YES on 45: HealthNet Contributes $5 Million to Deceptive and Misleading No on 45 Campaign Using Actor as Phony Hardware Store Owner in TV Ads

Consumer Watchdog Asks Fair Political Practices Commission to Investigate Failure to Disclose Payment to Actor

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Oct 16, 2014, 04:17 ET

SANTA MONICA, Calif., Oct. 16, 2014 /PRNewswire-USNewswire/ -- Health Insurer HealthNet has chipped in nearly $5 million to defeat Prop 45 in a sign that the health insurance industry fears rate regulation that a yes vote on the proposition would bring, Consumer Watchdog said today. The insurance pot against Prop 45 now totals $43 million to pay for misleading and deceptive TV ads, radio spots, and "independent" opinion pieces.

"Health insurance companies will stop at nothing to defeat Prop 45, including using an actor to portray a small business owner claiming to be against the ballot measure without revealing that he is a fake businessman," said Consumer Watchdog Advocate Liza Tucker. The tactic could violate campaign disclosure laws and the consumer group has asked the Fair Political Practices Commission to investigate, she said.

Under California campaign laws, a TV ad must disclose on screen that an actor is being paid if the payment tops $5,000. Any payment of more than $500 must be disclosed in required financial filings. There is no disclosure that Efrain Figueroa, who has appeared in roles such as Father Marquez in "Modern Family" and Jorge Machado in "The Shield" is an actor in the ad and financial filings don't show a payment to him. Figueroa plays "George" in the No campaign's TV ad, supposedly a small business owner opposed to Prop 45. KCRA's AdWatch judges rated it a D Plus for vagueness and "hiding something."

View Figueroa appearing as George in the ad here: http://stophighercosts.org/ads-small-business-owners/

View Figueroa's extensive acting credits here: http://www.imdb.com/name/nm0276691/?ref_=ttfc_fc_cl_t48

"Health insurance companies are running scared that voters will actually vote Prop 45 into law," said Tucker. "When was the last time you saw health insurance companies spend this kind of money on your behalf? Now that everyone has to buy heath insurance, these companies are too busy growing billions in excess reserves through uncontrolled price gouging that we have no way to stop."

HealthNet is one of five health insurance companies that are the sole funders of the campaign. Nurses and doctors in whose name the campaign operates haven't contributed a penny. HealthNet's private market share in California stands at 8 percent. "The amount of money they are kicking in shows a rising desperation to stave off regulation," said Tucker.

Prop 45 would give the state's elected insurance commissioner, who answers to voters, the power to make insurance companies open their books and justify their premium hikes and to reject excessive rates. It would allow consumer groups to challenge excessive and unfair premium increases. No federal or California state agency currently has the power to do so, despite what insurance companies say. Recently, regulators determined that $250 million in premium hikes were excessive but could do nothing to stop them. They went into effect anyway.

35 other states have a system of preapproval of health insurance rate hikes, but not California. "Prop 45 is the missing piece of the Affordable Care Act now that everyone has to buy health insurance," said Tucker.

HealthNet CEO since 1998, Jay Gellert, was paid a salary of more than $9 million in 2013. The company has $4.7 billion in assets, and its second quarter profits were $120 million — a 70 percent jump over the entire year's profits in 2013. "Health insurance companies are holding far more in reserve than the state requires," said Tucker.

The companies stand to lose some of what consumers will gain as it is estimated Prop 45 will save them up to $1 billion a year. Rate regulation for auto and home insurance, passed in 1988, and on which Prop 45 is modeled, has saved consumers $102 billion.

To learn more about Prop 45 visit: http://www.yeson45.org

Paid for by Consumer Watchdog Campaign – Yes on 45, a coalition of consumer advocates, nurses, attorneys, and policyholders. 777 S. Figueroa St., Ste. 4050, Los Angeles, CA 90017. Major Funding by Consumer Watchdog Campaign and California Nurses Association.

SOURCE Consumer Watchdog