Insurance Commissioners Squirm, Then Bow to Brokers and Insurance Lobbies

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The insurance commissioners of the 50 states held a private conference call Tuesday, and a number of them apparently noted/complained that they're getting "all these messages and faxes" from consumers opposing a resolution the National Association of Insurance Commissioners is about to vote on. So thanks to all who emailed or called, urging the commissioners to put consumers ahead of the insurance lobbies. You were heard, if not yet obeyed.  Go ahead, send more messages!

During the call, the NAIC apparently decided to toss consumers aside and and work to kill the only major consumer price protection in the federal health reform law. Not all of the commissioners–California, New York, Washington State, Connecticut, Oregon, Minnesota and DC have come out strong on behalf of consumers. These and a few others held off a vote by the NAIC for months, but today the insurance sales lobby and the insurance companies bulldozed them aside, with the help of industry-connected commissioners.

Here's what the reolution, sponsored by the insurance sales lobby, would do:

  • Ask Congress or the White House to exempt broker and agent sales commissions from being counted as insurance company administrative costs.
  • Seek to trash the requirement that insurers spend 80% or 85% of their premium income on health care, because the broker payments–about 4% to 8% of premium on average–would no longer be counted azs part of the allowable 15% or 20% of administrative spending.
  • Put the weight of the National Association of Insurance Commissioners behind federal legislation written by the insurance sales lobby. (The chief sponsor of the legislation, HR 1206, is Rep. Mike Rogers, R-Mich.)
  • Deprive consumers of  $1 billion or more in rebates they would otherwise be due from insurance companies that violated the 80%-85% rule.
  • Let Insurance companies keep raising rates without fear of penalty, while maybe (or not) paying brokers and agents a little more.

The commissioners privately tested the waters Tuesday for a final vote on Nov. 22, but of course any phone call with more than 100 people on the line (including staff) won't stay secret. 

We know that supporters of the anti-consumer postion have a majority. A large minority is from upset to aghast that the NAIC, a self-described "consensus organization," is taking a vote on a divisive political health reform issue and slapping down the consumers they're supposed to protect. At least one commissioner noted sharply that "not one single consumer" or consumer organization supports the resolution, which falsely claims to "preserve access" by consumers to brokers and agents.

The resolution is pushed by Florida insurance commissioner Kevin McCarty and his boss, Gov. Rick Scott. Scott is the disgraced former CEO of a health care company that paid billilons of dollars in federal fines and settlements for Medicare fraud. He is ferociously opposed to health insurance reform–known a few years ago as the Rush Limbaugh of health reform. Could it be a grudge against the federal investigators who caught his company, Columbia HCA, in the act?

It's still possible that some of the commissioners will think again about taking this highly political step on behalf of a corporate lobby. But if not, we hope our supporters will help us tell Congress and White House health policy makers that the NAIC is playing a political game and trying to throw consumers off the back of the health reform truck.

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