Consumer Federation of California

California’s doctors, hospitals and insurance companies launched their campaign Monday against a proposed ballot measure seeking tighter regulation of health insurance rates and proponents quickly returned fire.

The proposed ballot initiative seeks to give the California Department of Insurance the same rate-setting authority over health insurance that it already holds over auto and property policies. This issue has generated strong interest among many consumers hit with significant rate hikes on their health coverage in recent years.

Consumer Watchdog, the Santa Monica group that championed California’s Proposition 103 in 1988 that enacted rate controls on auto and property insurance, is leading the drive to get 505,000 valid signatures by early May to qualify the ballot measure for the November election. Consumer groups have failed to pass similar laws in the state Legislature in the past several years, encountering intense opposition from the insurance industry and other medical groups.

This latest coalition, called Californians Against Higher Health Care Costs,  also cites support from employers and business groups such as the California Chamber of Commerce.

‘As physicians, we agree that controlling healthcare costs is important,’ said James T. Hay, president of the California Medical Assn., in a statement. ‘But this misguided measure will cause higher rates and lessen access to care, which is why doctors, hospitals and healthcare providers oppose this measure.’

In an interview Monday, California Insurance Commissioner Dave Jones said consumers want relief from excessive rate hikes and medical providers shouldn’t be trying to protect insurance company profits.

‘I’m upset with the doctors and hospitals stumping for the insurance companies. It’s unfortunate they are allowing themselves to be used in this way,’ Jones said. ‘The opponents dress this up as being about patient access, but it’s all about the money for the HMOs and insurance companies.’

The coalition criticized the ballot measure as creating a costly new bureaucracy and giving the insurance commissioner too much control over healthcare coverage and prices.

C. Duane Dauner, chief executive of the California Hospital Assn., said chronic under-funding of Medicare and Medi-Cal by federal and state government was one of biggest reasons premiums keep climbing, because those costs are shifted to private health plans. ‘This initiative does not address government payment shortfalls,’ Dauner said in a statement.

Jamie Court, president of Consumer Watchdog, seized on the coalition’s disclosure that four health insurers ‘ Anthem Blue Cross, Kaiser Foundation Health Plan Inc., Health Net Inc. and Blue Shield of California ‘ were primarily funding the campaign. He said those four companies control 71% of the California insurance market.

‘The big insurance companies are trying to hide behind the lab coats of doctors and hospitals,’ Court said in an interview.