Archive for Monday, July 24, 2006

Insurance candidates pursue starkly different policies

Praeger, challenger far apart on office assessment, needs

July 24, 2006


When it comes to insurance, Eric Carter says Kansas has gone to hell in a handbasket.

"Despite what (Kansas Insurance Commissioner Sandy) Praeger tells you, Kansas is an awful place to do business," he said.

He called Praeger's office a "bureaucratic morass" that's stifled much-needed competition, sent premiums through the roof and slept through the last four legislative sessions.

"Her legislative agenda has been nothing," said Carter, a conservative Republican state representative from Overland Park. He's challenging Praeger in the Aug. 1 GOP primary.

Praeger, a former Lawrence mayor and a state senator from 1992 to 2000, said her opponent is playing fast and loose with the facts.

"Kansas is ranked fourth in the nation in the number of (insurance) companies' headquarters outside the state doing business inside the state," Praeger said. "That's 1,600 companies. That tells me we have a very good business climate in the state.

"He says we take forever to get (companies') paperwork done, but the National Association of Insurance Commissioners rates departments on the speed in which they process filings," she said. "The national average is 31 days; ours is 21 days."

The insurance commissioner is elected to a four-year term and supervises all transactions related to insurance companies in Kansas, including mergers, business conduct and the products they sell. The insurance department has a $22 million budget and employees nearly 150 people.

The winner of the GOP primary will face Democrat Bonnie Sharp, a state representative from Kansas City, Kan.

Opposite views

Other Praeger-Carter differences:

l Carter cited reports that he said showed health insurance premiums in Kansas had increased 10 percent a year for the last three years in part.

"Not true," Praeger said. "We've seen a stabilization in premiums, and what increases we have seen are an indication of health care costs going up. That's not a problem you solve with insurance - that would mean (companies) either paying fewer claims or offering fewer benefits. I'm not sure those are options Kansans want."

l Carter insisted that Blue Cross Blue Shield of Kansas controls 67 percent of the state's health-insurance market.

"When one company is that big, it means there's not enough competition," he said.

Insurance Commissioner: GOP Primary

Sandy Praeger Republican, Lawrence Age: 61 Family: Married, two children Education: Undergraduate degree in education from Kansas University Occupation: Insurance commissioner Political and governmental experience: Member of Kansas Senate 1992 to 2002; member of Kansas House 1990-92; served on Lawrence City Commission and was mayor 1986-87; member of numerous community boards and commissions. Eric Carter Republican, Overland Park Age: 34 Family: Married, four children Education: Undergraduate degree in science from Harvard; law degree from University of Missouri-Kansas City Occupation: Lawyer Political and governmental experience: Member of Kansas House since 2003. The primary election is Aug. 1.

Praeger said Blue Cross Blue Shield of Kansas is, in fact, the state's largest health insurer. But its market share, she said, is 38 percent.

"It's true they're the largest," she said. "But people like Blue Cross - their overhead is lower than the other companies', their premiums are lower and they pay claims promptly."

l Carter blasted Praeger for helping pass a 2001 bill that required health insurers to cover mental and physical illnesses equally.

"Mental health parity is now the No. 1 driver of health care costs," Carter said. "It's a mandate, and mandates are what drive up costs."

Praeger, who played a key role in getting the bill passed in the Senate, disagreed.

"We did an analysis of mental health parity's effect on the state employees' health insurance and the additional cost was between 1 and 2 percent," Praeger said. "It is not a big cost driver, and there are all kinds of indicators that show being treated for mental illness - depression, for example - reduces costs in other areas."

If elected, Carter said he would push for a bill to rescind mental health parity in Kansas.

"I may not be able to undo the damage," he said.

Few head-to-head meetings

Carter chided Praeger for avoiding him on the campaign trail, noting she often sent Assistant Commissioner Bob Tomlinson or aide Cindy Hermes in her stead.

"I haven't shared a podium with the commissioner in a month and a half," he said late Thursday.

Carter accused Praeger of using state employees - Tomlinson and Hermes - to lessen her campaign expenses.

"You watch," he said, "when the (campaign) expense reports come out (today), they won't show a penny for their time or mileage. The taxpayers are paying them."

"Again, not true," Praeger said, noting that Hermes is serving as her campaign manager and has taken a leave of absence from the department.

State law, she said, allows incumbents to send staff members to their place.

"We've been very careful in keeping track of what are campaign-related expenses and what are not," Praeger said. "It'll all be in the report."

She denied avoiding Carter. "He assumes I'm avoiding him if I'm not where he is," she said, "when, really, I'm either campaigning somewhere else or I'm being insurance commissioner."

Praeger said she missed a pair of joint appearances with Carter because she thought it was more important to meet with representatives of a health insurance company that wanted to do business in Kansas. Another time, she needed to review the details of Aviva, the world's fifth largest insurance group, buying the AmerUs Group.

Topeka-based American Investors Life Insurance Co. is a subsidiary of AmerUs Group.

"One of the things we're dealing with here is I have a job and (Carter) doesn't," Praeger said.

Carter is an attorney. He said he tends to represent health care providers.

The brain surgery incident

Last week The Pitch, a Kansas City-based alternative weekly newspaper, reported that during a recent forum Carter shared that he had been made aware of a brain operation at the University of Kansas Medical Center that lasted 60 hours, after which the patient spent a month and a half in the hospital's intensive care unit. He said the surgery cost taxpayers an estimated $600,000 to $750,000.

According to The Pitch, Carter noted that when the patient was ready to be discharged, "they put him on a a plane and flew him back to Mexico."

A spokesman for the medical center later doubted there had been a 60-hour operation, costing more than $600,000. He declined comment on the patient's nationality, citing privacy restrictions.

Asked if he exaggerated the length and cost of the surgery, Carter replied: "No, I have a relative who's there at the Med Center."

- Staff writer Scott Rothschild contributed to this report.


Richard Heckler 11 years, 10 months ago

Eric Carter has a terrible attitude and will likely try to win on character assassination rather than issues or substance.

Vote Praeger

Patrick Wilbur 11 years, 10 months ago

I am running an active campaign for Insurance Commissioner as well. I could care less who the "real Republican" is in this race. Please check out and link to the 2006 candidates page.

Patrick Wilbur Lawrence

Godot 11 years, 10 months ago

Carter says BCBS has 67 per cent share of the Kansas health insurance market, yet Praeger says it is only 38 per cent. That is a huge discrepancy.

There are 2 million Kansans. Many of them are on Medicare and many more are uninsured, so the total insurance market is much less than 2 million. 400,000 Kansans are participating in the State plan, which is through Blue Cross and Blue Shield. That is more than 20% of the market right there. Is Praeger saying that BCBS has less than a 17% share of the remaining insurance market?

I highly doubt that.

OldEnuf2BYurDad 11 years, 10 months ago

"Kansas is ranked fourth in the nation in the number of (insurance) companies' headquarters outside the state doing business inside the state"

This is something to be proud of? No one WANTS to headquarter their business here. Of course we're 4th. Who's first? Mississippi? Hawaii? Geez.

Dani Davey 11 years, 10 months ago

Carter is moderate?!

I beg to differ conservativeman. Look at his voting record in the house.

ksknowall 11 years, 10 months ago

Carter - Preager - Sharp

republicrat - demopublican It doesn't matter - "IT'S THE SAME THING"

If you want to shake up the establishment - Your only hope at real reform is Patrick Wilbur - Libertarian in 2006

Jamesaust 11 years, 10 months ago

So, to review:

Carter is not only incorrect on his facts but indeed his "analysis" of the health of the Kansas insurance industry CANNOT square with the fact that virtually every insurance company in the nation wants to do business in Kansas.

The same Carter that ranks near the top in various gifts from lobbyists. The same Carter whose livelihood is representing the interests of the health insurance industry. The same Carter who begs-off/is dismissed from Committee memebership because he's too busy to attend meetings. The same Carter that Pitch Weekly (that not only reported more instances of dubious "facts" but) reported on last week with the headline "He's Hot."

Something is quite disappointing in this piece. Carter makes several assertions that are objectively verifiable (that is, their correctness is not a matter of perspective). So, the LJW researches the facts and presents them to us, right?


Godot 11 years, 10 months ago

I agree, Jamesaust. Where is the verification of the facts, from either candidate?

Regarding the bragging rights that over 1400 insurance companies choose to do business in Kansas, that is a meaningless statistic. What does matter is the financial strength and size of the companies, whether they offer the products and coverage that Kansans need, at a price they can afford. Just because a company is doing business in Kansas does not mean that it is offering all of its products, or that it is doing so in a competitive manner.

This is just more meaningless propaganda.

Jamesaust 11 years, 10 months ago

"Regarding the bragging rights that over 1400 insurance companies choose to do business in Kansas, that is a meaningless statistic."

I'm not certain I agree.

Carter's claim is that regulation of the insurance industry is so onerous that companies find it difficult to do business in Kansas (and so consumers suffer from a resulting lack of competition).

Since most insurance companies are small and tend to be local and find each additional state they operate in requires a significant amount of additional compliance efforts, one would then expect to see a correlation in the quantity of companies doing business in a state and difficulty of doing business in that state. In other words, the state with the most out-of-state companies can hardly be described as being a regulatory nightmare while the state with the fewest has to have some reason why no companies find it desirable (with "over regulation" a likely culprit).

That strength, size, etc. are important factors in determining the "health" of the insurance market is certainly true. They are, however, NOT the basis of Carter's claims and so aren't particularly relevant to the political race.

(Indeed, to the extent that Carter points to one large insurer being prominent in Kansas - Blue Cross - this cuts against this 'strength/size' point.)

Jamesaust 11 years, 10 months ago

conservativeman -

Your reference to "the Democrat" brings up yet another interesting point about Carter.

Some mud-slinging has gone the other way from Praeger, charging that Carter failed to vote in some number of elections. It turns out that it depends on what you call an "election."

Carter has explained (and it appears to have a basis in fact) that he failed to vote in primaries after moving to Kansas. Carter explains that he was unaware that in Republican Kansas, quite often, the primary IS the election. Personally, I find that explanation beneath a "Harvard man" who should be able to figure that out quickly.

(So, I'm not holding my breath for any 'no name' Democrat in this race - with all due apologies to the 'no name' Democrat seeing that its difficult to become a 'name' Democrat in Kansas.)

kujeeper 11 years, 10 months ago

Patrick Wilbur is a lost cause.... Prager is worthless. It is estimated that up 25% of Kansans drive without the mandatory liability insurance needed in Kansas. BCBS does have the ability to dictate costs, we are in dire need of other health insurance providers in this state, competition keeps the rates down. I hope for Kansas, Prager is a thing of the past.

Godot 11 years, 10 months ago

Jamesaust, Blue Cross is not a "large insurer," in the scheme of things. According to A.M.Best, their financial size is a category X, meaning their holdings are between $500M and $750M

That BCBS dominates the health insurance market in Kansas is scary. What would happen to them in the event of a medical catastrophe, like the bird flu, for instance, hitting Kansas?

I'm not anti-BCBS, but I do think Carter has a point. It is financially unsound that one local company has responsibility for the health insurance coverage for well over one third of all Kansans.

Charles L. Bloss, Jr. 11 years, 10 months ago

I do think that physical and mental problems should be covered equally. I had problems with Blue Cross, a clause in their contract has cost me several thousand dollars in 2005 and six months of 2006. I do not want to comment further, except to say that no matter what health insurance company you are covered by read all of the fine print very carefully. I did not, and I paid a heavy price for not doing so. It has been an expensive learning experience. Thank you, Lynn

Jamesaust 11 years, 10 months ago

"That BCBS dominates the health insurance market in Kansas is scary. What would happen to them in the event of a medical catastrophe, like the bird flu, for instance, hitting Kansas?"

Uh ... what do these two sentences have to do with each other?

Uh ... I suppose the same thing that would happen if the Earth was struck by an asteroid.

"...I do think Carter has a point. It is financially unsound that one local company has responsibility for the health insurance coverage for well over one third of all Kansans."

Uh ... so it follows that Carter's "point" of lessening insurance regulation resolves this imaginary problem?

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