2018 Year in Preview

ACA Repeal, Part 2

Star turn for state regulators as insurance markets will continue to be a partisan battleground

Jan Greene
Julie Mix McPeak, Tennessee’s top insurance regulator

While Republicans in Congress tread on local insurance markets in their tug-of-war with Democrats over the fate of the ACA, state insurance commissioners are being drawn into the debate in new ways, a trend likely to continue in 2018.

The Senate Health, Education, Labor and Pensions Committee, where many of the ideological skirmishes take place, hosted a panel of five states’ commissioners in September. The regulators hailed from both red and blue states and had widely varying views on policy, but they brought a unified message, courtesy of the insurance industry: The unpredictability of federal policy is killing us. “Uncertainty related to payment of cost-sharing reductions, high premiums, and weakened enforcement of the individual mandate have placed our individual health insurance markets at serious risk,” Washington State Commissioner Mike Kreidler told the panel.

Insurance is all about risk, but as an industry it’s as risk-averse as they come. The business has developed a real headache from anticipating the constantly changing outcome of Republicans’ on-again, off-again efforts to abolish the federal level of insurance regulation that the ACA created. Insurers have also suffered indigestion from White House threats to end key subsidy payments that were propping up markets in many states.

Congress spent much of this year skirmishing over health care, and Republicans were relieved—at least initially—to change the subject to tax reform in late October. But health insurance coverage and the fate of the ACA will almost certainly leak into 2018 as a big story.

State insurance commissioners are not typically a high-profile lot, but the limelight seems to be finding them. Beyond rancor or simple advantage-seeking, much of the argument in Washington about health care travels that rutted path to disagreements about the role of the federal government and whether more power should be handed down to the states.

Insurance commissioners are either elected (11 of them) or appointed (the rest). Kaiser Health News compiled a handy, interactive profile of each state’s commissioner, finding a variety of models. In some states insurance oversight isn’t the whole job—some also oversee fire protection or serve also as state auditor. Many come from the insurance industry. Former Texas regulator Bob Hunter puts it bluntly: “Almost all of them will do whatever the insurance companies tell them to do.”

Whether in a red or blue state, the state commissioner jobs do require decent working relationships with insurance companies, particularly in precarious times as insurers threaten to leave some areas with no ACA coverage because of poor market conditions or dithering in Washington, D.C. Some regulators had to MacGyver clever fixes to keep all their counties covered; their bag of tricks included offering flexibility in plan designs and premium rates.

Current and former commissioners contacted for this article say they are frequently asked by federal officials for their input. “Insurance commissioners have been consistently visible in Washington, D.C., over the years,” says Julie Mix McPeak, Tennessee’s top insurance regulator and president-elect of the National Association of Insurance Commissioners.

At the same time, former Maine commissioner Mila Kofman, who now runs the insurance exchange in Washington, D.C., says the ACA repeal debate marked the first time she’s seen a group of current and former commissioners come together to press Congress on a specific issue. Eleven current and 25 former commissioners signed a Sept. 25, 2017, letter urging federal lawmakers to reject the last-last-last-ditch effort to disable the ACA, the bill sponsored by Republican Sens. Bill Cassidy of Louisiana and Lindsay Graham of South Carolina.

Kofman says she can’t predict whether that same group will be heard from again, but doesn’t rule it out.

Schooling lawmakers

The commissioners’ major role in federal policy is educating lawmakers on the complexities of insurance, which is nothing if not arcane. “One cannot know everything there is to know about insurance, and it is important members of Congress continue to engage commissioners on critical policy matters,” comments McPeak.

Mike Kreidler

Mike Kreidler, Washington State Commissioner (photo: Easton Richmond Photography)

Kreidler, a former member of Congress himself, agrees that insurance regulators are in an important position to work with lawmakers on continuing fixes to health insurance markets. He just wishes they’d listen before they draft legislation rather than after. “We’re in a more reactionary role, which is probably not the most constructive or effective method when it comes to developing a new health insurance system for the country,” Kreidler says. “Insurance commissioners can be a valuable partner in these conversations, but it will take more time than Congress seems willing to spend.”

Many of the health policy ideas pursued by the Republican administration and Congress would shift regulation of health insurance to states. That would be welcomed by the state commissioners who believe they know better than federal bureaucrats how to manage their local markets. Among them would be Oklahoma Insurance Commissioner John Doak, who, unlike his colleagues who protested the Graham–Cassidy bill, appreciated that it would provide block grant funding to states. Doak told the Senate in September: “What we really need is an innovative, long-term solution that returns power back to the states to implement ideas tailored to fit each state’s specific needs.”

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