As someone who has been involved in legislative affairs for most of my adult life, I cringe when I hear someone describe a legislative issue as a “no-brainer.” I’ve learned the hard way that “no-brainers” are as difficult to get enacted into law as the most controversial issues.
A couple of prime examples:
This year a state is attempting to require mandatory fraud warnings on insurance documents such as policy applications. I expect most insurers in that state already place warnings on claim and application forms anyway. Yet even though insurers support the insurance department’s effort, legislators are moving to stop the effort. Why? Those legislators combine their ignorance in understanding insurance fraud issues with their free-market philosophy. They do not want government telling business what to do, even if the business supports the effort.
Fraud warnings help fight insurance fraud — they give consumers a clear message that committing fraud is a crime. The warnings also help prosecutors prove that suspects had intent to commit fraud when they signed a document clearly warning them about the crime. And, who benefits from the warnings? Everyone benefits, because if we can reduce the cost insurers pay for fraud we’ll help reduce the premiums that consumers pay.
But, this is not the only case.
Several years ago a former governor of a Western state vetoed a bill creating a fraud unit, stating that the unit would add to personnel to the state. He opposed adding employee costs, and assessing insurers to fund the unit would constitute an additional tax. He found the assessment undesirable even though insurers were more than happy to pay for the fraud unit, without any new tax dollars. It took an additional year to get that governor to understand this, and he finally signed the identical bill. Adding state personnel and a “tax” was wrong in one year, but the next year, it was okay.
We have seen this in other states, where trying to increase the assessment on insurers, which insurers supported to help the state’s anti-fraud effort, was opposed by legislators who saw it as a tax increase. And by golly, no business should pay extra “taxes” even though that business supported the effort.
And then in some states the assessment was increased to bring more investigators on board, but state hiring freezes stopped the hiring even though funds existed to pay for those investigators.
“No-brainers” don’t exist in the legislative arena. And fraud fighters need to stay on top of all fraud bills that as they work to strengthen state anti-fraud efforts.
The author is director of government affairs for the Coalition Against Insurance Fraud and has served in that position since 1993.