Health is a hot topic in race for in­surance chief

Win­ner’s power over med­i­cal in­dus­try may be limited, but the job can be a bully pul­pit.

Los Angeles Times - - BUSINESS - By Pauline Bar­tolone

The per­son who wins the four-way race to be­come Cal­i­for­nia’s next in­surance com­mis­sioner will in­herit a job with broad au­thor­ity over poli­cies that cover homes, busi­nesses, cars and even air­planes.

But med­i­cal in­surance? Not so much. The com­mis­sioner’s di­rect con­trol over health in­sur­ers is limited, be­cause the Cal­i­for­nia Depart­ment of In­surance — headed by the com­mis­sioner — reg­u­lates only a small slice of the mar­ket.

Still, the job car­ries the power of the bully pul­pit, am­pli­fy­ing the com­mis­sioner’s voice on matters of re­gional, statewide and na­tional im­por­tance.

The in­cum­bent, Dave Jones, has used that bull­horn fre­quently to chas­tise health in­sur­ers, blast the Trump ad­min­is­tra­tion’s ef­forts to roll back the Af­ford­able Care Act and in­ter­ject his voice on sub­jects rang­ing from pre­scrip­tion drug prices to cli­mate change to women’s re­pro­duc­tive rights.

The four can­di­dates vy­ing in the June 5 pri­mary to re­place Jones — who is run­ning for at­tor­ney gen­eral — would no doubt fol­low his lead in mak­ing use of the soap box the com­mis­sioner’s of­fice pro­vides. Three of the four are ar­dent sup­port­ers of a statewide sin­gle-payer health­care sys­tem, which would re­place the cur­rent patch­work of pri­vate and public fund­ing with a sys­tem in which care is paid for and over­seen by the state gov­ern­ment. And they would use the of­fice to pro­mote it.

One of them, Demo­cratic state Sen. Ri­cardo Lara (DBell Gar­dens), said one of his big­gest pri­or­i­ties is “to en­sure that ev­ery­one gets health­care.” He is a strong pro­po­nent of gov­ern­men­trun health­care for all Cal­i­for­ni­ans and au­thor of the now-dor­mant leg­is­la­tion, Se­nate Bill 562, that would cre­ate such a sys­tem.

Nathalie Hrizi, a San Fran­cisco teacher-li­brar­ian

who is the Peace and Free­dom Party’s can­di­date, said she’s run­ning be­cause the com­mis­sioner’s of­fice is “part of the po­lit­i­cal movement … for sin­gle-payer health­care and so­cial­ism.” She added: “In­surance doesn’t serve a pro­duc­tive role in so­ci­ety.”

Asif Mah­mood, a Los An­ge­les pul­mo­nolo­gist and a Demo­crat, said that as a med­i­cal prac­ti­tioner, he reg­u­larly sees the fi­nan­cial chal­lenges peo­ple face with the high cost of care. As a re­sult, he said, he is best placed to find a “real so­lu­tion which in­cludes health­care for all, not health­care for most.”

Steve Poizner, a Sil­i­con Val­ley busi­ness­man, strongly op­poses the idea of gov­ern­ment-run health­care and said the can­di­dates who are ad­vo­cat­ing it “prob­a­bly should be run­ning for a different post.” He said he would push to elim­i­nate fraud and waste­ful health spend­ing and cre­ate a sys­tem that re­wards doc­tors and hos­pi­tals for the qual­ity of their care rather than the vol­ume of their ser­vices.

Poizner, who served as in­surance com­mis­sioner from 2007 to 2011 as a Repub­li­can and is run­ning now un­der no party ban­ner, leads the field with 20.7% of voter pref­er­ences, ac­cord­ing to a re­cent poll by Probol­sky Re­search.

Lara is in se­cond place with 13.7%, fol­lowed by Mah­mood with 6.3% and Hrizi with 5.9%. How­ever, more than half of the re­spon­dents were un­de­cided or de­clined to state their pref­er­ence. The can­di­dates who finish first and se­cond in the pri­mary will face off in the gen­eral elec­tion Nov. 6.

The com­mis­sioner’s au­thor­ity over the health in­surance in­dus­try has been eroded sig­nif­i­cantly in re­cent years, largely be­cause of Cal­i­for­nia’s bi­fur­cated sys­tem of reg­u­la­tion. Reg­u­la­tory dis­cre­tion has in­creas­ingly shifted to the Depart­ment of Man­aged Health Care, which over­sees not only HMOs but also some PPOs, which were pre­vi­ously the do­main of the com­mis­sioner.

This dual sys­tem of­ten has al­lowed in­sur­ers to drive a wedge be­tween the two agen­cies and es­sen­tially choose their reg­u­la­tors. Blue Shield of Cal­i­for­nia, for ex­am­ple, one of the state’s big­gest in­sur­ers, voted with its feet and is now mostly reg­u­lated by the the Depart­ment of Man­aged Health Care.

The in­surance com­mis­sioner has pri­mary reg­u­la­tory au­thor­ity over health plans that cover just un­der 10% of Cal­i­for­ni­ans en­rolled in com­mer­cial health plans, ac­cord­ing to the Cal­i­for­nia Health Care Foun­da­tion. Throw in the state’s nearly 13 mil­lion man­aged-care Med­i­Cal plans, and the com­mis­sioner’s share drops to about 5%.

De­spite this lim­i­ta­tion, the Depart­ment of In­surance has statu­tory pow­ers it can — and does — ex­er­cise. It pur­sues fraud, fines in­sur­ers that break the law and in­ves­ti­gates con­sumer com­plaints about cov­er­age. It also over­sees the state’s 360,000 li­censed in­surance agents, with the power to in­ves­ti­gate them, ar­rest them and turn them over for pros­e­cu­tion.

The depart­ment can also re­quire health plans to com­ply with cer­tain cov­er­age re­quire­ments. Jones, for ex­am­ple, has is­sued rules to en­sure plans have a ro­bust net­work of providers, cover autism treat­ment and pro­vide equal ac­cess to care for trans­gen­der peo­ple.

The com­mis­sioner also plays a role in ex­am­in­ing merger pro­pos­als.

One power the in­surance com­mis­sioner does not have, which Jones has of­ten lamented, is the au­thor­ity to pre­vent in­sur­ers from im­pos­ing large pre­mium in­creases — a mat­ter of sig­nif­i­cant public con­cern as rates have soared in re­cent years. The Depart­ment of Man­aged Health Care doesn’t have that power ei­ther.

The com­mis­sioner does ex­am­ine pro­posed rate in­creases, and on oc­ca­sion Jones has per­suaded in­sur­ers to re­duce the size of them.

Lara pro­poses rolling the two reg­u­la­tors into one, un­der the in­surance com­mis­sioner, and grant­ing the newly com­bined agency the power to re­ject what it deems to be un­rea­son­able rate hikes by in­sur­ers. That would help “bring prices down on be­half of con­sumers,” Lara said.

A bal­lot mea­sure to al­low the in­surance com­mis­sioner to re­ject health in­surance rate in­creases failed in 2014, as did a state bill in 2012.

In pre­vi­ous years, can­di­dates talked a lot more about keep­ing pre­mi­ums down, but this year much of the cam­paign rhetoric has fo­cused on the idea of univer­sal health­care, said Stephen Shivin­sky, a former Blue Shield ex­ec­u­tive who is now con­sult­ing for health in­sur­ers.

“Trump’s elec­tion changed ev­ery­thing,” Shivin­sky said. Fed­eral at­tempts to re­peal the Af­ford­able Care Act reignited ques­tions about how health­care is de­liv­ered, and “that re­ally brought about the de­bate on sin­gle payer,” he said.

Gary South, a long­time Cal­i­for­nia cam­paign strate­gist, said he’s not sur­prised the Demo­cratic can­di­dates are talk­ing up their sup­port for univer­sal health­care, es­pe­cially sin­gle payer.

“If you’re go­ing to run as a Demo­crat, you have to be for sin­gle payer,” South said. Not be­ing so “would be like run­ning for gov­er­nor of Cal­i­for­nia and op­pos­ing gun con­trol.”

Poizner, the ap­par­ent front-run­ner, not only op­poses gov­ern­ment-run health­care but also thinks it is way be­yond the purview of the job he’s seek­ing. His goals for health­care are rel­a­tively mod­est, in­clud­ing a study of how the money in Cal­i­for­nia’s $400-bil­lion health­care sys­tem is spent, with an eye to­ward trim­ming the fat.

“As in­surance com­mis­sioner, I want to fo­cus on what I can get done,” he said.

Kent Nishimura Los An­ge­les Times

AS STATE in­surance com­mis­sioner, Dave Jones of­ten crit­i­cized health in­sur­ers and the Trump ad­min­is­tra­tion’s push to roll back the Af­ford­able Care Act.

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