone.

Opponents of Prop 45 encompass the California Medical Association; various hospital groups; labor unions such as the International Brotherhood of Electrical Workers; the California Chamber of Commerce and the William Jefferson Clinton Democrats.

Those against the measure say Prop 45 giving one politician – the Insurance Commissioner – so much power is a bad idea, and that treatment decisions should be made by doctors and patients, not someone who takes campaign contributions. They also argue against creating more costly bureaucracy, and that this proposition is sponsored by special interest lawyers looking to profit from health care lawsuits.

The latest Field Poll estimates 48 percent of those surveyed support Prop 45, over 38 percent oppose, and about 14 percent are still undecided.

Stephen T. Holzer is a Business and Environmental Litigation Attorney. Contact him via phone: 818.907.3299 or by email:


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