House Bill Includes Provision for ‘Insurance Czar’

Published August 6, 2009

A provision in the health care overhaul bill in the U.S. House of Representatives would create the position of Health Choices Commissioner, or “insurance czar.”

The insurance czar would be appointed by the president to oversee the Health Choices Administration, a new agency created by the current version of the House bill.

The appointee, who would not have to be confirmed by Congress, would be responsible for assessing fines on employers and individuals who do not provide or acquire health insurance, determining who qualifies for federal subsidies to purchase insurance, regulating private insurers’ marketing activities and use of funds, and determining what benefits and coverages must be included in health insurance plans each year.

No Choice Allowed

Twila Brase, president of the Citizens’ Council on Health Care, said the proposed position and role of an insurance czar and Health Choices Administration reminded her of George Orwell’s 1984.

“A Health Choices Commissioner and a Health Choices Administration are a perfect example of doublespeak,” Brase said. “It’s a euphemism meant to assure the public that there will be choices when there won’t be choices.

“Just as there was no love in Orwell’s Ministry of Love, there will be no choices in Obama’s Health Choices Administration,” Brase said.

Merrill Matthews, Ph.D., executive director of the Council for Affordable Health Insurance, agreed, saying, “The irony behind the proposed ‘Health Choices Commissioner’ is that all of the ‘choices’ would belong to the commissioner, not the patients,” he said.

Dual System Suggested

Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute, believes a balance between federal regulation and the private sector would be beneficial, much like the current system of banking regulation.

“There is a case to be made for a form of federal regulation of insurance,” Scandlen said. “A dual system would be best, where a company could choose between being regulated by the states or by the federal government.

“That is how banking regulation is currently set up,” Scandlen continued. “A bank may choose to be national in scope or local. That would work for insurers as well. Large national carriers could opt for a single set of federal regulations, but smaller regional carriers could choose to be regulated only in a few select states.”

Unfortunately, said Scandlen, the current bill does not provide for any such balance.

“There would be no choice or flexibility allowed,” Scandlen said. “There would be one massive, centralized regulator accountable to no one. With the recent experience we have had with similar centralized agencies like the SEC and Fannie Mae, this would be a good time to be cautious.”

Local Worries Abound

Some state-level policymakers worry such regulations will harm industry and consumers.

“Here in Indiana, our state Department of Insurance does a great job of overseeing the industry and protecting consumers,” said Indiana state Rep. Eric Koch (R-Bedford). “Should this become law, it would be a real step backward for us.”

“Our health insurance needs can be most effectively met by vigorous competition in the free market,” said Connecticut state Rep. John Hetherington (R-New Canaan). “The appointment of a czar is necessarily destructive of competition. I wish Nicholas II [had been] the last of the czars.”

Katie Emanuel ([email protected]) writes from Georgia.