2014 California Propositions 45 & 46

September 25th, 2014

Prop 45 Health Care Insurance Rates

Should changes in some rates require the Insurance Commissioner’s approval before going into affect?

While most Californians (77%) are covered by large-group plans, 16% are covered by small-group or individual plans (7% are not insured.)

Currently small- & individual plan rate changes are reviewed by the California Dept of Managed Health Care (DMHC) who may declare the rates “unreasonable” but has no authority to reject them.

This year Covered California set up exchanges and negotiated rates for small and individual plans and those rates are again subject to review but, again, NO authority to reject rates.

Under the Proposition, the Insurance Commissioner would have power to approved rate changes after DMHC review before they could be implemented.   Consumers OR insurance  companies could challenge the outcome in court. Rates as far back as 11/6/2012 could be subject to refund if found to be excessive.

Previously Insurance Commissioner only had say over auto & homeowners insurance.

“Rates” would be defined to include ANY charges that affect cost: co-payments, deductibles, installment fees, premium financing & more.

Prop 45 would prohibit use of an individual’s credit history or absence of prior insurance coverage in determining rates for ANY type of personal insurance including homeowner’s & auto.

Funding would come from instance company fees (they already pay these fees, anyway).

Basically this is bringing all personal insurance into the same fold and giving consumers the same protections for all their insurances.

Consumer groups, labor groups, tort reform groups support Prop 45, insurance companies oppose it.

My conclusion...Those of us who have had to buy unsubsidized small or individual health insurance on the  ACA exchanges know that the rates are much higher than for large group plans.  Just as home and auto insurance rates decreased after they fell under the purview of the Insurance Commissioner, I believe that the same can happen with health insurance. I vote YES on 45.


Prop 46 Tracking Prescriptions of Controlled Substances, Medical Negligence Lawsuits, Drug/Alcohol Testing of Doctors

This is a 3 part proposition which should have been 3 separate ones so we need to decide if the greater good is served with them together.

Mandatory Controlled Substances Tracking by Doctors.  The purpose is to stop individuals who visit multiple doctors to obtain the excess medication for themselves or to sell to others. A database already exists for docs to check if another physician is already prescribing the drug to the same person but it’s use is currently not mandatory. This tracking is already mandatory in New York State and 43 states have databases, though they are not centralized across state lines. Legislators across the nation have recognized this and recognize that the CDC might be a good repository of a central database which would discourage abusers with doctors in multiple states.  The unfortunate cases of Walgreen’s seeking to deny  painkillers  to customers seems to indicate that doctors, rather than pharmacies should be responsible.

Malpractice Caps for Non-Economic Damages. The current cap of $250,00 was enacted in 1975 and has not been raised since. Prop 46 seeks to raise is to $1.1M (reflecting inflation since  1975) and index it to inflation going forward. Attorney’s contingency percentage cap would remain unchanged but they would receive the benefits of the increased base on which it is computed should higher amounts be awarded.

Drug & Alcohol Testing for MD’s.  There is no current testing requirement. According to the Society for Human Resource Management,   in California:

 “With limited exceptions, employers are prohibited from requiring or conducting drug tests on existing employees. Employers may require a drug test of existing employees only in the following circumstances:

  • Reasonable grounds or suspicion exist and justify a drug test.
  • There is a clear and present physical danger to the employee, other employees or members of the general public.
  • Employees are granted the opportunity to have drug test samples tested a second time by another drug testing facility.

Additional requirements exist under the Federal Motor Carriers Safety Administration, the Federal Railroad Administration (FRA), the Federal Aviation Administration (FAA), the Federal Transit Administration (FTA), the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the United States Coast Guard (USCG). -“

Doctors may already be tested under the “reasonable grounds or suspicion” so putting it into a Prop is not needed. Random testing would not seem to fall within the purview of current circumstances and seems to interfere with Federal rights.

Doctors feel that the drug testing is really being used as a fishing expedition to increase the limit on medical malpractice awards.


Controlled Substance Tracking. While tracking of controlled substances will be imperfect until the development of a national database, doctors SHOULD BE REQUIRED make use of available tools that are available.

 Malpractice Caps for Non-Economic Damages.  This seems very reasonable, I believe all legislated amounts should be indexed for inflation or deflation as they do away with the necessity for future propositions to right them.

Drug & Alcohol Testing for MD’s. This part of Prop 46 seems eminently unnecessary. Under current HR law they can already be tested for “reasonable grounds or suspicion”. Random testing seems to benefit only laboratories and impinges on personal freedoms.  It would seem that this portion of the bill could be taken to court and declared unconstitutional.

Two out of three are very good but the Drug Testing provisions are not palatable to me.  I don’t feel the other provisions are time critical, so, take this Prop back for revision without the drug and alcohol testing provision. I’m voting NO.

Go here for analysis of Props 1 & 2


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