Affordable Care Act / Healthcare / healthcare premiums / Politics

California’s Proposition 45: Why it Failed and Its Indictment on the Affordable Care Act

Tuesday (November 4) was a big day for the Republican Party, gaining seven seats in the Senate giving them control of both chambers of Congress. In all of the excitement about the momentum change in federal politics, there was a proposition being voted on in California that went relatively unnoticed when it should not have. Proposition 45 was a measure aimed to transfer control of the individual health insurance rates from the insurance companies to the state insurance commissioner and the people. This measure was spawned out of the public ire towards the consistent spike in insurance premiums over the past couple of years. The supporters of this bill hoped that it would take the rate settings out from behind closed doors through allowing the public to participate.

Blue Shield of CAFor the health insurance companies in California, this proposition became incredibly threatening as millions of dollars were at stake. As a result, the companies, led by Kaiser Permanente, WellPoint, and Blue Shield of California, spent more than $55 million in order to defeat the measure. This spending towards defeating the measure was seen as an additional reason for the public to act and stop the insurance companies from raising health insurance rates at will. It is believed that this proposition is primarily a response to issues that were occurring before the passing of the Affordable Care Act, but supporters of the proposition – primarily democrats – claim that Californians are still facing double-digit rate hikes under the ACA. The primary problem that derailed the proposition was that there was little to no unification among those individuals who dominate the political spectrum of the state.

The primary issue raised by those who opposed this version of the proposition was that the process would have put a considerable amount of stress on the open enrollment process. This perceived stress on the open enrollment period comes from the difference between proposition 45 and rate review systems in other states, the ability it would have given the public to take legal action in order to stop approved rate increases. The perceived problem with allowing consumers to sue to stop insurance rate increase is that the additional regulations could further confuse the consumers and potentially drive insurance providers away from the marketplace. Additionally, the ACA’s supporters feared that opponents of the program could use the public power to destabilize the state insurance exchange through stalling rate approvals until after the open enrollment period.

The perceived need for a proposition such as this further highlights that there are still serious fundamental problems with the Affordable Care Act. The whole point of the ACA was to not only insure every individual in the nation but to do so in an affordable manner. Yet the public ire and growing demand across the nation for further control on insurance companies setting rates shows that this act has not taken the necessary steps to provide affordable care. There arises a challenge for the administration and the new Congress over the next two years: The two sides need to work together to begin to reconstruct the ACA into an act that truly provides affordable care. This challenge will not be easy and it has the potential to get ugly, but this attempted action in California has only magnified the issue that the Affordable Care Act does not achieve its supposed desired effects and it needs to be altered.