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Health Insurance Lobby Gears Up to Defeat Effort to Strengthen Obamacare in California | The Nation

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Lee Fang

Lee Fang

Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.

Health Insurance Lobby Gears Up to Defeat Effort to Strengthen Obamacare in California


Election judge watches a voter cast their ballot. (Reuters)

As part of what advocates call the “next step” of the Affordable Care Act, California voters will consider an initiative next year that will empower regulators and consumer advocates to challenge health insurance premium rate hikes.

Though healthcare reform, better known these days as Obamacare, gives the government the ability to shine a spotlight onto insurance rates, it does not in itself enable regulators to block them. That power resides with the states. Currently, about thirty-four states have some laws on the books to give regulators the authority to block unjustified rate hikes; California is not one of them. And while advocates in California are optimistic about the prospects of reform, the health insurance lobby has wasted no time in preparing to defeat the measure.

Californians Against Higher Healthcare Costs, a political group created to defeat the rate review initiative, describes itself as a “coalition of doctors, hospitals, health insurers, and California employers.” Though the group bills itself as a diverse coalition, our review of disclosures with the California secretary of state’s office show that, since last year, the organization has received 99.27 percent of its funds from health insurance companies and health insurance political action committees. Health insurance interests such as UnitedHealth, Anthem Blue Cross, HealthNet and Kaiser Health Plans have raised $1,366,120 to fight the rate review. In addition, the California Hospital Committee on Issues has donated a mere $10,000.

The group has retained a number of consultants to help defeat rate review, including Thomas W. Hiltachk, a Sacramento attorney known for creating deceptive corporate campaigns for oil and tobacco companies. The media company retained by the insurers, Goddard Claussen (now known as Redwood Pacific Public Affairs), gained infamy for helping insurance companies block health insurance reforms in the past, including the advertising campaign known as “Harry and Louise” that many believe helped sink President Clinton’s attempt to overhaul the health care system.

In previous years, thousands of Californians have faced yearly premium hikes as high as 59 percent.

Topher Spiro, the vice president for health policy at the Center for American Progress, told The Nation that “every insurance commissioner should have the authority to reject premium rates that are excessive. If insurance companies can publicly justify their proposed rates with an actuarial analysis that stands up to independent scrutiny, they should have nothing to hide or fear.”

Carmen Balber, the executive director of Consumer Watchdog, the leading supporter of the rate review initiative, says the health insurance companies will spent “tens of millions” to defeat the 2014 measure “because their profits are at stake.” Balber points out that last year, Mercury General Corp. chief executive George Joseph spent $16 million on an initiative to unravel car insurance regulations, outspending opponents some 65 to 1, but was defeated.

“California voters are smarter than the insurance industry gives them credit for,” says Balber, arguing that no matter how much insurers spend, the public will see through the insurers’ “smoke screen” of advertisements.

Representatives for Californians Against Higher Healthcare Costs did not respond to a request for comment.

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The initiative is designed to create an intervener process to allow the public, including advocates like Consumer Watchdog, to challenge insurer rate hikes. When a similar measure to empower the California insurance commissioner to review and regulate rate hikes was proposed in the legislature, insurers and their allies, including several dark money organizations, spent millions of dollars on lobbying and campaign contributions to prevent it from passing. Even with Democrats in control of the legislature and the governor’s office, the bill failed. Now, the voters will have a chance to rein in health insurance companies.

Lee Fang writes about the hypocrisy of GOP lawmakers on Obamacare. 

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