Washington – A consumer group says Gov. Dannel P. Malloy should avoid “going back to the days of Corrupticut” and replace Insurance Commissioner Katharine Wade as the key state regulator on a proposed mega-merger between Anthem and Cigna insurance companies.
The Connecticut Citizen Action Group (CCAG) and its allies, which include the Connecticut State Medical Society, oppose the proposed merger and another planned by Aetna and Humana, saying they could drive up premiums and limit treatment and coverage options.
On Thursday, CCAG began circulating a petition asking Malloy to replace Wade, a former Cigna employee, in the review of the Anthem-Cigna merger with “a truly independent actor who will put Connecticut’s interest over insurance companies.”
Connecticut Department of Insurance spokeswoman Donna Tommelleo and the governor’s office declined comment.
Opponents of the merger were angered by Wade’s decision to give state approval to the marriage of Aetna and Humana on Jan. 22 without public notice or a public hearing. Wade disclosed her decision only last week, responding to questions about the issue from the Connecticut Mirror.
On Thursday, the Connecticut State Medical Society filed a Freedom of Information Act request asking for all information the state insurance department used in making its decision.
“How can the public have any faith or confidence in the quality of CID’s due diligence process associated with the merger of such large – and in Aetna’s case, Connecticut-based – institutions?” asked state medical society Vice President Matthew Katz. “Given the secrecy with which CID made the determination, it is impossible to know whether even a shred of evidence was presented to suggest that the merger would result in improved health coverage, job retention or any other positive result for Connecticut residents.”
In a statement released May 26, the Insurance Department said that on Jan. 22 it “made the determination that the proposed acquisition would not substantially lessen competition or create a monopoly in Connecticut as Humana has a small market footprint in this state.”
The statement also said the department did not hold a public hearing because none was required since “Connecticut does not have a domestic Humana Insurer” and a “change of control application” was not required.
The groups opposing the insurance consolidations also are incensed by Wade’s refusal to recuse herself as the leading state regulator on the Anthem-Cigna merger, a $48 billion deal that was announced last year within weeks of the one between Aetna and Humana, which is worth about $37 billion. The two mergers would shrink the U.S. healthcare insurance market from five major insurers to three.
Wade is a former Cigna executive whose husband still works for the company.
The state ethics offices determined there was no conflict of interest.
But a story in the online International Business Times this week questioned the relationship between Wade and the insurers and fueled new criticisms of Wade and the Malloy administration on Thursday.
“She was a longtime Cigna lobbyist whose father-in-law works at a law firm that lobbies for the company, whose mother and brother previously worked at Cigna, and whose husband still does,” CCAG said. “She was also a top official of the major lobbying group for the state’s health insurance industry. As commissioner, she appointed a top deputy who worked at Cigna and she had a former longtime Cigna employee serve as an agency counsel in the merger review.”
The IBT story also said Malloy’s decision to appoint Wade to head the state’s insurance department last year came after Cigna, its lobbying firm Robinson & Cole and Anthem delivered more than $1.3 million to national and state political groups affiliated with Malloy, including the Democratic Governors Association (which the Connecticut governor heads), the Connecticut Democratic Party, Malloy’s own gubernatorial campaign and a political action committee supporting Connecticut Democrats.
“We made clear to people (in the Malloy administration) for quite some time we thought (Wade) was conflicted,” said CCAC Executive Director Tom Swan. “When more information came out it became clear back-door channels were not working.”
Swan’s group has also asked Malloy to pledge to not accept contributions from these companies “in any political committees that you are associated with.”
The insurance consolidations are also under review by the U.S. Justice Department’s antitrust division.
The American Medical Society, the American Medical Association, the American Hospital Association and unions representing health care workers are lobbying the Justice Department to reject the merger proposals.
Correction: An earlier version of this story incorrectly gave Insurance Commissioner Katharine Wade’s first name as Kathleen. It is Katharine.