Connecticut insurance commissioner resigns amid outcry over rate hike

Thomas Sullivan approved an increase of up to 47% for new policies in a WellPoint-owned subsidiary.

By — Posted Nov. 18, 2010

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Connecticut's insurance commissioner resigned Nov. 1 to take a job as a consultant, a few weeks after jousting with opponents in his state and Washington, D.C., over his office's approval of rate increases for new Anthem Blue Cross and Blue Shield policies.

Commissioner Thomas Sullivan's office signed off on an increase of as much as 47% in the cost of new Anthem policies sold after Sept. 23. The increase, approved Sept. 16, was attributed to requirements under the Patient Protection and Affordable Care Act that kicked in on that date. Sullivan defended the increase as necessary for plans that previously had bare-bones benefits and are now required to offer more coverage.

In his resignation letter, Sullivan did not say why he was leaving.

His resignation, effective Nov. 12, will leave his successor to host public hearings over yet another round of double-digit rate increases from WellPoint-owned Anthem. On Nov. 1, the insurer filed for a 19% increase on about 48,000 of its individual customers -- those who are covered by "grandfathered" policies not subject to some parts of health system reform. The increase Anthem filed for on Nov. 1 is set to take effect on Jan. 1, 2011.

Sullivan had pledged to hold public hearings on the more recently filed rate increases. He scheduled them for Nov. 17, which will turn out to be a few days after he starts his new job. Sullivan, who was appointed commissioner in 2007 by Republican Gov. M. Jodi Rell, is scheduled to become a partner at PwC, formerly PricewaterhouseCoopers, on Nov. 15.

PwC spokeswoman Laura Schooler said in a statement that Sullivan's job will "focus on assisting PwC's clients in complying with the new regulations promulgated under new financial regulatory reform legislation."

As insurance commissioner, Sullivan came under public criticism for his approval of insurance rate hikes.

Among Sullivan's fiercest critics was Democratic U.S. Sen.-elect Richard Blumenthal, who in his position as state attorney general asked him to reconsider his approval of the rate increase.

The Connecticut State Medical Society raised questions about Sullivan's impartiality, not only because of the Anthem rate increases, but also because of his approval of UnitedHealth Group's takeover of Health Net's business in Connecticut in December 2009. The society sued the commissioner and asked a court to force him to reconsider, but a judge dismissed the lawsuit in July.

In reaction to Sullivan's resignation, CSMS Executive Vice President Matthew Katz said, "We hope that this creates a new opportunity for transparency in the process used by the Connecticut Dept. of Insurance."

Rell's office issued no public statement about when an interim or permanent replacement for Sullivan would be selected.

Rell did not seek re-election this year, and, nearly a week after the mid-term election, the new governor is Democrat Dan Malloy. On Nov. 8, Republican Tom Foley conceded the race.

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