Wash. insurance regulator supports Obamacare — and rejected Obama’s ‘fix.’ Here’s why.

November 16, 2013
(Washington Department of Insurance)
(Washington Department of Insurance)

Mike Kreidler has served as insurance commissioner in Washington state since 2000. Kreidler, an optometrist by training, also served one term in the House of Representatives and 16 years in the state legislature.

On Thursday, Kreidler was the first insurance commissioner to reject President Obama's proposal that would give insurers and extra year to sell plans that do not comply with the Affordable Care Act. He said, in a statement, that he was acting "in the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers."

Kreidler and I spoke Friday morning about his decision, why he thinks it will be difficult for any state to move forward on the Obama proposal and how he learned of the president's plans. What follows is a transcript of our discussion, lightly edited for clarity and length.

Sarah Kliff: So it sounds like you've had a very busy two days now. When did you learn of the president's proposal?

Mike Kreidler:  I went to the gym early, and came back out of the gym when I learned that the president was getting ready to allow individuals to keep their plans in the individual market if they want to. Then I thought I'd better get to the office.

SK: Did you get any warning about the announcement?

MK: The only sense I had, to be honest, was because of the bills that were before Congress. We'd done some discussion about those bills the day before. What I didn’t expect or anticipate was the fact the president would make this announcement.

I knew it was serious, with all the talk in Congress, but I was also probably in denial saying its not going to happen. The reason I was in denial is I'd looked at it practically as an insurance commissioner. How do you implement something after this is already afoot and insurers made all the changes. We've been doing everything in our power, working extra hour and burning the midnight oil to get everything set up to implement the ACA here in the state of Washington. We're getting people signed up and the Web site is working.

SK: Putting aside policy concerns for a moment, did you think it would be logistically possible to allow these plans that were initially barred from the market back in? 

MK: If that did happen, they'd have a key interest in wanting to re-rate their products. They'd be trying to do that when people were already signing up. That's true for any state, red or blue, they're going to be challenged to implement this without having a significant impact.

It’s too late in the game, certainly for the state of Washington. The health plans themselves have said that, as you've heard from AHIP How do you have one set of rules for some plans and another for others? It would have been very challenging.

Health carriers in our state were not excited about prospects of this. And the last thing I wanted to see was the market destabilizing  or seeing significant rate increases impacting the number of people signing up for health insurance. All of those things were going to be compromised. It’s brought about a lot of consternation.

I strongly support the Affordable Care Act. I know the president wants it to succeed. And I'm supporting the president by making the Affordable Care Act work in the state of Washington.

SK: How many cancellation notices have Washingtonians received?

MK: There are about 290,000 people in the individual market, and all of them were sent out discontinuation and replacement notices. Those notices we don't have authority to regulate, but we did ask the carriers if we could see them and in a number of cases made suggested changes to them as they went.

There are people out there who are not happy with the fact they received those notices. Not infrequently the carrier has identified a replacement for them that costs more. What people don't realize in many cases, and we’ve worked diligently to fix this, is they need to go look at other plans and what other companies are offering to see if there's a better fit for them.

SK: It only took you a few hours, after the president's announcement, to issue a statement saying you would not allow the types of renewals he proposed. How'd you move so quickly?

MK: My fear was, with these continued policies, it could have a significant impact on adverse selection, with the sick people getting into the health-care law and the healthy people staying out.

We had spoken to some of the carriers. I’d also been on a national phone call talking about the federal legislation. Right at the time the president announced this, there was an emergency meeting of insurance commissioners. When they called the first meeting, before the president spoke, I was still trying to get back from the gym, since I'm out on the West Coast. It was one of those emails that had big exclamation points in it.

It became pretty crystal clear this was not going to work for us.

SK: How did that become clear to you? Most states are taking a much longer time to make this decision.

MK: I've been bumping around health-care issues for a long time. I was a practicing optometrist, I've worked at a large HMO and picked up a masters in public health thinking Nixon would do health reform.

I didn’t look at it like rocket science. I moved pretty quick. Part of that was I wanted to make sure that there wasn't a lot of uncertainty in the state of Washington over the course we're going to follow. The longer you went, the more it would be unsettling. For people who are going to sign up for health insurance, we wanted to send a very clear message. The longer I took, the more uncertainty there would be.

SK: Have you gotten any push back from consumers? I'm curious if you'll have people in Washington wondering why other people get to extend their policies in 2014, but they don't. 

MK:I haven't really followed what other states are doing. I know there are states who are saying, how can you do that, how can you do make that work?  I feel their pain, I'm very empathetic. I wish things were different. But if you want this law to work — and I do — then this is what we have to do.

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