01:00 AM EDT on Tuesday, June 23, 2009
By FELICE J. FREYER and KATHERINE GREGG
Journal Staff Writers
The proposal to eliminate the state Office of the Health Insurance Commissioner stirred growing controversy Monday, as Governor Carcieri denounced it as “a mistake,” at least two lawmakers moved to preserve the office, and advocates scheduled a news conference for Tuesday.
Meanwhile, the House leadership remained mum about whether it will hold fast to a proposal that took many by surprise. “It’s one of several items that are still under discussion,” said Larry Berman, House spokesman.
The House Finance Committee last week approved a $7.76-billion tax-and-spending plan that would wipe out the $700,000 budget for the three-member commissioner’s office, led by Christopher F. Koller. The plan also calls for the repeal of the 2004 law that created the office, which resulted from a scandal involving Blue Cross & Blue Shield of Rhode Island.
The full House will vote on the committee’s budget plan Wednesday. Lawmakers had until 4 p.m. Monday to submit proposed amendments. Representatives Deborah L. Ruggiero, D-Jamestown, and Frank Ferri, D-Warwick, both filed amendments to save Koller’s position.
“We truly need in this state a watchdog over the health insurers and that’s what this office has done, saving small businesses and consumers millions of dollars through rate increase reductions,” Ruggiero said.
Carcieri praised Koller for asking three health insurers to withdraw their recent request for rate increases. (Before the office was established, rate increases received no public scrutiny; subscribers learned about them when they got their bills.)
“The role of the health insurance commissioner is to protect consumers and improve the quality of our health system. I cannot fathom how the General Assembly would propose abolishing the Office of Health Commissioner as part of their budget plan,” the governor said in a statement.
Business and health-care groups, led by Lt. Gov. Elizabeth H. Roberts, the Rhode Island Business Group on Health and the Rhode Island Medical Society, plan to hold a news conference at the State House at 12:30 p.m. on Tuesday, to implore lawmakers to keep Koller’s office.
After the Finance Committee voted on its budget plan last week, its chairman, Steven M. Costantino, said Koller’s duties could be handled by other government agencies, such as the Department of Business Regulation.
Five years ago, however, Costantino had faulted DBR for lax oversight. He co-chaired a special committee that crafted the law creating the commissioner’s office and giving it broad powers to regulate health insurers.
The law came after a scandal involving Blue Cross & Blue Shield of Rhode Island that sparked public outrage in 2004.
Blue Cross gave its CEO, Ronald A. Battista, a $600,000 loan to help pay for a divorce and build a house for his new wife. Then Blue Cross told Battista he didn’t have to repay the loan.
Top executives and directors of Blue Cross used subscribers’ money to finance a weekend “planning session” at a swank Cape Cod resort.
Blue Cross financed a public-access television program hosted by the chairman of the Senate committee that dealt with health-insurance matters and made questionable payments to another influential senator. Although a nonprofit entity, the company was paying its board members annual salaries ranging from $12,500 to $20,000.
Meanwhile, Blue Cross was raising premiums and building its reserves. Some small business owners, unable to afford health insurance, had to drop coverage for their employees. At the same time, doctors complained their pay was so low they couldn’t recruit new doctors into the state.
Battista eventually resigned –– with a $3.1-million severance package.
However excessive the perks seemed to most Rhode Islanders, it is unlikely that they accounted for much of the increases in premiums, at a time when medical costs were soaring. But they focused attention on Blue Cross, a not-for-profit insurer established by the state for the public good, and on the failure of the state to oversee its activities.
The Department of Business Regulation, required to check that insurers were solvent, rarely looked deeper. Its director, Marilyn Shannon McConaghy, was replaced in the wake of the Blue Cross scandal.
The General Assembly created the commissioner’s office, with new powers to require health insurers to work to keep health insurance affordable, to treat providers fairly and to improve the health-care system around the state.
|
