Mercury News editorial: If you liked Prop 103, pass Prop 45

San Jose Mercury News Editorial

Californians passed Proposition 103 in 1987, regulating auto insurance rates and saving drivers tens of billions of dollars over 25 years. California's drivers have enjoyed some of the lowest auto insurance rates in the nation because of this law.

Proposition 45 gives voters the opportunity to accomplish the same goal for health insurance, as 35 other states already do. Voters should approve it.

Prop 45 requires that health insurance companies justify rate increases and gain the state insurance commissioner's approval before enacting them. Now the commissioner only can review and comment on rate hikes.

The only serious question about this initiative is whether it's compatible with the Affordable Care Act reforms and Covered California, the state's health exchange. Three Covered California board members who oppose health insurance rate regulation in principal are using their positions to argue that Prop 45 is unnecessary and will damage health care reform.

But the Affordable Care Act anticipates that states will have rate regulation. In several states, including Connecticut, New York, Maryland and Oregon, the rules are similar to Prop 45. They provide compelling evidence that this regulation discourages insurance companies from seeking the kinds of outrageous increases California has seen. Remember, it was Anthem Blue Cross' proposed 40 percent increase in 2010 for some California customers that boosted President Obama's ability to pass his reforms.

Critics of Prop 45 say its provision giving the general public the right to challenge rate increases will prevent the health exchange from negotiating rates with insurers in a timely fashion. But the experience of Prop 103 indicates it won't be a problem. Auto insurance is generally more complex than health insurance, but there have been fewer than 10 complaints that have advanced to the level of a hearing in the past seven years under Prop 103.

Allowing public intervenors to challenge rates provides greater transparency to the process and allows the insurance commissioner get feedback from a wide range of voices.

The current commissioner, Dave Jones, is a primary backer of Prop 45. We think he's too smart to take responsibility for a law that will muck up the works.

It's always instructive to see who's backing and opposing propositions. Health insurance companies expect to spend more than $50 million to defeat Prop 45. Their lobbying thwarted three tries in the Legislature to pass rate regulation. Jones and consumer groups had no choice but to take this to the voters.

Prop 103 in California and health insurance regulations in two thirds of other states show Proposition 45 will work. Voters should approve it.