Proposed Ballot Measure Making it Harder for Insurers to Deny Claims Approved For Signature Gathering

A newly proposed California ballot initiative previously named after Luigi Mangione would make it illegal to “delay and deny” healthcare coverage, was given the green light by the state over the weekend to begin gathering signatures.

According to the proposed “Restricts insurance denials for physician-recommended medical care, increases insurers’ potential liability,” initiative statute measure, it would “prohibit health insurers from delaying, denying, or modifying physician-recommended medical care if doing so could seriously harm the patient and permits only licensed physicians to make coverage decisions.” Essentially, insurance companies would need to prove that there was a legitimate reason to delay or deny a claim and that it would not result in “disability, death, amputation, permanent disfigurement, or the loss or reduction of any bodily function.”

In addition, potential claimants could easily sue insurance companies and get not only attorney fees but also treble damages, a court remedy where the amount of damages awarded by a jury are tripled.

The Legislative Analyst’s Office gave a ballpark cost of the bill earlier this year. In their report they noted that the impact could be hundreds of millions of dollars, even into the billions thanks to the measure making it harder for insurers to deny claims. In any case, statewide health insurance costs would likely go up as a result.

“Given the above uncertainty, pinpointing the initiative’s fiscal effects on the state’s health care sector is difficult,” said the LAO report. “On net, the initiative probably could result in higher statewide health care costs. This is because affected health insurers might deny, delay, or change fewer doctor-recommended services and drugs to avoid penalties from potential lawsuits. To cover these higher costs, many health insurers would likely raise monthly premiums. The size of this cost, however, is uncertain. It depends on the scope of initiative’s restrictions, as well as how many new services insurers cover as a result of the measure.

“Some of the increase in health care costs could fall on state and local governments. The size of this cost is uncertain as well. Much of the effect depends on the measure’s impact on Medi-Cal, the state’s largest health care program. Higher premiums also could increase state and local government employee health insurance costs. Because of this uncertainty, the cost could range from limited to extensive, potentially from the hundreds of millions of dollars to as much as the billions of dollars each year.”

The initiative began earlier this year when it was originally filed with the Attorney General’s office by Los Angeles lawyer Paul Eisner as the “Luigi Mangione Access to Health Care Act.” That version, named after the alleged assassin of UnitedHealthcare CEO Brian Thompson, received widespread criticism in April following the request. However, as Eisner later stated, the proposal was named after Mangione primarily as a way of getting attention.

“That’s kind of the whole point,” confirmed Eisner. “It is getting the attention it needs because sometimes things require publicity.”

However, not wanting more negative backlash, and for the proposal to actually be approved, the initiative’s name was changed to the longer “Restricts insurance denials for physician-recommended medical care, increases insurers’ potential liability” initiative statute.

With the Attorney General’s office approving the measure for signature gathering, supporters now have until November 26th to get the signatures of 546,651 registered voters, or about 5% of all the total number of votes cast in the 2022 Gubernatorial election. Should enough signatures be collected and verified, the measure would then be placed on the November 2026 ballot.