This article first appeared in Kaiser Health News on September 6, 2017.
By Julie Appleby
With insurance premiums rising and national efforts at health reform in turmoil, a group of 50 state bureaucrats whom many voters probably can’t name have considerable power over consumers’ health plans: state insurance commissioners.
As insurers threaten to exit state markets and voters at town halls complain about unaffordable prices, the state commissioners are central characters in the unfolding drama that is America’s health coverage.
“What’s the worst job to have right now? Insurance commissioner,” said Christopher Koller, a former commissioner from Rhode Island who is president of the Milbank Memorial Fund, a foundation that works to improve health. “They’re trying to keep the market stable.”
Most are wrestling with how to take on this task amid ongoing political rancor over the fate of the Affordable Care Act. Several commissioners are slated to testify Wednesday before the Senate health committee to talk about market stability and how to ensure patients have affordable health care.
The political debate highlights the role of this crew of wonk-ish administrators who sometimes preside over underfunded, understaffed offices and whose range of duties usually spans well beyond health care and its myriad complexities.
In all but one state, the commissioner regulates all types of insurance, and in several he or she might hold other jobs — such as lieutenant governor (Ohio), state auditor (Montana) and fire marshal (Mississippi, North Carolina, Tennessee and Georgia).
Most commissioners have the authority to reject premiums or modify rates they deem excessive. They also have the power of their bully pulpit. Though California Commissioner Dave Jones, for example, lacks the statutory muscle to override insurers’ rate increases, he often uses his position to publicly call out insurers’ premium hikes.
But critics worry that in some states the position is a revolving door with industry, moving them to do less than they could.
“It a double-edged sword,” said Sabrina Corlette, research professor at Georgetown University’s Health Policy Institute. “Knowledge of industry … is very important in the job. [But] … if someone is coming from and going back to industry, it does raise some red flags about where their interests really lie.”
Sometimes a past résumé draws increased public scrutiny of a regulator’s actions on issues under the department’s purview.
Connecticut Insurance Commissioner Katherine Wade, who was a Cigna executive before being named commissioner, was fined $500 in June after the state’s Freedom of Information Commission ruled that she improperly withheld documents related to a proposed merger between Aetna and Humana. She is currently appealing the ruling. The proposed merger was called off in February after a federal court blocked the deal, but not before a state review of Connecticut-based Aetna’s plan drew criticism because of Wade’s past employment.
Eleven commissioners are elected and the remainder are appointed and — as such — face new political pressures in a highly partisan health care debate.
When Julie Mix McPeak, commissioner of Tennessee’s Department of Commerce and Insurance, persuaded Blue Shield to return to areas of the state that it had pulled out of last year, she recalled: “Some critics said I was going out of my way to prop up Obamacare. Others said I wasn’t doing enough because I’m from a red state and that must mean we want Obamacare to fail. But I just want access to coverage.”
Historically, insurance commissioners have stayed out of political battles, said Tim Jost, emeritus professor at the Washington and Lee University School of Law who also serves as a consumer advocate with the National Association of Insurance Commissioners (NAIC). They see “themselves as civil servants more than politicians,” he said.
But, he added, “at least for the moment, it’s more politicized than it has been in the past.”
The individual insurance market, where about 17 million people purchase their own plans because they don’t get it through their jobs, is the focus for much of this drama.
GOP repeal-and-replace talking points have hammered a message that the individual market — including these government exchanges — are imploding. But Democrats counter that though they face difficulties, this is not the case. The insurance commissioners are caught in the middle and have the power to make either narrative come true.
Many had to scramble this summer — negotiating, offering incentives or just downright pleading — to get insurers to stay in their markets.
At one point, there were more than 40 counties nationwide with zero insurers for next year. As of Aug. 24, when insurer CareSource agreed to provide coverage in Ohio’s Paulding County, no more of these so-called “bare counties” remained.
McPeak and other commissioners also say that cost issues need to be tackled, but there’s no bandwidth to take on these thorny issues because they have to deal with the more immediate problems.
“We can’t get to affordability if I don’t have a policy for people to buy,” said McPeak. For next year, “I’m telling consumers there will be problems and they will see rate increases. But at least they have an option.”
These efforts are made more complicated by President Donald Trump’s repeated threats to eliminate subsidies used to lower deductibles for some ACA policyholders, which would raise premiums. Payments are currently being made on a month-to-month basis. It will likely be a topic during the upcoming Senate hearing.
“We would all like to know what the rules are. When there is uncertainty, it’s difficult to make short- or long-term decisions, said Al Redmer, who was appointed Maryland’s insurance commissioner in 2015 by Republican Gov. Larry Hogan.
And the subsidies aren’t the only point of contention, with the partisan divide also reflected among some commissioners.
Trump and Congress are causing uncertainty that is “sabotaging the progress we’ve made,” Washington state Insurance Commissioner Mike Kreidler wrote in June. His state strongly embraced the ACA.
Kreidler, a Democrat who formerly was a member of Congress, was first elected commissioner in 2000.
In contrast, Oklahoma Insurance Commissioner John Doak, whose state opposed the ACA from the start, has made it no secret that he supports repeal of the law, calling it “this disastrous experiment.” Doak, a Republican who was elected to the position in 2010 after working for various insurance companies, blamed ACA regulations for “so many insurers dropping out of exchanges or resorting to double digit premium increases.”
Commissioners’ regulatory powers vary by state, depending on the rules state legislators have put in place for them to enforce.
“Some states have comprehensive protections for consumers … while others have limited protection,” said Claire McAndrew, director of campaign strategy at Families USA.
But if they are so motivated, consumers can always find means to take an activist role.
Past commissioners, for instance, talk of using the regulatory process itself — pushing the boundaries in drafting the rules or using a “slow walk” toward their implementation — to work around these boundaries.
Even so, they face other limits. For instance, staffing levels for their departments are down nearly 6 percent since 2008, according to the most recent NAIC statistics.
That’s a big disadvantage when contrasted with the “strength of insurance industry lobby,” said J. Robert Hunter, a former Texas commissioner and now director of insurance at the Consumer Federation of America.
And some fail to counter industry influence in legislatures and even inside their own offices, he added.
He recalls that when he took up his post in Texas, he met with lawmakers in the Statehouse, some of whom were “unabashed” in their support of the insurance industry, warning “we’ll hurt your budget” if he went too hard on industry.
He didn’t play ball.
“If insurers are always happy, something is wrong,” said Hunter. “Insurance commissioners’ jobs are to hold them to account.”