Here’s Why the D.C. Insurance Commissioner’s Critique Ended Badly
One day after William P. White — the insurance commissioner for the District of Columbia — critiqued President Barack Obama for allowing Americans to keep policies not compliant with the Affordable Care Act’s consumer protection policies, he was dismissed from his job.
Through a source familiar with the matter, CNN reported that the insurance commissioner was not forced out of his position because of the stance he took on how the president rephrased his promise that any American who liked his or her current health insurance plan could keep it. Rather, White’s behavior was deemed inappropriate because of “how he went about it,” according to the district official who spoke to CNN.
While White may have expressed an uncontroversial opinion, the problem appears to be that he failed to notify his immediate supervisor, Washington’s district mayor. A series of interviews conducted by the Washington Post shed more light on the events that led to his firing, which came despite a late-night apology to D.C. Mayor Vincent C. Gray.
According to one Post source, Gray’s chief of staff, Christopher Murphy, called White to ask why the statement was published without the approval of the mayor’s office. White had emailed a copy of the statement to Murphy but he never waited for its approval; the statement became public on the city’s website in 20 minutes.
For “a very long time,” White did not admit he had made a serious mistake, one city official told the Post.
Then, defending his decision, White told interviewers on both Saturday and Sunday that he had posted statements to the website numerous times without approval, although, typically, the issues involved were much less contentious. In this instance, White felt a need to issue a timely response to Obama’s announcement, the Washington Post reports. Only after speaking with Deputy Mayor Victor L. Hoskins and City Administrator Allen Y. Lew did White “seem to understand the severity of the error,” according to one source.
“I was concerned that failure to respond might lead to some of the problems we encountered last year with the marketplace changes and the initial rollout of the exchange; the industry and their lobbyists took advantage of our initial silence in the press and used it to undermine our efforts,” White wrote, according to a copy of an email made available to the Washington Post. “I thought a statement as a regulator would buy us some time to look at our options.”
He concluded the email with an apology: “I take full responsibility for the press statement and its release. I understand that this was a failure in our process because I should have clarified my intentions and sought approval from [the executive office of the mayor] before issuing the press statement. I apologize for any difficulties this caused.”
Still, an official told CNN that Washington, D.C., may very well decide not to allow insurers to keep selling policies in 2014 that do not comply with the Affordable Care Act’s requirements on the types of care provided and the total amount of coverage offered. “The D.C. exchange is doing well,” the official said to the news network, on the condition of anonymity. “We probably aren’t going to side with the White House.”
When it became clear that Obama’s oft-repeated promise — “If you like your current health insurance plan you can keep it” — could not be kept, the anger from individuals whose policies were cancelled by their insurers and the bipartisan protest from lawmakers in Congress forced the administration to make a change. White was not the only official to speak out against the administration’s decision to allow insurance companies to continue selling similar policies to the ones that were initially cancelled.
Jim Donelon, president of the National Association of Insurance Commissioners, on Thursday warned that the president’s adjustment may not be plausible. “This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond,” Donelon said in a statement. Similarly, Mike Kreidler, who has served as insurance commissioner in Washington state since 2000, has rejected that rule change.
Kreidler acknowledged that many individuals were “upset” by the termination notices they received from their health plans, but he expressed “serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.” His opposition to Obama’s proposal is rooted in a desire to keep the “consumer protections we have enacted” and ensure that health insurance costs remain low for all consumers.
“We are staying the course,” Kreidler said in a statement released Thursday. “We will not be allowing insurance companies to extend their policies. I believe this is in the best interest of the health insurance market in Washington [state].”
In words that echoed the fears of Donelon and Kreidler, White also rejected the president’s decision. “The action … undercuts the purpose of the exchanges, including the District’s DC Health Link, by creating exceptions that make it more difficult for them to operate,” he wrote in his statement posted to the Washington, D.C., government website. “We concur with that assessment,” he added, referring to the comments made by the National Association of Insurance Commissioners and Donelon.
For them, the problem with Obama’s proposal is that the premiums in the new federally facilitated and state-run insurance exchanges were calculated based on the assumption that young, healthy, and therefore cheap-to-insure individuals would be moved into the new marketplaces because the plans they are currently enrolled in would not comply with the Affordable Care Act’s new requirements.
If those healthier individuals stick with their current plans, the risk pools of the new insurance exchanges will be dominated by older, sicker people, who are more like to find more affordable policies through the marketplace. Exchange risk pools must be broad enough to balance out the proportionally higher medical costs of the sicker and older individuals, who will likely be among the first to sign up.
Policy prices have already been set for 2014. If current rates are not profitable, insurers could hike premiums the following year, which could cause more people to drop out of the system, creating what could be a self-feeding cycle of higher premiums and fewer enrollments. Alternatively, insurers could also leave exchanges, decreasing the competition needed to keep policy prices low. Either way, insurance offered on the exchanges could become less affordable, thereby undermining the success of the health care reform.