California Insurance Commissioner Dave Jones thinks Aetna’s health insurance premium increase for small-business policies is so “excessive and unreasonable” it’s noted twice in a short press release from his department.

But he can’t do anything about it. On November 4, 59% of the voting public thought it ill-advised to grant the insurance commissioner the power to do more than rail about high health insurance rates, and soundly defeated Proposition 45.

That measure, put on the ballot by lawmakers, would have let the insurance commissioner reject rates found to be unreasonable. Thirty-five states already let regulators have that control, which is similar to that already exercised in California over auto and home insurance.

Instead, voters found Prop. 45 excessive and unreasonable, so, according to the Department of Insurance, 64,000 people will experience average rate increases of 10.7%, with some as high as 19.5% beginning January 1.

Commissioner Jones said that was awful Scrooge-like. “In the final days of 2014, one of the best gifts California small business owners could receive would be the promise of reasonable health insurance rates for the new year,” he said in a press release. “Unfortunately, California law does not protect consumers and businesses from excessive and unreasonable health insurance rates.”

Jones called it a repeat of the previous year when Aetna raised rates in a similar fashion: “The ongoing trend of unreasonable rate increases imposed on California businesses and families over the last decade is likely to continue in 2015.”

The California HealthCare Foundation reported in January that premiums for workplace health insurance have jumped 185% since 2002. That was five times the state's inflation rate. “Average monthly premiums for single coverage in California were $572 in 2013, compared to $490 nationally.”

One of the arguments made by critics of Prop. 45 was that the introduction of Covered California and its health exchange would serve as a sufficient governor on the acceleration of health care costs. The market dynamic and rate negotiations between insurers and the health exchange would be upset if the commissioner were allowed to intervene on rates.

And, indeed, after years of double-digit premium hikes, insurance companies indicated in August they were aiming for an average 4.2% annual increase next year for people insured through Covered California, the state’s version of Obamacare.

Some skeptics thought the companies were just laying low because Prop. 45 was polling well and they didn’t want any more negative publicity. A Field Poll conducted in June and July found 69% of the public in favor, 16% opposed and 33% undecided.

That soon changed. Major health insurers and other companies poured $24 million into the campaign against Prop. 45 by September 9, while proponents raised $450,000. Another Field Poll published in mid-September found support had dropped to 41%, while 26% opposed it and 33% were undecided.

Mark DiCamillo, director of the Field Poll, said what everyone was thinking: “I don't think its chances of passage are all that great.”

Some things aren’t really that hard to predict.

–Ken Broder

To Learn More:

Aetna Charging Small Businesses Too Much, California Commissioner Says (by Christopher Cadelago, Sacramento Bee)

Aetna Rate Hike Excessive, California Insurance Commissioner Says (by Chad Terhune, Los Angeles Times)

Major Health Insurer Imposes Unreasonable Rate on California Businesses (California Department of Insurance)

Field Poll Finds Support Slipping for Props. 45, 46 (by Victoria Colliver, San Francisco Chronicle)

Small Covered California Premium Increases Announced as Vote to Control Rates Looms (by Ken Broder, AllGov California)