Submission: Prop. 45 will raise health insurance prices, lower care quality
By Tanner Siciliano
Oct. 31, 2014 12:34 a.m.
Proposition 45 is a poor attempt to prevent the rising insurance rates caused by the Affordable Care Act.
Proposition 45 gives all the power of determining health care prices to one bureaucrat. As history has shown, the government is very inefficient and incapable of performing even the most basic tasks. Proposition 45 gives California’s insurance commissioner the power to approve changes in health insurance rates on a very subjective basis. This hinders the free market from efficiently setting the insurance rate. As a result, we will see declining quality of health insurance, and thus, health care.
Additionally, this proposition prohibits the use of credit history or the absence of prior insurance coverage to set rates or eligibility for health insurance. This is guaranteed to have a negative effect on the problem of rising health insurance costs. Credit history is a way of determining the risk that a policyholder cannot pay his or her insurance bills. Prior insurance coverage can be a sign of individuals’ states of health, and helps insurance companies determine how to charge them.
If health insurers are not allowed to determine rates based on credit history or prior insurance coverage, they will have to diversify this risk by charging everybody more for insurance.
Proposition 45 does nothing to fix rising insurance prices and declining quality of care, and will only hurt consumers.
Siciliano is a fourth-year mathematics/economics student and the president of Bruin Libertarians.
