House Speaker Joins Sen. Kelly: Wade Should Not Preside Over Cigna-Anthem Merger [Courant]

June 12, 2016

Pressure continues to mount for Insurance Commissioner Katharine Wade, as the outgoing House Speaker added his voice to Republican colleagues, who have repeatedly said she should recuse herself in the review of Anthem’s acquisition of Cigna.

“At a minimum, the commissioner should recuse herself from further involvement in the Cigna-Anthem merger review,” said Rep. Brandon Sharkey D-Hamden. “Whether a potential conflict crosses a legal ethical line should not be the only factor here. Perception of a conflict is also an important part of the equation, and most onlookers, including consumer and healthcare advocates, following this issue all have the same perception.”

Several Republican legislators already asked Wade to recuse herself in the review process of the merger last fall, and Friday, Senate Minority Leader Sen. Len Fasano and Insurance Committee Ranking Member Kevin Kelly, R-Stratford, issued a press release asking again for her to step back from the review. They cited a story by the International Business Times and a Courant editorial.

“If she had recused herself as we asked last year, she would not be facing calls for her resignation now. Today we reemphasize our call for her to recuse herself from the merger in question,” they said.

Universal Health Care Foundation of Connecticut sponsored an online petition a week ago that has garnered hundreds of signatures, spokeswoman Lynne Ide said. The group, along with the Connecticut Citizen Action Group, was also critical of Wade’s approval of the Aetna-Humana merger without a public hearing.

Wade, who was unanimously approved by the state Senate to become insurance commissioner in 2015, worked for Cigna from 1992 to 2013, ending her career there supervising the company’s lobbying operations.

Gov. Dannel P. Malloy said Friday Wade should not withdraw, because she has no conflict.
“Quite frankly we need a steady hand directing our approach to what is a very complicated issue,” he said.
The petition drive came one day after a story was published online with the headline “How Insurers Pump Money into Politics” by the International Business Times

The story suggested that Wade could not be impartial because she worked for Cigna and because her husband still works there.
Wade defended herself in a statement: “I am following the Connecticut ethics statutes and I have taken the appropriate measures that allow me to carry out my duties as Insurance Commissioner. I am confident that nothing in my professional background or in my family’s associations will adversely affect my ability to take action fairly, objectively and in the public interest. Consumer protection is first and foremost the mission of state insurance regulators and safeguarding the best interest of Connecticut consumers is a mission I take very seriously.”

Insurance Committee Vice Chairman David Zoni, D-Southington, said the history between Wade and Cigna “gives the perception of [a conflict of interest], whether it exists or not.”

He said that as a public official, “You’re torn between the optics of what it looks like, what the perception looks like, and doing your job. It’s a judgment call.”

Zoni said he wouldn’t ask that Wade recuse herself, because, he said, “You have to make the call. Others can’t do that for you.”
But he said, “I don’t know that I would’ve done that,” referring to her decision to continue to oversee the merger.

Bridgeport resident and community advocate Gail Janensch learned about Wade’s ties to Cigna through an email blast from the Universal Health Care Foundation. She tweeted: “CT Insurance Commissioner K Wade is too closely tied to Cigna to be fair about bad consequences for consumers if Anthem & Cigna R merged,” said she learned about the issue from an email blast from the Universal Health Care Foundation.

Janensch said it’s possible she could be eventually be affected if she and her husband’s retiree health care coverage from Quinnipiac, now contracted with Anthem, becomes more expensive.

But her larger concern is that if insurers amass too much pricing power through consolidation, it could damage the viability of Obamacare.
“If we don’t have adequate competition, and if our regulators, if they aren’t wary and extra careful, we’re going to be back in a situation where many people aren’t adequately covered by health insurance,” she said.

For those who wholeheartedly support Wade, the fact that the Office of State Ethics said Wade has no conflict of interest is key.
Committee Co-Chairman Joe Crisco, D-Woodbridge, issued a statement that said: “The state’s independent Ethics Commission has already issued a decision in this matter, ruling that Commissioner Wade does not need to recuse herself. I would expect Commissioner Wade to continue to hold herself to the highest ethical standards in all of her duties as state insurance commissioner.”

Wade issued a statement Friday that said: “I am following the Connecticut ethics statutes and I have taken the appropriate measures that allow me to carry out my duties as Insurance Commissioner. I have been and will continue to be in consultation with the Office of State Ethics as necessary and appropriate.”

Carol Carson, executive director of the Office of State Ethics, noted that her office ruled in December that Wade has no conflict of interest.
“The code of ethics does not speak of appearances of conflict, only actualities,” Carson said. An example of an actual conflict of interest would be if Wade’s husband had been promised a promotion if the merger went through — or if the couple knew his job would be eliminated because an Anthem employee would get his role in the combined company.

Carson said the IBT coverage was all about the appearance of a conflict of interest.
Kelly said that matters.

“We need to have the faith of the people of Connecticut that they can trust what’s happening that it can be done without bias,” he said in an interview Thursday. He said the donations of insurers to Malloy’s campaign “raises an eyebrow.”

Unlike the Universal Health Care Foundation, which opposes the merger, Kelly said he doesn’t have a position on its approval.
But he said the fact that Wade has refused to recuse herself “starts to cast a shadow on everything that the Insurance Department is going to be doing.”

One of those things is considering rate increases requested by insurers.

Zoni said none of his constituents have complained about Wade’s ties to Cigna, but they are talking about the insurance rate requests submitted this week, some of which exceed 20 percent.

Zoni said he’s confident that professionals in the Insurance Department will only allow increases that are justified by the facts of how much insurers have been paying out in claims, and the best projections of what claims could be next year.
“It’s kind of like a negotiation,” he said, describing the insurers’ requests. “They probably know that’s not what they’re going to get.”