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April 7, 2013
Editorial: Consumer group should know better

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(April 7 -- By the Editorial Board)

One of the little-known provisions in the Affordable Care Act, also known as "Obamacare," is federal grant money for consumer groups to monitor rate increases by health insurance companies.

Recently, Insurance Commissioner Dave Jones awarded as much as $88,305 of this money to the advocacy group Consumer Watchdog. Not surprisingly, Consumer Watchdog last week issued a report finding that Anthem Blue Cross is asking for too much in its latest rate request, as the Los Angeles Times reported.

If Consumer Watchdog had stopped there, no one would be raising red flags. But in touting its taxpayer-funding findings about Anthem in a press release, the Santa Monica-based organization also promoted an initiative that will be on the 2014 ballot. Some federal taxpayers undoubtedly will be uneasy knowing their money is being used to help an advocacy group with one of its campaigns.

The press release stated that the initiative "will require health insurance companies to publicly justify and get approval for rate hikes." It also noted that the 2014 ballot measure is "modeled after a successful California law regulating auto, home and other property insurance that has saved drivers $62 billion since 1988, according to the Consumer Federation of America."

The press release did not directly state that Consumer Watchdog sponsored the 1988 measure, and is sponsor of the 2014 initiative. Nor did it say that Jones is one of the initiative's main proponents. Jones and Consumer Watchdog insist that no government money was used to promote the initiative, and Jones says he had little choice but to reward the grant, since Consumer Watchdog met the qualifications.

That may be so, but Jones should have known that, given his longstanding relationship with Consumer Watchdog, the grant would raise eyebrows. Worse, it gives fodder to foes of health care reform, who will look for any excuse to attack Obamacare.

The initiative would give California insurance commissioners - Jones if he wins reelection next year - power over health insurance companies. It also would grant groups including Consumer Watchdog the power to intervene before the Insurance Commissioner in rate hike cases, and receive intervener fees.

The initiative may be a fine idea. For too long, too many insurance companies found ways to deny coverage to sick people, and company executives have received exorbitant pay. But as any consumer advocate ought to know, recipients of taxpayer money should not be using the resulting work product to promote their political campaigns.

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