Commissioner Jones Awards $2.3 Million to Faux Consumer Group Backing Prop 45

Insurance Commissioner Dave Jones awarded $2.3 million in state “intervenor” fees in 2013 to ConsumerWatchdog, the Santa Monica-based group that is sponsoring Proposition 45, a measure on the November ballot to give Jones sweeping new powers to regulate health insurance.

The information comes from a report that Jones has removed from the California Department of Insurance website after a Public Records Act request was sent to his office requesting detailed information on the awards.

The fees – nearly triple the $846,485 the group received from Jones in 2012 – are in addition to a controversial $88,305 no-bid contract that Jones gave to the group last year.

ConsumerWatchdog was the only group to receive intervenor fees in 2013.

Overall, the group has received more than $14,238,269.74 in intervenor fees since the program began in 1990. The fees are awarded as part of a little-known provision in Prop 103, authored by ConsumerWatchdog founder Harvey Rosenfield, that allows outside groups to “intervene” in rate cases before the Department of Insurance.

Rosenfield bills the state $675 per hour for participating in insurance rate cases.

The 2013 awards were made exclusively to Consumer Watchdog by Jones despite complaints from legislators, including then State Sen. Juan Vargas (D-San Diego) in 2012 that he diversify the pool of organizations receiving awards. According to Department of Insurance reports, ConsumerWatchdog.org has been the only group to receive intervenor fees between 2008 and 2013.

From 2003 to 2014, according to the Department of Insurance website, Consumer Watchdog has received 77 percent of the total intervenor fees awarded.

Proposition 45, the health insurance ballot measure, contains a similar provision for an intervenor process. No other state has such a provision.

Covered California officials have said the process would slow their process for negotiating rates and puts the implementation of the Affordable Care Act at risk in California.

Steven Maviglio is a consultant to Californians Against Higher Health Care Costs.