Insurance Director Resigns amid Controversy over Health Exchange

Published December 30, 2011

By Mike Whiteley, WorkCompCentral

South Carolina Insurance Director David Black is stepping down from his post amid controversy over the state’s response to the federal mandate that it create a health insurance exchange, according to news reports.

The Charleston Post and Courier reported on Thursday that Black informed employees at the South Carolina Insurance Department of his decision to resign by email on Wednesday.

Black, the former president and CEO of Liberty Mutual Life Insurance in Greenville, S.C., was appointed to the $112,407-a-year job last January by incoming Gov. Nikki Haley. He was confirmed by the South Carolina Senate in February.

Haley spokesman Rob Godfrey confirmed Black’s decision on Wednesday night, but neither Godfrey nor Black gave a reason.

Black said in the email that he made the decision last week.

“Since I have enjoyed this work and your friendship, this was not an easy decision,” Black said in the email. “I know you’re proud of how much has been accomplished on every front in 2011.”

Neither Godfrey nor Ann Roberson, spokeswoman for the Insurance Department, returned telephone calls to WorkCompCentral on Thursday.

But the Post and Courier reported that U.S. Sen. Thomas Harkin, D-Iowa, has asked the U.S. Health and Human Services Department to investigate whether Haley misused a $1 million federal health care reform grant issued to help the state establish the health care insurance exchange required by the Patient Protection and Affordable Care Act of 2010.

According to emails obtained by The Post and Courier, Haley, her top aides and a member of the panel she created to examine a potential health insurance exchange, discussed ways to avoid creating the exchange last March.

“Spending taxpayer funds to construct an ideologically motivated façade not only violates Congress’ intent, but also the public’s trust in government,” Harkin was quoted as saying.

The Post and Courier reported that Haley used the grant to fund the Health Planning Committee, which ultimately recommended against creating the exchange.

In a blog posted on Thursday by South Carolina Small Business Chamber of Commerce President Frank Knapp, Knapp said the Insurance Department received the federal grant but was never informed of Haley’s directive to state officials.

“Mr. Black and his insurance department will now have to respond to a possible federal investigation of misusing taxpayer dollars as called for on December 22 by U.S. Senator Tom Harkin,” Knapp said. “On December 23, the Chairman-elect of the S.C. Legislative Black Caucus sent Mr. Black a letter requesting a full briefing on this issue.”

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