What is Proposition 45?

There has been a lot of debate over California Proposition 45, the Public Notice Required for Insurance Company Rates Initiative. Prop 45 would require certain regulations on health insurers similar to homeowners insurance and automobile insurance industries. Essentially, the initiative would give the elected Insurance Commissioner a pretty broad authority to either approve or disapprove anything affecting health insurance. This not only includes rates but also coverage for individuals or small group plans.

If approved, Prop 45 would:

  • Mandate that any changes regarding health insurance rates be approved by the California Insurance Commissioner prior to taking effect
  • Require that the public be notified of any health insurance rate changes
  • Prohibit health, auto, and homeowners insurance from denying coverage or determining enrollment eligibility based on credit history or previous coverage
  • Health insurers would be required to give a sworn statement regarding the accuracy of their proposed rates and justification of any changes
  • Large group employer health plans would be exempt (this proposition only applies to small group business and individual policies)
Why are people opposed to Prop 45?
  • Individuals and organizations would be able to collect fees and challenge insurer rates in front of a court room (Similar to how Consumer Watchdog does this to keep home and automobile rates down)
  • There are concerns that the Insurance Commissioner will change over time and thus may side differently (either with consumers or with the insurers)
  • The Insurance Commissioner will be an elected official who can receive funding for his or her campaign from insurers or people with special interests which may cause bias

What are your thoughts on Prop 45?

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