A loud hissing contest on California’s left political flank began weeks before the state’s largest health insurance companies announced the other day they plan to raise average rates by 8 percent to 14 percent for thousands of consumers with individual policies – well over twice the 3.6 percent increase in their annual costs.
The fact no one in government can stop those increases spotlights the tiff between two longtime major figures – both of whom call themselves “progressives” – in a war of words that shows, for one thing, how different Democrats are from Republicans. The names are Harvey Rosenfield and Steve Maviglio.
The roots of this grudge go back to at least 2008. Longtime consumer activist Rosenfield and his Consumer Watchdog organization back then opposed a $14 billion measure requiring uninsured Californians to get health coverage, with many policies to be state-subsidized. Universal insurance is a longtime Rosenfield goal, but he says he fought this bill – sponsored by then-Gov. Arnold Schwarzenegger and then-Assembly Speaker Fabian Nunez – because it did not allow for price regulation.
Maviglio, who came to California as press secretary for ex-Gov. Gray Davis and later had similar jobs with Nunez and his successor as speaker, Karen Bass, worked hard for the bill. He claimed Rosenfield, best known for writing 1987’s Proposition 103, which mandates strict rate regulation for almost every kind of insurance except health, opposed the bill solely because it did not include “intervenor fees,” money paid to those who help reduce or thwart rate hikes. The fees exist so rate increase opponents can hire comparable legal and consulting talent to what insurance companies ordinarily deploy.
Last fall, three years later, Rosenfield and Consumer Watchdog pushed legislation to put health insurance under the same rate regulations as other coverage, and Maviglio opposed it. That bill won only 14 votes in the state Senate, nowhere near enough for passage. Consumer Watchdog then began an initiative campaign.
Enter Maviglio. He launched a website called consumerwatchdogwatch.com, which now turns up ahead of Consumer Watchdog’s own website on the Google search engine. He insists he’s been paid nothing for opposing the Santa Monica-based Consumer Watchdog and personally foots all bills for advantageous treatment on Google.
“Simply put, Consumer Watchdog is an affront to legitimate consumer organizations,” said Maviglio, who now runs his own political consulting firm, Sacramento-based Forza Communications, and refused to disclose either his client list or his earnings. “It’s a group that is all about its own self-interest…”
Meanwhile, other consumer groups have not complained about Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights). By itself, Proposition 103 has saved consumers an estimated $2 billion since 2000 in proposed insurance rate hikes that didn’t happen. Consumer Watchdog, meanwhile, got about $2 million in intervenor fees for helping hold premiums down. That’s about 25 cents for every $100 the group has saved California drivers, homeowners and businesses, the group calculates. Consumer Watchdog has pulled in far more from contingency fees earned while opposing allegedly illegal practices of major corporations in court.
But that doesn’t stop Maviglio from excoriating Rosenfield, who formally left Consumer Watchdog eight years ago and now is its main outside lawyer. Rosenfield at the time said he made the move because he needed more income as his children were about to enter college. He was succeeded by Consumer Watchdog’s current president, Jamie Court, whose wife is a newly-appointed Los Angeles Superior Court judge.
Maviglio says the more than $450,000 income earned last year by Rosenfield from fighting the likes of Anthem Blue Cross, Mercury Insurance and Farmers Group is “unseemly” for a consumer advocate. So, Maviglio says, is the fact he lives in a house valued at $1.4 million by the real estate website Zillow.com.
“I don’t think most people expect someone running a consumer organization to live in a house like that and make about $500,000,” he said. He would not, however, say where he thinks Rosenfield should live or what income would be proper. In fact, salaries paid by Consumer Watchdog to its staff are largely in line with those at other California consumer groups of similar size and scope.
Can anyone imagine name-calling like this on California’s much more unified right wing?
Each side here charges the other is motivated purely by greed. While Maviglio maintains Consumer Watchdog does nothing that won’t earn it money, Court says, “We fight insurance companies and the politicians and consultants who work for them and you make enemies along the way.”
All of which underlines the deep gulf between the establishment side of California’s left wing, which gets copious corporate support, and its populist side, which often battles big corporations.
It’s a division that took decades to develop and won’t heal soon.