Advocates ask HHS to intervene in exchange board composition

A small business owner and critic of the state’s health insurance exchange board has asked a top federal health official to intervene and urge Connecticut leaders to change the board’s composition.

In a letter to U.S. Department of Health and Human Services Secretary Kathleen Sebelius, Kevin Galvin, president of Small Business for a Healthy Connecticut, wrote that the board fails to meet federal and state standards, and that its composition “could invite legal challenges” from consumers, small businesses or insurers that don’t have links to board members and whose applications to sell insurance through the exchange are denied.

“Today, we ask you to intervene with Connecticut’s policymakers, and to urge them in the strongest language possible to remove health insurance industry influence and to expand consumer and small business representation on the Connecticut Health Insurance Exchange Board,” Galvin wrote.

He and other critics of the board have taken issue with the appointment of three former insurance executives to the board, which is overseeing the development of a marketplace for purchasing health care coverage as part of federal health reform.

But some board members and people who selected them say the appointments fit within the requirements and that it’s important to have people on the board who understand insurance.

Board member Mickey Herbert, for example, has noted that in addition to his experience as CEO of the insurer ConnectiCare — from which he retired last year — he has experience purchasing insurance for a small business, and has been involved in efforts to figure out how to expand insurance coverage to all state residents.

The other board members that advocates have sought to remove are Robert Scalettar, a physician who has held top medical positions at Aetna Better Health, AmeriChoice by UnitedHealthcare, and Anthem Blue Cross and Blue Shield, and Mary Fox, a former senior vice president for Aetna Product Group. Neither currently works for insurers.

In his letter, Galvin wrote that at least one member of the board “was specifically recommended by the insurance industry’s lobbyist, and two have been openly involved in efforts to stifle reform.”

“‘Exchanges are intended to support consumers, including small businesses, and as such, the majority of the voting members of governing boards should be individuals that represent their interests,'” Galvin wrote, quoting a proposed federal regulation. “Yet, Connecticut’s 10-member Exchange board includes no voting consumer representatives and only one small business owner.”

Representatives for HHS did not say whether Sebelius would intervene.

“To ensure exchanges represent the interests of consumers and small businesses, we have proposed that the governing board must represent consumer interests and that the voting majority cannot be made up of representatives of health insurance issuers, agents, or brokers, or any other individual licensed to sell health insurance,” said Bennett Blodgett, a spokesman for the department’s Center for Medicare & Medicaid Services.

According to CMS, the proposed federal regulation for exchanges gives states discretion on the membership of the exchange boards, although it requires that the interests of consumers and small businesses be represented. The final rule has not yet been issued.

Galvin also pointed to state law, which prohibits exchange board members from being affiliated with health care industry groups, including insurers, and said that state officials who appointed board members did not honor the law. In addition, he wrote, state law calls for board members to have expertise in certain areas, but most members do not have the qualifications to match.

Galvin’s letter is the latest effort to get the board changed. Earlier this month, representatives from eight groups, including Galvin, asked the Office of State Ethics to investigate possible conflicts of interest among board members.

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