Group Releases Prop. 45 Savings Projections

Consumer Watchdog Says Passage Could Save $1 Billion
Payers & Providers Staff

The advocacy group that is the primary backer of Proposition 45 claims that if voters pass the initiative in November, they could save themselves as much as $1.2 billion a year in healthcare insurance premiums.

Consumer Watchdog made the claim during a press conference at its Santa Monica headquarters on Wednesday. It said that data analyzed by an outside actuarial firm, New Jersey-based AIS Risk Consultants, to reach that conclusion. AIS occasionally works with the California Department of Insurance to provide actuarial data on its decisions regarding premium changes for automobile insurers.

The ballot proposition would give the California Insurance Commissioner the power to reject premium increases for individual healthcare policies it deems unacceptably high. The commissioner has that power for automobile coverage, but not for health.

Carmen Balber, Consumer Watchdog’s executive director, noted that 35 states have some form of regulatory power to keep premiums in check, but California is not among those states.

According to the AIS study, consumers would save about $212 a person, or $612 per household, annually, if the proposition passes.

Health insurers have spent about $37 million to date to defeat it, according to Consumer Watchdog. There has also been some speculation that the recently announced premium increases from insurers selling on the Covered California health insurance exchange – an average of 4.2% for 2015 – may have been to try and blunt voter sentiment on the issue.

Wednesday's press conference also featured two Californians who claim their premiums have skyrocketed in recent years given the regulatory vacuum. Ron Blasco said his premiums with Anthem Blue Cross have risen from $244 a month in 1997 to the current $2,386 a month, making his pending retirement difficult. Linda Raffel's premiums with Anthem have risen from $196 a month in 2004 to $854.

"I’ve been waiting for Proposition 45’s type of protections for a long time,” Raffel said.

News Region: 
California
Keywords: 
Consumer Watchdog, Proposition 45, insurance, premiums