The Vermont Attorney General’s office has dismissed a complaint calling for House Speaker Shap Smith to rescind his appointment of former state Sen. Jim Leddy to the state’s health care reform commission.
Leddy and Con Hogan, both veterans of past health care reform efforts, were named to the commission last week. Smith chose Leddy; Senate President Pro Tem Peter Shumlin selected Hogan.
Dr. Deb Richter questioned Leddy’s appointment last weekend in an e-mail to members of Vermont Health Care for All, a nonprofit group that advocates for state-funded health care.
Leddy serves in a voluntary capacity as president of the Vermont chapter of AARP, the national organization for seniors, which markets health insurance benefits under its name to members. He also holds a seat on the National Policy Council, which makes public policy recommendations to the national AARP board.
On Monday, Richter filed a formal complaint with the attorney general on behalf of Vermont Health Care for All on the grounds that the former state senator’s relationship to AARP is a conflict of interest and violates state statute.
Vermont’s new health care reform law was written to ensure that members of the commission are not beholden to industry interests. It states that the two nonvoting members of the commission shall not have “any official relation” or “in any manner be connected” to an insurer.
Bill Griffin, chief assistant attorney general, ruled Tuesday that the Vermont Health Care for All complaint was baseless on. AARP contracts with insurers to provide insurance, he said, but AARP itself is not an insurer, therefore the appointment of Leddy does not violate state statute.
“Our understanding was (AARP) does not sell insurance,” Griffin said in an interview. “The insurance products are offered by insurance companies, and the insurance companies pay AARP royalties for their part in it.”
According to a Washington Post report, AARP, a not-for-profit organization for seniors, “heavily markets” health insurance policies to its 40 million members. The policies are sold through a broker, United Health Group, under the AARP brand identity. From 2007 to 2008, AARP earned $400 million, or 63 percent of its revenues, through royalties for AARP Medigap policies, which provide supplemental coverage for Medicare patients, Post reporter Dan Eggen wrote on Oct. 27, 2009. During the national health care reform debate, questions were raised about AARP’s lobbying support for proposals that would drive up demand for the Medigap policies, Eggen reported.
Richter said she is disappointed with the AG’s ruling. Leddy’s appointment, in her view, may be technically legal but violates the spirit of the law.
“I want to make very clear, I have respect for Jim Leddy and his service to Vermont,” Richter said. “He has worked tirelessly on health care reform – that is not the issue. … Unfortunately, he is president of an organization that lobbies against publicly financed health care. … AARP worked against single payer at the national level, and it’s understandable why. If we eliminate the private insurance industry from health care, they would lose a good deal of money.”
More than 150 members of Vermont Health Care for All have sent e-mails to the commission this week objecting to Leddy’s appointment, Richter said. The Vermont Workers Center issued a statement saying the appointment undermines “public confidence.” The center urges Smith to “rescind this appointment and make a choice that does not cast any doubt whatsoever on the process.”
Leddy, the well-respected former chair of the Senate Health and Welfare Committee who oversaw the state’s 2006 health care reform legislation, sees Richter’s complaint with the AG’s office as a personal affront. He said she should have called him to talk about her concerns before taking the matter public.
“The accusations and allegations were baseless from the beginning,” Leddy said. “I’m not a voting member. I’m being attacked for taking a volunteer job for which I have a voice but not a vote, and I’m not sure what it was all about in the first place.”
House Speaker Smith defended his pick for the commission: “I believe that Jim’s primary mission is to make sure all Vermonters have health care, and I think that goal is consistent with the goal of Dr. Richter.”
Doug Racine, a Democratic candidate for governor who led the charge for passage of S.88, the health care reform bill, supports Leddy’s appointment.
“Jim’s a man of high integrity,” Racine said. “I don’t think he’ll be looking out for the interests of the insurance industry.”
Leddy said a publicly funded option needs to be considered. The difficulty for the state, he said, is figuring out how Vermont can integrate its progressive health care initiatives with the changes being implemented on the federal level. “That’s the key, and that’s the challenge,” Leddy said. “We can’t succeed unless we have a partner in the federal government.”
The commission, which also includes eight members of the Legislature and two gubernatorial appointees, is authorized to recommend a consultant to evaluate three health care designs for the state of Vermont, including a single payer system. The Joint Fiscal Committee will hire the firm, which will present its findings to the Legislature in January.
The state has sent out requests for proposals, and the commission will review bids on June 28.
Conflict of interest language from S.88, page 10
(b)(1) Members of the commission shall include four representatives appointed by the speaker of the house, four senators appointed by the committee on committees, and two nonvoting members appointed by the governor, one nonvoting member with experience in health care appointed by the speaker of the house, and one nonvoting member with experience in health care appointed by the president pro tempore of the senate.
(2) The two nonvoting members with experience in health care shall not:
(A) be in the employ of or holding any official relation to any health care provider or insurer or be engaged in the management of a health care provider or insurer;
(B) own stock, bonds, or other securities of a health care provider or insurer, unless the stock, bond, or other security is purchased by or through a mutual fund, blind trust, or other mechanism where a person other than the member chooses the stock, bond, or security;
(C) in any manner, be connected with the operation of a health care provider or insurer; or
(D) render professional health care services or make or perform any business contract with any health care provider or insurer if such service or contract relates to the business of the health care provider or insurer, except contracts made as an individual or family in the regular course of obtaining
health care services.
