by Andrew Zajac.
Healthcare overhaul legislation moving through the Senate Finance Committee would put crucial rule-making authority in the hands of a private association of state insurance commissioners that consumer advocates fear is too closely tied to the industry.
The National Assn. of Insurance Commissioners currently writes model laws and regulations that individual states are free to accept or discard. Under the bill by Sen. Max Baucus (D-Mont.), it would craft a model rule governing "health insurance rating, issuance and marketing requirements" that would become "the new federal minimum standard without any further congressional action." States would be permitted to deviate from the standards only by appealing to the Department of Health and Human Services.
In effect, the bill would allow the group to write many of the new rules on issuing and marketing insurance to millions of uninsured Americans who would be required to purchase policies.
"The NAIC is clearly an organization that is dominated by the insurance industry," said California Lt. Gov. John Garamendi, a former state insurance commissioner.
"I think the NAIC has an important role to play. They have a lot of knowledge, but I would be concerned about giving them authority to set the rules."
The group's 56 members are public officials -- the elected or appointed chief insurance regulators of the states, the District of Columbia and five U.S. territories -- responsible for enforcing laws that vary widely in rigor depending on jurisdiction.
But the association itself is a private organization not subject to open meetings and public records law, noted J. Robert Hunter, insurance director of the Consumer Federation of America and a former Texas insurance commissioner.
"They have no transparency," he said.
See the full report on health-care reform and the insurance regulators who stand to set the rules in Tribune newspapers and here in the Swamp:
Sandy Praeger, insurance commissioner of Kansas and chairwoman of the National Assn. of Insurance Commissioners' healthcare committee, defended the association's proceedings as "deliberative and open" and brushed off concerns about its ties to insurers.
"I don't view our position as too close to the industry," she said. "It's tapping existing expertise."
In giving rule-writing authority to the association, Baucus would avoid creating a new federal bureaucracy, potentially heading off a source of opposition to the bill.
A Senate Finance Committee aide said in an e-mailed statement that "Sen. Baucus believes keeping all stakeholders at the table will result in passing the best bill possible, and he worked with the NAIC as well as a wide variety of other stakeholders."
A rival, costlier bill advanced by Rep. Henry A. Waxman (D-Beverly Hills) would establish a "health choices" commissioner's office.
Putting the rule-writing pen in the association's hands would be "totally inappropriate," said the Consumer Federation's Hunter. "The NAIC is not accountable. [Federal lawmakers] don't have any control over them."
Much of the criticism, particularly from consumer groups, stems from the departure of top association officials for plum industry jobs.
In 2004, the president of the National Assn. of Insurance Commissioners quit midterm to head the Property & Casualty Insurers Assn. of America.
Last year, one official left to become chairman of Swiss Re America Holding Corp., a division of global reinsurance giant Swiss Re. Another left to lead the Insured Retirement Institute, a Washington-based trade group that promotes the use of insurance in retirement portfolios.
Praeger said she saw benefits in such mobility.
"I kind of look at it as seeding the industry with good regulators," Praeger said.
Comments
I don't know about you, but that is too cozy a set-up, for me to trust. First of all, it needs to be accountable to the taxpayers of America. It needs to be part of the Department of Commerce, or Health and Human Services. No wonder our health insures can get away with murder, they control the "governing board" of their industry. Senator Baucus must rethink his initial serving, that this Association can continue to set rules and govern their own, is an absurdity. Isn't it painfully obvious, that they have not only dropped the ball, for the citizens of America, they have lost the game, in the sense of the many lives lost, due to the negligence, greed and callousness of the Healthcare Insurance Corporations. I thought that Senator Baucus had set the bar too high, even if this is a starting point, but his pragmatism has gotten the better of him. He still thinks the Republican-Libertarian Parties want to work with President Obama and the Democrats, which, he better come to realize, is right out of "Alice in Wonderland". Pragmatism, my eye !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, IL | September 28, 2009 9:13 AM
Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance.
"Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty.
Illegals given free healthcare on our backs with penalties. Lets fix the economy before passing ridiculous 1000 page behemoth bills no-one reads or really wants.
Posted by: Greg H | September 28, 2009 10:25 AM
Gee Don, the democrats pump out this puke and you blame the republicans?
Put down the pipe don, it's frying your brain.
Posted by: springfield | September 28, 2009 10:56 AM
Here's an excerpt from a letter that my expatriate brother wrote to America:
"In short, in the US, you pay more, get less, and die younger than we do in Europe. What part of that don't you understand?
"My fellow Americans, you have nothing to fear except those who would use fear to keep you enslaved to the myth of the might of the American health care system."
Jeff Degan
What can I tell you? The guy is a Communist. Not only does he live in France, he actually likes it there. Go figure.
http://www.tomdegan.blogspot.com
Tom Degan, Goshen, NY
Posted by: Tom Degan | September 28, 2009 11:24 AM
What the Hell? That is the last thing we need. Get the insurance company's out of the regulation business! According to an article in the Milwaukee Journal/Sentinel, The CEO of Wellpoint Inc., an insurance company. Angela Braly says "health insurance company's would agree to universal care if consumers met conditions"! Read that again folks! Who the hell cares if they agree or not! Now they want to be the regulators too? Single payer plan is looking more and more like the only option. It is time to put the health care insurance company's out of business. REMEMBER THE REPUBLICANS NEVER DO ANYTHING FOR THIS COUNTRY, THEY ONLY DO THINGS TO THIS COUNTRY!whiteagle38
Posted by: Raymond Juneau | September 28, 2009 12:04 PM
Speaking of transparency, Andrew, how come you transcribed what these insurance cirtics said, but didn't identify their party?
For example--Californian John Garamendi is a longtime Democrat who is running for Congress as a Democrat. And J. Robert Hunter was appointed TX insuarance commissioner by Democrat Ann Richards.
Telling the whole truth at--at The Swamp, a novel concept.
Posted by: Bruce | September 28, 2009 12:43 PM
Couple of health care stories that didn't make the Swamp cut:
http://www.cnsnews.com/news/article/54608
What's the use of having a healthcare database if the data is incomplete?
http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform
Obamacare is sinking fast.
http://www.washingtontimes.com/news/2009/sep/28/liberals-seek-health-care-access-for-illegals/
The libs want to expand their voter base.
Posted by: Terry | September 28, 2009 2:01 PM
Maybe these are the people with the req'd expertise to make this whole thing come together in a prompt and coherent fashion. Keep in mind that all those good safety rules for building houses were first proposed and written by private organizations with close ties to the building industry; those rules didn't really favor the building industries, did they?
Posted by: Once and Future Skeptic | September 28, 2009 4:13 PM
Government run health care – the so-called “public option” - presents serious challenges for us. The private sector and competitive market forces are the best means to meeting health care needs. Watch this video from the U.S. Chamber http://www.friendsoftheuschamber.com/media/
Posted by: Audrey | September 28, 2009 11:09 PM
While the NAIC does produce "model laws," this does sound bad. The NAIC works as a state legislator resource and insurance industry lobbying group. The 56 members who are public officials -- the elected or appointed chief insurance regulators of the states, the District of Columbia and five U.S. territories -- responsible for enforcing laws that vary widely in rigor depending on jurisdiction - but they get that power by virtue of being their jurisdictions regulator - not by being part of the NAIC. Those model laws are written by the insurance companies, approved by - sometimes edited but not often by NAIC staff - the NAIC. The insurance companies then sell the adoption of those laws to state legislators, and use the NAIC label as a seal of good intentions, and also use the NAIC has an information resource for those states - albeit one that is fed the information on why the model law is needed by the ins. co's. There are some very good ethical regulators - Larry M. Gorski, FSA, MAAA who is - or was - the State Actuary in the Illinois Insurance Department - comes to mind as such a person - but he is not the person that holds Illinois' seat on the NAIC - Michael McRaith who is appointed and therefore via an insurance company blessing, is the current Illinois Director of Insurance and holds the seat. It is hard to see how NAIC regulation of health will be as strong as NY State current regulation - and NY State claims ratio required and policy form regulation is not all that strong, albeit it is stronger than the rest of the states.
How does a group of appointed folks make law for a state - that "regulation" replaces the state insurance departments it would seem - at least in the area of health - so that NY State's rather strong claims ration and policy form rules would be replaced by whatever model the insurance industry could get past the NAIC. Not a good thing.
Posted by: papau | September 28, 2009 11:24 PM
Keep drinking the cool aid?
Posted by: Lawrence | September 29, 2009 12:36 AM
Insurance companies are in the insurance business. Hospitals are in the hospital business. Big pharma is in the drug business. Doctors are in the doctor business. Of the four which does a better job than the other three at looking after your health? I am not sure that insurance, hospitals and drug companies should be such a strong part of making decisions that impact me.
Posted by: Stan | September 29, 2009 2:41 PM