Industry ties among state insurance commissioners raise concerns

Insurance company pillar

The sometimes-cozy relationship between state regulators and payers is raising questions about how rigorously these officials conduct oversight of the health insurance industry.

Although state insurance commissioners have the power to regulate premium hikes and investigate consumer complaints against insurers, many in the position maintain uncomfortably close ties to the industry, according to the Center for Public Integrity. In five of the seven states where insurance commissioners are elected, the insurance industry is allowed to donate to the commissioner’s campaign.

In other instances, state commissioners routinely accept dinners and drinks with company representatives, even in the midst of an investigation involving that company. The relationship calls into question the loyalties of those in an oversight position designed to protect consumers.

The revolving door between the insurance commissioner’s office and the industry is frequently in use. Over the last decade, 55 of the 109 insurance commissioners who left their job ended up working for an insurer, according to CPI, compared to just two who transitioned to consumer advocacy.

In 2008 for example, UnitedHealthcare attorneys frequently entertained former Arkansas Commissioner Julie Benafield Bowman while she was in the midst of an investigation regarding a provider’s billing complaint. Benafield ultimately ruled in the insurer’s favor and joined the company years later, before a judge vacated the decision.

“Many people consider the job an audition for a better-paying job,” former Indiana commissioner Sally McCarty told CPI.

Recently, the Connecticut Office of State Ethics questioned Connecticut insurance commissioner Katherine Wade for her ties to Cigna as the company sought approval to be acquired by Anthem. Earlier this month, Wade recused herself from the approval process because her role had become “highly politicized,” but denied any conflict of interest, according to the Connecticut Mirror.