California Proposition 45, Public Notice Required for Insurance Company Rates Initiative (2014)

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Proposition 45
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California Proposition 45, the Public Notice Required for Insurance Company Rates Initiative, was on the November 4, 2014 ballot in California as an initiated state statute, where it was defeated.

The initiative would have:[1]

  • Required changes to health insurance rates, or anything else affecting the charges associated with health insurance, to be approved by the California Insurance Commissioner before taking effect.
  • Provided for public notice, disclosure, and hearing on health insurance rate changes, and subsequent judicial review.
  • Required sworn statement by health insurer as to accuracy of information submitted to Insurance Commissioner to justify rate changes.
  • Exempted employer large group health plans under any circumstances.
  • Prohibited health, auto, and homeowners insurers from determining policy eligibility or rates based on lack of prior coverage or credit history.

Overall, the initiative would have imposed on the health insurance rate regulation system what Proposition 103 (1988) imposed on automobile and homeowners insurance.[2]

Supporters refered to the initiative as the Insurance Rate Public Justification and Accountability Act.[3]

Its sponsors originally hoped to qualify their measure for the November 6, 2012, ballot. They submitted over 800,000 signatures on May 18, 2012.[4] On June 28, it became evident that election officials would not have adequate time to scrutinize the signatures for validity in time for placement on the November 6, 2012, ballot. On August 23, 2012, it was announced that the measure had qualified for the 2014 ballot.[5]

Election results

California Proposition 45
Defeatedd No4,184,41658.91%
Yes 2,917,882 41.08%

Election results via: California Secretary of State

Text of measure

See also: Ballot titles, summaries and fiscal statements for California's 2014 ballot propositions

Ballot title:[6]

Healthcare Insurance. Rate Changes. Initiative Statute.

Official summary:

The long-form summary read:[6]

  • Requires changes to health insurance rates, or anything else affecting the charges associated with health insurance, to be approved by Insurance Commissioner before taking effect.
  • Provides for public notice, disclosure, and hearing on health insurance rate changes, and subsequent judicial review.
  • Requires sworn statement by health insurer as to accuracy of information submitted to Insurance Commissioner to justify rate changes.
  • Does not apply to employer large group health plans.
  • Prohibits health, auto, and homeowners insurers from determining policy eligibility or rates based on lack of prior coverage or credit history.[7]

Fiscal impact statement:[6]

(Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's Legislative Analyst and its Director of Finance.)

  • Increased state administrative costs to regulate health insurance, likely not exceeding the low millions of dollars annually in most years, funded from fees paid by health insurance companies.[7]


CW Yes on 45 2014.png

The campaign in support of Proposition 45 was led by Consumer Watchdog.[8]




  • California Democratic Party[11]
  • Courage Campaign[10]
  • California Industrial Areas Foundation (IAF)
  • California National Organization for Women (NOW)
  • Consumer Federation of California
  • Consumer Watchdog
  • Consumer Attorneys of California
  • California Alliance for Retired Americans
  • Congress of California Seniors (CCS)
  • CREDO Action[12]
  • San Diego Hunger Coalition
  • Coalition for Economic Survival (CES)
  • California Partnership
  • Campaign for a Healthy California
  • Coalition of California Welfare Rights Organizations, Inc.
  • Los Angeles Alliance for a New Economy (LAANE)
  • Actual Systems Web Services
  • AllCare Alliance
  • Physicians for a National Health Program (PNHP) - California
  • Potrero Hill Democratic Club[13]
  • Bend The Arc: A Jewish Partnership for Justice[14]




A Consumer Watchdog video, titled "California Nurses Say YES to Prop 45."

Jamie Court, President of Consumer Watchdog and author of Proposition 45, argued, "We all have to buy health insurance under the law, but no government agency has the power to guarantee insurance is affordable." According to Court, healthcare is too costly for the average person in California. He continued:

... Four health insurance companies, which control 84% of the California market, are spending tens of millions of dollars to convince voters they have it so good that the state doesn't need Proposition 45. The November ballot measure would simply give the insurance commissioner the right to reject excessive health insurance rates.

Covered California, the government health insurance pool — which insurance industry advertising against Proposition 45 refers to as “the independent commission” — is spending tens of millions of taxpayer dollars too. Its advertising showcases satisfied policyholders touting their affordable health insurance ahead of November's open enrollment period and the election.

The reality for many people forced to buy insurance under the government mandate is radically different: high premiums and too few doctors in their networks.

In a Field Poll released in August, Californians expressed strong support for the Affordable Care Act but complained of the high cost of health insurance premiums...

Covered California touts the insurance companies as its “plan partners.” Many consultants hired to create the pool and its key staff have been employees at the health insurance companies. That includes key staff members who help the Covered California board negotiate contracts with the companies behind closed doors.

Collaboration may be good in marketing a product, but it's not what consumers need to ensure that they don't get ripped off by insurance companies that can set any price on their policies.

Thirty-five other states require health insurance companies to get approval before raising rates, but not California. Proposition 45 gives the elected insurance commissioner the power to reject excessive rates. And that's what Covered California and the insurance industry seem to fear...

We all have to buy health insurance under the law, but no government agency has the power to guarantee insurance is affordable.

Those who believe Covered California can use the carrot of negotiation to keep rates low don't understand how insurance companies work when they have huge market power and no one with the stick to stop them.

Over the years, California's elected insurance commissioners — who are accountable directly to the voters who created the office in 1988 — have kept auto, home and business insurance rates affordable because they had the power to reject excessive rates in those industries. Commissioners — Republican and Democrat alike — have kept auto insurance rates, for example, lower in real dollars than they were 25 years ago, the only state with that record. And despite claims in insurance industry advertising against Proposition 45, no insurance commissioner has taken insurance industry contributions since 2002...

These Californians deserve Proposition 45's guarantee that an elected official be able to publicly review and say no to excessive rates.[7]

—Jamie Court[16]

Other arguments in support of Proposition 45 included:

  • Harvey Rosenfield said, "Premiums are going through the roof. A lot of people can't get health insurance at any price. Benefits are going down. Company CEOs are getting rich."[17]
  • Dr. Mohammad Gharavi, a heart and lung surgeon in Thousand Oaks, argued, "If I had a choice of insurance companies controlling it or the government controlling it, I'd rather have the government."[18]


Total campaign cash Campaign Finance Ballotpedia.png
as of December 31, 2014
Category:Ballot measure endorsements Support: $6,935,612
Circle thumbs down.png Opposition: $56,954,326

Two ballot measure campaign committees registered in support of the initiative as of December 31, 2014:[19]

Note: Consumer Watchdog Campaign - Yes on 45 and 46, A Coalition of Consumer Advocates, Attorneys and Nurses supported Proposition 45 and Proposition 46.
Committee Amount raised Amount spent
Consumer Watchdog Campaign - Yes on 45 and 46, A Coalition of Consumer Advocates, Attorneys and Nurses $2,397,542 $2,106,214
Consumer Watchdog Campaign - Yes on 45, A Coalition of Consumer Advocates, Attorneys, Policyholders, and Nurses $4,368,389 $4,375,403
Jones for Passage 2014 Insurance Rate Public Justification & Accountability Act $169,681 $188,848
Total $6,935,612 $6,670,465

The following are the donors who contributed $10,000 or more to the campaign in support of the initiative as of December 31, 2014:[19]

Note: Some of these donors gave their money to a committee that was simultaneously supporting more than one ballot measure. When that is the case, it is not generally possible to break down how much of that donor's money specifically was spent on the campaign for a particular proposition. Those contributions are listed below with shading; readers should not assume that all or even most of a donation to a multi-purpose committee was used for expenditures related to this particular proposition.
Donor Amount
Consumer Watchdog $1,478,529
California Nurses Association $1,200,000
Kathryn Taylor $500,000
Thomas Steyer $200,000
Greene Broillet & Wheeler, LLP $125,000
Wylie A. Aitken and Affliliated Entity Wylie A. Aitken Law Corporation $125,000
Committee for Corporate Accountability and Consumer Protection $105,121
CA Nurses Association Initiative PAC $75,000
Shernoff Bidart Echeverria Bentley, LLP $50,000
Strumwasser & Woocher $50,000
Lieff, Cabraser, Heimann & Bernstein, LLP $50,000
Cotchett, Pitre & McCarthy, LLP $50,000

Campaign advertisements

The following advertisements in support of Proposition 45 were put out by Consumer Watchdog:

A Consumer Watchdog ad, titled "Yes On Prop 45."

A Consumer Watchdog ad, titled "Prop 45 Consumer Alert - Health Insurers spending money to raise your rates."

A Consumer Watchdog ad, titled "Yes On 45 - Health Insurance Rates Are Like a Runaway Train."


Californians Against Higher Health Care Costs 2014.png

The organization that led the campaign in opposition to Proposition 45 was Californians Against Higher Health Care Costs.[20]


See also: A full list of opponents


  • California Republican Party[21]
  • California Chamber of Commerce
  • California Medical Association
  • California Hospital Association
  • California Orthopaedic Association
  • California Association of Health Plans
  • California Association of Health Underwriters
  • California Association of Marriage and Family Therapists
  • California Chapter of the American College of Cardiology
  • California Children's Hospital Association
  • American Academy of Pediatrics, California
  • American Congress of Obstetricians and Gynecologists District IX
  • American College of Physicians California Services Chapter
  • American Nurses Association California
  • Association of Northern California Oncologists
  • Association of California Healthcare Districts
  • Association of California Life and Health Insurance Companies
  • California Association of Rural Health Clinics
  • California Society of Plastic Surgeons
  • California State Oriental Medical Association
  • California Urological Association
  • CAPG
  • Employer Health Coalition
  • NAACP California
  • California Citizens Against Lawsuit Abuse
  • Civil Justice Association of California
  • William Jefferson Clinton Democrats
  • California Taxpayer Protection Committee


  • State Building and Construction Trades Council of California
  • Imperial County Building and Construction Trades Council
  • Los Angeles/Orange County Building and Construction Trades Council
  • California-Nevada Conference of Operating Engineers
  • United Contractors
  • International Brotherhood of Boilermakers
  • International Brotherhood Of Electrical Workers - 9th District
  • Sailors’ Union of the Pacific


Californians Against Higher Health Care Costs issued a "Get the Facts" sheet detailing their reasons for opposing Proposition 45. The sheet read:


A special interest group is sponsoring an initiative on the November 2014 ballot that gives ONE POLITICIAN new power over our health care – including our co-pays, deductibles and even the treatment options our health insurance covers.

We all want to control health care costs – that’s why California has a new independent commission with the authority to negotiate rates with health plans and reject them if they’re too expensive. We should give this commission a chance to work, NOT give more power to a politician who can take campaign contributions from special interests.

This flawed, deceptive measure will just increase costs for consumers and harm the quality of our health care.

1. Gives One Politician Too Much Power
  • Gives one politician new power over what treatment options your health insurance covers. Treatment decisions should be made by doctors and patients, not someone with a political agenda.
  • Grants the insurance commissioner more power over health care while allowing millions in campaign contributions from special interests – with no safeguards against corruption.
  • Gives one politician sweeping new power over rates, co-pays, and benefits for millions of small business employees and could force many small businesses to lay off workers, drop coverage, or even go out of business.
2. Creates More Costly Bureaucracy
  • Creates ANOTHER expensive state bureaucracy when we can least afford it, ultimately paid for with higher health insurance premiums.
  • Costs tens of millions of dollars for bureaucracy, bureaucrats, and salaries, but doesn’t do anything to control the costs that are driving health care premiums.
  • Duplicates existing bureaucracy and regulation with a new program, creating costly confusion and overlap with other state and federal laws and regulations.
3. Sponsored by Special Interests Who Stand to Make Millions Under the Measure
  • Sponsored by special interest lawyers who included a hidden provision allowing them to charge up to $675/hour and make tens of millions in fees off costly health care lawsuits.
  • The proponents have made more than $11 million off a similar provision in the last ballot measure they bankrolled – costs that were ultimately paid by consumers.
  • Proposes special interest reforms of a large and complicated health system without the input of patients, doctors, hospitals, or health plans.
4. Interferes With Your Treatment Options
  • Gives one politician power over co-pays, deductibles, benefits, and even what treatment options your health insurance covers.
  • Treatment decisions should be made by doctors and patients — not someone with a political agenda.


Californians Against Higher Health Care Costs [22]

A Californians Against Higher Health Care Costs video, titled "Clear Choice — Dr. Marshall Morgan."

Other arguments in opposition to the initiative included:

  • Patrick Johnston, president of the California Association of Health Plans, said the initiative would create "misguided, onerous rate regulation" that would harm consumers.[9]
  • James T. Hay, president of the California Medical Association, stated, "This misguided measure will cause higher rates and lessen access to care, which is why doctors, hospitals and healthcare providers oppose this measure."[23]
  • Dr. Paul Phinney, a Sacramento pediatrician, said, "They're gambling that people will submit a knee-jerk vote and create a program that will be a cash cow for consumer attorneys."[18]
  • Supporters of Covered California argued that the initiative was unnecessary because the Affordable Care Act, also known as "Obamacare," already imposed new rules to protect consumers. Susan Kennedy, a board member, said the initiative could damage healthcare reform in California "permanently, perhaps fatally." She continued, "Even under the best-case scenario, enactment of this measure significantly complicates Covered California's ability to enact healthcare reform. I just think it's the wrong time to add an entire layer of complication and risk to what we are attempting to achieve." Diana Dooley, chairwoman of Covered California, said, "I feel very mother-bearish on protecting the investment we have made in implementing the Affordable Care Act."[24]


Two ballot measure campaign committees registered in opposition to the initiative as of December 31, 2014:[19]

Committee Amount raised Amount spent
No On 45 - Californians Against Higher Healthcare Costs $56,508,176 $56,373,265
No On 45: California Association of Health Underwriters Issues Committee $446,876 $358,245
Total $56,954,502 $56,731,510

The following are the donors to the campaign against the initiative who gave $150,000 or more as of October 31, 2014:[19]

Donor Amount
Kaiser Foundation Health Plan, Inc. / KP Financial Services $18,866,574
Wellpoint, Inc. and Affiliated Entities $18,866,574
Blue Shield of California $12,476,424
Health Net, Inc. $5,518,324
Anthem Blue Cross $270,000

Campaign advertisements

The following advertisements in opposition to Proposition 45 were put out by Californians Against Higher Health Care Costs:

A Californians Against Higher Health Care Costs ad, titled "Clear Choice — Nurse."

A Californians Against Higher Health Care Costs ad, titled "Clear Choice — Dr. Amy Nguyen Howell, MD."

Media editorial positions

See also: Endorsements of California ballot measures, 2014


  • Fresno Bee: "Proposition 45 is worthy of a "yes" vote. But if you want to put more of your hard-earned dollars into the pockets of insurance company CEOs, by all means vote "no." They might be having trouble making the mortgage on their second yacht — or third vacation home."[25]
  • Marin Independent Journal: "Proposition 45 would expand the insurance commissioner's authority to health care plans covering individuals and small-group plans. The commissioner already has that say-so over other forms of insurance. If voters don't approve of the decisions of that politician, they can vote him or her out of office."[26]


  • Los Angeles Times: "[It] leaves much of the timetable for filing and reviewing rates up to whoever happens to be the insurance commissioner, who may not have the ability or the desire to make the process work — or to stop intervenors determined to undermine it. Nor does it try to contain the damage that might be caused if a court throws out a rate months after it goes into effect, leaving insurers, policyholders and the government that subsidizes them to figure out who pays rebates to whom...Sacramento may eventually need to regulate health premiums, but now's not the time and Proposition 45 isn't the way."[27]
  • Monterey Herald: "If Covered California had been a failure at rollout, we might agree with the arguments for Proposition 45. But Obamacare is working in California — perhaps more so than anywhere else in the country. So why add new levels of bureaucratic regulation, and further burden a health care law that has helped millions of uninsured Californians. Vote no on Proposition 45."[28]
  • The Sacramento Bee: "The question of the insurance commissioner’s authority over health insurance is complicated and best left to the Legislature, not the blunt instrument of an initiative written by partisans... California politics being what they are, the next commissioner and the one after that probably will be Democrats. But Democrats differ. One might side with consumers. Another might side with the insurance industry."[29]
  • The San Diego Union-Tribune: "Consumer Watchdog depicts itself as a populist defender of the little guy against avaricious business interests. But critics make a powerful case that the organization — which refuses to reveal its major contributors — amounts to a trial lawyers’ front group, constantly advocating for complex laws and regulations that pave the way for more lawsuits. That’s a certain result if Proposition 45 passes."[30]
  • San Francisco Chronicle: "The measure is being advanced by Consumer Watchdog, a Santa Monica group behind Proposition 103, the 1988 initiative that created the elected state insurance commissioner's office and gave it the authority to approve or reject premium increases. That measure, as with Prop. 45, is structured to allow an outside group to intervene in cases - and collect legal fees and other expenses at the conclusion. Consumer Watchdog has collected millions of dollars through this process, and has come under fire at times for excessive fees. Vote no on Proposition 45."[31]


See also: Polls, 2014 ballot measures
  • The Field Poll conducted a survey related to ballot initiatives between June 26 and July 19, 2014. They found that about 69 percent of total registered voters supported Proposition 45. Democrats supported the proposal by 75 percent, while Republicans approved of it by 58 percent. Voters not affiliated with either party supported it by 73 percent.[32]
  • The Field Poll's August 14 through August 28, 2014, poll showed a sharp drop in support for Proposition 45. The only subgroups in which the proposition was supported by 50 percent or more were self-classified "liberals" and Latinos. The subgroup least likely to support the initiative was registered Republicans, with 34 percent support. However, more registered Republicans were undecided than were against the measure.[33]
  • The Public Policy Institute of California sampled 1,702 adult residents between September 8 and September 15, 2014. The institute found that almost half of respondents favored Proposition 45. While 54 percent of Democrats and 49 percent of independents supported the initiative, only 39 percent of Republicans did.[34]
California Proposition 45 (2014)
Poll Support OpposeUndecidedMargin of ErrorSample Size
The Field Poll
6/26/2014 - 7/19/2014
The Field Poll
8/14/2014 - 8/28/2014
Public Policy Institute of California
9/8/2014 - 9/15/2014
Hoover Institute Golden State Poll
10/3/2014 - 10/17/2014
Public Policy Institute of California
10/12/2014 - 10/19/2014
The Field Poll
10/15/2014 - 10/28/2014
USC Dornsife/Los Angeles Times Poll
10/22/2014 - 10/29/2014
AVERAGES 43.86% 34.43% 21.43% +/-3.49 1,393.43
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to

Path to the ballot

See also: Signature requirements for ballot measures in California

Two different versions of the initiative--#11-0070 and #11-0072--were submitted to election officials. Initiative #11-0070 is the one that qualified for the ballot.

In the wake of the extended signature verification process that led to the initiative qualifying for the 2014 ballot, rather than the intended 2012 ballot, Consumer Watchdog released a statement arguing that the state's signature verification process should be changed. They said, "A flawed signature verification process wasted hundreds of thousands of taxpayer dollars on an unnecessary full signature count, and Californians now have to wait two extra years to vote to get outrageous health insurance prices under control. Citizens usually take to the initiative process only when legislative reform has proved impossible, meaning ballot measures address problems for which a fix is long overdue. It's time to lower the random sample threshold to ensure that measures like this one make the ballot they are intended for, and save the counties the significant time and expense of a full count."[36]

Cost of signature collection:

The cost of collecting the signatures to qualify the initiative for the ballot came to $1,728,998.

The signature vendor was Kimball Petition Management.

See also: California ballot initiative petition signature costs

See also

External links

Suggest a link

Basic information



Additional reading


  1. California Secretary of State, "Proposition 45 Ballot Title and Summary," July 3, 2014 (dead link)
  2. Home Insurance, "Groups working to expand California's Proposition 103," November 15, 2011
  3. California Attorney General, "Insurance Rate Public Justification and Accountability Act Petition," accessed August 4, 2014
  4. 4.0 4.1 Los Angeles Business Journal, "Signatures Submitted for Health Insurance Rate Initiative," May 18, 2012
  5. 5.0 5.1 Sacramento Bee, "Initiative on health insurance rates won't make November ballot," June 28, 2012
  6. 6.0 6.1 6.2 California Official Voter Information Guide for the November 4, 2014, General Election, "Proposition 45 Official Title and Summary," accessed September 16, 2014
  7. 7.0 7.1 7.2 7.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  8. Consumer Watchdog - Vote Yes on Prop 45, "Homepage," accessed July 11, 2014
  9. 9.0 9.1 Los Angeles Times, "Sen. Feinstein backs health insurance rate controls," February 1, 2012
  10. 10.0 10.1 10.2 Consumer Watchdog, "Endorsers," accessed July 11, 2014
  11. Post-Periodical, "State Democrats Vote to Support Ballot Measures," July 14, 2014
  12. San Francisco Bay Area Independent Media Center, "CREDO Action urges NO vote on Prop. 1, the California Water Bond," October 16, 2014
  13. Potrero Hill Democratic Club, "Endorsements for the November 4, 2014 General Election," accessed October 9, 2014
  14. Bend The Arc, "California 2014 Voter Guide," accessed October 24, 2014
  15. Consumer Watchdog, "Dennis Quaid Calls On Californians To Support Pack Patient Safety Act," January 16, 2014
  16. Los Angeles Times, "Op-Ed Why California needs Prop. 45," October 7, 2014
  17. Los Angeles Times, "Consumer advocate Harvey Rosenfield takes on health insurers," November 26, 2011
  18. 18.0 18.1 Ventura County Star, "Initiative to regulate health insurance hikes sparks big debate," April 14, 2012
  19. 19.0 19.1 19.2 19.3 California Secretary of State, "Campaign Finance: Proposition 45," accessed April 17, 2014
  20. Californians Against Higher Health Care Costs, "Homepage," accessed July 9, 2014
  21. Santa Monica Mirror, "State Republicans Vote To Back Two Measures On November Ballot, Oppose Two," September 22, 2014
  22. Californians Against Higher Health Care Costs, "Get the Facts," accessed July 10, 2014
  23. Los Angeles Times, "Battle escalates over ballot measure on health premiums," March 12, 2012
  24. Los Angeles Times, "Covered California officials, insurance chief clash over Prop. 45," August 22, 2014
  25. Fresno Bee, "Editorial: 'Yes' vote on Prop. 45 will rein in health premiums," October 16, 2014
  26. Marin Independent Journal, "Editorial: IJ's stands on Nov. 4 state propositions," October 15, 2014
  27. Los Angeles Times, "No on Proposition 45," September 30, 2014
  28. Monterey Herald, "Editorial: Don't mess with ACA in California: Vote no on Proposition 45," September 17, 2014
  29. The Sacramento Bee, "Endorsement: Proposition 45 would undermine the Affordable Care Act, which is reason to oppose it," September 14, 2014
  30. The San Diego Union-Tribune, "Trial-lawyer scam: Vote no on Prop. 45," September 9, 2014
  31. San Francisco Chronicle, "Chronicle recommends: No on Prop. 45," September 14, 2014
  32. The Field Poll, "2014 TCWF-Field Health Policy Poll - Part 2," August 20, 2014
  33. The Field Poll, "Voter Support Diminishing for Two Health-Related Ballot Measures, Propositions 45 and 46," September 11, 2014
  34. Public Policy Institute of California, "Californians & Their Government, September 2014," accessed September 23, 2014
  35. California Healthline, "SEIU-UHW Says Ballot Initiatives Seek To Stop 'Hospital Price Gouging'," February 15, 2012
  36. Herald Online, "Ballot Initiative to Make Health Insurance Companies Justify Rates Should Have Qualified for 2012 Ballot According to Official Signature Count Released Today, says Consumer Watchdog Campaign," August 27, 2012