$800,000 in Campaign Cash from Health Insurers Stops Premium Regulation in Sacramento

Aug 31, 2010, 14:22 ET from Consumer Watchdog

SANTA MONICA, Calif., Aug. 31 /PRNewswire-USNewswire/ -- Some of the top Democratic recipients of health insurance cash teamed up with Republicans in the California state senate late Monday to block health insurance premium legislation authored by state Assembly Members Dave Jones and Mike Feuer.

Overall health insurers have given $800,218 in campaign contributions to California senators since 2007, in addition to gifts and donations made at their behest to nonprofit groups according to an analysis by Consumer Watchdog. View the full analysis here:

** Graph: http://www.ConsumerWatchdog.org/resources/CASenateTiesToHealthIns.pdf

** Contribution list: http://www.ConsumerWatchdog.org/resources/CASenateIHealthInsContribs.pdf

AB 2578 (Jones/Feuer), which would have required approval from regulators before health insurance rate increases took effect, fell four votes short of the 21 needed for passage on the senate floor. The final vote on Monday was 17 to 17, with Democratic senators Lou Correa, Ronald Calderon, and Rod Wright – top recipients of health insurance company contributions – joining Republicans to oppose the bill.

Since 2007, Senator Lou Correa has received $44,992 from health insurers, Senator Calderon took in $33,800 from the industry, and Senator Wright was given $21,500.

Democrat Senators Gloria Negrete McCloud, Alex Padilla and Lois Wolk abstained, and Senators Oropeza and Wiggins had excused absences. Negrete McLeod and Padilla received $45,647 and $41,893 from health insurers respectively since 2007.

Republican Senators Tony Strickland, Dave Cogdill and Tom Harman, who also voted against the Jones/Feuer bill, topped the list of health insurance money-getters with $68,750, $54,650 and $46,900 received respectively.

"It's outrageous that all Californians will be required by law to have health insurance by 2014, but the state senate has refused to require health insurers to sell affordable insurance by giving regulators the power to stop excessive premium increases," said Consumer Watchdog president Jamie Court. "Too many state senators have refused to buck the industry that has lined their campaign chests. It's clear now that if health insurance premium regulation is to become a reality in California, voters will have to take matters into their hands at the ballot box and enact the law themselves via ballot measure."

In 1988, Consumer Watchdog founder Harvey Rosenfield authored insurance reform Proposition 103, which was approved by voters. The initiative enacted the strongest premium regulation in America for auto and home insurers, and has saved California motorists $62 billion on their auto insurance according to a 2008 report by the Consumer Federation of America. Proposition 103 also included rate freeze and rate refund provisions, as well as many rule changes making auto insurance fairer.

SOURCE Consumer Watchdog