The press has been abuzz lately about the possible appointment of Harvard law professor Elizabeth Warren to head the Federal Reserve’s new consumer financial protection bureau. There’s been a ton of speculation about whether Warren (who might be a tough regulator), government bureaucrats (who might play nicely with the banks), or assorted other consumer advocates will get Obama’s blessing.
In the meantime, the media has missed an equally important story about the new consumer insurance operation in the Department of Health and Human Services—you know, Sebelius territory, where monumental decisions will be made about the health insurance consumers will be required to buy. Mike Dennison, a state house reporter for Lee Newspapers, who kept a close eye on Max Baucus last year, tells us that Liz Fowler will become deputy director of the Office of Consumer Information and Insurance Oversight at HHS.
The job will presumably entail figuring out what kind of disclosures insurance companies will have to (or be willing to) make about the policies they will be selling. Fowler will have to satisfy insurers, which generally like to disclose as little as possible, and consumers, who will be required to buy coverage. Fowler might also be called on to oversee the possible shenanigans of the insurers as they begin to snare all the new business Congress is sending their way. Will she be able to say “no” to them in the interests of the public?
Fowler, as chief health counsel for the Senate Finance Committee, worked closely with Baucus last year crafting the health reform law. You might say she and her boss are pretty much responsible for what finally emerged from the sausage grinder. Fowler, who also has a doctorate in public health, worked for the Senate Finance Committee from 2001 to 2005, where she was a major force in writing the Medicare prescription drug legislation that also bestowed another gift on the insurance companies—the privatized Part D drug benefit. Before that, she was a lobbyist at Hogan & Hartson, a D.C. law firm which represented a bunch of health care interests.
When the drug law took effect in early 2006, Fowler left the Baucus committee and signed on as a vice president and senior lobbyist for WellPoint until Baucus asked her to come back in 2008 to help out with the health reform bill. It’s a sure bet that WellPoint, a big time player in the reform effort and foe of the pubic plan, was heard as the bill developed. As Campaign Desk pointed out, WellPoint told its policyholders in a series of weekly updates that it wanted its plans grandfathered—that is, exempt from some provisions of the new law. Indeed, that is what the bill did. How that will play out down the road and what those policies offer and how they will be sold is now is the province of the new HHS office, with Fowler in a key position to call the shots. Sort of a fox-guarding-the-chicken-coop arrangement; so typical of American regulatory agencies.
Perhaps media silence about Fowler’s connection with WellPoint stems from a Politico story last spring that talked about important health care honchos, and Fowler was one of them. Politico called her a “backroom operator” who described her job as getting from point A to point B. Politico gave a brief synopsis of her work history, reporting that, after the Medicare drug law passed, Fowler got burned out and “left for the private sector.” But the story did not mention WellPoint by name. Perhaps it’s as David Sirota, the liberal political commentator, suggested on the Huffington Post: “the political press corps in the nation’s capital no longer sees this kind of revolving door corruption as even mildly problematic, much less newsworthy…ubiquitous to the point of invisible in the eyes of most of the so-called watchdogs.”
We note that Fowler will be working closely with Karen Pollitz, a Georgetown University academic hired to direct the Division of Consumer Support in the new consumer office. Last year, Pollitz testified before the Senate Commerce Committee, where she admitted that the incentive for insurance companies to still select people based on the risk they present—the pre-ex thing—“will not go away,” even though carriers cannot turn someone down for having a health problem. She then ticked off a bunch of ways the carriers can get around the prohibition. Pollitz told senators that coverage information for insurance policies might look like labels found on canned peaches.
I know the press is not terribly interested in covering “boring” regulators, but when there are fox-guarding-chicken-coop appointments, the media should be taking a closer look—especially after the foxes take up residence. I, for one, would be very interested in how WellPoint, a company that selects good risks better than just about any other insurer, will carry on its business under the watchful eye of its former lobbyist, Liz Fowler. As for the canned peach labels, we’ll have to wait and see how much insurers want to be like grocery manufacturers and more important how much consumers want to choose insurance like canned fruit. Good stories in the making.