NU Online News Service, Sept. 29, 3:48 p.m. EDT
WASHINGTON–Consumer representatives have asked the Senate Finance Committee to drop a proposed provision of health care reform legislation giving state regulators rule-making authority to draft health insurance standards.
The group said the nation's insurance regulators should be kept from the process because they are too close to the insurance industry and have a conflict of interest.
In a letter to the panel they asked that lawmakers delete a section being drafted that would give the National Association of Insurance Commissioners the authority for setting health coverage rules.
The group urged that rule-making authority be kept in the jurisdiction of government agencies "that operate under standards requiring transparency, independence and open meetings."
The letter was signed by 14 current and former consumer representatives who have been certified as public representatives to receive NAIC funds to attend that organization's meetings.
In its letter, the group said the NAIC does not operate independently of the insurance industry and also questioned NAIC's commitment to consumer concerns.
"Any institution given the authority to promulgate final regulations which have the force of law–especially those that will determine health insurance benefits for millions of Americans–must be bound, at the very least, by all of the standards which federal government agencies are currently required to follow during the rule-making process," said Kevin Lucia, a professor at Georgetown University and an NAIC- funded consumer rep.
"Based upon its usual manner of conducting business, the NAIC fails to meet any of these standards," the letter said.
The provision is contained in America's Health Future Act. The bill is now being worked on by the committee. The committee hopes to finish work on the bill by the end of the week and send it to the Senate floor.
Comparable legislation being drafted by the House would create an independent federal agency headed by a commissioner appointed by the president to oversee consumer health care issues.
The provision, Sec. 141 of the "committee print" of the health care reform bill now being drafted in the House, would have market conduct oversight authority as well as authority to establish standards for operation of the "public plan" that is part of the House bill.
Amongst the signers, Betty Ahrens, director of the Iowa Citizen Action Network, said that "while we strongly support the valuable advisory role the NAIC has played this year in the health care deliberations, we cannot support expansion of that role to include rule-making authority."
In the letter, the group said a majority of the NAIC presidents from 1998 through 2007 have gone to work for the industry they regulated, as have many other insurance commissioners with leadership roles in the NAIC.
"This revolving door gives the impression that leadership positions at the NAIC are stepping-stones to careers in the insurance industry," the letter said.
On the consumer advocacy issue, Birny Birnbaum, executive director of the Center for Economic Justice, based in Austin, Texas, said consumer advocates who have participated in the proceedings "have long recognized an institutional bias among insurance regulators toward the interests of the insurance industry."
"The consumer representatives who participate in its proceedings are significantly outnumbered at NAIC meetings by many hundreds of representatives from the insurance industry and industry-related groups," he added. "We need rule-makers to be independent of the insurance industry, and the NAIC clearly does not meet this vital standard."
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