SC Gov. Haley dictated health panel: Outcome ordered before committee met

Post and Courier (Charleston, SC)
December 14, 2011
Wednesday, December 14, 2011
Gov. Nikki Haley dictated the conclusions of a committee charged with deciding how the state should implement federal health care reform before the group ever held its first meeting, public documents show.
Now, some of those involved in the dozens of meetings are calling the entire planning process a sham that wasted their time and part of a $1 million federal grant.
In a March 31 email thread that included Haley, her top advisers and the committee member who eventually wrote the report, Haley wrote, “The whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange,” which is eventually what happened.
A central part of the federal health care overhaul, an exchange is a marketplace where various insurance plans eventually will be sold.
The emails were released to the newspaper Friday afternoon in response to a Nov. 16 public records request to the S.C. Department of Health and Human Services.
The newspaper had made a nearly identical request of the governor’s office in May, but the office did not include the emails in its response.
The documents show a first-term Republican administration focused on public perception of its handling of the Democratic health care reform law. They also reveal the tight control Haley and her top aides exercise over other state agencies, requiring media inquiries to various state departments to pass through the governor’s office for inspection.
“Oh my God, we just threw $1 million away here,” said Frank Knapp, who participated in the meetings as president of the S.C. Small Business Chamber of Commerce. “This confirms this whole thing was an effort to justify the million-dollar grant, but the reality is they had no intention of even exploring whether the state should establish an exchange — which is exactly what the grant called for.”
Through a spokesman, Haley said she had no time to be interviewed Tuesday or today for this story. Spokesman Rob Godfrey said the governor’s office
responded fairly to questions about the committee.
“She has a lot to do over the next few days in preparation for the holidays,” he said. “It’s just a matter of a tight schedule.”
Godfrey did not respond to questions related to the email discrepancy. In an email, he wrote, “The governor calls it watching out for the citizens of our state as we try to deliver the most health care for the least amount of money.”
Lack of oversight
In a March 10 executive order, Haley established the nonpartisan South Carolina Health Planning Committee to “build trust and consensus among stakeholders” and to decide “whether or not the state should establish a health insurance exchange.”
States that decline to set up their own exchanges are subject to federally run ones beginning in 2014.
Members of the nonpartisan committee and its four subcommittees, who met more than 30 times over the past seven months, did exactly that. In a report sent to the governor two weeks ago, the panel rejected the idea of a state-run exchange, saying South Carolina has few incentives to be a “first-mover” nationally.
Instead, it would “encourage and facilitate … private exchanges,” the report said.
It is unclear whether federal health officials will accept the private solution, but consumer advocates have raised concerns about lack of oversight and regulation. Insurance exchanges are the state- or federally-established marketplaces where health coverage will be sold to individuals and small business employees beginning in 2014.
Copied on Haley’s March email thread was S.C. Health and Human Services Director Tony Keck, an influential member of the Health Planning Committee established by executive order.
Earlier in the thread, Keck had suggested pitching an op-ed piece for publication. The piece would highlight the health insurance exchange’s “roots in conservative principles,” including the idea that “exchanges are viewed by Democrats and Republicans as an important component in improving health care outcomes and lowering costs.”
Haley’s staff members immediately shut down the idea.
“I don’t want the Administration to embrace the idea of an exchange as conservative,” wrote Tim Pearson, Haley’s chief of staff. “It’s a very tough slog to try and change the perception on that.”
‘Losing our message’
Pearson referenced a newspaper report detailing legislation that would have created a framework for a state exchange and prevented insurance carriers from serving on its board. The bill was sponsored by S.C. Reps. Harold Mitchell Jr. and Gilda Cobb-Hunter, Democrats from Spartanburg and Orangeburg, respectively.
“We can’t be on the side of Reps. Mitchell and Cobb-Hunter vs. Campaign for Liberty and Tea Party,” Pearson wrote.
Referencing the federal lawsuit aiming to overturn the mandate requiring everyone to have health coverage, he continued; “The message has to be this … If we don’t at least explore an exchange, we are guaranteeing that — if the lawsuit fails — the Federal exchange, developed entirely by the Obama administration will exist in South Carolina.”
In response to the story in question, Haley wrote, “Ok we are losing our message here.”
In another email minutes later, she continued, “Also lets be clear, if mitchells bill comes to my desk I will veto it. Say that.”
The group of top aides agreed in the thread that the op-ed should not carry the byline of anyone in the Haley administration.
“I am confident I could get a business group or legislator to submit op-ed,” wrote Trey Walker, formerly Haley’s deputy chief of staff.
$109,000 spent
In an email to The Post and Courier Tuesday, Godfrey wrote; “The governor is not going to support a federal health care mandate that she and her HHS director know will cost taxpayers more money down the road while delivering less services. And that’s why she established the committee to study South Carolina solutions that provide our state with the most health at the least cost.”
The newly released emails enraged consumer advocates, small business leaders, local economists, taxpayer watchdogs and S.C. Press Association officials this week.
“They took the money on the pretense they would conduct an objective analysis of whether the state should do the exchange or not,” said John Crangle, executive director of Common Cause of South Carolina. “But they decided what they were going to find before they even started the research process.”
The most recent progress reports filed with the federal government show the administration used about $109,000 of the $1 million grant through the end of November.
Crangle said the exercise was “not in good faith” and called it “an abuse of federal funds.” State money also is at issue because state employees were on state time when they attended dozens of exchange planning meetings, he said.
Sue Berkowitz, an advocate for the uninsured who participated in planning discussions as executive director of S.C. Appleseed Legal Justice Center, said time was wasted.
“We came together and sat down for a lot of meetings in good faith that we’d explore every option and discuss what is in the best interests of the state,” she said. “I’m frustrated that we were being used for something that wasn’t an open, transparent discussion.”
‘Residents lost’
Lynn Bailey, an independent health economist in Columbia, called the meetings “kabuki theater — all for show.”
“People honestly invested their time to do public service,” said Bailey, who participated in the discussions. “It’s a waste of people’s time and talents. It’s disrespectful.”
Bailey added; “With the Haley people, it’s all about the message. They did exactly what she wanted them to do. But in the meantime, residents lost.”
Knapp, of the Small Business Chamber, summed it up this way; “They’re not looking at the merits of the legislation and whether it advances the cause of South Carolinians. They care about ‘whose side we appear to be on’ and keeping an arm’s length from anything to do with the Affordable Care Act. They’re still running a campaign.”

What is an exchange?
Insurance exchanges are the state- or federally-run marketplaces where health coverage will be sold to individuals and small business employees beginning in 2014. They are a key part of the federal health law.
Envisioned as the “Expedia” for health insurance, exchanges are intended to make purchasing health care easier and more affordable by allowing customers to compare options side-by-side.
They also are intended to be the place where residents who make between 133 percent and 400 percent of the poverty level will apply for and collect federal tax credits to buy coverage.
A state panel established by Gov. Nikki Haley recommended last month the state should not manage its own exchange. If Haley accepts the recommendations, South Carolina will join a handful of other states that already have declined to set up exchanges.
States that do not set up exchanges by 2014 will be subject to federally run exchanges.
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