Will Colorado’s Health Insurance Industry Run One Of Its Own For Governor?

As health insurance premiums inexorably rise and Democratic voters increasingly warm to the idea of government-sponsored health care, private insurers have funneled big money to political groups, helping ward off state single-payer proposals. Now in one of the highest-profile races of 2018, the industry appears to be taking the next step: running one of its own for governor.

Colorado Lt. Gov. Donna Lynne, a Democrat, announced Tuesday she is considering a run for the state’s highest office. Lynne, an outspoken critic of single-payer health care, was appointed lieutenant governor in 2016, coming straight into state government from her job as a vice president for health insurance conglomerate Kaiser Permanente. Lynne’s former employer has been raising premiums in the state, has faced regulatory punishments, and has led the fight to stop single-payer initiatives in Colorado and California. Just as Lynne was being confirmed for her state government job, her company successfully lobbied against a Democratic measure in Colorado that would have strengthened requirements for health insurers to cover annual breast cancer screenings.

“She’s like a Hoover vacuum cleaner of problems. They just disappear, and everyone’s happy,” term-limited Democratic Gov. John Hickenlooper said this week about Lynne and her candidacy. He declined to officially endorse her, but added: “I do think she is a remarkably talented person, and if she were to run and to win she would be a great governor.”

From 2005 to 2016, Lynne was an executive at Kaiser, serving as the group president of Kaiser’s Colorado, Pacific Northwest and Hawaii regions before she was appointed by Hickenlooper to fill the lieutenant governorship last year. At the time she pledged not to run for governor in 2018. Having reversed that decision, she will not only face a crowded Democratic primary field — including a millionaire congressman and a former state treasurer — she may also face questions about her old employer, and whether an insurance executive is the kind of candidate Democrats want as their standard bearer in 2018.

Under Lynne’s leadership, Kaiser was sanctioned twice by Colorado regulators for violating consumer protection laws, according to state records reviewed by International Business Times. One set of those sanctions was handed down by the administration of her current boss, Gov. Hickenlooper — a potential 2020 presidential candidate whose support Lynne may be counting on in the primary.

Lynne would be running for the nomination just as Kaiser reports record earnings and pushes to increase premiums in Colorado by 24 percent. Those proposed increases come only months after health insurers helped block a ballot measure to move Colorado to a single-payer system. That measure — championed by Sen. Bernie Sanders and progressive voters who will be critical in the gubernatorial primary — was defeated by a wide margin with the help of a Democratic Party-linked group bankrolled by Kaiser. The insurer gave the anti-single-payer group with the innocuous name “Coloradans for Coloradans” $500,000 on the same day Lynne was sworn in as lieutenant governor in May.

“Lt. Governor Lynne was among the nearly 80 percent of Coloradans who opposed Amendment 69 as bad policy that threatened to severely impact the state budget,” Lynne’s campaign spokesperson Ethan Susseles told IBT in a statement. “She believes, like other leading Democrats including Governor Hickenlooper and Senator Bennet, that this constitutional amendment went too far too fast. Her priority is to focus on fixing ObamaCare and preventing Donald Trump from keeping his threats that would eliminate health coverage and subsidies for hundreds of thousands Coloradans.”

Nathan Wilkes of Healthcare for All Coloradans, which backed the ballot measure, said Lynne’s ties to the private insurance industry — and her work as lieutenant governor pushing more subsidies for the industry — raised questions about her gubernatorial agenda.

“It is difficult to imagine that a health insurance executive, whose company donated $500,000 to directly oppose [the single payer ballot measure] and affordable, quality health care for all Coloradans, would have the best interests of our citizens and their health at heart,” Wilkes told IBT. Pointing to Lynne’s advocacy of legislative bills boosting insurance subsidies, he added: “Since public policy is so often dominated by the influence of corporate money, it's a small leap to understand where her 2017 proposal to funnel millions in additional state dollars directly to private insurance companies came from.”

Lynne spoke out against the single payer plan last year, saying the ballot measure “throws out a system that we've spent years now building under the Affordable Care Act and creates obviously a substantial tax on both businesses and individuals.”

Kaiser currently has nearly 680,000 customers in Colorado.

While Lynne was running the company in 2009, Kaiser faced $367,000 in state fines. Colorado regulators’ report documented what it said were periodic failures by the company to “provide mandated coverage for maternity care”; “provide accurate information regarding coverage for emergency services”; and “correctly adjudicate claims resulting in erroneous denials” of claims.

In 2014, with Lynne still running the company, Colorado sanctioned Kaiser for periodic failures “to reflect correct and complete coverage for preventive health care services,” “to correctly reflect information concerning the extended length of a newborn hospital stay” and “to pay, deny or settle claims within the time periods required under Colorado insurance law.” Regulators said the latter “was a systemic issue that extended over a long period of time.” The company faced penalties of $78,000, but the total was reduced to $4,400 after Kaiser took corrective action.

Kaiser currently employs six different lobbyists in Colorado, according to state records reviewed by IBT. Those records show that this year the company successfully lobbied against bills in Colorado that would prevent providers from dropping coverage for medicines after a patient has enrolled in a plan and another to expand consumer access to health care. In 2016, as Lynne’s lieutenant governor nomination was being reviewed by state lawmakers, her company opposed a House bill that would have required insurers to cover the specific breast cancer screening tests ordered by doctors, so that physicians could determine the proper test for individual patients. The lobbying was successful: The bill did not pass.

In total, Kaiser has spent nearly $1 million on political contributions in Colorado since 2005. That number is dwarfed by the millions Kaiser has spent in California in recent years, as it has fought regulatory reform and single-payer health care legislation there.

In 2014 alone, Kaiser gave $24.5 million to California political groups, including $18 million to a group called “Californians Against Higher Health Costs” which raised $56 million from health insurance companies in 2014 to defeat Proposition 45, the ballot measure that would have required the state’s insurance commissioner to approve rate changes after public hearings. Prop 45 would also have prohibited insurers from using credit history or previous lack of coverage in determining rates and eligibility. During the current battle over California’s single payer bill, Kaiser has spent $327,000 on lobbying.

If elected, Lynne would not be the first governor with ties to the health care industry. Florida Gov. Rick Scott, a Republican, was the CEO of hospital and home-health company Columbia/HCA, which federal investigators hit with a record $1.7 billion in fines for Medicare fraud. In 2009, Republican Charlie Baker left his job as CEO of Harvard Pilgrim Health Care to successfully run for governor of Massachusetts.