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Archive for Sunday, October 20, 2002

s defining theme: campaign money

October 20, 2002

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In the race for state insurance commissioner, acceptance of campaign contributions from the insurance industry has become one of the main issues.

Republican Sandy Praeger, a state senator from Lawrence, faces Democrat Jim Garner, a legislator from Coffeyville, in the Nov. 5 election. He's not taking insurance industry contributions; she is.

"Quite simply," Garner said recently, "if your campaign is heavily funded by the industry, you cannot be an independent commissioner."

But Praeger says she is independent.

"It's not about the contributions," she said. "It's about the candidate."

Still, the issue remains contentious in a campaign matchup that pairs two veteran and high-ranking lawmakers who want to lead the Kansas Insurance Department, an agency with an annual budget of $20.5 million that employs about 160 people.

The commissioner's term is four years and the job pays $75,260 per year. Kansans pay about $10 billion annually in insurance premiums.

Saying no

In 1994, Kathleen Sebelius became the first Democrat elected insurance commissioner in more than a century after she refused to take campaign contributions from insurance interests and vowed to undo the cozy relationship between insurance companies and the Insurance Department.

Now Sebelius is running for governor, leaving a vacancy for the commissioner job and an eight-year legacy of an arms-length relationship between state insurance regulators and the insurance industry.

Garner, who is the leader of Democratic legislators in the Kansas House, says he will continue the practice of not accepting campaign funds from the insurance industry.

"I will maintain the independence Kathleen Sebelius has brought to this office," Garner said.

Praeger, vice president of the Senate, has actively solicited insurance industry donations, including holding a $250-a-head fund-raising reception this summer in Philadelphia during a national conference of insurance regulators.

As of her last campaign finance report from July 29, she had received tens of thousands of dollars from insurance interests.

Praeger asks voters to look at her record, maintaining that as chairwoman of the Senate committee that deals with insurance legislation, she has been a solid consumer advocate.

As proof of her commitment to consumers, Praeger points to her efforts in 2001 in getting legislation approved that required health insurers to provide expanded coverage of mental health problems. The measure was vigorously opposed by the insurance lobby.

But Garner said Praeger caved in to the industry because the bill fails to provide full mental health coverage that is comparable to what insurance policies offer for physical ailments.

On the issue of campaign contributions, Praeger said the Insurance Department makes decisions that affect many, varied special interests, such as trial lawyers, hospitals and doctors. Would it be fair, she asks, to not accept money from insurers, while accepting funds from trial lawyers?

"Where do you draw the line?" she asked.

Garner says you draw the line with insurance companies because the insurance commissioner has direct regulatory authority over those companies in deciding whether rate increases are justified, contracts with policyholders are fair, and whether a company is being run properly so that it remains economically healthy.

Blue Cross pending

Questions about industry influence have gained in prominence because of a major decision that will confront the next insurance commissioner.

Anthem Insurance Cos. Inc., an Indiana-based firm with 10 million policyholders nationwide, has proposed purchasing Blue Cross and Blue Shield of Kansas, the state's largest health insurance company.

But earlier this year, Insurance Commissioner Sebelius rejected the proposal, saying that if Blue Cross were absorbed by the for-profit Anthem, it would increase costs to policyholders. The insurance companies denied the claim, appealed and won a decision in state district court. Sebelius has appealed that decision to the Kansas Supreme Court.

It is likely that the next insurance commissioner will have to respond to whatever the state high court decides.

In the past, Praeger has taken donations from Blue Cross executives and lobbyists for Anthem, but she has maintained the contributions were from individuals unrelated to their jobs. And she has said she will not accept corporate contributions from Blue Cross of Kansas and Anthem while the case is litigated.

Both Praeger and Garner have stated that they would pursue the Insurance department's appeal of the lower court ruling.

Priorities

Aside from their differences regarding campaign contributions, both candidates find unity in applauding Sebelius' tenure as commissioner

Praeger said she wanted to increase the general availability of health insurance and try to get more children on Healthwave, the insurance program for children in low-income families.

Praeger also said she was concerned about the decreasing availability of malpractice insurance for doctors, and that it may be time for the Legislature to consider reforms that would limit some damages in lawsuits.

Garner said he would use the office to push for a "meaningful" program to help senior citizens purchase prescription drugs. And he said he would maintain the pro-consumer focus started by Sebelius at the agency.

"I have witnessed over the past eight years a major change in a government agency and a change for the better," Garner said of the Insurance Department. "I didn't want to just stand by and let things go back to business as usual."

Small-town backgrounds

Garner and Praeger have some things in common. Both have roots in small towns and were drawn to politics believing that government could help people.

Garner grew up in Coffeyville and said his interest in politics stemmed from conversations with his grandfather who spoke to him about struggles during the Great Depression and how government programs saved a lot of people.

"Government impacts real people's lives all the time, on a daily basis. I want to be involved in that, trying to make sure that government is doing things that are good," he said.

Praeger grew up in Paola where her father operated a furniture store that was started by her grandmother as a used-furniture store during the Depression. "I can still remember the furniture stain under her fingernails," she said.

Praeger and Garner were both elected to the Kansas House in 1990. Prior to her election, Praeger had served in a number of positions in Lawrence, including a stint on the city commission where she served as mayor for one year.

In 1992, Praeger was elected to the Kansas Senate, where she worked on health and insurance issues. Meanwhile, Garner rose among his party's ranks to become the Democratic leader in 1998, also working on health issues.

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