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Health Reform: Consumer Reps Reject NAIC Role

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WASHINGTON BUREAU — At least 14 people who have represented consumer groups in National Association of Insurance Commissioners proceedings want to keep Congress from giving the NAIC authority over health coverage standards.

The consumer reps have written a letter to the Senate Finance Committee asking the committee to delete a health reform bill provision that would give the NAIC, Kansas City, Mo., a role in setting health insurance standards.

The consumer reps ask that rule-making authority be kept under the jurisdiction of government agencies “that operate under standards requiring transparency, independence, and open meetings.”

The NAIC does not operate independently of the insurance industry, and there are questions about the NAIC’s commitment to consumer concerns, the consumer reps contend.

A majority of the regulators who served as NAIC presidents from 1998 through 2007 went on to work for the insurance industry, as did many other insurance commissioners with leadership roles in the NAIC, the consumer reps write.

“This revolving door gives the impression that leadership positions at the NAIC are stepping-stones to careers in the insurance industry,” the consumer reps write.

The NAIC provision in question is part of the current draft of the America’s Health Future Act health reform bill. The Senate Finance Committee is continuing to go over the bill this week. Finance Committee Chairman Max Baucus, D-Mont., hopes to complete work on the bill and send it to the Senate floor by the end of the week.

A comparable health reform bill now being drafted by the House would create an independent federal agency to oversee consumer health care issues. The agency would be headed by a commissioner appointed by the president.

The federal consumer agency provision of the “committee print” of the health reform bill now being marked up in the House, Section 141 would give the new agency market conduct oversight authority as well as the authority to establish standards for the operation of the “public plan” that is part of the House bill.

Betty Ahrens, consumer rep who signed the consumer rep letter, tempered her criticism of the NAIC rule-setting provision in the AHFA bill with praise for the NAIC.

“We strongly support the valuable advisory role the NAIC has played this year in the health care deliberations,” Ahrens, who is director of the Iowa Citizen Action Network, Des Moines, Iowa, says in a separate statement.

Other consumer reps who signed the consumer rep letter have issued statements that are highly critical of the NAIC.

“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,” Kevin Lucia, a Georgetown University professor and consumer rep who signed the letter, says in a statement. “Based upon its usual manner of conducting business, the NAIC fails to meet any of these standards.”

Consumer advocates who have participated in the proceedings “have long recognized an institutional bias among insurance regulators toward the interests of the insurance industry,” says Birny Birnbaum, executive director of the Center for Economic Justice, based in Austin, Texas. “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. 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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