Insurance Commissioners Prepare for Health Care Policy Conflicts

This low-profile office will receive more attention as state officeholders decide on how to progress on the Affordable Care Act.
by | April 12, 2011

As states begin to grapple with implementation of the Affordable Care Act (ACA), a historically low-profile state office -- the state insurance commissioner -- is attracting newfound attention and conflict.

In 11 states, the insurance commissioner is an elected office. In the rest, it is appointed, most often by the governor. Historically, overseeing health insurance is only one of the commissioner's duties -- in many states, hurricane insurance, car insurance and worker compensation are hot-button issues. That said, one state, Rhode Island, has its own committed commissioner working only on health care.

The new health care law centralizes many functions at the federal level, but it leaves significant roles for the states. These include implementing the bill's consumer-oriented reforms, such as eliminating preexisting-condition restrictions in health plans; the establishment of state-based health exchanges; and keeping insurer rate increases in check. As implementation of the law continues, insurance commissioners "have a very important role to play," says Robert Zirkelbach, a spokesman for America's Health Insurance Plans, an industry trade group. Depending on the state, the insurance commissioner may be responsible for implementing these reforms.

But in many states, insurance commissioners are walking a tricky path. Many of the Republican governors and legislative caucuses that surged to victory in the 2010 elections are dead-set against the health care law, seeing it as an irresponsible expansion of government power. The Republican critics of the law don't want their states to do anything to implement it, hoping that the Supreme Court will eventually side with the 14 Republican attorneys general who have sued over its constitutionality.

At the same time, states that decline to prepare for the act's implementation are taking a risk. Those will see the federal government take over the task for them, a development that would rob the states of crucial leverage in shaping the law's impact on constituents.

As a result, insurance commissioners have found themselves caught in the crossfire: Do they or do they not help support and implement ACA?

Many insurance commissioners, especially those who are appointed, come to the job with a mindset that's more technocratic than political, says Tim Jost, a Washington and Lee University law professor who serves as a consumer representative to the National Association of Insurance Commissioners (NAIC).

Jost says that when he attended an NAIC meeting in March in Austin, Texas, he had expected to find heightened antipathy to the law among some of the newer commissioners - particularly among those who either won office directly in the 2010 Republican wave or who were appointed by governors who did. Instead, he says, he found a lot of honest grappling with the issues. Caution, rather than aggressive action against the law, was the rule.

"No one said it was unconstitutional and that they would refuse to go along with it," Jost says. "It was more about how can we move this forward for the benefit of our consumers. I guess this was only the first meeting of this year, but I haven't seen the hard swing to the right that I was expecting."

Election Results and Appointments

Indeed, the 2010 election results did not swing the partisan affiliations of insurance commissioners solely towards Republicans. Rather, offices tended to switch in roughly equal ratios. Of the four direct elections for insurance commissioner in 2010, one seat switched from Democratic to Republican (Oklahoma) while another switched from Republican to Democratic (California). In the other two states (Georgia and Kansas), the commissionership remained in Republican hands.

Meanwhile, the appointed commissionerships also changed partisan hands in roughly equal numbers. In four states - Ohio, Pennsylvania, Tennessee and Wisconsin -- the Republicans won an opportunity to flip a previously Democratic seat. But in four other states -- Connecticut, Hawaii, Minnesota and Vermont - newly elected Democratic governors helped flip commissionerships to their party.

The growing tensions between insurance commissioners and politicians are not exclusive to 2010 elections and appointments. Changes in the legislature can cause tensions as well. An example is Montana, a generally Republican-leaning state where a Democrat, Monica Lindeen, won election as insurance commissioner in 2008. In 2010, Republicans seized control of the House, in addition to adding one seat to their majority in the Senate.

The newly emboldened Republicans in the Montana Legislature not only killed a Democratic proposal to start establishing an exchange but also a "compromise" bill that had earned the support of some moderate Republicans.

Meanwhile, Republican state Sen. Jason Priest, a Tea Party favorite, has sought to force Lindeen to reject a health exchange grant from the federal government and to compel the state's Democratic attorney general, Steve Bullock, to join the Republican-led lawsuit against the health care bill, Politico reports.

"The tension between the insurance commissioner's office and very conservative Republicans has never been higher," says Democratic state Sen. Dave Wanzenried.

Partisan Influences on the Insurance Commissioner's Actions

Still, many of the fiercest battles are taking place in states that saw a partisan shift in 2010.

In Kansas, a moderate Republican insurance commissioner, Sandy Praeger, has repeatedly skirmished over the health care law with the conservative wing of her party, which gained ground in the 2010 election, seizing the Democratic-held governorship and post of attorney general.

Praeger succeeded Kathleen Sebelius as insurance commissioner after Sebelius became governor; later, President Barack Obama appointed Sebelius as the U.S. Secretary of Health and Human Services, the key player in implementing the new law. Praeger, who has often worked closely with Sebelius, has sought to move forward on the health care law despite fierce resistance from elected officials in the state.

"So far she is holding her own, to the point that Kansas is a demonstration project with federal funds," says Burdett Loomis, a University of Kansas political scientist. "Conservatives hate her, but she has held them off so far."

New Hampshire -- where Democratic Gov. John Lynch won reelection but where the GOP seized both chambers of the Legislature -- is another flashpoint.

Insurance commissioner Roger Sevigny "has worked closely with Lynch, which has put him at odds with the current legislature," says Grant Bosse, the lead investigator for the free-market Josiah Bartlett Center for Public Policy, based in Concord, N.H. The newly Republican Legislature is pushing the state attorney general, Democrat Michael A. Delaney, to join the repeal lawsuit.

In three key Midwestern swing states where Republicans romped to victory in 2010 -- Ohio, Pennsylvania and Wisconsin -- the partisan shift is expected to shape the insurance commissioner's office, though the battles have been somewhat slower to develop.

In Ohio, Lt. Gov. Mary Taylor is taking on the insurance commissioner's role. She was elected on a ticket with staunch conservative John Kasich, and insiders expect her to make some waves on health care policy. "Because she has the job, it has become more high profile," says Republican consultant Mark Weaver.

In Pennsylvania, Joel Ario, a commissioner appointed by former Democratic Gov. Ed Rendell, "was fairly aggressive in his dealing with major insurers in the state, including his decision to block a big merger of Blue Cross divisions," says Muhlenberg College political scientist Christopher Borick.

But Ario's gone, and newly elected Republican Gov. Tom Corbett has tapped corporate lawyer Michael Consedine as insurance commissioner. While it's too early to tell how Consedine will act in his new position, Borick says, he thought it "would be more than fair to say that state insurers were pleased to see the change in party control of the governor's office," given their past experience with Ario.

And Wisconsin -- where new Republican Gov. Scott Walker has taken a hard and controversial line against labor unions -- has seen a switch in the insurance commissioner's office.

Sean Dilweg, an appointee of former Democratic Gov. Jim Doyle, "exercised unusual independence from the industry and broke new ground on developing some strong consumer protections like readability of policies, and independent external review of recessions and denial in Wisconsin," says Bobby Peterson, the founder of ABC for Health Inc., a law firm that seeks to expand access to health care.

Peterson says he expected a more conservative approach from Walker's appointee, Ted Nickel. Walker has been clear about his opposition to the health care law; he replaced a health care reform office set up by Doyle with one called the Office of Free Market Health Care.

Governors Team with Insurance Commissioners to Move Forward

In some states, though, supporters of the health care could benefit from the 2010 electoral changes. In Connecticut, for instance, Thomas Sullivan, the insurance commissioner appointed by former Republican Gov. M. Jodi Rell, sparked controversy last year when he approved rate increases for individual plans offered by Anthem Blue Cross. He's out now, succeeded by Thomas Leonardi, an independent tapped by Democratic Gov. Dannel Malloy.

Even in some solidly Republican states like Georgia and South Carolina, there have been tentative efforts by the governors to make preparations for the health care law, but these have prompted battles between Republican officeholders and Tea Party activists who were partly responsible for electing them to office.

Tea Party efforts to derail preparations for a health care exchange are akin to "the ostrich sticking its head in the sand and saying it's not a problem," Georgia insurance commissioner Ralph Hudgens, a Republican, recently told Politico. "But it is a problem. We need to be prepared to implement a state solution.


More from Politics