Voters Reject Props. 45, 46; OK Prop. 47

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California voters agreed with the California Chamber of Commerce in rejecting Propositions 45 and 46, but passed CalChamber-opposed Proposition 47.

Proposition 45 would have given the state Insurance Commissioner authority to approve individual and small group health insurance rates. Proposition 46 would have increased and linked to inflation the longstanding pain and suffering cap in medical malpractice lawsuits.

Proposition 47 reduces penalties for certain drug and property offenses by requiring they be treated as misdemeanors rather than felonies.

Proposition 45

Voters rejected by a margin of 60% no to 40% yes Proposition 45’s requirement for the Insurance Commissioner to approve rates for all health insurance coverage before it can be sold to consumers.

Proposition 45 would have unnecessarily created a new layer of bureaucracy, duplicated work already being done by Covered California and other state agencies, caused costly confusion and added more red tape to the health care system. The nonpartisan Legislative Analyst’s Office projected the measure could have increased state administrative costs tens of millions of dollars per year — costs that ultimately would have been paid by consumers.

“Allowing outside intervenors to make millions off of consumers while holding up health care decisions was just one of the fundamental flaws of Proposition 45,” said CalChamber President and CEO Allan Zaremberg, who signed the ballot arguments opposing the measure. “Voters fundamentally rejected the concept of giving one politician the power to determine health care benefits and rates.”

By giving sweeping control over health care coverage rates to one elected politician—the Commissioner— Proposition 45 would have increased costs and bureaucracy. The measure defined “rate” broadly, meaning the Commissioner would have had the authority to reject or modify more than just health care premium rates.

The Commissioner also could have rejected proposed co-payment amounts, deductibles, benefit offerings, and more. During the campaign, some argued this would have undermined efforts by California’s health exchange, Covered California, to make sure health coverage offered to individuals and small businesses is a good value, not just inexpensive.

Proposition 46

Voters also saw through Proposition 46, a trial lawyer-sponsored measure that sought to increase the cap on noneconomic damages for medical malpractice lawsuits. Proposition 46 failed, 67% no to 33% yes

Proponents sweetened the measure and also proposed new random drug testing requirements on physicians and required health care providers to consult an electronic database regarding patient prescriptions before issuing any new prescriptions.

Proposition 46 would have quadrupled the limit on medical malpractice awards in California, which would have cost consumers and taxpayers hundreds of millions of dollars every year in higher health care costs, and caused many doctors and other medical care professionals to quit their practice or move to other states with lower medical malpractice insurance premiums.

The primary beneficiary of these higher malpractice awards would have been the medical malpractice trial bar, which would have been incentivized to file more lawsuits and pursue higher damage awards.

The electronic prescription drug database—which is not yet even operational and proven—would have been controlled by the state government. Since the database has not yet demonstrated its data security to date, this measure could have threatened individuals’ privacy by requiring a massive expansion of the use of a personal prescription drug database.

If medical malpractice awards went up, health insurance companies would have raised their rates to cover their increased costs. When health care insurance companies raised their rates, Californians would have paid more in health care premiums, and fewer doctors and other medical providers could afford to serve Californians.

Proposition 47

Voters opted to support Proposition 47 by a margin of 58.5% yes to 41.5% no, thereby reducing penalties for certain offenders convicted of nonserious and nonviolent property and drug crimes.

The CalChamber opposed Proposition 47 because it will hamper retailers’ ability to prosecute theft and encourages theft by reducing penalties.

In addition, the language of the measure suggests that even if a person forges multiple documents whose total value exceeds $950, the person could be charged only with a misdemeanor. As a result, reducing penalties for theft, receiving stolen property and forgery could cost businesses and consumers millions of dollars.

More Information

The latest election results are available at the website of the Secretary of State at www.ss.ca.gov.

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