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Reconsidering Regulatory Separation

A new report from the California Health Care Foundation spurred discussion yesterday about California’s dual regulators of health insurance. For the past decade, California’s Department of Insurance (CDI) and Department of Managed Health Care (DMHC) shared oversight of the health insurance market even as distinctions between PPOs and HMOs blurred. While CDI and DMHC are already collaborating across department lines, the two agencies have different governance, legal frameworks, and regulatory emphases.

With Exchange implementation and new federal insurance requirements looming in 2014, regulatory consistency will be crucial for success. Report co-author Deborah Kelch suggested two options for regulatory reform: consolidation of the two departments that draws on their relative strengths, or institutionalized coordination and consistency between the two agencies. Whichever path the state chooses for the near term, Kelch said the focus should be on improving the consumer experience.

Maureen McKennan, Acting Deputy Director for Plan and Provider Relations at DMHC, and Janice Rocco, Deputy Commissioner for Health Policy at CDI, stressed their departments’ informal teamwork to ready the state for the ACA. Patrick Johnston, President and CEO of CAHP, commented that while regulatory questions are important, they should not overshadow the critical work remaining to implement the Exchange. While Anthony Wright, Executive Director of Health Access, agreed that there is pressing work to be done in the present, he argued that CDI and DMCH should still get on the path toward a future merger.

Slides from the session can be found here.