Capitol Alert

California health exchange stays neutral on Proposition 45

After months of intense discussions, California’s health insurance exchange on Thursday remained on the sidelines of a Nov. 4 ballot initiative that would allow the state’s elected insurance commissioner to regulate rates.

Covered California Board Chairwoman Diana Dooley, secretary of the Health and Human Services Agency, acknowledged the many concerns of the exchange and its more than 1 million consumers should Proposition 45 be approved. Among the impacts are its potential to interfere with the exchange’s role negotiating with health insurers, possible delays caused by third-party rate-challengers, unforeseen effects on federal subsidies and the risk of plans pulling out of the program.

But taking a formal position against the measure could undermine the agency’s efforts to largely remain above the political fray as it enters its second year of the federal health care overhaul, Dooley said at the board’s meeting in Sacramento.

“I personally have some very serious concerns about the interaction of the plain language of this initiative and the work that we’ve invested in making the Affordable Care Act real in California and to some considerable degree somewhat successful,” she said. “I think we have established a reputation of openness, evidence and consumer protection and for that reason I have been unwilling to further make this political by taking a formal board position.”

Other board members argued in past meetings that the exchange should be permitted to enshrine their tentative opposition in the form of an official vote. While a legal analysis prepared by the agency left open the possibility of formally weighing in on ballot measures, it reiterated that the public agency was expressly prohibited from campaigning. On Thursday, the members also opted not to weigh in on whether they could use their titles when speaking about the initiative.

The exchange board has been at the center of debate over Proposition 45. Proponents argue the exchange does not have the clout to negotiate with the powerful insurance industry for the best possible rates. Meanwhile, critics have used the popularity of the health care law here and the potential for interference as one of their main arguments against the measure. The litany of concerns expressed by the exchange has already given opponents plenty of campaign fodder.

Still, advocates on both sides of the debate urged neutrality. Betsy Imholz, a director at Consumers Union, said the health exchange has been scrupulous over the last two years at establishing a nonpartisan identity and following its mission of getting people enrolled in health care coverage. The insurance industry’s fierce opposition was reason for the exchange not to weigh in, she said.

“Were you to align with that position I think it would create a bad public image,” Imholz said.

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