A new report from the Center on Public Integrity, Drinks, Dinners, Junkets and Jobs, lays out the tight relationship between state insurance commissioners and the insurance industry and what that means for the people commissioners are supposed to represent. In a nutshell, insurance commissioners are often either former or future insurance industry executives or both. Not surprisingly, as state insurance commissioners, their rulings tend to favor the insurance industry.
Each state has one insurance commissioner responsible for overseeing and regulating insurance rates and complaints against them on behalf of state residents. But, commissioners may want to think about their own interests as well. And, that often means ensuring the insurers do well by them if, down the road, they want a job in the insurance industry. In the last ten years, the Center on Public Integrity found that more than 5o insurance commissioners of the 109 who had left their positions had taken jobs with the insurance industry.
Today, 24 of the 50 insurance commissioners worked for an insurer before assuming their role as commissioner. Some argue that they have the needed expertise. Others argue that the relationship can be too close. Whichever way you cut it, a large number of commissioners are conflicted–hard-pressed to look out for the best interest of consumers.
The Center on Public Integrity scoured thousands of pages of information and surfaced all kinds of conflicts. It found four commissioners with direct financial ties to the insurance industry through stock ownership, a spouse’s job or a retirement plan. Several commissioners received campaign contributions from insurers, even in states where these contributions are prohibited. And many more received expensive trips.
The Center reports that the Arkansas Commissioner socialized many times with lawyers from United Healthcare at the same time as she was deliberating on a case a hospital had filed against United Healthcare. The Center uncovered the thank you note the Arkansas Commissioner emailed: “I had a blast with you Monday night. Thank you so much for entertaining us.’” She subsequently ruled in favor of United Healthcare, saving the company millions. And, then she left her post as commissioner and took a job with United Healthcare.
The Center reports that while 33 or more states prohibit lobbying of former colleagues by former legislators for some amount of time, it does not keep them from taking advantage of their close relationships with the lawmakers and meeting with them. One former regulator claimed she was not lobbying when she asked for meetings since she was not specifically seeking a change in legislation or regulation.
Here’s more from Just Care:
- Medicare premium projected to rise significantly in 2017
- No increase in Social Security checks likely in 2017
- Insurance premiums projected to rise a lot in 2017
- Support grows for Medicare buy-in and public health insurance option
- Four key differences between traditional Medicare and Medicare Advantage plans