Revelations of discrimination by insurance companies are always shocking, but when they come out just days before a vote on an industry-sponsored ballot measure that would legalize unfair price increases and prejudice in auto insurance, Californians should pay particular attention.

A former insurance agent from the Auto Club of Southern California just blew the whistle on a scheme at the company that led to discrimination. The allegations come just as California voters take up Prop 33, a ballot measure financed with $16 million by one insurance executive, Mercury Insurance chairman George Joseph, that will allow auto insurance companies to surcharge motorists just because they didn’t buy insurance in the past, even if they didn’t own a car.

A new poll from the California Business Roundtable, whose numbers consistently tilt in favor of big business that funds it, shows voters have turned against Prop 33, with support dropping to 48% as the public learns about the proposal and the billionaire insurance executive who is behind it.

The Auto Club of Southern California insurance agent Jill Rogers exposed how the insurance company financially penalized agents for writing policies for new drivers and those without prior insurance, including those who did not drive previously. She said agents hung up on customers who did not have prior insurance and quoted them the most expensive policies, because the agents would only receive a $20 commission on those policies. For those who had continuous coverage, the Auto Club would pay its agents $100 to $500.


Call it Jim Crow Insurance. It’s illegal to charge more to new drivers and those with lapses in coverage in California, so insurance companies find other ways to keep them off the roll.

Clearly auto insurance companies don’t like to insure new drivers and those who had a lapse in their coverage, even though they are prevented by law from charging them more. Prop 33 would open the door to outright price discrimination.

As husband of an African American woman, I have seen racial discrimination first hand, including misplaced reservations, overcharges and other indignities endured by my wife and family on a fairly regular basis. Jill Rogers’ description of how insurance companies financially pressure agents, who in turn drop phone calls and misquote certain types of drivers, rings a bell. And this occurs in a system where it is already illegal to charge more to people who did not drive previously because they could not afford insurance.

How much worse will it be if Prop 33 made such price discrimination legal for all insurance companies?

We know from history. Shortly after California imposed tough mandatory insurance laws in the 1980s, a group of inner city residents sued because they were being forced by the state to buy auto insurance but could not afford it: Insurance companies were charging them thousands of dollars per year for auto insurance because of the ZIP-code they lived in and the fact that they did not have insurance previously.

Auto insurance companies, including George Joseph’s Mercury Insurance, the backer of the current Prop 33 proposal, essentially drew a “redline” around their communities and used these two pricing factors to keep African Americans and Latinos out of the auto insurance market.

Justice Allen Broussard of the California Supreme Court wrote: “This case arises from the attempt of the California Legislature to solve a serious social problem – the uninsured driver – without taking into account an equally serious problem – insurance pricing practices which make automobile liability insurance prohibitively expensive for many of the urban poor.”

Broussard, the second African American justice to serve on the California Supreme Court, noted that the plaintiffs “speak also of the reluctance of insurance companies to insure persons who were previously uninsured, a problem of particular concern since the purpose of the 1984 legislation was to compel such persons to obtain insurance.”

In its decision in the seminal King v Meese case, the California Supreme Court said it sympathized with the plaintiffs but told them to turn to the legislature, which then refused to act. Voters took matters into their own hands in 1988 with Prop 103 and banned the power of insurance companies to charge new drivers and those without previous insurance more for auto insurance.

Now, 24 years later, Prop 33 would reverse the ban and allow companies to again charge new drivers and those without insurance more for auto insurance.

Anyone who doubts that Prop 33 is about giving insurance companies the power to discriminate just needs to listen to Jill Rogers.

Joseph, who has tried to overturn this and others prohibitions on discrimination in the courts and legislature for two decades, before losing a nearly identical ballot measure to Prop 33 just two years, finally admitted to the LA Times recently that he would use Prop 33 to charge more to new people in the market. Afterall, when was the last time an insurance company billionaire spent $16 million on a ballot measure to save you money?

And if you doubt that such price discrimination would fall hardest on people of color, consider that the unemployment rates among whites is 7.5% and among blacks 14.1% percent and Latinos 10.2%. People of color are going to be the most likely to have to stop driving for economic reasons, and Prop 33 will slam them with 40% premium increases when they come back in the insurance market. That’s exactly how much Mercury Insurance charged those who didn’t drive previously when the sponsor of Prop 33 and his company were caught illegally surcharging them in the late 1990s and early 2000s.

Prop 33 hurts all of us by putting more uninsured motorists on the road, and raising our uninsured motorists premiums, but it’s attempt to punish communities of color is outrageous.

Prop 33 is a deceptive initiative designed to bring us back to the day when insurance companies could price certain types of people out of the insurance market. That’s why consumer groups, civil rights groups like MALDEF and Equal Justice Society, as well every major newspaper editorial board in the state oppose it.

Recently civil rights leader Dolores Huerta spoke out against Prop 33. “We should be wary when a billionaire funds a self-enrichment ballot scheme,” said Huerta. “We will all pay if insurance discrimination against the poor and communities of color is brought back. Please join me in voting NO on Prop 33.”

Judging by the most recent poll, and thanks to whistleblowers like Jill Rogers, Californians seem to be agreeing with Huerta.

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Originally posted on 11/1/2012 on the Huffington Post. Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Amidst the budget issues, Afghanistan, and Health Care it seems like there are more and more issues slipping to the wayside.  One of those issues that I’ve recently had brought to my attention has to do with past discrimination by the US Department of Agriculture.  For decades both African-American and Latino farmers endured discrimination and unfair treatment in their loan applications and loan approvals.  

African-American farmers who experienced this discrimination by the U.S. Government were compensated by the Agriculture Department.  Latino farmers, however, were never addressed in that compensation and a lawsuit has been pending for years with no resolution under the Bush Administration.  

There is a lot more about this issue at:  http://www.garciaclassaction.org/  

So far, the Congressional Hispanic Caucus and eight Senators, including Senator Barbara Boxer, have appealed to the President and the Agriculture Department, calling for a quick and fair resolution to the case.  

If your member of Congress hasn’t signed on yet, contact them and ask them to join in calling for a fair and quick resolution of the case.  You can also sign the online petition at http://www.ipetitions.com/peti…

We shouldn’t let the bigger fights obscure all the little cleanups we still have to do from the last eight years!

At this point the judiciary is pretty much the only government entity in this state I have a modicum of belief in; they aren’t hamstrung by ridiculous rules that make it impossible to function, so they can simply follow the law.  State agencies, when properly run, also can exhibit some independence.  Lately, there have been several cases ruled in favor of reformers at the expense of malign protectors of the health care status quo.

After a series of investigations from the California Department of Public Health, 18 hospitals have been fined for substandard care.

Violations included an improperly inserted catheter, a ventilator that was not turned on and surgical tools left inside patients after operations […]

The hospitals were fined $25,000 for each violation – the latest of dozens of penalties the state has issued in recent years to more than 40 hospitals.

“The number of penalties will decrease and the quality of care will dramatically improve as hospitals take action to improve,” said Kathleen Billingsley, director of the health department’s Center for Healthcare Quality. “The entire intent of these fines is to improve the overall quality of care in California.”

As care is improved, so must access for treatment.  The proposed cuts to Medi-Cal by the governor would have decimated the ability for the poor to find a doctor.  The cuts never made it through district court.

A federal judge has ordered a temporary halt in the state’s 10 percent reduction in Medi-Cal reimbursement rates, improving access to care for 6.5 million low-income patients but throwing a new wrench in already difficult budget negotiations.

The U.S. District Court decision forces the state to reimburse most Medi-Cal providers at rates prior to the 10 percent cut, which lawmakers and Gov. Arnold Schwarzenegger made effective July 1 as a cost-cutting measure to help resolve a $15.2 billion budget shortfall this year.

The move increases reimbursement rates the state pays to doctors, dentists, pharmacists, adult day-care centers and other providers who serve Medi-Cal patients. It excludes some hospitals who do not contract with the state and do not provide emergency care.

This just shows the fallacy of a cuts-only budget, which runs into all kinds of voter mandates and constitutional demands.  The good news here is that reimbursement rates will be sustained, albeit at a level low enough that half of the state’s doctors will still probably reject Medi-Cal patients.  The Democratic budget would also have rescinded the Medi-Cal rate cuts.

In a separate decision in the State Supreme Court, the justices ruled that doctors cannot deny care to gays and lesbians based on moral objections.

Justice Joyce Kennard wrote that two Christian fertility doctors who refused to artificially inseminate a lesbian have neither a free speech right nor a religious exemption from the state’s law, which “imposes on business establishments certain antidiscrimination obligations.”

In the lawsuit that led to the ruling, Guadalupe Benitez, 36, of Oceanside said that the doctors treated her with fertility drugs and instructed her how to inseminate herself at home but told her their beliefs prevented them from inseminating her. One of the doctors referred her to another fertility specialist without moral objections, and Benitez has since given birth to three children.

Nevertheless, Benitez in 2001 sued the Vista-based North Coast Women’s Care Medical Group. She and her lawyers successfully argued that a state law prohibiting businesses from discriminating based on sexual orientation applies to doctors.

Of course, we cannot rely on the courts to shape public policy.  But they set the boundaries – the lines that lawmakers cannot cross.  And those boundaries are leading to increased access and improved care.

When the Governor looks around and sees a mortgage crisis, a potential $10 billion dollar shortfall in the state budget, and failures to deal with pressing economic problems and instead push the problem off to the next generation, he always falls back on worker’s compensation reform.  This was the centerpiece of his economic agenda upon coming into office, it’s what he always touts as the first step on getting California business moving again.

And it was based on discrimination.

A state appeals court ruled Monday that a 76-year-old Sacramento woman can’t have her permanent disability benefits reduced because of her age.

The decision by the 3rd District Court of Appeal in Sacramento represents a small but significant victory for injured workers who argued for years that their benefits have been slashed by Gov. Arnold Schwarzenegger’s overhaul of the workers’ compensation system three years ago.

For the first time, the court said the injured workers are protected by the state’s anti-discrimination laws. In this case, insurers and doctors can’t use a worker’s age, race or gender in determining permanent disability awards.

The road to economic solvency for Arnold Schwarzenegger was based on this; trying to take money from the permanently disabled because of their age or race or gender.  We should all feel a little bit ashamed.

Now the job of the legislature is to permanently fix this injustice to put it in legal working order.  Frank Russo has a lot more, but here’s a taste:

Yesterday’s decision by three judges of the California Court of Appeals that the so-called “reform” of workers’ compensation laws–the law that Schwarzenegger demanded and the legislature enacted in 2004–cannot be used when it leads to discrimination based on gender or race is just the latest example of how badly that law was written. The legislature bought a pig in a poke when they were stampeded into adopting at a 3 a.m. committee hearing followed by floor votes of a complicated 75 page bill which almost none of them had read–or really considered.

Workers have been paying for this ever since.

Senate Bill 1437 was passed from the Senate Judiciary Committee on April 5, 2006.  The bill bans discrimination in school textbooks based upon sexual orientation.  Further, it encourages the inclusion of LGBT contributions when students learn about contributions of other minorities.  The Bill has become very controversial amongst the state’s conservatives and evangelical Christians.

This bill is a good idea.  I wrote a paper about it that is now available online.  Click here for the paper.  Enjoy!