Connecticut Secrecy Bill Could Prevent Public From Knowing Important Merger Information

June 14, 2016

 

State Attorneys General and the Department of Justice conduct merger investigations that are almost entirely confidential. By contrast, State Insurance Commissioners fully analyze health insurance markets and mergers in the open, and can broaden the scope of the investigation or consider additional factors after listening to the public. For these reasons, it is extremely worrying that Connecticut Governor Dannel Malloy recently signed a secrecy bill into law that will empower state officials to conceal key documents about health insurers. This bill is not in the best interests of consumers and could possibly prevent the public from knowing important information.

 

The new law states that “all workpapers, recorded information, [and] documents” received by state regulators from insurance companies during their investigations “shall be confidential, shall not be subject to subpoena and shall not be made public.” It was signed into law on Friday, June 10th, and will take effect in October 2016. Connecticut Insurance Commissioner Katherine Wade supported the change, and her office told Connecticut state lawmakers that the bill was important because it would let regulators protect information that “if revealed could cause harm to the insurance company, its policyholders and its shareholders.” The powerful Connecticut Association of Health Plans, which lobbies for the insurance industry, strongly supported the measure as well.

 

This bill is the only major change to state laws on insurance investigations in the past thirty years. The state’s healthcare advocate opposed the bill, testifying that it would give Connecticut officials the power to conceal information about insurance companies and that it could be very broadly applied. The Connecticut State Medical Society and Connecticut Citizen Action Group also criticized the bill, saying that it would give the Insurance Department the tools to withhold information about the impact of the health insurance mergers.

At this time the Connecticut Insurance Department is closely reviewing the Anthem-Cigna merger, and newspapers have been writing articles about this investigation for months. Yet Governor Malloy’s office issued no press release or public statement regarding this bill, which was passed close to midnight in the final moments of the 2016 Connecticut legislative session after being attached to unrelated dental health legislation.

 

On Friday, Governor Malloy also rejected calls for Commissioner Wade to recuse herself from the Anthem-Cigna merger because of a possible conflict of interest. Consumer advocates, watchdog groups, and lawmakers have criticized the Governor for appointing Wade and called for her recusal, given that for many years she worked as an executive for Cigna.

 

Much of the strength of the Insurance Commissioner review process lies in its transparency. We, along with other organizations, are concerned that this legislation will block important information about the merger from the public, and make it more difficult to evaluate the merger’s impact. The criticism of this new law is well deserved, and interested organizations and regulators should redouble their efforts to ensure that the process is open and informative. The Anthem-Cigna merger would affect millions of consumers, and it is far too important to be approved without public comments and information.

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