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Providers Line Up Against Initiative

PAYERS & PROVIDERS

Prepared To Do Battle Against Premium Regulation

California's provider and payer communities lined up this week against a proposed ballot measure for the November election that would provide the California Insurance Commissioner new powers to regulate health insurance premiums.

The California Medical Association, California Hospital Association, and California Association of Physician Groups have banded together to create an organization called Californians Against Higher Health Care Costs.

"We are confident when voters find out about the many flaws in this proposal, and how it will hurt their own healthcare, they will oppose it," said Don Crane, CAPG's chief executive officer.

Although the initial announcement of the coalition prominently featured the provider organizations, its website, www.stophighercosts.com, stated that most of its funding is coming from the state's four major insurers: Anthem Blue Cross, Kaiser Foundation Health Plan, Blue Shield of California, and HealthNet. The site itself is operated by a Studio City public relations firm, Fiona Hutton & Associated, whose clients include the California Association of Health Plans.

Their opponent in this instance is a longtime insurance industry nemesis:  Consumer Watchdog, the Santa Monica-based advocacy group that won a landmark victory in the 1980's passing a ballot proposition to regulate automobile insurance premiums.

Consumer Watchdog is operating its own website, www.justifyrates.org, to help gather donations and the 505,000 signatures required by the end of May to qualify the initiative.

Should it qualify and be approved by voters, it would allow the Insurance Commissioner to have the final say on proposed rate hikes. Currently, the Department of Insurance can only provide suggestions. It would also cap administrative expenses and outlaw underwriting practices that take into account an applicant's credit history or prior insurance coverage.

"Opponents are hiding behind the medical establishment, but it's the insurance companies footing the bill," said Carmen Balber, who directs Consumer Watchdog's Washington, D.C. Operations.

The ballot initiative's language is similar to AB 52, which died in the Legislature last year after failing to garner enough support in the Senate.

Payers & Providers reported last year that State Sen. Ed Hernandez, D-West Covina and chair of the Senate Health Committee, receives about $69,000 a year in rental income from Kaiser Permanente.