Appointments of federal watchdogs suggest more tough scrutiny for insurers

Angoff (Courtesy Of Kaiser Health News - Courtesy Of Kaiser Health News)
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By Julie Appleby
Kaiser Health News
Tuesday, June 1, 2010

Pounded by the Obama administration for raising premiums, health insurers now must reckon with a foursome of longtime industry watchdogs who are helping steer the federal government's effort to overhaul the private insurance market.

The four have top spots in the newly minted Office of Consumer Information and Insurance Oversight, whose work will be key to the success -- or failure -- of the new health-care law, which vastly expands federal authority over health insurance, traditionally a state-regulated industry.

On this year's to-do list: writing rules to define when premium increases are "unreasonable," creating coverage for people who cannot get it because of health conditions and making sure insurers comply with consumer protections.

The new director of the office is Jay Angoff, a former Missouri insurance commissioner who once played keyboard in the Brooklyn Bridge rock band. He gained a reputation in Missouri as a demanding but fair regulator who saved the state millions of dollars by creating a "competitive bidding" process for insurers that wanted to cover state employees. A top priority now, he said in an interview, is to "make sure consumers have as much market power as possible."

Joining him are former Maryland insurance commissioner Steve Larsen, who in 2003 rejected the sale of nonprofit insurer CareFirst Blue Cross Blue Shield; former Georgetown University professor Karen Pollitz, a longtime critic of the individual insurance market; and Richard Popper, who runs Maryland's insurance program for people who cannot get coverage because they have health problems.

Their appointments suggest that insurers will continue to face tough scrutiny as the administration and Democrats -- with an eye to the November elections -- play up the benefits of the new law, while Republicans denounce it as a costly government intrusion.

"It will be them against the insurance companies, them against employers, trying to do everything to advance these policies to make the plan look better," said James Gelfand, director of health policy for the U.S. Chamber of Commerce, which opposed the law.

Angoff played down possible conflict, saying, "We work with industry where we can, and where the industry is overreaching or not complying with the law, we will make the changes we need to." He said he is pleased that many insurers have volunteered to keep young adults on their parents' policies up to age 26 -- even before the law requires it.

In putting the law into effect, his office will have to work closely with states.

That's "one of the most delicate dances of federalism" ever, said law professor Sara Rosenbaum, chairman of the department of health policy at George Washington University. "You could not ask for three better people to be the dance partners."

Still, "they have an impossible job ahead of them," said Robert Laszewski, a former insurance industry executive who runs a consulting firm. "Any decision they make will wrong someone, somehow."

-- Jay Angoff. Angoff was most recently head of the insurance litigation department, which sues insurers on behalf of consumers, for the Washington-based law firm Mehri & Skalet. As Missouri's insurance commissioner in the 1990s, he required Blue Cross of Missouri to create a $400 million foundation to convert to a for-profit entity.

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