Marcy Morrison, the Colorado insurance commissioner, has made it clear that she supports keeping insurance regulation at a state level. I’m sure most state insurance commissioners agree with her point of view, and are likely less than pleased with the notion of a federal “insurance czar”. The creation of a Health Choices Commissioner is part of the reform bill drafted by House Democrats, and would basically duplicate a lot of the responsibilities currently handled by state insurance commissioners. This person would be in charge of determining who qualifies for health insurance premium subsidies, what sort of benefits would be offered, what percentage of premiums are being spent on claims, and how insurance companies market their products.
It’s not clear if there would still be any room for state insurance commissioners in the mix, or if their authority over health insurance issues would be stripped away (obviously there are still lots of other types of insurance for them to regulate, and those products wouldn’t be impacted by the creation of the federal insurance czar).
I think that Ms. Morrison does a good job for the people of Colorado. I can’t speak for other lines of insurance, but I think that our health insurance industry here is well regulated. In the individual market, there are numerous plans available, and robust competition among carriers. There is an active high risk pool with subsidies available for people with household incomes below $50,000. Of course there are scams and cruddy insurance policies here too, but I believe the Colorado division of insurance does a good job of confronting those companies. Overall, I think Colorado does a good job of balancing consumer protection and business interests.
This is not the case in all states. Jay and I have talked with agents in other states who have only a handful of options for their clients, because regulations are so strict that most health insurance carriers opt to not do business in the state. On the other end of the spectrum, there are states with exceedingly lax regulations, leaving consumers vulnerable to fraud. There are states where people who don’t have employer-sponsored health insurance and can’t qualify for individual insurance have no option at all, because the states don’t have risk pool coverage.
So feelings about a federal insurance commissioner probably vary a lot depending on what state you’re in. If such a position were to be created, I’d like to see a lot of Colorado’s current regulatory practicies carried over to the national level. My guess is that states will rebel against the notion of giving up regulatory power to a federal entity, and that this will become a bargaining chip on the table, eventually getting dumped in favor of letting states continue to regulate their own insurance markets.
