Showing posts with label Health Insurance. Show all posts
Showing posts with label Health Insurance. Show all posts
Sunday, June 17, 2012
Insurance Premium Review Is Basically Useless
ACA’s Much Touted Health Insurance Premium Review Is Basically Useless
Jon Walker
Wednesday May 9, 2012
http://fdlaction.firedoglake.com/2012/05/09/acas-much-touted-health-insurance-premium-review-is-basically-useless
In the Affordable Care Act the Department of Health and Human Services (HHS) was given the power to review health insurance premium increases, but it wasn’t given the power to actually do anything about unreasonable increases. HHS can only say an increase is “unreasonable,” but it has zero regulatory power to force the companies to change their premiums. Not surprisingly this totally toothless provision is now proving to be mostly worthless. From Politico:
HHS can use its bully pulpit to publicly shame insurers whose rates don’t pass its sniff test – and HHS has done just that, holding four media calls since November to scold insurers each time it’s made a new “unreasonable” determination.
Faced with the choice of dealing with some negative press on the national stage or upending their business plan, the four insurers that have been dinged by HHS have all chosen to stick with the business plan.
Even though a provision with zero enforcement obviously has almost no value, this hasn’t stopped Democrats from claiming the rating review process is amazing and should be super effective. The White House’s official overview of the law still falsely implies the law has regulatory teeth:
Stopping Unreasonable Rate Increases: In every State and for the first time ever, insurance companies are required to publicly justify their actions if they want to raise rates by 10 percent or more.
The reality is that the law now merely lets us officially know that HHS thinks the rates are “unreasonable,” but it does nothing to actually stop them.
During the drafting of the ACA, efforts were made to include a provision that would give HHS the power to stop unreasonable rate increases, but the provision didn’t make it into the final law. Instead the Obama administration seems to be just pretending it did.
With so much over promising and under delivering around the health care law, it is no wonder it is still unpopular.
Monday, April 23, 2012
20 million could lose employer coverage
20 million could lose employer coverage under Obama health care overhaul
Kate Randall
17 March 2012
http://wsws.org/articles/2012/mar2012/heal-m17.shtml
As many as 20 million Americans could lose their employer-sponsored coverage in 2019 under the health care legislation signed into law by President Obama in March 2010. This is the worst-case scenario set out by the Congressional Budget Office (CBO) in a report released Thursday.
The CBO’s most optimistic estimate, which the federal agency says is subject to a “tremendous amount of uncertainty,” is that 3 million to 5 million could lose their employer health coverage each year from 2019 through 2022.
The new projections for loss of employee coverage are a substantial increase over last year’s estimates, when the CBO’s best prediction was that only 1 million people would lose employer-sponsored coverage.
The new study is the latest indication that the health care overhaul will result in a deterioration of health care for the majority of Americans, and not the improvement touted by the Obama administration. Working families and those in low-wage jobs stand to suffer the most from companies eliminating coverage.
As the World Socialist Web Site explained during the administration’s campaign for its health care “reform,” the scheme was the opposite of universal and quality health care for all. Drawn up in close consultation with the insurance, pharmaceutical and hospital industries as well as Wall Street, it was driven by a determination to reduce government deficits and health care costs at the expense of the working class. In addition to cutting hundreds of billions of dollars from Medicare, the government health insurance program for the elderly, the plan is designed to ration health care on class lines, depriving millions of working people of benefits on which they currently rely.
Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) will mandate individuals and families to obtain insurance or pay fines that could eventually rise to as much as 2 percent of income for all but the very poor. Those who purchase insurance on the health care “exchanges” set up under the PPACA will be at the mercy of private insurers who can increase premiums without any meaningful government oversight.
Companies with more than 50 employees that stop offering health coverage will be levied a $2,000 per employee tax penalty. The CBO projection indicates that a significant proportion of businesses will find it financially advantageous to drop coverage and pay the penalty.
The CBO’s worst-case scenario is in line with previous studies on the impact of the health care bill on employer coverage. A study released in August 2011 by human resources consultants Towers Watson showed that at least 9 percent of companies planned to drop their coverage by 2014. A study last June by the McKinsey Company showed that an even larger proportion, 30 percent, were likely to stop providing coverage when provisions of the PPACA take effect.
On the same day the CBO published its report, the Center for Studying Health System Change (HSC) released a national study showing that employer-provided health coverage has already been substantially eroded as a result of the recession. Between 2007 and 2010, the share of children and working-age adults covered by employer-sponsored health insurance dropped by 10 percentage points, from 63.6 percent to 53.5 percent.
The study notes that increased unemployment was the key driver of this loss of employer coverage, with the proportion of people younger than 65 with no employed workers in the household jumping to 31.6 percent in 2010—up 10 percent. This rise in joblessness accounted for approximately three-quarters of the drop in employer-provided health coverage since 2007.
However, the HSC study found that about 20 percent of those who lost their employer-sponsored health care from 2007 to 2010 were employed but either dropped from coverage by their employer or opted out of it. The survey also showed that a steady decline in employer health coverage was well underway before the official start of the recession in December 2007, with fewer companies offering coverage and fewer employees choosing to enroll because they could not afford to pay their portion of the cost of coverage.
Employer-sponsored coverage in the US is rarely provided free of charge to the employee. Going forward, it has still not been made clear precisely what level of coverage businesses will be required to offer their workers to qualify under the Obama health care legislation.
The HSC surveyed showed that employer-provided coverage has become increasingly unaffordable for a significant share of the workforce, particularly low-wage workers. Households with incomes below 200 percent of the poverty line—$44,100 for a family of four in 2010—saw employer-sponsored health care coverage drop dramatically, from 42 percent in 2001 to only 24 percent in 2010.
In addition to low-wage workers, segments of the population seeing a disproportionate decline in coverage were young adults, people with a high school education or less, and those employed in small firms.
In 2007, among those aged 18 to 27, 70 percent lived in a household where at least one member was working and 43 percent were covered by employer-sponsored health insurance. By 2010, only 50 percent lived in working households and employer coverage had dropped to 31 percent.
People in families headed by someone with a high school education or less saw their employer health coverage decline from 47 percent in 2007 to 36 percent in 2010. For those employed by companies with less than 100 workers, employer health coverage fell from 51 percent in 2007 to 45 percent in 2010.
As the CBO report demonstrates, the numbers of those losing their employer-sponsored coverage—whether they are dumped by their employer or can no longer afford it—will rise as a result of the Obama health care overhaul. This tendency will be exacerbated by the continuing rise of overall health care costs, driven in the main by the spiraling profits of the insurance companies and giant health care providers and pharmaceuticals.
A new report by the Annals of Family Medicine, a peer-reviewed medical journal, predicts that the average cost of health insurance for American families will surpass average household income by 2033.
The report finds: “If health insurance premiums and national wages continue to grow at recent rates and the U.S. health system makes no major structural changes, the average cost of a family health insurance premium will equal 50 percent of the household income by the year 2021, and surpass the average household income by the year 2033.”
The Obama-sponsored health bill is aimed, not at improving health care provision, but cutting costs for the government and corporations. From the beginning, the Obama administration has pitched the overhaul as “deficit neutral,” making the spurious claim that hundreds of billions can be slashed from Medicare and other government programs while improving the accessibility and quality of care.
Notably, the CBO report states that under the worst-case scenario—in which 20 million people lose their employer-sponsored coverage—the federal government will actually save $13 billion relative to baseline projections. Under conditions of skyrocketing health care costs, this can only be the result of reductions in care and forcing people into cut-rate plans on the “insurance exchanges,” or into Medicaid and other government programs that are being targeted for sweeping cuts.
Kate Randall
17 March 2012
http://wsws.org/articles/2012/mar2012/heal-m17.shtml
As many as 20 million Americans could lose their employer-sponsored coverage in 2019 under the health care legislation signed into law by President Obama in March 2010. This is the worst-case scenario set out by the Congressional Budget Office (CBO) in a report released Thursday.
The CBO’s most optimistic estimate, which the federal agency says is subject to a “tremendous amount of uncertainty,” is that 3 million to 5 million could lose their employer health coverage each year from 2019 through 2022.
The new projections for loss of employee coverage are a substantial increase over last year’s estimates, when the CBO’s best prediction was that only 1 million people would lose employer-sponsored coverage.
The new study is the latest indication that the health care overhaul will result in a deterioration of health care for the majority of Americans, and not the improvement touted by the Obama administration. Working families and those in low-wage jobs stand to suffer the most from companies eliminating coverage.
As the World Socialist Web Site explained during the administration’s campaign for its health care “reform,” the scheme was the opposite of universal and quality health care for all. Drawn up in close consultation with the insurance, pharmaceutical and hospital industries as well as Wall Street, it was driven by a determination to reduce government deficits and health care costs at the expense of the working class. In addition to cutting hundreds of billions of dollars from Medicare, the government health insurance program for the elderly, the plan is designed to ration health care on class lines, depriving millions of working people of benefits on which they currently rely.
Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) will mandate individuals and families to obtain insurance or pay fines that could eventually rise to as much as 2 percent of income for all but the very poor. Those who purchase insurance on the health care “exchanges” set up under the PPACA will be at the mercy of private insurers who can increase premiums without any meaningful government oversight.
Companies with more than 50 employees that stop offering health coverage will be levied a $2,000 per employee tax penalty. The CBO projection indicates that a significant proportion of businesses will find it financially advantageous to drop coverage and pay the penalty.
The CBO’s worst-case scenario is in line with previous studies on the impact of the health care bill on employer coverage. A study released in August 2011 by human resources consultants Towers Watson showed that at least 9 percent of companies planned to drop their coverage by 2014. A study last June by the McKinsey Company showed that an even larger proportion, 30 percent, were likely to stop providing coverage when provisions of the PPACA take effect.
On the same day the CBO published its report, the Center for Studying Health System Change (HSC) released a national study showing that employer-provided health coverage has already been substantially eroded as a result of the recession. Between 2007 and 2010, the share of children and working-age adults covered by employer-sponsored health insurance dropped by 10 percentage points, from 63.6 percent to 53.5 percent.
The study notes that increased unemployment was the key driver of this loss of employer coverage, with the proportion of people younger than 65 with no employed workers in the household jumping to 31.6 percent in 2010—up 10 percent. This rise in joblessness accounted for approximately three-quarters of the drop in employer-provided health coverage since 2007.
However, the HSC study found that about 20 percent of those who lost their employer-sponsored health care from 2007 to 2010 were employed but either dropped from coverage by their employer or opted out of it. The survey also showed that a steady decline in employer health coverage was well underway before the official start of the recession in December 2007, with fewer companies offering coverage and fewer employees choosing to enroll because they could not afford to pay their portion of the cost of coverage.
Employer-sponsored coverage in the US is rarely provided free of charge to the employee. Going forward, it has still not been made clear precisely what level of coverage businesses will be required to offer their workers to qualify under the Obama health care legislation.
The HSC surveyed showed that employer-provided coverage has become increasingly unaffordable for a significant share of the workforce, particularly low-wage workers. Households with incomes below 200 percent of the poverty line—$44,100 for a family of four in 2010—saw employer-sponsored health care coverage drop dramatically, from 42 percent in 2001 to only 24 percent in 2010.
In addition to low-wage workers, segments of the population seeing a disproportionate decline in coverage were young adults, people with a high school education or less, and those employed in small firms.
In 2007, among those aged 18 to 27, 70 percent lived in a household where at least one member was working and 43 percent were covered by employer-sponsored health insurance. By 2010, only 50 percent lived in working households and employer coverage had dropped to 31 percent.
People in families headed by someone with a high school education or less saw their employer health coverage decline from 47 percent in 2007 to 36 percent in 2010. For those employed by companies with less than 100 workers, employer health coverage fell from 51 percent in 2007 to 45 percent in 2010.
As the CBO report demonstrates, the numbers of those losing their employer-sponsored coverage—whether they are dumped by their employer or can no longer afford it—will rise as a result of the Obama health care overhaul. This tendency will be exacerbated by the continuing rise of overall health care costs, driven in the main by the spiraling profits of the insurance companies and giant health care providers and pharmaceuticals.
A new report by the Annals of Family Medicine, a peer-reviewed medical journal, predicts that the average cost of health insurance for American families will surpass average household income by 2033.
The report finds: “If health insurance premiums and national wages continue to grow at recent rates and the U.S. health system makes no major structural changes, the average cost of a family health insurance premium will equal 50 percent of the household income by the year 2021, and surpass the average household income by the year 2033.”
The Obama-sponsored health bill is aimed, not at improving health care provision, but cutting costs for the government and corporations. From the beginning, the Obama administration has pitched the overhaul as “deficit neutral,” making the spurious claim that hundreds of billions can be slashed from Medicare and other government programs while improving the accessibility and quality of care.
Notably, the CBO report states that under the worst-case scenario—in which 20 million people lose their employer-sponsored coverage—the federal government will actually save $13 billion relative to baseline projections. Under conditions of skyrocketing health care costs, this can only be the result of reductions in care and forcing people into cut-rate plans on the “insurance exchanges,” or into Medicaid and other government programs that are being targeted for sweeping cuts.
Wednesday, September 14, 2011
Sicko Healthcare
From LATimes.com:
U.S. workers whose wages stagnated over the last decade also saw their health insurance degrade, even as medical costs gobbled up a growing share of their income, two new studies show.
An estimated 29 million adults who had health insurance lacked adequate coverage in 2010, leaving them exposed to medical expenses such as high deductibles that they couldn't afford, according to a survey by the nonprofit Commonwealth Fund.
That is up from 16 million underinsured people in 2003, the survey found, underscoring the rising burden that insurance plans are placing on consumers as the industry raises required co-pays and deductibles.
"Underinsured families are at nearly as high risk as the uninsured because, while they have health insurance, holes or limits in their plans expose them to often unaffordable medical costs," said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the new report, which was published in the journal Health Affairs.
More workers also simply lost coverage over the last decade, the survey found. Fifty-two million adults ages 19 to 64 did not have insurance at some point in 2010, up from 46 million in 2003.
That has left nearly half the working-age population without enough protection from illness. Altogether, 44% of U.S. adults were either uninsured or underinsured last year, according to the Commonwealth Fund.
Children and seniors are more likely to have insurance because many qualify for public programs such as Medicare and Medicaid.
The erosion in insurance coverage, which hit middle- and low-income Americans hardest, meant higher medical bills for U.S. families. The typical family of four with employer-based coverage saw its total monthly healthcare tab almost double between 1999 and 2009 — from $805 to $1,420 — researchers at the Rand Corp. found.
Over the same period, total monthly income grew only 30%, barely keeping pace with inflation, which pushed up prices 29% over the decade...
Healthcare costs rose while insurance coverage fell, studies show
September 08, 2011
Noam N. Levey, Los Angeles Times
http://articles.latimes.com/2011/sep/08/business/la-fi-health-insurance-20110908
U.S. workers whose wages stagnated over the last decade also saw their health insurance degrade, even as medical costs gobbled up a growing share of their income, two new studies show.
An estimated 29 million adults who had health insurance lacked adequate coverage in 2010, leaving them exposed to medical expenses such as high deductibles that they couldn't afford, according to a survey by the nonprofit Commonwealth Fund.
That is up from 16 million underinsured people in 2003, the survey found, underscoring the rising burden that insurance plans are placing on consumers as the industry raises required co-pays and deductibles.
"Underinsured families are at nearly as high risk as the uninsured because, while they have health insurance, holes or limits in their plans expose them to often unaffordable medical costs," said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the new report, which was published in the journal Health Affairs.
More workers also simply lost coverage over the last decade, the survey found. Fifty-two million adults ages 19 to 64 did not have insurance at some point in 2010, up from 46 million in 2003.
That has left nearly half the working-age population without enough protection from illness. Altogether, 44% of U.S. adults were either uninsured or underinsured last year, according to the Commonwealth Fund.
Children and seniors are more likely to have insurance because many qualify for public programs such as Medicare and Medicaid.
The erosion in insurance coverage, which hit middle- and low-income Americans hardest, meant higher medical bills for U.S. families. The typical family of four with employer-based coverage saw its total monthly healthcare tab almost double between 1999 and 2009 — from $805 to $1,420 — researchers at the Rand Corp. found.
Over the same period, total monthly income grew only 30%, barely keeping pace with inflation, which pushed up prices 29% over the decade...
Healthcare costs rose while insurance coverage fell, studies show
September 08, 2011
Noam N. Levey, Los Angeles Times
http://articles.latimes.com/2011/sep/08/business/la-fi-health-insurance-20110908
Tuesday, June 21, 2011
Obamacare in Action
The predictions about healthcare keep coming. The latest suggests that nearly a third of employers are likely to stop offering health insurance to employees in 2014 when major federal healthcare-reform provisions kick in. This comes from a new report by McKinsey Quarterly.
The Congressional Budget Office estimated that only 7% of employees would be forced into subsidized-exchange policies, the report said, but the survey of more than 1,300 employers suggests otherwise. That research found that 30% said they would “definitely or probably” drop the insurance policies.
As Reuters notes in its article about the latest prediction: That number rises to more than 50% among employers with a high awareness of healthcare reform...
One in three employers may drop health benefits, report says
Marissa Cevallos, HealthKey
June 7, 2011
http://www.latimes.com/health/boostershots/la-heb-healthcare-employer-20110607,0,3210281.story
The Congressional Budget Office estimated that only 7% of employees would be forced into subsidized-exchange policies, the report said, but the survey of more than 1,300 employers suggests otherwise. That research found that 30% said they would “definitely or probably” drop the insurance policies.
As Reuters notes in its article about the latest prediction: That number rises to more than 50% among employers with a high awareness of healthcare reform...
One in three employers may drop health benefits, report says
Marissa Cevallos, HealthKey
June 7, 2011
http://www.latimes.com/health/boostershots/la-heb-healthcare-employer-20110607,0,3210281.story
Wednesday, February 2, 2011
The President Adams Payroll Tax
Nothing Like an Individual Mandate
Jon Walker
Friday January 21, 2011
http://fdlaction.firedoglake.com/2011/01/21/the-president-adams-payroll-tax-nothing-like-an-individual-mandate
The incredible degree to which many “liberal” writers have gone all-out to defend the previously conservative idea of an individual mandate requiring people to give a private corporation their money is bizarre. That latest attempt seems to be a dishonest interpretation of a 1798 law that created a payroll tax to pay for federal socialized medicine. From Rick Ungar:
In July of 1798, Congress passed – and President John Adams signed -“An Act for the Relief of Sick and Disabled Seamen.” The law authorized the creation of a government operated marine hospital service and mandated that privately employed sailors be required to purchase health care insurance...
[I]t created the Marine Hospital Service, a series of hospitals built and operated by the federal government to treat injured and ailing privately employed sailors. This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner. The payment of this tax for health care was not optional. If a sailor wanted to work, he had to pay up.
This is nothing like the individual mandate in the new health care law. What it is similar to is Medicare, which is also a direct government health care service paid for by a payroll tax.
While it is true that this tax was technically “mandatory,” every tax, almost by definition, is mandatory. The idea that the government has the right to force you to pay them a tax is a fairly uncontroversial foundational principle of modern government.
The fact the founders supported the completely uncontroversial idea that the government could levy taxes on individuals and use those funds to provide government services–such as health care–in absolutely no way indicates, one way or another, their support for using government power to require people to buy an expensive product from a private corporation. Just because this law deals with health care is immaterial. This tax no more indicates support for the individual mandate than anyone of the other hundreds of laws that “mandated” individuals pay a tax to the government.
It does show the founders supported socialized medicine
I’m glad that this law has come to light, though, because it shows the founding fathers had no principle objections to socialized medicine, government-run health insurance, or an entitlement programs funded by a payroll tax. It is strong proof that they would, in general, have no Constitutional issue with Medicare or single-payer health care. It is good to know when it come to health care issues, our founders were more prepared to adopt far more sensible, direct solutions than the highly inefficient “fixes” supported by President Obama and the modern Democratic Party.
Progressives should be pointing to this law to show that the founders had no problem with the basic design of the honestly progressive solution of single payer. However, using it to defend the idea of the individual mandate seems to a be a real distortion.
Progressives really need to stop defending the individual mandate. It isn’t progressive, it isn’t popular, it isn’t necessary, and, most importantly, it is an inherently inferior way of expending coverage when compared to a truly progressive approach.
Jon Walker
Friday January 21, 2011
http://fdlaction.firedoglake.com/2011/01/21/the-president-adams-payroll-tax-nothing-like-an-individual-mandate
The incredible degree to which many “liberal” writers have gone all-out to defend the previously conservative idea of an individual mandate requiring people to give a private corporation their money is bizarre. That latest attempt seems to be a dishonest interpretation of a 1798 law that created a payroll tax to pay for federal socialized medicine. From Rick Ungar:
In July of 1798, Congress passed – and President John Adams signed -“An Act for the Relief of Sick and Disabled Seamen.” The law authorized the creation of a government operated marine hospital service and mandated that privately employed sailors be required to purchase health care insurance...
[I]t created the Marine Hospital Service, a series of hospitals built and operated by the federal government to treat injured and ailing privately employed sailors. This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner. The payment of this tax for health care was not optional. If a sailor wanted to work, he had to pay up.
This is nothing like the individual mandate in the new health care law. What it is similar to is Medicare, which is also a direct government health care service paid for by a payroll tax.
While it is true that this tax was technically “mandatory,” every tax, almost by definition, is mandatory. The idea that the government has the right to force you to pay them a tax is a fairly uncontroversial foundational principle of modern government.
The fact the founders supported the completely uncontroversial idea that the government could levy taxes on individuals and use those funds to provide government services–such as health care–in absolutely no way indicates, one way or another, their support for using government power to require people to buy an expensive product from a private corporation. Just because this law deals with health care is immaterial. This tax no more indicates support for the individual mandate than anyone of the other hundreds of laws that “mandated” individuals pay a tax to the government.
It does show the founders supported socialized medicine
I’m glad that this law has come to light, though, because it shows the founding fathers had no principle objections to socialized medicine, government-run health insurance, or an entitlement programs funded by a payroll tax. It is strong proof that they would, in general, have no Constitutional issue with Medicare or single-payer health care. It is good to know when it come to health care issues, our founders were more prepared to adopt far more sensible, direct solutions than the highly inefficient “fixes” supported by President Obama and the modern Democratic Party.
Progressives should be pointing to this law to show that the founders had no problem with the basic design of the honestly progressive solution of single payer. However, using it to defend the idea of the individual mandate seems to a be a real distortion.
Progressives really need to stop defending the individual mandate. It isn’t progressive, it isn’t popular, it isn’t necessary, and, most importantly, it is an inherently inferior way of expending coverage when compared to a truly progressive approach.
Friday, November 26, 2010
How Corporate America Is Pushing Us All Off a Cliff...
a letter from Michael Moore
Friday, November 19th, 2010
Friends,
When someone talks about pushing you off a cliff, it's just human nature to be curious about them. Who are these people, you wonder, and why would they want to do such a thing?
That's what I was thinking when corporate whistleblower Wendell Potter revealed that, when "Sicko" was being released in 2007, the health insurance industry's PR firm, APCO Worldwide, discussed their Plan B: "Pushing Michael Moore off a cliff."
But after looking into it, it turns out, it's nothing personal! APCO wants to push everyone off a cliff.
APCO was hatched in 1984 as a subsidiary of the Washington, D.C. law firm Arnold & Porter -- best known for its years of representing the giant tobacco conglomerate Philip Morris. APCO set up fake "grassroots" organizations around the country to do the bidding of Big Tobacco. All of a sudden, "normal, everyday, in-no-way-employed-by-Philip Morris Americans" were popping up everywhere. And it turned out they were outraged -- outraged! -- by exactly the things APCO's clients hated (such as, the government telling tobacco companies what to do). In particular, they were "furious" that regular people had the right to sue big corporations...you know, like Philip Morris. (For details, see the 2000 report "The CALA Files" by my friends and colleagues Carl Deal and Joanne Doroshow.)
Right about now you may be wondering: how many Americans get pushed off a cliff by Big Tobacco every year? The answer is 443,000 Americans die every year due to smoking. That's a big cliff.
With this success under their belts, APCO created "The Advancement of Sound Science Coalition." TASSC, funded partly by Exxon, had a leading role in a planned campaign by the fossil fuel industry to create doubt about global warming. The problem for Big Oil speaking out against global warming, according to the campaign's own leaked documents, was that the public could see the "vested interest" that oil companies had in opposing environmental laws. APCO's job was to help conceal those oil company interests.
And boy, have they ever succeeded. Polls now show that, as the world gets hotter, Americans are getting less and less worried about it.
How big is this particular cliff? According to the World Health Organization, climate change contributes -- right now -- to the deaths of 150,000 people every year. By 2030 it may be double that. And after that...well, the sky is literally the limit! I don't think it's crazy to say APCO may rack up even bigger numbers here than they have with tobacco.
With this track record, you can see why, when the health insurance industry wanted to come after "Sicko," they went straight to APCO. The "worst case," as their leaked documents say, was that "Sicko evolves into a sustained populist movement." That simply could not be allowed to happen. Something obviously had to be done.
As Wendell Potter explains, APCO ran their standard playbook, setting up something called "Health Care America." Health Care America, according to Potter, "was received by mainstream reporters, including the New York Times, as a legitimate organization when it was nothing but a front group set up by APCO Worldwide. It was not anything approaching what it was reporting to be: a 'grassroots organization.' It was a sham group."
Health Care America showed up online in 2007 (the year "Sicko" was released) and disappeared quickly by early 2008. You can still find their website archived here. As you'll see, their "moderated forum" allowed normal, everyday, in-no-way-employed-by-the-insurance-industry Americans to speak out. For instance, here's something Nicole felt very strongly about:
"Moore shouldn't be allowed to call his film a 'documentary.' It should be called a political commercial. We need to fix our health care system, but we shouldn’t accept a Hollywood moviemaker’s political views as the starting point."
Here's what Wendell Potter revealed about the insurance industry's media strategy:
"As we would do the media training, we would always have someone refer to him as 'Hollywood entertainer' or 'Hollywood moviemaker Michael Moore.' They don't want you to think that it was a documentary that had some truth."
Thanks for your perspective, "Nicole"!
Now, how big was THAT cliff? A pretty good size -- according to a recent study, 45,000 Americans die every year because they don't have health insurance.
And here we are in 2010. A lesser PR firm might be resting on its laurels at this point, content to sit back and watch hundreds of thousands of people continue to be pushed off the various cliffs they've built. But not APCO! Right now they've taken on their biggest challenge yet: leading a giant, multi-million dollar effort to help Wall Street "earn back the trust of the American people."
We may never know the size of this particular cliff. But we can be sure it's gigantic. According to the New York Times, one of the things Wall Street's recession gave us is "the crippling of the government program that provides life-sustaining antiretroviral drugs to Americans with H.I.V. or AIDS who cannot afford them." Internationally, organizations fighting AIDS and other diseases are "hugely afraid" of cutbacks in funding.
Of course, there are the 101 ways recessions kill quietly. For instance, children's hospitals are seeing a sharp 55% rise in the abuse of babies by parents.
And that's just the previous cliff. If APCO and its Wall Street co-conspirators lull us into turning our backs on them again, we can be sure the next cliff -- the next crash -- will be much bigger.
Anyway, this is all just a way for me to say to APCO: No hard feelings! My getting mad at you would be like a chicken who's still happily pecking away getting mad at McDonald's. Compared to the millions you've already turned into McNuggets, you've actually treated me much, much BETTER! Spying on my family, planting smears and lies about me, privately badgering movie critics to give the film a poor review, scaring Americans into believing they'd be committing a near-act of treason were they to go to the theater and see my movie -- hey, ya done good, health insurance companies of America. And, most important, you stopped the nation from getting true universal health care. Good job!
There's only one problem -- I'm not one of those "liberals" you fund in Congress, the ones who fear your power.
I'm me. And that, sadly, is not good for you.
Yours in good health,
Michael Moore
MMFlint@aol.com
MichaelMoore.com
P.S. It seems to me that APCO's discussion of pushing me off a cliff should legitimately be part of their Wikipedia page. And why not something about their role in Wall Street's new PR offensive? So I'm asking everyone interested to write something up that meets Wikipedia's guidelines and help bring the APCO Worldwide entry up to date. Post it somewhere online and send a tweet about it to @mmflint. I'll award a signed copy of "Sicko" by noon Sunday to the best entry...and then deputize you to post it on Wikipedia for real and make sure APCO's minions don't take it down. Just be sure afterward not to walk near any cliffs!
P.P.S. The late, great comedian Bill Hicks had some thoughts about marketing and the people who do it.
Friday, November 19th, 2010
Friends,
When someone talks about pushing you off a cliff, it's just human nature to be curious about them. Who are these people, you wonder, and why would they want to do such a thing?
That's what I was thinking when corporate whistleblower Wendell Potter revealed that, when "Sicko" was being released in 2007, the health insurance industry's PR firm, APCO Worldwide, discussed their Plan B: "Pushing Michael Moore off a cliff."
But after looking into it, it turns out, it's nothing personal! APCO wants to push everyone off a cliff.
APCO was hatched in 1984 as a subsidiary of the Washington, D.C. law firm Arnold & Porter -- best known for its years of representing the giant tobacco conglomerate Philip Morris. APCO set up fake "grassroots" organizations around the country to do the bidding of Big Tobacco. All of a sudden, "normal, everyday, in-no-way-employed-by-Philip Morris Americans" were popping up everywhere. And it turned out they were outraged -- outraged! -- by exactly the things APCO's clients hated (such as, the government telling tobacco companies what to do). In particular, they were "furious" that regular people had the right to sue big corporations...you know, like Philip Morris. (For details, see the 2000 report "The CALA Files" by my friends and colleagues Carl Deal and Joanne Doroshow.)
Right about now you may be wondering: how many Americans get pushed off a cliff by Big Tobacco every year? The answer is 443,000 Americans die every year due to smoking. That's a big cliff.
With this success under their belts, APCO created "The Advancement of Sound Science Coalition." TASSC, funded partly by Exxon, had a leading role in a planned campaign by the fossil fuel industry to create doubt about global warming. The problem for Big Oil speaking out against global warming, according to the campaign's own leaked documents, was that the public could see the "vested interest" that oil companies had in opposing environmental laws. APCO's job was to help conceal those oil company interests.
And boy, have they ever succeeded. Polls now show that, as the world gets hotter, Americans are getting less and less worried about it.
How big is this particular cliff? According to the World Health Organization, climate change contributes -- right now -- to the deaths of 150,000 people every year. By 2030 it may be double that. And after that...well, the sky is literally the limit! I don't think it's crazy to say APCO may rack up even bigger numbers here than they have with tobacco.
With this track record, you can see why, when the health insurance industry wanted to come after "Sicko," they went straight to APCO. The "worst case," as their leaked documents say, was that "Sicko evolves into a sustained populist movement." That simply could not be allowed to happen. Something obviously had to be done.
As Wendell Potter explains, APCO ran their standard playbook, setting up something called "Health Care America." Health Care America, according to Potter, "was received by mainstream reporters, including the New York Times, as a legitimate organization when it was nothing but a front group set up by APCO Worldwide. It was not anything approaching what it was reporting to be: a 'grassroots organization.' It was a sham group."
Health Care America showed up online in 2007 (the year "Sicko" was released) and disappeared quickly by early 2008. You can still find their website archived here. As you'll see, their "moderated forum" allowed normal, everyday, in-no-way-employed-by-the-insurance-industry Americans to speak out. For instance, here's something Nicole felt very strongly about:
"Moore shouldn't be allowed to call his film a 'documentary.' It should be called a political commercial. We need to fix our health care system, but we shouldn’t accept a Hollywood moviemaker’s political views as the starting point."
Here's what Wendell Potter revealed about the insurance industry's media strategy:
"As we would do the media training, we would always have someone refer to him as 'Hollywood entertainer' or 'Hollywood moviemaker Michael Moore.' They don't want you to think that it was a documentary that had some truth."
Thanks for your perspective, "Nicole"!
Now, how big was THAT cliff? A pretty good size -- according to a recent study, 45,000 Americans die every year because they don't have health insurance.
And here we are in 2010. A lesser PR firm might be resting on its laurels at this point, content to sit back and watch hundreds of thousands of people continue to be pushed off the various cliffs they've built. But not APCO! Right now they've taken on their biggest challenge yet: leading a giant, multi-million dollar effort to help Wall Street "earn back the trust of the American people."
We may never know the size of this particular cliff. But we can be sure it's gigantic. According to the New York Times, one of the things Wall Street's recession gave us is "the crippling of the government program that provides life-sustaining antiretroviral drugs to Americans with H.I.V. or AIDS who cannot afford them." Internationally, organizations fighting AIDS and other diseases are "hugely afraid" of cutbacks in funding.
Of course, there are the 101 ways recessions kill quietly. For instance, children's hospitals are seeing a sharp 55% rise in the abuse of babies by parents.
And that's just the previous cliff. If APCO and its Wall Street co-conspirators lull us into turning our backs on them again, we can be sure the next cliff -- the next crash -- will be much bigger.
Anyway, this is all just a way for me to say to APCO: No hard feelings! My getting mad at you would be like a chicken who's still happily pecking away getting mad at McDonald's. Compared to the millions you've already turned into McNuggets, you've actually treated me much, much BETTER! Spying on my family, planting smears and lies about me, privately badgering movie critics to give the film a poor review, scaring Americans into believing they'd be committing a near-act of treason were they to go to the theater and see my movie -- hey, ya done good, health insurance companies of America. And, most important, you stopped the nation from getting true universal health care. Good job!
There's only one problem -- I'm not one of those "liberals" you fund in Congress, the ones who fear your power.
I'm me. And that, sadly, is not good for you.
Yours in good health,
Michael Moore
MMFlint@aol.com
MichaelMoore.com
P.S. It seems to me that APCO's discussion of pushing me off a cliff should legitimately be part of their Wikipedia page. And why not something about their role in Wall Street's new PR offensive? So I'm asking everyone interested to write something up that meets Wikipedia's guidelines and help bring the APCO Worldwide entry up to date. Post it somewhere online and send a tweet about it to @mmflint. I'll award a signed copy of "Sicko" by noon Sunday to the best entry...and then deputize you to post it on Wikipedia for real and make sure APCO's minions don't take it down. Just be sure afterward not to walk near any cliffs!
P.P.S. The late, great comedian Bill Hicks had some thoughts about marketing and the people who do it.
Saturday, November 13, 2010
Insurers Press GOP on Its Health-Care Agenda
http://online.wsj.com/article/SB10001424052748704865104575588842204829432.html
HEALTH INDUSTRY NOVEMBER 3, 2010
Insurers Press GOP on Its Health-Care Agenda
Industry Wants Key Elements of Obama Administration's Overhaul Reversed, but Fears the Removal of Coverage Mandate
JANET ADAMY and JONATHAN WEISMAN
Health-industry groups are pressing to roll back key provisions in the Obama administration's health-care overhaul if Republicans recapture the House, but they're also worried that the party could go too far.
If they win the House, Republicans have promised that one of their first votes will be to repeal the health-care law passed in March. That would ultimately be stopped by the White House, or first by the Senate if Democrats retain control of it.
But Republicans will have the power to block appropriations funding for the least popular parts of the overhaul. And health-industry groups, which aligned themselves with Democrats to pass the overhaul, are now reaching out to Republicans to help shape the GOP's health-care agenda.
Insurers want to reverse tax increases and loosen restrictions on insurance premiums, and several groups hope to tack on medical malpractice protections.
At the same time, the health-care industry is concerned that Republicans want to remove the requirement that most Americans carry health insurance—a provision that rewards health-care providers with millions of new customers.
"Obviously you need good relations with the people who are crafting policy, because when they're crafting policy, they're shooting with real bullets," said Chip Kahn, president of the Federation of American Hospitals, which represents for-profit hospitals.
The insurance industry is working to persuade the next Congress to roll back a roughly $70 billion tax on insurance companies that takes effect in 2014, saying it will disproportionately hit small businesses that insure their workers. It also wants lawmakers to allow insurers to widen the rating bands that dictate how much more insurers can charge older customers.
Insurers also want to tackle the growth of health costs by enacting a new measure to give robust protections against medical malpractice lawsuits to doctors who follow certain "best practice" guidelines, said Karen Ignagni, the insurance industry's top lobbyist.
"We always reach out to both sides of the political aisle and we'll continue doing that because we have had concerns," said Ms. Ignagni, president of America's Health Insurance Plans. She said her group would be most focused on parts of the bill that it believes fail to lower the growth of health costs.
Drug makers want to eliminate a part of the law creating an independent committee to recommend cuts reducing the per-capita rate of growth in Medicare spending, known as the Independent Payment Advisory Board. Such a panel could lead to cuts in federal spending on prescriptions, which would hurt pharmaceutical companies.
"It will come down to specific policies," said Wes Metheny, senior vice president of the Pharmaceutical Research and Manufacturers of America, the drug industry's main lobby. "We were very supportive of health-care reform last year and there are some good things we think need to stay in place."
Republicans have been highly critical of the law's requirement that nearly all Americans carry insurance or pay a penalty. Some industry groups, which fought fiercely for such a mandate, say they are now looking for other ways of ensuring that healthy customers are funneled into insurance pools should that provision get dismantled.
"If there's a way to make sure that the primary goal" is met of ensuring access to affordable coverage, "we're open to lots of different ideas," Mr. Metheny said.
Health-care lobbyists say ideas under consideration include imposing higher rates for people who don't buy insurance in the law's early years and automatically enrolling people who are eligible for coverage subsidies. An administration official said Democrats initially looked at auto-enrollment and concluded it had drawbacks.
Most health-industry groups—including Ms. Ignagni's insurance group, which criticized the final law—say they're not ready to take a position on the Republicans' repeal effort.
Some of the architects of the health law say they fear a repeal less than inadequate funding for putting the law into effect. Two officials said underfunding could cripple efforts to set up federally regulated exchanges where individuals and small businesses can shop for insurance.
At the same time, the federal government will still have to enforce parts of the law that force insurers to cover people with pre-existing medical conditions and curb caps on coverage. Insurance companies fear that if they face new mandates but the law fails to bring millions of healthy uninsured Americans into the system, they could wind up with a relatively unhealthy customer base.
"It's absolutely the worst possible outcome," one former White House official said.
Write to Janet Adamy at janet.adamy@wsj.com and Jonathan Weisman at jonathan.weisman@wsj.com
HEALTH INDUSTRY NOVEMBER 3, 2010
Insurers Press GOP on Its Health-Care Agenda
Industry Wants Key Elements of Obama Administration's Overhaul Reversed, but Fears the Removal of Coverage Mandate
JANET ADAMY and JONATHAN WEISMAN
Health-industry groups are pressing to roll back key provisions in the Obama administration's health-care overhaul if Republicans recapture the House, but they're also worried that the party could go too far.
If they win the House, Republicans have promised that one of their first votes will be to repeal the health-care law passed in March. That would ultimately be stopped by the White House, or first by the Senate if Democrats retain control of it.
But Republicans will have the power to block appropriations funding for the least popular parts of the overhaul. And health-industry groups, which aligned themselves with Democrats to pass the overhaul, are now reaching out to Republicans to help shape the GOP's health-care agenda.
Insurers want to reverse tax increases and loosen restrictions on insurance premiums, and several groups hope to tack on medical malpractice protections.
At the same time, the health-care industry is concerned that Republicans want to remove the requirement that most Americans carry health insurance—a provision that rewards health-care providers with millions of new customers.
"Obviously you need good relations with the people who are crafting policy, because when they're crafting policy, they're shooting with real bullets," said Chip Kahn, president of the Federation of American Hospitals, which represents for-profit hospitals.
The insurance industry is working to persuade the next Congress to roll back a roughly $70 billion tax on insurance companies that takes effect in 2014, saying it will disproportionately hit small businesses that insure their workers. It also wants lawmakers to allow insurers to widen the rating bands that dictate how much more insurers can charge older customers.
Insurers also want to tackle the growth of health costs by enacting a new measure to give robust protections against medical malpractice lawsuits to doctors who follow certain "best practice" guidelines, said Karen Ignagni, the insurance industry's top lobbyist.
"We always reach out to both sides of the political aisle and we'll continue doing that because we have had concerns," said Ms. Ignagni, president of America's Health Insurance Plans. She said her group would be most focused on parts of the bill that it believes fail to lower the growth of health costs.
Drug makers want to eliminate a part of the law creating an independent committee to recommend cuts reducing the per-capita rate of growth in Medicare spending, known as the Independent Payment Advisory Board. Such a panel could lead to cuts in federal spending on prescriptions, which would hurt pharmaceutical companies.
"It will come down to specific policies," said Wes Metheny, senior vice president of the Pharmaceutical Research and Manufacturers of America, the drug industry's main lobby. "We were very supportive of health-care reform last year and there are some good things we think need to stay in place."
Republicans have been highly critical of the law's requirement that nearly all Americans carry insurance or pay a penalty. Some industry groups, which fought fiercely for such a mandate, say they are now looking for other ways of ensuring that healthy customers are funneled into insurance pools should that provision get dismantled.
"If there's a way to make sure that the primary goal" is met of ensuring access to affordable coverage, "we're open to lots of different ideas," Mr. Metheny said.
Health-care lobbyists say ideas under consideration include imposing higher rates for people who don't buy insurance in the law's early years and automatically enrolling people who are eligible for coverage subsidies. An administration official said Democrats initially looked at auto-enrollment and concluded it had drawbacks.
Most health-industry groups—including Ms. Ignagni's insurance group, which criticized the final law—say they're not ready to take a position on the Republicans' repeal effort.
Some of the architects of the health law say they fear a repeal less than inadequate funding for putting the law into effect. Two officials said underfunding could cripple efforts to set up federally regulated exchanges where individuals and small businesses can shop for insurance.
At the same time, the federal government will still have to enforce parts of the law that force insurers to cover people with pre-existing medical conditions and curb caps on coverage. Insurance companies fear that if they face new mandates but the law fails to bring millions of healthy uninsured Americans into the system, they could wind up with a relatively unhealthy customer base.
"It's absolutely the worst possible outcome," one former White House official said.
Write to Janet Adamy at janet.adamy@wsj.com and Jonathan Weisman at jonathan.weisman@wsj.com
Wednesday, October 27, 2010
Michigan Blues
October 19th, 2010
Michigan Blues
Michael Moore
MichaelMoore.com
I have a rule of thumb that's served me well my whole life: whenever corporate executives begin talking about how they support "free markets" and "competition," check to see if you still have your wallet.
That's because no one -- not Karl Marx, not Fidel Castro, not your niece who owns the only lemonade stand on the block -- hates competition more than corporations. The whole goal of a corporation is to crush all the competition. When corporate executives start pushing for "free market policies," what they mean is a government that lets them become a monopoly.
Don't believe me? Well, count how many corporate CEOs (and Republican politicians) stand up and cheer for the Obama administration today:
The Justice Department sued Blue Cross Blue Shield of Michigan on Monday, asserting that the company, the state’s dominant health insurer, had violated antitrust laws and secured a huge competitive advantage by forcing hospitals to charge higher prices to Blue Cross’s rivals.
The civil case appears to have broad implications because many local insurance markets, like those in Michigan, are highly concentrated, and Blue Cross and Blue Shield plans often have the largest shares of those markets. [...]
Blue Cross and Blue Shield, like most insurers, contracts with hospitals, doctors, labs and other providers for services. The lawsuit took direct aim at contract clauses stipulating that no insurance companies could obtain better rates from the providers than Blue Cross. Some of these contract provisions, known as "most favored nation" clauses, require hospitals to charge other insurers a specified percentage more than they charge Blue Cross -- in some cases, 30 to 40 percent more, the lawsuit said.
As the New York Times reports, Blue Cross Blue Shield insures 60% of Michiganders -- including me and everyone in my office. They have nine times more customers than the state's next largest insurer.
And they're just doing what businesses do, even non-profits like Blue Shield: use all their power to eliminate the competition. In fact, if Daniel J. Loepp, Blue Cross's CEO, didn't do that, he'd be kicked out and someone who did would replace him. (I'd hate to see that happen -- he always seems like a real gentlemen when he writes every year to tell us they're hiking our premiums 27%.)
So this is the future we face with health care in the U.S., even with Obama's new bill: endless battles between the federal government and health insurance corporations as the companies use all their ingenuity to give us fewer choices and higher prices...at least until we get President Palin, who'll stop fighting the biggest insurance companies and start helping them kill their competition. Which she'll do while giving tons of speeches about the need for competition and free markets.
Is there any solution for Michigan? Yes, and it's just across the river in Canada: they have single-payer health insurance. Of course, at this point we pretty much do too. The difference is that our single-payer is run by a corporation. Theirs is run by the government -- or to put it another way, democratically.
P.S. Blue Cross Blue Shield is fantastic at making secret agreements with hospitals, but not so great at actually getting people health care: the U.S. is now ranked 49th worldwide in life expectancy. Look out, French Polynesia, we're coming for you next!
Michigan Blues
Michael Moore
MichaelMoore.com
I have a rule of thumb that's served me well my whole life: whenever corporate executives begin talking about how they support "free markets" and "competition," check to see if you still have your wallet.
That's because no one -- not Karl Marx, not Fidel Castro, not your niece who owns the only lemonade stand on the block -- hates competition more than corporations. The whole goal of a corporation is to crush all the competition. When corporate executives start pushing for "free market policies," what they mean is a government that lets them become a monopoly.
Don't believe me? Well, count how many corporate CEOs (and Republican politicians) stand up and cheer for the Obama administration today:
The Justice Department sued Blue Cross Blue Shield of Michigan on Monday, asserting that the company, the state’s dominant health insurer, had violated antitrust laws and secured a huge competitive advantage by forcing hospitals to charge higher prices to Blue Cross’s rivals.
The civil case appears to have broad implications because many local insurance markets, like those in Michigan, are highly concentrated, and Blue Cross and Blue Shield plans often have the largest shares of those markets. [...]
Blue Cross and Blue Shield, like most insurers, contracts with hospitals, doctors, labs and other providers for services. The lawsuit took direct aim at contract clauses stipulating that no insurance companies could obtain better rates from the providers than Blue Cross. Some of these contract provisions, known as "most favored nation" clauses, require hospitals to charge other insurers a specified percentage more than they charge Blue Cross -- in some cases, 30 to 40 percent more, the lawsuit said.
As the New York Times reports, Blue Cross Blue Shield insures 60% of Michiganders -- including me and everyone in my office. They have nine times more customers than the state's next largest insurer.
And they're just doing what businesses do, even non-profits like Blue Shield: use all their power to eliminate the competition. In fact, if Daniel J. Loepp, Blue Cross's CEO, didn't do that, he'd be kicked out and someone who did would replace him. (I'd hate to see that happen -- he always seems like a real gentlemen when he writes every year to tell us they're hiking our premiums 27%.)
So this is the future we face with health care in the U.S., even with Obama's new bill: endless battles between the federal government and health insurance corporations as the companies use all their ingenuity to give us fewer choices and higher prices...at least until we get President Palin, who'll stop fighting the biggest insurance companies and start helping them kill their competition. Which she'll do while giving tons of speeches about the need for competition and free markets.
Is there any solution for Michigan? Yes, and it's just across the river in Canada: they have single-payer health insurance. Of course, at this point we pretty much do too. The difference is that our single-payer is run by a corporation. Theirs is run by the government -- or to put it another way, democratically.
P.S. Blue Cross Blue Shield is fantastic at making secret agreements with hospitals, but not so great at actually getting people health care: the U.S. is now ranked 49th worldwide in life expectancy. Look out, French Polynesia, we're coming for you next!
Tuesday, October 19, 2010
Federal judge lets 20 states' health-care lawsuit move forward
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/14/AR2010101406842.html
Federal judge lets 20 states' health-care lawsuit move forward
N.C. Aizenman
Washington Post Staff Writer
Friday, October 15, 2010
A federal judge ruled Thursday that a lawsuit brought by 20 states challenging the health-care overhaul law can move forward.
The decision by Judge Roger Vinson of the U.S. District Court for the Northern District of Florida to reject the Obama administration's request to throw out the case was expected. During oral arguments over the government's motion to dismiss last month, Vinson had indicated that he was likely to rule at least partly in the states' favor. His ruling is limited to the plaintiffs' standing to mount the case, as opposed to its merits - which will be discussed at a summary judgment hearing scheduled for Dec. 16.
But Vinson's opinion delineates the issues over which the states - and two private citizens and a business group also party to the suit - will and will not be allowed to make arguments in what could shape up to be one of the most serious of about a dozen pending legal challenges to President Obama's signature legislative achievement.
Specifically, while dismissing most of the states' other complaints, Vinson ruled that they can contest whether the law's "individual mandate" requiring virtually all Americans to buy health insurance exceeds Congress's constitutional authority to regulate commerce and make laws "necessary and proper" for carrying out its powers.
Last week, in a suit brought by private parties, a federal judge in Michigan unequivocally upheld Congress's authority on that point. However, Vinson described the question as far from settled, because the relevant clauses of the Constitution "have never been applied in such a manner before."
Vinson added that "the power that the individual mandate seeks to harness is simply without prior precedent." Although he also noted that, "of course, to say that something is 'novel' and 'unprecedented' does not necessarily mean that it is 'unconstitutional' and 'improper.' There may be a first time for anything."
On a related note, Vinson ruled that the fee imposed on people who fail to comply with the individual mandate amounts to a "penalty" rather than a "tax." This would mean that Congress's ability to impose it cannot derive from its constitutional powers of taxation. Vinson, an appointee of President Ronald Reagan, also rebuked government attorneys for arguing that the fee was a tax in the response to the lawsuit after congressional supporters had characterized it as a "penalty" during the debate over the health-care law.
"Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an 'Alice-in-Wonderland' tack and argue in court that Congress really meant something else entirely," Vinson wrote, "thereby circumventing the safeguard that exists to keep their broad power in check."
Vinson will also permit the states to present arguments on whether the law's expansion of Medicaid to cover not just the very poor but also people who are low-income impinges on state sovereignty because it could require states to spend billions more on the program.
Medicaid is a voluntary federal-state partnership. If states don't wish to spend the extra money to expand coverage, they can - at least theoretically - pull out. However, the states contend that because doing that would force them to give up a huge cash infusion from the federal government and leave millions of their poorest citizens without insurance, they effectively have no choice.
Florida Attorney General Bill McCollum (R), who was the first to file the suit, issued a statement pronouncing Vinson's ruling "a victory" that "confirms the significance of this lawsuit protecting against the federal health care act's intrusions on individual liberty and limited government."
In addition to Florida, the states party to the suit are South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia and Alaska. The National Federation of Independent Business has also joined.
Tracy Schmaler, a spokeswoman for the Justice Department, said in a statement, "While we are disappointed that the Court did not dismiss the entire case . . . we remain confident that the law ultimately will be upheld." Referring to the Michigan suit, she added that "the only court that has decided the constitutionality of this law has sustained it and found that the minimum coverage provision was a reasonable step for Congress to take in reforming the nation's health-care system."
A separate, but similar suit brought by Virginia also survived a government motion to dismiss, with oral arguments on the merits scheduled for Monday.
Federal judge lets 20 states' health-care lawsuit move forward
N.C. Aizenman
Washington Post Staff Writer
Friday, October 15, 2010
A federal judge ruled Thursday that a lawsuit brought by 20 states challenging the health-care overhaul law can move forward.
The decision by Judge Roger Vinson of the U.S. District Court for the Northern District of Florida to reject the Obama administration's request to throw out the case was expected. During oral arguments over the government's motion to dismiss last month, Vinson had indicated that he was likely to rule at least partly in the states' favor. His ruling is limited to the plaintiffs' standing to mount the case, as opposed to its merits - which will be discussed at a summary judgment hearing scheduled for Dec. 16.
But Vinson's opinion delineates the issues over which the states - and two private citizens and a business group also party to the suit - will and will not be allowed to make arguments in what could shape up to be one of the most serious of about a dozen pending legal challenges to President Obama's signature legislative achievement.
Specifically, while dismissing most of the states' other complaints, Vinson ruled that they can contest whether the law's "individual mandate" requiring virtually all Americans to buy health insurance exceeds Congress's constitutional authority to regulate commerce and make laws "necessary and proper" for carrying out its powers.
Last week, in a suit brought by private parties, a federal judge in Michigan unequivocally upheld Congress's authority on that point. However, Vinson described the question as far from settled, because the relevant clauses of the Constitution "have never been applied in such a manner before."
Vinson added that "the power that the individual mandate seeks to harness is simply without prior precedent." Although he also noted that, "of course, to say that something is 'novel' and 'unprecedented' does not necessarily mean that it is 'unconstitutional' and 'improper.' There may be a first time for anything."
On a related note, Vinson ruled that the fee imposed on people who fail to comply with the individual mandate amounts to a "penalty" rather than a "tax." This would mean that Congress's ability to impose it cannot derive from its constitutional powers of taxation. Vinson, an appointee of President Ronald Reagan, also rebuked government attorneys for arguing that the fee was a tax in the response to the lawsuit after congressional supporters had characterized it as a "penalty" during the debate over the health-care law.
"Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an 'Alice-in-Wonderland' tack and argue in court that Congress really meant something else entirely," Vinson wrote, "thereby circumventing the safeguard that exists to keep their broad power in check."
Vinson will also permit the states to present arguments on whether the law's expansion of Medicaid to cover not just the very poor but also people who are low-income impinges on state sovereignty because it could require states to spend billions more on the program.
Medicaid is a voluntary federal-state partnership. If states don't wish to spend the extra money to expand coverage, they can - at least theoretically - pull out. However, the states contend that because doing that would force them to give up a huge cash infusion from the federal government and leave millions of their poorest citizens without insurance, they effectively have no choice.
Florida Attorney General Bill McCollum (R), who was the first to file the suit, issued a statement pronouncing Vinson's ruling "a victory" that "confirms the significance of this lawsuit protecting against the federal health care act's intrusions on individual liberty and limited government."
In addition to Florida, the states party to the suit are South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia and Alaska. The National Federation of Independent Business has also joined.
Tracy Schmaler, a spokeswoman for the Justice Department, said in a statement, "While we are disappointed that the Court did not dismiss the entire case . . . we remain confident that the law ultimately will be upheld." Referring to the Michigan suit, she added that "the only court that has decided the constitutionality of this law has sustained it and found that the minimum coverage provision was a reasonable step for Congress to take in reforming the nation's health-care system."
A separate, but similar suit brought by Virginia also survived a government motion to dismiss, with oral arguments on the merits scheduled for Monday.
Friday, October 8, 2010
McDonald's Health-Insurance Offerings May Be Fried
http://www.foxbusiness.com/markets/2010/09/30/mcdonalds-health-insurance-offerings-fried/
McDonald's Health-Insurance Offerings May Be Fried
Matt Egan
September 30, 2010
Unless regulators waive a requirement of the health-care overhaul, McDonald’s has warned federal regulators it could drop its health insurance plan for almost 30,000 hourly workers, The Wall Street Journal reported.
Last week, a senior McDonald’s official told the Department of Health and Human Services the hamburger chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care, the paper reported, citing a company memo.
McDonald’s disagrees with the overhaul’s requirement that “mini-med” insurance plans spend a minimum of 80% of premium revenue on medical care, the Journal said.
The fast-food giant reportedly told federal regulators it would be “economically prohibitive” for its insurance carriers to continue to cover hourly workers unless it gets a waiver on the 80% requirement. It added that having “to drop our current mini-med offering would represent a huge disruption to our 29,500 participants."
Restaurant and retailer trade groups have warned that employers could drop their coverage unless the government loosens this requirement.
However, the White House and McDonald’s pushed back against the Journal story.
“This story is wrong. The new law provides significant flexibility to maintain coverage for workers. Additionally, this story is premature as guidance on the new medical loss ratio rules has not even been issued,” Jessica Santillo, a Health and Human Services spokesperson, told FOX News.
In a statement released to reporters, Steve Russell, senior vice president and chief people officer at McDonald’s, said, “Media reports stating that we plan to drop health care coverage for our employees are completely false. These reports are purely speculative, misleading and intended to garner attention.”
McDonald’s said most of its franchisees offer a limited benefits plan and almost 30,000 employees are enrolled in medical coverage.
“We will continue to have an open dialogue with legislators as well as regulators,” Russell said.
McDonald’s stock didn’t appear to be influenced by the reports, falling 0.03% to $74.43 Thursday morning.
McDonald's Health-Insurance Offerings May Be Fried
Matt Egan
September 30, 2010
Unless regulators waive a requirement of the health-care overhaul, McDonald’s has warned federal regulators it could drop its health insurance plan for almost 30,000 hourly workers, The Wall Street Journal reported.
Last week, a senior McDonald’s official told the Department of Health and Human Services the hamburger chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care, the paper reported, citing a company memo.
McDonald’s disagrees with the overhaul’s requirement that “mini-med” insurance plans spend a minimum of 80% of premium revenue on medical care, the Journal said.
The fast-food giant reportedly told federal regulators it would be “economically prohibitive” for its insurance carriers to continue to cover hourly workers unless it gets a waiver on the 80% requirement. It added that having “to drop our current mini-med offering would represent a huge disruption to our 29,500 participants."
Restaurant and retailer trade groups have warned that employers could drop their coverage unless the government loosens this requirement.
However, the White House and McDonald’s pushed back against the Journal story.
“This story is wrong. The new law provides significant flexibility to maintain coverage for workers. Additionally, this story is premature as guidance on the new medical loss ratio rules has not even been issued,” Jessica Santillo, a Health and Human Services spokesperson, told FOX News.
In a statement released to reporters, Steve Russell, senior vice president and chief people officer at McDonald’s, said, “Media reports stating that we plan to drop health care coverage for our employees are completely false. These reports are purely speculative, misleading and intended to garner attention.”
McDonald’s said most of its franchisees offer a limited benefits plan and almost 30,000 employees are enrolled in medical coverage.
“We will continue to have an open dialogue with legislators as well as regulators,” Russell said.
McDonald’s stock didn’t appear to be influenced by the reports, falling 0.03% to $74.43 Thursday morning.
Monday, September 27, 2010
Big health insurers to stop selling new child-only policies
http://www.latimes.com/health/la-fi-kids-health-insurance-20100921,0,799167.story
Big health insurers to stop selling new child-only policies
Anthem Blue Cross, Aetna Inc. and others say they will make the move as soon as Thursday when parts of the new healthcare law take effect. They cite potentially huge and unexpected costs for insuring children.
Duke Helfand, Los Angeles Times
September 21, 2010
Major health insurance companies in California and other states have decided to stop selling policies for children rather than comply with a new federal healthcare law that bars them from rejecting youngsters with preexisting medical conditions.
Anthem Blue Cross, Aetna Inc. and others will halt new child-only policies in California, Illinois, Florida, Connecticut and elsewhere as early as Thursday when provisions of the nation's new healthcare law take effect, including a requirement that insurers cover children under age 19 regardless of their health histories.
The action will apply only to new coverage sought for children and not to existing child-only plans, family policies or insurance provided to youngsters through their parents' employers. An estimated 80,000 California children currently without insurance — and as many as 500,000 nationwide — would be affected, according to experts.
Insurers said they were acting because the new federal requirement could create huge and unexpected costs for covering children. They said the rule might prompt parents to buy policies only after their kids became sick, producing a glut of ill youngsters to insure. As a result, they said, many companies would flee the marketplace, leaving behind a handful to shoulder a huge financial burden.
The insurers said they now sell relatively few child-only policies, and thus the changes will have a small effect on families.
"Unfortunately, this has created an un-level competitive environment," Anthem Blue Cross, California's largest for-profit insurer, said in a statement declaring its intention to "suspend the sale of child-only policies" on Thursday, six months after the healthcare overhaul was signed.
The change has angered lawmakers, regulators and healthcare advocates, who say it will force more families to enroll in already strained public insurance programs such as Medi-Cal for the poor in California.
The White House weighed in Tuesday, condemning Anthem corporate parent WellPoint Inc. and others that plan to stop selling child-only policies.
"It's obviously very unfortunate that insurance companies continue to make decisions on the backs of children and families that need their help," White House Press Secretary Robert Gibbs said at a news briefing.
The Obama administration had told insurers they could solve the problem by issuing policies only during designated enrollment periods. Some White House officials, however, noted that families who can't find policies might be able to sign up for high-risk pools being set up around the country as part of the new healthcare law.
In California, the stakes may be particularly high for insurers who abandon child-only policies. A bill awaiting Gov. Arnold Schwarzenegger's signature would bar such companies from selling insurance in the lucrative individual market for five years. A Schwarzenegger spokeswoman said the governor had not yet taken a position on the measure.
Assemblyman Mike Feuer (D- Los Angeles), the bill's author, voiced frustration over the insurers' plans and singled out Anthem Blue Cross, whose corporate parent notified brokers nationwide Friday of its decision to exit the child-only business in 10 states, including Colorado, Connecticut, Missouri, Nevada and Georgia as well as California.
"At a time when we are launching a national approach to ensure that all children have access to healthcare, Anthem's actions represent a step backwards," Feuer said. "By threatening to drop child-only policies in California, the company jeopardizes the health of families and children. I call on Anthem to reconsider its plan."
Other regional and national insurers also plan to stop selling insurance policies exclusively for children. Among the companies is UnitedHealth Group Inc., the nation's largest insurer by revenue. It did not say which states would be affected.
"We continue to believe that regulations can be structured that will enable child-only plans to be offered, and we are working toward that goal," spokesman Tyler Mason said.
Aetna said that effective Oct. 1 it would no longer offer policies in the 32 states where it conducts business, including California, Florida, Illinois, Virginia and Pennsylvania.
Cigna Corp. will halt the policies in 10 states, including California, Arizona, Colorado, Tennessee and Texas.
"We made a decision to stop offering child-only policies to ensure that we can remain competitive in the 10 markets where we sell individual and family plans," Cigna spokeswoman Gwyn Dilday said. "We'll continue to evaluate this policy and could reconsider changing this position as market dynamics change."
The explanations left healthcare advocates fuming. They accused insurers of trying to skirt the law's new requirement to cover children with health problems.
"Insurers need to decide if they are in the business of providing care or denying coverage," said Anthony Wright, executive director of Health Access California, a consumer group. "In California, we hope our insurers come to an equitable compromise that allows access for all children and affordability for those with preexisting conditions."
In Colorado, regulators and insurance carriers are trying to work out such a compromise. The state's insurance commissioner met Friday with several insurers, including Anthem, Cigna and Aetna. The two sides did not reach an agreement, but officials remain hopeful they can broker a deal before Thursday.
"Obviously this deadline looms large," said Jo Donlin, director of external affairs for the Colorado Division of Insurance. "The commissioner wants families to have access to the insurance they need. Both sides of this want to find a solution."
duke.helfand@latimes.com
Noam N. Levey in the Washington bureau contributed to this report.
Big health insurers to stop selling new child-only policies
Anthem Blue Cross, Aetna Inc. and others say they will make the move as soon as Thursday when parts of the new healthcare law take effect. They cite potentially huge and unexpected costs for insuring children.
Duke Helfand, Los Angeles Times
September 21, 2010
Major health insurance companies in California and other states have decided to stop selling policies for children rather than comply with a new federal healthcare law that bars them from rejecting youngsters with preexisting medical conditions.
Anthem Blue Cross, Aetna Inc. and others will halt new child-only policies in California, Illinois, Florida, Connecticut and elsewhere as early as Thursday when provisions of the nation's new healthcare law take effect, including a requirement that insurers cover children under age 19 regardless of their health histories.
The action will apply only to new coverage sought for children and not to existing child-only plans, family policies or insurance provided to youngsters through their parents' employers. An estimated 80,000 California children currently without insurance — and as many as 500,000 nationwide — would be affected, according to experts.
Insurers said they were acting because the new federal requirement could create huge and unexpected costs for covering children. They said the rule might prompt parents to buy policies only after their kids became sick, producing a glut of ill youngsters to insure. As a result, they said, many companies would flee the marketplace, leaving behind a handful to shoulder a huge financial burden.
The insurers said they now sell relatively few child-only policies, and thus the changes will have a small effect on families.
"Unfortunately, this has created an un-level competitive environment," Anthem Blue Cross, California's largest for-profit insurer, said in a statement declaring its intention to "suspend the sale of child-only policies" on Thursday, six months after the healthcare overhaul was signed.
The change has angered lawmakers, regulators and healthcare advocates, who say it will force more families to enroll in already strained public insurance programs such as Medi-Cal for the poor in California.
The White House weighed in Tuesday, condemning Anthem corporate parent WellPoint Inc. and others that plan to stop selling child-only policies.
"It's obviously very unfortunate that insurance companies continue to make decisions on the backs of children and families that need their help," White House Press Secretary Robert Gibbs said at a news briefing.
The Obama administration had told insurers they could solve the problem by issuing policies only during designated enrollment periods. Some White House officials, however, noted that families who can't find policies might be able to sign up for high-risk pools being set up around the country as part of the new healthcare law.
In California, the stakes may be particularly high for insurers who abandon child-only policies. A bill awaiting Gov. Arnold Schwarzenegger's signature would bar such companies from selling insurance in the lucrative individual market for five years. A Schwarzenegger spokeswoman said the governor had not yet taken a position on the measure.
Assemblyman Mike Feuer (D- Los Angeles), the bill's author, voiced frustration over the insurers' plans and singled out Anthem Blue Cross, whose corporate parent notified brokers nationwide Friday of its decision to exit the child-only business in 10 states, including Colorado, Connecticut, Missouri, Nevada and Georgia as well as California.
"At a time when we are launching a national approach to ensure that all children have access to healthcare, Anthem's actions represent a step backwards," Feuer said. "By threatening to drop child-only policies in California, the company jeopardizes the health of families and children. I call on Anthem to reconsider its plan."
Other regional and national insurers also plan to stop selling insurance policies exclusively for children. Among the companies is UnitedHealth Group Inc., the nation's largest insurer by revenue. It did not say which states would be affected.
"We continue to believe that regulations can be structured that will enable child-only plans to be offered, and we are working toward that goal," spokesman Tyler Mason said.
Aetna said that effective Oct. 1 it would no longer offer policies in the 32 states where it conducts business, including California, Florida, Illinois, Virginia and Pennsylvania.
Cigna Corp. will halt the policies in 10 states, including California, Arizona, Colorado, Tennessee and Texas.
"We made a decision to stop offering child-only policies to ensure that we can remain competitive in the 10 markets where we sell individual and family plans," Cigna spokeswoman Gwyn Dilday said. "We'll continue to evaluate this policy and could reconsider changing this position as market dynamics change."
The explanations left healthcare advocates fuming. They accused insurers of trying to skirt the law's new requirement to cover children with health problems.
"Insurers need to decide if they are in the business of providing care or denying coverage," said Anthony Wright, executive director of Health Access California, a consumer group. "In California, we hope our insurers come to an equitable compromise that allows access for all children and affordability for those with preexisting conditions."
In Colorado, regulators and insurance carriers are trying to work out such a compromise. The state's insurance commissioner met Friday with several insurers, including Anthem, Cigna and Aetna. The two sides did not reach an agreement, but officials remain hopeful they can broker a deal before Thursday.
"Obviously this deadline looms large," said Jo Donlin, director of external affairs for the Colorado Division of Insurance. "The commissioner wants families to have access to the insurance they need. Both sides of this want to find a solution."
duke.helfand@latimes.com
Noam N. Levey in the Washington bureau contributed to this report.
The Half-Empty Glass
http://fdlaction.firedoglake.com/2010/09/20/the-half-empty-glass-connecticut-insurance-rates-soar-to-pay-for-health-care-bill-provisions/
The Half-Empty Glass: Connecticut Insurance Rates Soar to Pay For Health Care Bill Provisions
Jane Hamsher
Monday September 20, 2010
I still can’t quite wrap my head around the fact that Obama thought it was a good idea, in midst of 9.6% unemployment, and on the day after the census bureau announces that 1 in 7 Americans are living in poverty, to show up at the gated Connecticut mansion of a guy named Rich Richman and tell a privileged few at a private $30,000 a plate fundraiser that people who see their glass “half empty” are pessimists and that the health care bill represents “the most productive, progressive legislative session in at least a generation.”
The people in Connecticut who couldn’t afford $30,000 to attend an event that raised $1 million for the DNC might not see it that way:
Sept. 19 – Connecticut regulators in recent days approved increases of more than 20 percent on some health plans starting Oct. 1, including a series of rates requested by Anthem Blue Cross & Blue Shield, by far the largest health insurer in the state...
The higher prices, however, are a glimpse of what may be in store later this year when insurers propose new rates for 2011.
The major difference between rising prices this year and years past is the cost of new benefits added to health plans starting Thursday as mandated by the sweeping reform approved by Congress in March.
Insurers say the cost of new benefits will increase prices more than 20 percent for certain plans.
When Obama was selling his health care plan to the public on June 22, 2010, he said that the changes mandated by the health care bill this year meant that people would be seeing benefits immediately:
[S]tarting in September, some of the worst abuses will be banned forever. No more discriminating against children with preexisting conditions. No more retroactively dropping somebody’s policy when they get sick if they made an unintentional mistake on an application. No more lifetime limits or restrictive annual limits on coverage. Those days are over.
He also said “we’ve got to make sure that this new law is not being used as an excuse to simply drive up costs.”
But that’s exactly what’s happening in Connecticut.
Anthem Blue Cross Blue Shield, the largest insurer in Connecticut, has already requested and received increases on individual market plans to cover the cost of new benefits mandated by the health care bill that start this year:
•4.8% increase related to the mandate about pre-existing conditions for children
•up to 8.5% increases for mandated preventive care with no deductibles
Anthem has also said that removing annual spending caps would cause the cost of individual market plans to “rise by as much as 22.9 percent.”
Obama, the Urban Institute and others were relying on estimates made by the Department of Labor that were used to calculate the impact of the health care bill’s 2010 mandates:
•Removal of annual spending caps: “The Departments estimate that the transfer would be three-quarters of a percent or less for lifetime limits and one-tenth of a percent or less for annual limits, under a situation of pure community rating where all the costs get spread across the insured population.”
•Mandates for preventive care: “There will likely be negligible transfers due to this provision given no changes in coverage or cost-sharing.”
•Coverage for children with preexisting conditions: “Even in States with community rating, the cost and transfer effects will be relatively small, at most a few tenths of a percent over the next few years.”
But Connecticut isn’t the only place this is happening. As the Wall Street Journal reported last week, the health care bill is being used as an excuse by insurance companies to jack up rates all across the country.
It’s clear that the rate increases are far in excess of what these reform provisions actually cost. And there is nothing in the health care bill that stops them from doing so. In a free market, other insurance companies would be able to enter the market and provide a better product at a lower price. But health insurance companies are exempt from anti-trust regulation, and can legally operate as monopolies and engage in monopolistic practices. The health care bill did nothing to stop that.
That’s why the people Obama now mocks wanted a public option. If the government is going to assign its right to collect taxes to private companies (which is what they did when they passed the mandate), and allow the IRS to be used as an enforcement mechanism, people wanted to feel like there was an alternative. Faced with looming rate increases far in excess of anything they were told when the bill was being sold to them, in the wake of rising economic insecurity and high unemployment, people are justifiably anxious.
Single mother Susie Madrack explains why people like her found Obama’s comments upsetting:
[T]hose of us left living on a wing and prayer thanks to your “half full,” half-assed economic policies just don’t have a sense of humor about our continuing plight. I know it’s been a long time since your mom got food stamps, but you might want to give that empathy thing some thought.”
The usual suspects are cheering Obama’s comments, including the American Prospect, who call them “justified mockery.” But those who enjoy a ”subsidized existence vomiting up flabby consensus received opinions within the federal zone” generally aren’t the working class single moms who have to worry about things like rising health insurance premiums. So it’s no surprise they wouldn’t understand why someone might feel their glass is “half empty” these days.
The Half-Empty Glass: Connecticut Insurance Rates Soar to Pay For Health Care Bill Provisions
Jane Hamsher
Monday September 20, 2010
I still can’t quite wrap my head around the fact that Obama thought it was a good idea, in midst of 9.6% unemployment, and on the day after the census bureau announces that 1 in 7 Americans are living in poverty, to show up at the gated Connecticut mansion of a guy named Rich Richman and tell a privileged few at a private $30,000 a plate fundraiser that people who see their glass “half empty” are pessimists and that the health care bill represents “the most productive, progressive legislative session in at least a generation.”
The people in Connecticut who couldn’t afford $30,000 to attend an event that raised $1 million for the DNC might not see it that way:
Sept. 19 – Connecticut regulators in recent days approved increases of more than 20 percent on some health plans starting Oct. 1, including a series of rates requested by Anthem Blue Cross & Blue Shield, by far the largest health insurer in the state...
The higher prices, however, are a glimpse of what may be in store later this year when insurers propose new rates for 2011.
The major difference between rising prices this year and years past is the cost of new benefits added to health plans starting Thursday as mandated by the sweeping reform approved by Congress in March.
Insurers say the cost of new benefits will increase prices more than 20 percent for certain plans.
When Obama was selling his health care plan to the public on June 22, 2010, he said that the changes mandated by the health care bill this year meant that people would be seeing benefits immediately:
[S]tarting in September, some of the worst abuses will be banned forever. No more discriminating against children with preexisting conditions. No more retroactively dropping somebody’s policy when they get sick if they made an unintentional mistake on an application. No more lifetime limits or restrictive annual limits on coverage. Those days are over.
He also said “we’ve got to make sure that this new law is not being used as an excuse to simply drive up costs.”
But that’s exactly what’s happening in Connecticut.
Anthem Blue Cross Blue Shield, the largest insurer in Connecticut, has already requested and received increases on individual market plans to cover the cost of new benefits mandated by the health care bill that start this year:
•4.8% increase related to the mandate about pre-existing conditions for children
•up to 8.5% increases for mandated preventive care with no deductibles
Anthem has also said that removing annual spending caps would cause the cost of individual market plans to “rise by as much as 22.9 percent.”
Obama, the Urban Institute and others were relying on estimates made by the Department of Labor that were used to calculate the impact of the health care bill’s 2010 mandates:
•Removal of annual spending caps: “The Departments estimate that the transfer would be three-quarters of a percent or less for lifetime limits and one-tenth of a percent or less for annual limits, under a situation of pure community rating where all the costs get spread across the insured population.”
•Mandates for preventive care: “There will likely be negligible transfers due to this provision given no changes in coverage or cost-sharing.”
•Coverage for children with preexisting conditions: “Even in States with community rating, the cost and transfer effects will be relatively small, at most a few tenths of a percent over the next few years.”
But Connecticut isn’t the only place this is happening. As the Wall Street Journal reported last week, the health care bill is being used as an excuse by insurance companies to jack up rates all across the country.
It’s clear that the rate increases are far in excess of what these reform provisions actually cost. And there is nothing in the health care bill that stops them from doing so. In a free market, other insurance companies would be able to enter the market and provide a better product at a lower price. But health insurance companies are exempt from anti-trust regulation, and can legally operate as monopolies and engage in monopolistic practices. The health care bill did nothing to stop that.
That’s why the people Obama now mocks wanted a public option. If the government is going to assign its right to collect taxes to private companies (which is what they did when they passed the mandate), and allow the IRS to be used as an enforcement mechanism, people wanted to feel like there was an alternative. Faced with looming rate increases far in excess of anything they were told when the bill was being sold to them, in the wake of rising economic insecurity and high unemployment, people are justifiably anxious.
Single mother Susie Madrack explains why people like her found Obama’s comments upsetting:
[T]hose of us left living on a wing and prayer thanks to your “half full,” half-assed economic policies just don’t have a sense of humor about our continuing plight. I know it’s been a long time since your mom got food stamps, but you might want to give that empathy thing some thought.”
The usual suspects are cheering Obama’s comments, including the American Prospect, who call them “justified mockery.” But those who enjoy a ”subsidized existence vomiting up flabby consensus received opinions within the federal zone” generally aren’t the working class single moms who have to worry about things like rising health insurance premiums. So it’s no surprise they wouldn’t understand why someone might feel their glass is “half empty” these days.
Pre-Existing Condition Insurance Plan — Out of Reach
http://seminal.firedoglake.com/diary/71974
Pre-Existing Condition Insurance Plan — Out of Reach
By: Niland
Friday September 17, 2010
I don’t think the site has addressed this in a while, but the new Preexisting Condition Insurance Plan has been rolled out across the country now, and the more I look into it, the more I think this is emblematic of everything that was wrong with Obama’s health care reform bill. Remember, this is the temporary high risk pool to act as a holdover until the exchanges kick in in 2014. I had high hopes for this, as my Mother is a 61 year old widow who has low income but is too young for Medicare and who we (my brother and I) have been paying $1,000+/mo for Anthem Blue Cross individual market insurance for the last three years to keep her insured. I thought the new high risk plan was going to be standardized with a 4-1 age ratio and also “affordable” for people who cannot get affordable coverage in the individual market. I looked up the rates for California where she lives, and her premium will be $799/mo with no subsidy under the new plan . Meanwhile, the premium for a child under 15 is $142/mo…how is that 4-1? How is that even remotely affordable?
Instead of imposing a unified structure with standardized rates, the bill gave extreme leeway for each State to set up its own program using private contractors guided only by very loose language regarding premiums and coverage structure. This has resulted in some states charging $600/mo for 60+ and areas of California charging $800 or more.
I’m so dejected at this point. I had such high hopes for this program and I feel like I’ve been kicked in the stomach. I cheered this bill, telling my brother, “help is on the way,” and soon we will be able to get coverage at a more reasonable rate compared to the way Anthem was ripping us off. We just can’t afford to pay $800+ per month in health insurance when we are already completely financially supporting our Mother. You mean to tell me that all this bill is going to save us for the next 4 years is 200 bucks a month? That we still have to pay 800/mo not including cost sharing? My Mom doesn’t even have a super-serious preexisting condition – she doesn’t have cancer, hasn’t had any debilitating illnesses. She is a smoker who gets episodic panic attacks.
I know there are lots of horror stories worse than this, but this type of disappointment is going to keep happening as each new element of this bill is rolled out. When 2014 hits and the means-tested subsidized rates are still going to be unaffordable for anyone but the poorest of the poor, the bill’s popularity will continue to tank.
And they wonder why there is an enthusiasm gap!
Pre-Existing Condition Insurance Plan — Out of Reach
By: Niland
Friday September 17, 2010
I don’t think the site has addressed this in a while, but the new Preexisting Condition Insurance Plan has been rolled out across the country now, and the more I look into it, the more I think this is emblematic of everything that was wrong with Obama’s health care reform bill. Remember, this is the temporary high risk pool to act as a holdover until the exchanges kick in in 2014. I had high hopes for this, as my Mother is a 61 year old widow who has low income but is too young for Medicare and who we (my brother and I) have been paying $1,000+/mo for Anthem Blue Cross individual market insurance for the last three years to keep her insured. I thought the new high risk plan was going to be standardized with a 4-1 age ratio and also “affordable” for people who cannot get affordable coverage in the individual market. I looked up the rates for California where she lives, and her premium will be $799/mo with no subsidy under the new plan . Meanwhile, the premium for a child under 15 is $142/mo…how is that 4-1? How is that even remotely affordable?
Instead of imposing a unified structure with standardized rates, the bill gave extreme leeway for each State to set up its own program using private contractors guided only by very loose language regarding premiums and coverage structure. This has resulted in some states charging $600/mo for 60+ and areas of California charging $800 or more.
I’m so dejected at this point. I had such high hopes for this program and I feel like I’ve been kicked in the stomach. I cheered this bill, telling my brother, “help is on the way,” and soon we will be able to get coverage at a more reasonable rate compared to the way Anthem was ripping us off. We just can’t afford to pay $800+ per month in health insurance when we are already completely financially supporting our Mother. You mean to tell me that all this bill is going to save us for the next 4 years is 200 bucks a month? That we still have to pay 800/mo not including cost sharing? My Mom doesn’t even have a super-serious preexisting condition – she doesn’t have cancer, hasn’t had any debilitating illnesses. She is a smoker who gets episodic panic attacks.
I know there are lots of horror stories worse than this, but this type of disappointment is going to keep happening as each new element of this bill is rolled out. When 2014 hits and the means-tested subsidized rates are still going to be unaffordable for anyone but the poorest of the poor, the bill’s popularity will continue to tank.
And they wonder why there is an enthusiasm gap!
Friday, September 24, 2010
Suit on Health Care Bill Appears Likely to Advance
http://www.nytimes.com/2010/09/15/health/policy/15health.html
Suit on Health Care Bill Appears Likely to Advance
KEVIN SACK
September 14, 2010
PENSACOLA, Fla. — A federal judge indicated on Tuesday that he would give a green light to a lawsuit filed by elected officials from 20 states who are challenging the constitutionality of the new health care law and its requirement that most individuals obtain medical insurance.
Although he did not issue a formal ruling, Judge Roger Vinson of Federal District Court said at the close of a two-hour hearing that he leaned toward denying the federal government’s motion to dismiss the lawsuit, on at least one count. That would end the jockeying over whether states have legal standing to challenge the law, and move the case to a full debate over its fundamental constitutional question: Is the federal government’s power so broad that Congress can require citizens to purchase a commercial product like health insurance?
Judge Vinson did not detail which claims he might sustain and which he might dismiss as improper. But he said he would issue an opinion no later than Oct. 14, and scheduled arguments on the merits of the case for Dec. 16.
The Pensacola case would be the second of more than 15 lawsuits filed against the health law to advance to this stage. Last month, a federal judge in Richmond, Va., rejected a Justice Department request to dismiss a similar lawsuit filed by Virginia’s attorney general. That case is scheduled for oral argument on Oct. 18.
Experts on both sides expect the challenges to eventually present the Supreme Court with a landmark opportunity. “Our whole system of federalism rests on the decisions of this case,” said Florida’s attorney general, Bill McCollum, a Republican who is the lead plaintiff in the lawsuit here.
Although the Florida case is proceeding slightly behind its Virginia counterpart, it has been closely watched as a possible first among equals in the appellate process because of the political weight carried by the plaintiffs. They include 16 attorneys general, all but one a Republican, and four Republican governors.
Two individuals and the National Federation of Independent Business, which represents small companies, were added to the lawsuit to fend off the federal government’s contention that states do not have standing to sue because they have not been injured by the new health law.
Given that all but one of the state plaintiffs are Republicans, the lawsuit is seen as one prong of a partisan strategy to eviscerate the law in the courts, at the ballot box and on Capitol Hill.
By filing the lawsuit in Pensacola, Mr. McCollum ensured that the case would be heard by a Republican appointee to the District Court, and then by the United States Court of Appeals for the 11th Circuit, in Atlanta, a generally conservative bench that handles cases from Florida. Judge Vinson, a senior judge who was nominated by President Ronald Reagan, is a former naval aviator and a member of the Federal Intelligence Surveillance Court, as well as the president of the American Camellia Society.
His comments from the bench on Tuesday suggested initial skepticism of the federal government’s claim that an individual’s decision to not purchase insurance constitutes commercial “activity” that can be regulated by Congress.
“You’re trying to turn the word upside down and say activity is really equivalent to inactivity,” Judge Vinson at one point challenged Ian H. Gershengorn, a deputy assistant United States attorney general.
Each of the legal challenges to the health care law is somewhat different, and judges around the country have ruled differently on whether plaintiffs have legal standing to sue. Judges recently tossed out lawsuits filed by individuals and interest groups in California and Maryland, but those filed by state officials have survived.
Mr. McCollum, who recently lost Florida’s Republican primary for governor, watched the hearing in the courtroom along with Attorneys General Troy King of Alabama and Mark L. Shurtleff of Utah.
The Florida lawsuit attacks the sweeping health care law on a number of fronts. Most prominently, it charges that the insurance requirement, which does not take effect until 2014, exceeds the traditional reach of the Commerce Clause in Article I of the Constitution. The Supreme Court in its most recent opinion on the matter said the clause allows Congress to “regulate activities that substantially affect interstate commerce.”
David B. Rivkin Jr., a Washington lawyer hired to represent the plaintiffs, argued that if the government could regulate individual decisions to not purchase health insurance there could be no meaningful limits on federal power. “Congress can regulate commerce,” he said. “But Congress cannot create it.”
Mr. Gershengorn countered that decisions to not buy insurance, taken in the aggregate, have a direct effect on commerce because uninsured people still consume health care, and often cannot pay. That uncompensated care, he said, is subsidized by others and drives up costs for hospitals, governments and privately insured individuals.
“The appearance of inactivity here is just an illusion,” Mr. Gershengorn said. What Congress is regulating, he said, is how and when people will pay for the medical services they will inevitably consume. “This is not telling people you have to buy a product,” he said. “It’s saying this is how you have to pay for your health care.”
The states also argue that the new law, by vastly expanding the shared state and federal Medicaid program, amounts to a coercive commandeering of state resources. The federal government initially will pay for the entire eligibility expansion, but states will start paying a share in 2016 that eventually rises to 10 percent.
The Justice Department responds that the Medicaid program, which provides health insurance to those with low incomes, is voluntary, and that states may withdraw if they wish. But Blaine H. Winship, an assistant Florida attorney general, said that presented states with a Hobson’s choice that ignored the safety-net role played by Medicaid for more than four decades.
“I think it’s disingenuous,” he told Judge Vinson. “The idea that we could walk away from Medicaid is just essentially nonsensical.”
The judge seemed to empathize. “This really puts all 50 states on the short end of the stick,” he said. “States are in a Catch-22 situation.”
A version of this article appeared in print on September 15, 2010, on page A20 of the New York edition.
Suit on Health Care Bill Appears Likely to Advance
KEVIN SACK
September 14, 2010
PENSACOLA, Fla. — A federal judge indicated on Tuesday that he would give a green light to a lawsuit filed by elected officials from 20 states who are challenging the constitutionality of the new health care law and its requirement that most individuals obtain medical insurance.
Although he did not issue a formal ruling, Judge Roger Vinson of Federal District Court said at the close of a two-hour hearing that he leaned toward denying the federal government’s motion to dismiss the lawsuit, on at least one count. That would end the jockeying over whether states have legal standing to challenge the law, and move the case to a full debate over its fundamental constitutional question: Is the federal government’s power so broad that Congress can require citizens to purchase a commercial product like health insurance?
Judge Vinson did not detail which claims he might sustain and which he might dismiss as improper. But he said he would issue an opinion no later than Oct. 14, and scheduled arguments on the merits of the case for Dec. 16.
The Pensacola case would be the second of more than 15 lawsuits filed against the health law to advance to this stage. Last month, a federal judge in Richmond, Va., rejected a Justice Department request to dismiss a similar lawsuit filed by Virginia’s attorney general. That case is scheduled for oral argument on Oct. 18.
Experts on both sides expect the challenges to eventually present the Supreme Court with a landmark opportunity. “Our whole system of federalism rests on the decisions of this case,” said Florida’s attorney general, Bill McCollum, a Republican who is the lead plaintiff in the lawsuit here.
Although the Florida case is proceeding slightly behind its Virginia counterpart, it has been closely watched as a possible first among equals in the appellate process because of the political weight carried by the plaintiffs. They include 16 attorneys general, all but one a Republican, and four Republican governors.
Two individuals and the National Federation of Independent Business, which represents small companies, were added to the lawsuit to fend off the federal government’s contention that states do not have standing to sue because they have not been injured by the new health law.
Given that all but one of the state plaintiffs are Republicans, the lawsuit is seen as one prong of a partisan strategy to eviscerate the law in the courts, at the ballot box and on Capitol Hill.
By filing the lawsuit in Pensacola, Mr. McCollum ensured that the case would be heard by a Republican appointee to the District Court, and then by the United States Court of Appeals for the 11th Circuit, in Atlanta, a generally conservative bench that handles cases from Florida. Judge Vinson, a senior judge who was nominated by President Ronald Reagan, is a former naval aviator and a member of the Federal Intelligence Surveillance Court, as well as the president of the American Camellia Society.
His comments from the bench on Tuesday suggested initial skepticism of the federal government’s claim that an individual’s decision to not purchase insurance constitutes commercial “activity” that can be regulated by Congress.
“You’re trying to turn the word upside down and say activity is really equivalent to inactivity,” Judge Vinson at one point challenged Ian H. Gershengorn, a deputy assistant United States attorney general.
Each of the legal challenges to the health care law is somewhat different, and judges around the country have ruled differently on whether plaintiffs have legal standing to sue. Judges recently tossed out lawsuits filed by individuals and interest groups in California and Maryland, but those filed by state officials have survived.
Mr. McCollum, who recently lost Florida’s Republican primary for governor, watched the hearing in the courtroom along with Attorneys General Troy King of Alabama and Mark L. Shurtleff of Utah.
The Florida lawsuit attacks the sweeping health care law on a number of fronts. Most prominently, it charges that the insurance requirement, which does not take effect until 2014, exceeds the traditional reach of the Commerce Clause in Article I of the Constitution. The Supreme Court in its most recent opinion on the matter said the clause allows Congress to “regulate activities that substantially affect interstate commerce.”
David B. Rivkin Jr., a Washington lawyer hired to represent the plaintiffs, argued that if the government could regulate individual decisions to not purchase health insurance there could be no meaningful limits on federal power. “Congress can regulate commerce,” he said. “But Congress cannot create it.”
Mr. Gershengorn countered that decisions to not buy insurance, taken in the aggregate, have a direct effect on commerce because uninsured people still consume health care, and often cannot pay. That uncompensated care, he said, is subsidized by others and drives up costs for hospitals, governments and privately insured individuals.
“The appearance of inactivity here is just an illusion,” Mr. Gershengorn said. What Congress is regulating, he said, is how and when people will pay for the medical services they will inevitably consume. “This is not telling people you have to buy a product,” he said. “It’s saying this is how you have to pay for your health care.”
The states also argue that the new law, by vastly expanding the shared state and federal Medicaid program, amounts to a coercive commandeering of state resources. The federal government initially will pay for the entire eligibility expansion, but states will start paying a share in 2016 that eventually rises to 10 percent.
The Justice Department responds that the Medicaid program, which provides health insurance to those with low incomes, is voluntary, and that states may withdraw if they wish. But Blaine H. Winship, an assistant Florida attorney general, said that presented states with a Hobson’s choice that ignored the safety-net role played by Medicaid for more than four decades.
“I think it’s disingenuous,” he told Judge Vinson. “The idea that we could walk away from Medicaid is just essentially nonsensical.”
The judge seemed to empathize. “This really puts all 50 states on the short end of the stick,” he said. “States are in a Catch-22 situation.”
A version of this article appeared in print on September 15, 2010, on page A20 of the New York edition.
Monday, September 6, 2010
Eyewear Industry Is an Incredible Ripoff, But There Are Alternatives
http://www.alternet.org/economy/148024/wow_--_the_eyewear_industry_is_an_incredible_ripoff%2C_but_there_are_alternatives
AlterNet / By Anneli Rufus
Wow -- the Eyewear Industry Is an Incredible Ripoff, But There Are Alternatives
What makes glasses so expensive? Oblong plastic lenses? Plastic and metal frames? We're getting screwed.
August 31, 2010
Those of us who need prescription eyewear need prescription eyewear. Are you wearing yours to read this? Imagine if you weren't. Imagine life without your glasses for a year, a week, an hour. Yet many health insurance plans, especially for the unemployed or self-employed, don't cover them.
Mine doesn't.
Last year, I went shopping for no-line progressive bifocals in small oval metal frames. Name brands mean nothing to me. Price does. My high astigmatism and need for bifocals disqualify me from those buy-one-get-one-free deals, which almost always involve only single-vision specs.
In store after store, megachains and optical boutiques alike, small oval metal frames fitted with lenses matching my prescription started at $300. One popular shop quoted me $582 for the lenses alone.
I bought a pair of no-line progressive bifocals in small oval metal frames for $44 online. I'm wearing them right now.
Perhaps because prescription glasses are where medicine meets fashion, they're among the world's most overpriced merchandise. Imperfect eyesight isn't your fault: You can't make yourself nearsighted by eating too much fudge. Yet if your health plan excludes vision care, you've spent years at the mercy of a $64 billion industry characterized by 500-percent markups.
This has begun to change over the last few years. A knowledge-is-power, power-to-the-people, Web-driven DIY wave is rocking the optical industry's very foundations. Dozens of companies now sell prescription glasses online, frames and lenses included, for as little as $7.95.
It works like this: Google "cheap glasses" to find a frame you like at a price you like at a site you like. (Among the most popular are 39DollarGlasses, ZenniOptical — where I bought mine — and Goggles4U.) Use the virtual fitting mechanism to "try it on." Type in your prescription (obtained from an actual eye doctor), pupillary distance (aka PD, derived by measuring the space between your pupils with a ruler), address and payment information. Send.
It's a virtual myopian/hyperopian/presbyopian Tea Party, led largely by Minnesota software engineer Ira Mitchell, who launched his revolutionary GlassyEyes blog (its motto is "Saving the World from Overpriced Glasses!") in 2006. Packed with forums, product reviews, discount deals, and tips for buying specs online, it's the vision-impaired version of Yelp.
"There is no appreciable functional or material difference" between prescription eyewear bought online and bought in brick-and-mortar stores, Mitchell tells me, but in stores "the cost to the consumer is anywhere from four to ten times more. It turns out that they’re making ridiculous margins on the frames, the lenses and the coatings."
Complete with antiscratch coatings and other pluses, his own glasses cost between $30 and $60 per pair online. Over the last three years, he’s bought around 40 pair — because, at that price, he can.
Mitchell was appalled when he first began researching wholesale prices for optical merchandise and realized that opticians acquire lenses for as little as $3 each. "I've easily paid twenty times that when I didn't know any better," he says.
Granted, these glass, plastic, polycarbonate or polymer blanks must be ground to fit frames and prescriptions, and this takes work, but it's not rocket science. Typically, lens grinding is done by optical laboratory technicians. According to PayScale.com, OLTs in the United States earn between $9.73 and $14.40 per hour. Most learn on the job, and have only a high-school diploma or a GED. No specific certification is required.
The fleecing, Mitchell says, is just as bad on frames.
"A consumer-level frame costs significantly less than $10 to manufacture. The rest is operations, licensing and profit. Think about that the next time you pick up an average $150 frame. These aren't markedly different or superior to the $30 glasses available from reputable online dealers — and those include lenses, probably the same ones you were just about to pay $200 for in the store."
A key to the industry-standard overpricing is the fact that a single corporation — Luxottica, the world's largest eyewear firm — owns many retail eyewear chains and many popular eyewear brands. Based in Milan, Italy, Luxottica owns and operates LensCrafters, Sears Optical, Target Optical, Pearle Vision, Sunglass Hut, Ilori, and other chains in the United States, along with yet more chains throughout Asia, Europe, Africa, India, the Antipodes and the Middle East.
Luxottica owns Ray-Ban, Oakley, Oliver Peoples, Vogue, and other brands, and makes glasses under license for over a dozen designer labels including Versace, Prada, Bulgari, DKNY, Burberry, Ralph Lauren, Dolce & Gabbana, Donna Karan, Tiffany, and more. As if that isn't enough, Luxottica is also the parent company of a vision-care benefits program, EyeMed.
Eyewear prices in brick-and-mortar stores stay artificially high, Mitchell says, due to "the lack of real competition, inasmuch as Luxottica owns massive manufacturing, licensing, retailing and insurance interests" — albeit EyeMed is "not so much insurance as a marketing ploy to get people to buy from their stores at a discount and to force the remaining independent stores to buy Luxottica controlled frames. But, again, most people are unaware of this."
Because one company holds a near-monopoly on brick-and-mortar eyewear stores, "pricing models are somewhat static across the lot of them. They also have a knack for using the mattress sale model ... constantly running sales that seem too good to pass up when in reality they're still making enormous profits."
"Semi-Annual 50% Off Sales Event," reads a current LensCrafters ad. But the frames in question range from around $100 to around $300, and that's without lenses.
"People pay what the brick-and-mortars are asking, primarily because the vast majority don't know there are better, cheaper options," Mitchell says.
As with any purchase — in fact more than with most purchases, as this involves eyesight — it pays to research each company's delivery and return policies, Better Business Bureau status, and accessibility. Does its Web site list a phone number? If not, why not? If so, call it. Can you reach live people? Are they knowledgeable about your prescription? Does the company have its own in-house optometrists? It should. If you care about brand names, can you ascertain that the logo-bearing frames sold by any given company aren't counterfeits? Factories churn out fakes.
While many online outfits sell real and bogus designer frames, the least expensive frames available online are unapologetically nameless generics: current and classic styles, sans logo. As is true with most consumer products, they're not necessarily worse than their name-brand counterparts. After a year-plus of daily use, my $44 generics still look new. (That being said, I should have paid a few dollars more for higher-quality polycarbonate lenses and I should have sought bifocals with a wider middle-vision band, but these errors were my own, not the company's.)
"Very high-priced frames may have somewhat better materials," Mitchell says, "but from my experience, the no-names have been very well made." Having owned dozens of generic pairs, he's experienced "no more issues with them than with the name brands from LensCrafters. I think they're pretty much on par."
These days, he notes, "there are a lot more online retailers now than at the end of 2006. There aren't a whole lot more reputable ones, however. I've shopped at over a dozen, and narrowed things down to about three or four that I feel comfortable recommending to others. As this is a fully custom market, mistakes can enter the process anywhere from the initial customer entering prescription information to the production process. I've found that a few of the sites do a better job than others at fixing mistakes. Some do better at this than the traditional stores.
"Prices haven't dropped at all in the traditional brick-and-mortars, but downward price pressure from Wal-Mart will undoubtedly start to make an impact in certain parts of the country. I saw a sign in a Wal-Mart recently for $38 glasses. The selection was tiny, but we're starting to see a price intersection."
The first online eyeglasses company was Houston-based FramesDirect. In 1992, optometrists Dhavid Cooper and Guy Hodgson closed their several Texas brick-and-mortar shops, then pondered their future.
"We knew that we wanted to sell eyewear in all fifty states 24 hours a day, seven days a week, 365 days a year," Hodgson says. "We had no idea how to do this." Renting a small office, they installed computers.
"When you talked about the Internet in those days, no one knew what you meant. Search engines were in their absolute infancy. We thought a 56k modem was blisteringly fast."
Cooper had won a Surgeon General’s Commendation Award in his native South Africa for creating a program providing the poor with recycled glasses for free. Hodgson specialized in treating the nearly blind. Barely fluent in email, the pair created a basic Web site, offering designer glasses at low prices because, unlike brick-and-mortar opticians, they needed to pay neither storefront rent nor employees' salaries, nor did they need to keep large quantities of merchandise in stock.
"Everyone around us thought we were completely mad: Eye doctors, giving up their lucrative practices to go into this weird thing," Hodgson laughs. But once orders started pouring in, "The whole optical industry completely shunned us. They said we were ruining them."
At eyewear conventions, he and Cooper wore their nametags backward to avoid verbal abuse. Since then, dozens of imitators have emerged, many based overseas and most able to offer even lower prices because they sell generics. Buying prescription eyewear is like buying prescription drugs: It's cheaper online. It's cheaper when it comes from outside the U.S. GlassesUnlimited, for instance, can afford to sell hundreds of different stylish frames fitted with prescription lenses for only $9.99 because its entire operation is based in Thailand.
"We don't have big margins here. That's how we are serving our clientele. That's why we're getting hundreds of orders on a daily basis, 70 percent of which come from the U.S. and Canada," GU manager Sam Davis tells me. "We have virtually no expenses. We have our own home brand and do our own production. We don't outsource anything."
Based in the U.S., FramesDirect still undercuts retail-store prices for guaranteed designer goods.
"What we sell and what the brick-and-mortar stores sell are the exact same products," Guy Hodgson says. "How can they afford to charge the prices they charge?"
Anneli Rufus is the author of several books, most recently The Scavenger's Manifesto (Tarcher Press, 2009). Read more of Anneli's writings on scavenging at scavenging.wordpress.com.
AlterNet / By Anneli Rufus
Wow -- the Eyewear Industry Is an Incredible Ripoff, But There Are Alternatives
What makes glasses so expensive? Oblong plastic lenses? Plastic and metal frames? We're getting screwed.
August 31, 2010
Those of us who need prescription eyewear need prescription eyewear. Are you wearing yours to read this? Imagine if you weren't. Imagine life without your glasses for a year, a week, an hour. Yet many health insurance plans, especially for the unemployed or self-employed, don't cover them.
Mine doesn't.
Last year, I went shopping for no-line progressive bifocals in small oval metal frames. Name brands mean nothing to me. Price does. My high astigmatism and need for bifocals disqualify me from those buy-one-get-one-free deals, which almost always involve only single-vision specs.
In store after store, megachains and optical boutiques alike, small oval metal frames fitted with lenses matching my prescription started at $300. One popular shop quoted me $582 for the lenses alone.
I bought a pair of no-line progressive bifocals in small oval metal frames for $44 online. I'm wearing them right now.
Perhaps because prescription glasses are where medicine meets fashion, they're among the world's most overpriced merchandise. Imperfect eyesight isn't your fault: You can't make yourself nearsighted by eating too much fudge. Yet if your health plan excludes vision care, you've spent years at the mercy of a $64 billion industry characterized by 500-percent markups.
This has begun to change over the last few years. A knowledge-is-power, power-to-the-people, Web-driven DIY wave is rocking the optical industry's very foundations. Dozens of companies now sell prescription glasses online, frames and lenses included, for as little as $7.95.
It works like this: Google "cheap glasses" to find a frame you like at a price you like at a site you like. (Among the most popular are 39DollarGlasses, ZenniOptical — where I bought mine — and Goggles4U.) Use the virtual fitting mechanism to "try it on." Type in your prescription (obtained from an actual eye doctor), pupillary distance (aka PD, derived by measuring the space between your pupils with a ruler), address and payment information. Send.
It's a virtual myopian/hyperopian/presbyopian Tea Party, led largely by Minnesota software engineer Ira Mitchell, who launched his revolutionary GlassyEyes blog (its motto is "Saving the World from Overpriced Glasses!") in 2006. Packed with forums, product reviews, discount deals, and tips for buying specs online, it's the vision-impaired version of Yelp.
"There is no appreciable functional or material difference" between prescription eyewear bought online and bought in brick-and-mortar stores, Mitchell tells me, but in stores "the cost to the consumer is anywhere from four to ten times more. It turns out that they’re making ridiculous margins on the frames, the lenses and the coatings."
Complete with antiscratch coatings and other pluses, his own glasses cost between $30 and $60 per pair online. Over the last three years, he’s bought around 40 pair — because, at that price, he can.
Mitchell was appalled when he first began researching wholesale prices for optical merchandise and realized that opticians acquire lenses for as little as $3 each. "I've easily paid twenty times that when I didn't know any better," he says.
Granted, these glass, plastic, polycarbonate or polymer blanks must be ground to fit frames and prescriptions, and this takes work, but it's not rocket science. Typically, lens grinding is done by optical laboratory technicians. According to PayScale.com, OLTs in the United States earn between $9.73 and $14.40 per hour. Most learn on the job, and have only a high-school diploma or a GED. No specific certification is required.
The fleecing, Mitchell says, is just as bad on frames.
"A consumer-level frame costs significantly less than $10 to manufacture. The rest is operations, licensing and profit. Think about that the next time you pick up an average $150 frame. These aren't markedly different or superior to the $30 glasses available from reputable online dealers — and those include lenses, probably the same ones you were just about to pay $200 for in the store."
A key to the industry-standard overpricing is the fact that a single corporation — Luxottica, the world's largest eyewear firm — owns many retail eyewear chains and many popular eyewear brands. Based in Milan, Italy, Luxottica owns and operates LensCrafters, Sears Optical, Target Optical, Pearle Vision, Sunglass Hut, Ilori, and other chains in the United States, along with yet more chains throughout Asia, Europe, Africa, India, the Antipodes and the Middle East.
Luxottica owns Ray-Ban, Oakley, Oliver Peoples, Vogue, and other brands, and makes glasses under license for over a dozen designer labels including Versace, Prada, Bulgari, DKNY, Burberry, Ralph Lauren, Dolce & Gabbana, Donna Karan, Tiffany, and more. As if that isn't enough, Luxottica is also the parent company of a vision-care benefits program, EyeMed.
Eyewear prices in brick-and-mortar stores stay artificially high, Mitchell says, due to "the lack of real competition, inasmuch as Luxottica owns massive manufacturing, licensing, retailing and insurance interests" — albeit EyeMed is "not so much insurance as a marketing ploy to get people to buy from their stores at a discount and to force the remaining independent stores to buy Luxottica controlled frames. But, again, most people are unaware of this."
Because one company holds a near-monopoly on brick-and-mortar eyewear stores, "pricing models are somewhat static across the lot of them. They also have a knack for using the mattress sale model ... constantly running sales that seem too good to pass up when in reality they're still making enormous profits."
"Semi-Annual 50% Off Sales Event," reads a current LensCrafters ad. But the frames in question range from around $100 to around $300, and that's without lenses.
"People pay what the brick-and-mortars are asking, primarily because the vast majority don't know there are better, cheaper options," Mitchell says.
As with any purchase — in fact more than with most purchases, as this involves eyesight — it pays to research each company's delivery and return policies, Better Business Bureau status, and accessibility. Does its Web site list a phone number? If not, why not? If so, call it. Can you reach live people? Are they knowledgeable about your prescription? Does the company have its own in-house optometrists? It should. If you care about brand names, can you ascertain that the logo-bearing frames sold by any given company aren't counterfeits? Factories churn out fakes.
While many online outfits sell real and bogus designer frames, the least expensive frames available online are unapologetically nameless generics: current and classic styles, sans logo. As is true with most consumer products, they're not necessarily worse than their name-brand counterparts. After a year-plus of daily use, my $44 generics still look new. (That being said, I should have paid a few dollars more for higher-quality polycarbonate lenses and I should have sought bifocals with a wider middle-vision band, but these errors were my own, not the company's.)
"Very high-priced frames may have somewhat better materials," Mitchell says, "but from my experience, the no-names have been very well made." Having owned dozens of generic pairs, he's experienced "no more issues with them than with the name brands from LensCrafters. I think they're pretty much on par."
These days, he notes, "there are a lot more online retailers now than at the end of 2006. There aren't a whole lot more reputable ones, however. I've shopped at over a dozen, and narrowed things down to about three or four that I feel comfortable recommending to others. As this is a fully custom market, mistakes can enter the process anywhere from the initial customer entering prescription information to the production process. I've found that a few of the sites do a better job than others at fixing mistakes. Some do better at this than the traditional stores.
"Prices haven't dropped at all in the traditional brick-and-mortars, but downward price pressure from Wal-Mart will undoubtedly start to make an impact in certain parts of the country. I saw a sign in a Wal-Mart recently for $38 glasses. The selection was tiny, but we're starting to see a price intersection."
The first online eyeglasses company was Houston-based FramesDirect. In 1992, optometrists Dhavid Cooper and Guy Hodgson closed their several Texas brick-and-mortar shops, then pondered their future.
"We knew that we wanted to sell eyewear in all fifty states 24 hours a day, seven days a week, 365 days a year," Hodgson says. "We had no idea how to do this." Renting a small office, they installed computers.
"When you talked about the Internet in those days, no one knew what you meant. Search engines were in their absolute infancy. We thought a 56k modem was blisteringly fast."
Cooper had won a Surgeon General’s Commendation Award in his native South Africa for creating a program providing the poor with recycled glasses for free. Hodgson specialized in treating the nearly blind. Barely fluent in email, the pair created a basic Web site, offering designer glasses at low prices because, unlike brick-and-mortar opticians, they needed to pay neither storefront rent nor employees' salaries, nor did they need to keep large quantities of merchandise in stock.
"Everyone around us thought we were completely mad: Eye doctors, giving up their lucrative practices to go into this weird thing," Hodgson laughs. But once orders started pouring in, "The whole optical industry completely shunned us. They said we were ruining them."
At eyewear conventions, he and Cooper wore their nametags backward to avoid verbal abuse. Since then, dozens of imitators have emerged, many based overseas and most able to offer even lower prices because they sell generics. Buying prescription eyewear is like buying prescription drugs: It's cheaper online. It's cheaper when it comes from outside the U.S. GlassesUnlimited, for instance, can afford to sell hundreds of different stylish frames fitted with prescription lenses for only $9.99 because its entire operation is based in Thailand.
"We don't have big margins here. That's how we are serving our clientele. That's why we're getting hundreds of orders on a daily basis, 70 percent of which come from the U.S. and Canada," GU manager Sam Davis tells me. "We have virtually no expenses. We have our own home brand and do our own production. We don't outsource anything."
Based in the U.S., FramesDirect still undercuts retail-store prices for guaranteed designer goods.
"What we sell and what the brick-and-mortar stores sell are the exact same products," Guy Hodgson says. "How can they afford to charge the prices they charge?"
Anneli Rufus is the author of several books, most recently The Scavenger's Manifesto (Tarcher Press, 2009). Read more of Anneli's writings on scavenging at scavenging.wordpress.com.
Monday, August 16, 2010
Cancer Patients Relapsing Because They Can't Afford Deductibles
http://crooksandliars.com/susie-madrak/cancer-patients-relapsing-because-the
Cancer Patients Relapsing Because They Can't Afford Deductibles On Their Life-Saving Medication
Susie Madrak
Sunday Aug 08, 2010
Tags: cancer patients, finan, health care reform, healthcare coverage, Recession, USAToday
While politicians play games, people live with the economic fallout of their cowardice. Because this was a predictable problem, and the health care reform bill should have included free prescription coverage for people in situations like this:
In 2009 and 2010, as the economic collapse shuddered across the globe, oncologists in California noticed a troubling trend: Three patients who had had serious tumors under control for as long as eight years reappeared in the clinic with massive cancer regrowth which, in one case, required emergency surgery. In retrospect, this downturn in fortunes should have been predictable: The economic recession had forced the patients to discontinue a life-extending medication.
"In all three cases, the patients developed new symptoms and came in after having missed an appointment or two without us knowing that they had stopped the drug," said Dr. Katie Kelley, co-author of a letter-to-the-editor in the Aug. 5 issue of the New England Journal of Medicine, which describes the cases. Kelley is also assistant clinical professor of medicine at the University of California, San Francisco (UCSF).
And there have been other such cases, both at UCSF and around the nation, either of patients stopping medications altogether or rationing in the hopes of making precious supplies last longer.
"Certainly we've seen an increase in affordability concerns," said Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network in Washington, D.C. "Very definitely we've seen an upward trend in the last couple of years of people struggling with deductibles and cost sharing."
Got that? A lot of these people have insurance. They simply can't afford the deductibles. And that's what's going to happen when the new healthcare reform bill kicks in, too.
Medicare for all would have fixed this.
Cancer Patients Relapsing Because They Can't Afford Deductibles On Their Life-Saving Medication
Susie Madrak
Sunday Aug 08, 2010
Tags: cancer patients, finan, health care reform, healthcare coverage, Recession, USAToday
While politicians play games, people live with the economic fallout of their cowardice. Because this was a predictable problem, and the health care reform bill should have included free prescription coverage for people in situations like this:
In 2009 and 2010, as the economic collapse shuddered across the globe, oncologists in California noticed a troubling trend: Three patients who had had serious tumors under control for as long as eight years reappeared in the clinic with massive cancer regrowth which, in one case, required emergency surgery. In retrospect, this downturn in fortunes should have been predictable: The economic recession had forced the patients to discontinue a life-extending medication.
"In all three cases, the patients developed new symptoms and came in after having missed an appointment or two without us knowing that they had stopped the drug," said Dr. Katie Kelley, co-author of a letter-to-the-editor in the Aug. 5 issue of the New England Journal of Medicine, which describes the cases. Kelley is also assistant clinical professor of medicine at the University of California, San Francisco (UCSF).
And there have been other such cases, both at UCSF and around the nation, either of patients stopping medications altogether or rationing in the hopes of making precious supplies last longer.
"Certainly we've seen an increase in affordability concerns," said Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network in Washington, D.C. "Very definitely we've seen an upward trend in the last couple of years of people struggling with deductibles and cost sharing."
Got that? A lot of these people have insurance. They simply can't afford the deductibles. And that's what's going to happen when the new healthcare reform bill kicks in, too.
Medicare for all would have fixed this.
Wednesday, June 30, 2010
Individuals see health insurance costs jump-report
http://www.reuters.com/article/idUSN2125993520100621
Individuals see health insurance costs jump-report
Mon Jun 21, 2010
Susan Heavey
* Kaiser Family survey looks at those who buy own coverage
* Future impact of health care reforms unclear
* Industry defends rate hikes, points to cost of care (Adds reaction, quotes, share movement)
WASHINGTON - U.S. health insurers are raising prices by an average of 20 percent for working age adults who buy their own policies, according to a survey released by a nonprofit healthcare group on Monday.
Such premium cost increases affected more than three-quarters of the 14 million U.S. adults who buy their own health plans and caused some to either seek a cheaper option with fewer benefits or switch insurers altogether, the Kaiser Family Foundation study showed.
The findings come as the Obama administration works with insurers to implement some of the new rules under the recently passed healthcare law, which aims to expand consumers' coverage while cracking down on discriminatory industry practices.
U.S. Health Secretary Kathleen Sebelius has blasted health insurance companies such as WellPoint Inc for their premium hikes in individual policies sold in California and other U.S. states.
"With people in the individual market being hit with average increases of 20 percent, the survey shows that the steep increases we have been reading about over the last several months are not just extreme cases," Kaiser Family Foundation Chief Executive Officer Drew Altman said in a statement.
Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.
The survey of nearly 1,040 working-age adults from 18 to 64 years of age was conducted in late March and early April. Most responses came on or before March 23, when President Obama signed the healthcare bill into law.
Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.
Robert Zirkelbach, spokesman for the industry's lobby group, America's Health Insurance Plans (AHIP), defended the industry's premium hikes, citing "soaring medical costs" and the number of younger, healthier consumers who are opting out of coverage. AHIP fought the healthcare reform bill.
While most working-age adults who have insurance get it through their employers, roughly 14 million people in the United States -- usually small business owners or those whose companies don't offer insurance -- buy their own policies.
In comparison, 157 million adults under 65 have employer or "large group" policies, while roughly 45 million people 65 and older have coverage through the federal government's Medicare program for the elderly and disabled.
Besides WellPoint, other health insurers include Aetna Inc, Cigna Corp, Humana Inc, UnitedHealth Group Inc, Health Net Inc, Amerigroup Corp and the Blue Cross Blue Shield network.
Kaiser's findings also found those who have to buy their own policies still worry about their access to care and whether their insurance will adequately cover them.
"People in this market are not expressing much confidence in their level of protection that's provided by the plan," Mollyann Brodie, vice president and director of Kaiser's Public Opinion and Survey Research, told reporters. They also have higher deductibles and large out-of-pocket costs, she added.
CHANGES COMING
Many insurers have already begun adopting some of the new health law's reforms ahead of schedule, such as ending lifetime caps on coverage and stopping cancellations when a policyholder gets sick.
But other reforms, such as protections for those with pre-existing health conditions, do not go into effect until 2014.
By then, all Americans will be required to have health insurance or risk paying a fine. States can also set up health insurance exchanges aimed at providing consumers one-stop shopping to compare plans.
Oversight of insurers' rates is still left largely up to individual U.S. states, although companies will have to publicly justify any increases.
Other rules governing how insurers spend premium dollars on actual medical care versus administrative expenses also aim to help bring down insurers' costs and, ideally, premiums.
It remains to be seen just how the various changes will affect health insurers, which saw their shares buffeted amid the health reform debate. Companies are now awaiting clearer rules from the Department of Health and Human Services.
Kaiser said 52 percent of survey respondents who buy their own coverage said they would keep their current plan next year, while 32 percent said they were not sure they would do so. Another 14 percent said they would switch companies.
"In the vast majority of states, the nongroup market is subject to substantially less regulation than group insurance," the Kaiser report said. "Much will change under the new health reform law."
Various studies have shown the nation's healthcare costs outpace inflation, rising more than 6 percent a year.
"Insurance is still going to be expensive because healthcare is expensive," said Gary Claxton, vice president and director of the Kaiser Family Foundation's Marketplace Project, but he said many of the reforms should help increase competition for those shopping for their own coverage.
The Morgan Stanley Healthcare Payor Index ended down 0.8 percent and the S&P Managed Healthcare Index fell 0.5 percent, while the overall S&P 500 Index lost 0.4 percent. (Reporting by Susan Heavey; Editing by Lisa Von Ahn and Tim Dobbyn)
Individuals see health insurance costs jump-report
Mon Jun 21, 2010
Susan Heavey
* Kaiser Family survey looks at those who buy own coverage
* Future impact of health care reforms unclear
* Industry defends rate hikes, points to cost of care (Adds reaction, quotes, share movement)
WASHINGTON - U.S. health insurers are raising prices by an average of 20 percent for working age adults who buy their own policies, according to a survey released by a nonprofit healthcare group on Monday.
Such premium cost increases affected more than three-quarters of the 14 million U.S. adults who buy their own health plans and caused some to either seek a cheaper option with fewer benefits or switch insurers altogether, the Kaiser Family Foundation study showed.
The findings come as the Obama administration works with insurers to implement some of the new rules under the recently passed healthcare law, which aims to expand consumers' coverage while cracking down on discriminatory industry practices.
U.S. Health Secretary Kathleen Sebelius has blasted health insurance companies such as WellPoint Inc for their premium hikes in individual policies sold in California and other U.S. states.
"With people in the individual market being hit with average increases of 20 percent, the survey shows that the steep increases we have been reading about over the last several months are not just extreme cases," Kaiser Family Foundation Chief Executive Officer Drew Altman said in a statement.
Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.
The survey of nearly 1,040 working-age adults from 18 to 64 years of age was conducted in late March and early April. Most responses came on or before March 23, when President Obama signed the healthcare bill into law.
Although individual, or "nongroup," policies are a small slice of the health insurance industry, they have attracted sharp scrutiny in recent months amid reports of price increases as high as 39 percent.
Robert Zirkelbach, spokesman for the industry's lobby group, America's Health Insurance Plans (AHIP), defended the industry's premium hikes, citing "soaring medical costs" and the number of younger, healthier consumers who are opting out of coverage. AHIP fought the healthcare reform bill.
While most working-age adults who have insurance get it through their employers, roughly 14 million people in the United States -- usually small business owners or those whose companies don't offer insurance -- buy their own policies.
In comparison, 157 million adults under 65 have employer or "large group" policies, while roughly 45 million people 65 and older have coverage through the federal government's Medicare program for the elderly and disabled.
Besides WellPoint, other health insurers include Aetna Inc, Cigna Corp, Humana Inc, UnitedHealth Group Inc, Health Net Inc, Amerigroup Corp and the Blue Cross Blue Shield network.
Kaiser's findings also found those who have to buy their own policies still worry about their access to care and whether their insurance will adequately cover them.
"People in this market are not expressing much confidence in their level of protection that's provided by the plan," Mollyann Brodie, vice president and director of Kaiser's Public Opinion and Survey Research, told reporters. They also have higher deductibles and large out-of-pocket costs, she added.
CHANGES COMING
Many insurers have already begun adopting some of the new health law's reforms ahead of schedule, such as ending lifetime caps on coverage and stopping cancellations when a policyholder gets sick.
But other reforms, such as protections for those with pre-existing health conditions, do not go into effect until 2014.
By then, all Americans will be required to have health insurance or risk paying a fine. States can also set up health insurance exchanges aimed at providing consumers one-stop shopping to compare plans.
Oversight of insurers' rates is still left largely up to individual U.S. states, although companies will have to publicly justify any increases.
Other rules governing how insurers spend premium dollars on actual medical care versus administrative expenses also aim to help bring down insurers' costs and, ideally, premiums.
It remains to be seen just how the various changes will affect health insurers, which saw their shares buffeted amid the health reform debate. Companies are now awaiting clearer rules from the Department of Health and Human Services.
Kaiser said 52 percent of survey respondents who buy their own coverage said they would keep their current plan next year, while 32 percent said they were not sure they would do so. Another 14 percent said they would switch companies.
"In the vast majority of states, the nongroup market is subject to substantially less regulation than group insurance," the Kaiser report said. "Much will change under the new health reform law."
Various studies have shown the nation's healthcare costs outpace inflation, rising more than 6 percent a year.
"Insurance is still going to be expensive because healthcare is expensive," said Gary Claxton, vice president and director of the Kaiser Family Foundation's Marketplace Project, but he said many of the reforms should help increase competition for those shopping for their own coverage.
The Morgan Stanley Healthcare Payor Index ended down 0.8 percent and the S&P Managed Healthcare Index fell 0.5 percent, while the overall S&P 500 Index lost 0.4 percent. (Reporting by Susan Heavey; Editing by Lisa Von Ahn and Tim Dobbyn)
Wednesday, May 12, 2010
AT&T, Verizon considered dropping employee health insurance
http://rawstory.com/rs/2010/0506/att-verizon-considered-dropping-health-insurance-employees/
AT&T, Verizon considered dropping employee health insurance as a result of healthcare overhaul
John Byrne
Thursday, May 6th, 2010
Democrats canceled hearings after learning companies' plans would make health insurance bill look bad
House Democrats abruptly canceled hearings into major US companies' responses to their massive health care overhaul after receiving documents revealing that companies were considering dropping all of their employees' health benefits in response to the healthcare bill.
Documents obtained by Fortune and published on CNN show that AT&T and other major companies -- including Verizon, Deere and Caterpillar -- considered eliminating their employee benefits program and simply paying a fine to the government for those they employed without insurance. The fine for AT&T would have amounted to $2,000 per employee, costing the company a grand total of $600 million a year. Maintaining benefits, meanwhile, will cost the firm some $4.6 billion.
Democrats apparently canceled hearings into the companies practices when they received the documents and learned that such hearings might expose a major flaw in their health insurance overhaul: namely that companies might pay a fine rather than provide benefits for employees because the fine would be dramatically cheaper. They've had the documents for roughly a month, Fortune magazine said.
Democrats requested documents from the four companies after they announced they were taking massive write-downs to earnings as a result of costs incurred by the bill. Liberals said the huge firms were overstating costs as a result of the bill, presumably to make it look bad.
After receiving documents from the companies, however, Democrats issued a brief memo the write-downs were "proper and in accordance with SEC rules."
The memo didn't mention they'd received proof that their bill might result in the loss of coverage for millions of Americans.
Verizon commissioned a study examining the effects of various healthcare bills under consideration on their bottom line. The study, prepared by a consulting firm, asserted, "Even though the proposed assessments [on companies that do not provide health care] are material, they are modest when compared to the average cost of health care."
To avoid added costs, the study said, "employers may consider exiting the health care market and send employees to the Exchanges."
Caterpillar and AT&T examined what they believed would be an increase in insurance costs as major drug manufacturers, insurers and medical device makers shifted costs from new taxes they were going to pay onto health insurance clients.
"Caterpillar and AT&T actually spell out the cost differences: Caterpillar did its estimate in November, when the most likely legislation would have imposed an 8% payroll tax on companies that do not provide coverage," CNN's Shawn Tully wrote late Wednesday. "Even with that immense penalty, Caterpillar stated that it could shave $25 million a year, or almost 10% from its bill. Now, because the $2,000 is far lower than 8%, it could reduce its bill by over 70%, by Fortune's estimate."
On the flip side, health insurance companies have argued the penalties for not carrying insurance are too small. They posit that some Americans will decide to pay a fine rather than carry insurance because the fine is cheaper, and they figure they can buy insurance when they get sick (since insurers will be banned from denying coverage based on pre-existing conditions).
None of the companies have confirmed they are actively considering dropping benefits for employees. Many businesses see health and other benefits as important factors in helping them hire and retain talented workers.
But the costs to the US government if they did would be enormous -- another reason why Democrats may have canceled hearings on the matter.
"By Fortune's reckoning, each person who's dropped would cost the government an average of around $2,100 after deducting the extra taxes collected on their additional pay," Tully wrote. "So if 50% of people covered by company plans get dumped, federal health care costs will rise by $160 billion a year in 2016, in addition to the $93 billion in subsidies already forecast by the" Congressional Budget Office.
AT&T, Verizon considered dropping employee health insurance as a result of healthcare overhaul
John Byrne
Thursday, May 6th, 2010
Democrats canceled hearings after learning companies' plans would make health insurance bill look bad
House Democrats abruptly canceled hearings into major US companies' responses to their massive health care overhaul after receiving documents revealing that companies were considering dropping all of their employees' health benefits in response to the healthcare bill.
Documents obtained by Fortune and published on CNN show that AT&T and other major companies -- including Verizon, Deere and Caterpillar -- considered eliminating their employee benefits program and simply paying a fine to the government for those they employed without insurance. The fine for AT&T would have amounted to $2,000 per employee, costing the company a grand total of $600 million a year. Maintaining benefits, meanwhile, will cost the firm some $4.6 billion.
Democrats apparently canceled hearings into the companies practices when they received the documents and learned that such hearings might expose a major flaw in their health insurance overhaul: namely that companies might pay a fine rather than provide benefits for employees because the fine would be dramatically cheaper. They've had the documents for roughly a month, Fortune magazine said.
Democrats requested documents from the four companies after they announced they were taking massive write-downs to earnings as a result of costs incurred by the bill. Liberals said the huge firms were overstating costs as a result of the bill, presumably to make it look bad.
After receiving documents from the companies, however, Democrats issued a brief memo the write-downs were "proper and in accordance with SEC rules."
The memo didn't mention they'd received proof that their bill might result in the loss of coverage for millions of Americans.
Verizon commissioned a study examining the effects of various healthcare bills under consideration on their bottom line. The study, prepared by a consulting firm, asserted, "Even though the proposed assessments [on companies that do not provide health care] are material, they are modest when compared to the average cost of health care."
To avoid added costs, the study said, "employers may consider exiting the health care market and send employees to the Exchanges."
Caterpillar and AT&T examined what they believed would be an increase in insurance costs as major drug manufacturers, insurers and medical device makers shifted costs from new taxes they were going to pay onto health insurance clients.
"Caterpillar and AT&T actually spell out the cost differences: Caterpillar did its estimate in November, when the most likely legislation would have imposed an 8% payroll tax on companies that do not provide coverage," CNN's Shawn Tully wrote late Wednesday. "Even with that immense penalty, Caterpillar stated that it could shave $25 million a year, or almost 10% from its bill. Now, because the $2,000 is far lower than 8%, it could reduce its bill by over 70%, by Fortune's estimate."
On the flip side, health insurance companies have argued the penalties for not carrying insurance are too small. They posit that some Americans will decide to pay a fine rather than carry insurance because the fine is cheaper, and they figure they can buy insurance when they get sick (since insurers will be banned from denying coverage based on pre-existing conditions).
None of the companies have confirmed they are actively considering dropping benefits for employees. Many businesses see health and other benefits as important factors in helping them hire and retain talented workers.
But the costs to the US government if they did would be enormous -- another reason why Democrats may have canceled hearings on the matter.
"By Fortune's reckoning, each person who's dropped would cost the government an average of around $2,100 after deducting the extra taxes collected on their additional pay," Tully wrote. "So if 50% of people covered by company plans get dumped, federal health care costs will rise by $160 billion a year in 2016, in addition to the $93 billion in subsidies already forecast by the" Congressional Budget Office.
Sunday, April 4, 2010
Frosh Sen. Michael Bennet Won’t Offer Public Option Amendment
http://fdlaction.firedoglake.com/2010/03/24/frosh-sen-michael-bennet-wont-offer-public-option-amendment-still-seems-not-to-understand-how-legislative-process-works/
Frosh Sen. Michael Bennet Won’t Offer Public Option Amendment, Still Seems Not To Understand How Legislative Process Works
Jon Walker
Wednesday March 24, 2010
Oh, poor, poor Michael Bennet (D-CO). He just doesn’t seem to understand how the legislative process works. He took to the Senate floor to praise what the “Patient Protection and Affordable Care Act”–which was signed yesterday by President Obama–will do. That bill is now law. Today they are working on a completely different bill, a budget reconciliation bill, which mostly contains some tax changes that will not go into effect for years.
Bennet falsely equates what the already-passed health insurance law will do with what this reconciliation bill will accomplish. He claims that trying to make improvements to this minor “sidecar” would be to “play games with the lives of thousands of Coloradans and millions of Americans, and I won’t do it.”
That is absurd. The bill that expands insurance coverage was already signed into law. This reconciliation bill, with its minor changes for the employer mandate, and changes to the excise tax, is not playing games with the lives of millions of Americans. Whether this new bill passes or not it will have little impact on our health care system.
Bennet also claims that merely offering some popular amendments to improve the reconciliation bill would kill it. This is completely nonsense. Changing the bill will only send it back to the House for another vote, where it would likely pass. Because of Byrd rule points of order, the bill will almost certainly need to go back to the House for another vote, anyway. Of course, if there are not enough votes for the amended reconciliation bill in the House, they can always amended the bill again to their liking and send it back to the Senate for a final vote. This is how the legislative process works.
In a moment of pure comedy, Bennet states that he “will continue to fight for the [public option] until we get a vote.” Clearly Bennet doesn’t have the vaguest understanding of what the word “fight” means–because he doesn’t even need to fight to get a vote on the public option. All he needs to do is exercise his right as a senator, and politely ask for a vote on the public option by offering an amendment.
It is completely within his power to get a vote on the public option at this very moment because of the rules of reconciliation. All he needs to do is offer an amendment, and it will get an up-or-down vote in the Senate. In fact, a reconciliation that deals with health care is basically the only time Bennet can be assured to get an up-or-down vote on the public option.
I guess taking one very simple step to ensure that you get a vote on the public option, at the time when you most easily can, is just too hard a fight for Michael Bennet.
Frosh Sen. Michael Bennet Won’t Offer Public Option Amendment, Still Seems Not To Understand How Legislative Process Works
Jon Walker
Wednesday March 24, 2010
Oh, poor, poor Michael Bennet (D-CO). He just doesn’t seem to understand how the legislative process works. He took to the Senate floor to praise what the “Patient Protection and Affordable Care Act”–which was signed yesterday by President Obama–will do. That bill is now law. Today they are working on a completely different bill, a budget reconciliation bill, which mostly contains some tax changes that will not go into effect for years.
Bennet falsely equates what the already-passed health insurance law will do with what this reconciliation bill will accomplish. He claims that trying to make improvements to this minor “sidecar” would be to “play games with the lives of thousands of Coloradans and millions of Americans, and I won’t do it.”
That is absurd. The bill that expands insurance coverage was already signed into law. This reconciliation bill, with its minor changes for the employer mandate, and changes to the excise tax, is not playing games with the lives of millions of Americans. Whether this new bill passes or not it will have little impact on our health care system.
Bennet also claims that merely offering some popular amendments to improve the reconciliation bill would kill it. This is completely nonsense. Changing the bill will only send it back to the House for another vote, where it would likely pass. Because of Byrd rule points of order, the bill will almost certainly need to go back to the House for another vote, anyway. Of course, if there are not enough votes for the amended reconciliation bill in the House, they can always amended the bill again to their liking and send it back to the Senate for a final vote. This is how the legislative process works.
In a moment of pure comedy, Bennet states that he “will continue to fight for the [public option] until we get a vote.” Clearly Bennet doesn’t have the vaguest understanding of what the word “fight” means–because he doesn’t even need to fight to get a vote on the public option. All he needs to do is exercise his right as a senator, and politely ask for a vote on the public option by offering an amendment.
It is completely within his power to get a vote on the public option at this very moment because of the rules of reconciliation. All he needs to do is offer an amendment, and it will get an up-or-down vote in the Senate. In fact, a reconciliation that deals with health care is basically the only time Bennet can be assured to get an up-or-down vote on the public option.
I guess taking one very simple step to ensure that you get a vote on the public option, at the time when you most easily can, is just too hard a fight for Michael Bennet.
Obama health insurance requirement taken from GOP
http://news.yahoo.com/s/ap/us_health_overhaul_requiring_insurance
Obama health insurance requirement taken from GOP
Ricardo Alonso-zaldivar, Associated Press Writer
Sat Mar 27, 2010
WASHINGTON – Republicans were for President Barack Obama's requirement that Americans get health insurance before they were against it.
The obligation in the new health care law is a Republican idea that's been around at least two decades. It was once trumpeted as an alternative to Bill and Hillary Clinton's failed health care overhaul in the 1990s. These days, Republicans call it government overreach.
Mitt Romney, weighing another run for the GOP presidential nomination, signed such a requirement into law at the state level as Massachusetts governor in 2006. At the time, Romney defended it as "a personal responsibility principle" and Massachusetts' newest GOP senator, Scott Brown, backed it. Romney now says Obama's plan is a federal takeover that bears little resemblance to what he did as governor and should be repealed.
Republicans say Obama and the Democrats co-opted their original concept, minus a mechanism they proposed for controlling costs. More than a dozen GOP attorneys general are determined to challenge the requirement in federal court as unconstitutional.
Starting in 2014, the new law will require nearly all Americans to have health insurance through an employer, a government program or by buying it directly. That year, new insurance markets will open for business, health plans will be required to accept all applicants and tax credits will start flowing to millions of people, helping them pay the premiums.
Those who continue to go without coverage will have to pay a penalty to the IRS, except in cases of financial hardship. Fines vary by income and family size. For example, a single person making $45,000 would pay an extra $1,125 in taxes when the penalty is fully phased in, in 2016.
Conservatives today say that's unacceptable. Not long ago, many of them saw a national mandate as a free-market route to guarantee coverage for all Americans — the answer to liberal ambitions for a government-run entitlement like Medicare. Most experts agree some kind of requirement is needed in a reformed system because health insurance doesn't work if people can put off joining the risk pool until they get sick.
In the early 1970s, President Richard Nixon favored a mandate that employers provide insurance. In the 1990s, the Heritage Foundation, a conservative think tank, embraced an individual requirement. Not anymore.
"The idea of an individual mandate as an alternative to single-payer was a Republican idea," said health economist Mark Pauly of the University of Pennsylvania's Wharton School. In 1991, he published a paper that explained how a mandate could be combined with tax credits — two ideas that are now part of Obama's law. Pauly's paper was well-received — by the George H.W. Bush administration.
"It could have been the basis for a bipartisan compromise, but it wasn't," said Pauly. "Because the Democrats were in favor, the Republicans more or less had to be against it."
Obama rejected a key part of Pauly's proposal: doing away with the tax-free status of employer-sponsored health care and replacing it with a standard tax credit for all Americans. Labor strongly opposes that approach because union members usually have better-than-average coverage and suddenly would have to pay taxes on it. But many economists believe it's a rational solution to America's health care dilemma since it would raise enough money to cover the uninsured and nudge people with coverage into cost-conscious plans.
Romney's success in Massachusetts with a bipartisan health plan that featured a mandate put the idea on the table for the 2008 presidential candidates.
Democrat Hillary Rodham Clinton, who failed in the 1990s to require employers to offer coverage, embraced the individual requirement, an idea advocated by her Republican opponents in the earlier health care debate.
"Hillary Clinton believed strongly in universal coverage," said Neera Tanden, her top health care adviser in the 2008 Democratic campaign. "I said to her, 'You are not going to be able to say it's universal coverage unless you have a mandate.' She said, 'I don't want to run unless it's universal coverage.'"
Obama was not prepared to go that far. His health care proposal in the campaign required coverage for children, not adults. Clinton hammered him because his plan didn't guarantee coverage for all. He shot back that health insurance is too expensive to force people to buy it.
Obama remained cool to an individual requirement even once in office. But Tanden, who went on to serve in the Obama administration, said the first sign of a shift came in a letter to congressional leaders last summer in which Obama said he'd be open to the idea if it included a hardship waiver. Obama openly endorsed a mandate in his speech to a joint session of Congress in September.
It remains one of the most unpopular parts of his plan. Even the insurance industry is unhappy. Although the federal government will be requiring Americans to buy their products — and providing subsidies worth billions — insurers don't think the penalties are high enough.
Tanden, now at the Center for American Progress, a liberal think tank, says she's confident the mandate will work. In Massachusetts, coverage has gone up and only a tiny fraction of residents have been hit with fines.
Brown, whose election to replace the late Democratic Sen. Edward M. Kennedy almost led to the collapse of Obama's plan, said his opposition to the new law is over tax increases, Medicare cuts and federal overreach on a matter that should be left up to states. Not so much the requirement, which he voted for as a state lawmaker.
"In Massachusetts, it helped us deal with the very real problem of uncompensated care," Brown said.
Obama health insurance requirement taken from GOP
Ricardo Alonso-zaldivar, Associated Press Writer
Sat Mar 27, 2010
WASHINGTON – Republicans were for President Barack Obama's requirement that Americans get health insurance before they were against it.
The obligation in the new health care law is a Republican idea that's been around at least two decades. It was once trumpeted as an alternative to Bill and Hillary Clinton's failed health care overhaul in the 1990s. These days, Republicans call it government overreach.
Mitt Romney, weighing another run for the GOP presidential nomination, signed such a requirement into law at the state level as Massachusetts governor in 2006. At the time, Romney defended it as "a personal responsibility principle" and Massachusetts' newest GOP senator, Scott Brown, backed it. Romney now says Obama's plan is a federal takeover that bears little resemblance to what he did as governor and should be repealed.
Republicans say Obama and the Democrats co-opted their original concept, minus a mechanism they proposed for controlling costs. More than a dozen GOP attorneys general are determined to challenge the requirement in federal court as unconstitutional.
Starting in 2014, the new law will require nearly all Americans to have health insurance through an employer, a government program or by buying it directly. That year, new insurance markets will open for business, health plans will be required to accept all applicants and tax credits will start flowing to millions of people, helping them pay the premiums.
Those who continue to go without coverage will have to pay a penalty to the IRS, except in cases of financial hardship. Fines vary by income and family size. For example, a single person making $45,000 would pay an extra $1,125 in taxes when the penalty is fully phased in, in 2016.
Conservatives today say that's unacceptable. Not long ago, many of them saw a national mandate as a free-market route to guarantee coverage for all Americans — the answer to liberal ambitions for a government-run entitlement like Medicare. Most experts agree some kind of requirement is needed in a reformed system because health insurance doesn't work if people can put off joining the risk pool until they get sick.
In the early 1970s, President Richard Nixon favored a mandate that employers provide insurance. In the 1990s, the Heritage Foundation, a conservative think tank, embraced an individual requirement. Not anymore.
"The idea of an individual mandate as an alternative to single-payer was a Republican idea," said health economist Mark Pauly of the University of Pennsylvania's Wharton School. In 1991, he published a paper that explained how a mandate could be combined with tax credits — two ideas that are now part of Obama's law. Pauly's paper was well-received — by the George H.W. Bush administration.
"It could have been the basis for a bipartisan compromise, but it wasn't," said Pauly. "Because the Democrats were in favor, the Republicans more or less had to be against it."
Obama rejected a key part of Pauly's proposal: doing away with the tax-free status of employer-sponsored health care and replacing it with a standard tax credit for all Americans. Labor strongly opposes that approach because union members usually have better-than-average coverage and suddenly would have to pay taxes on it. But many economists believe it's a rational solution to America's health care dilemma since it would raise enough money to cover the uninsured and nudge people with coverage into cost-conscious plans.
Romney's success in Massachusetts with a bipartisan health plan that featured a mandate put the idea on the table for the 2008 presidential candidates.
Democrat Hillary Rodham Clinton, who failed in the 1990s to require employers to offer coverage, embraced the individual requirement, an idea advocated by her Republican opponents in the earlier health care debate.
"Hillary Clinton believed strongly in universal coverage," said Neera Tanden, her top health care adviser in the 2008 Democratic campaign. "I said to her, 'You are not going to be able to say it's universal coverage unless you have a mandate.' She said, 'I don't want to run unless it's universal coverage.'"
Obama was not prepared to go that far. His health care proposal in the campaign required coverage for children, not adults. Clinton hammered him because his plan didn't guarantee coverage for all. He shot back that health insurance is too expensive to force people to buy it.
Obama remained cool to an individual requirement even once in office. But Tanden, who went on to serve in the Obama administration, said the first sign of a shift came in a letter to congressional leaders last summer in which Obama said he'd be open to the idea if it included a hardship waiver. Obama openly endorsed a mandate in his speech to a joint session of Congress in September.
It remains one of the most unpopular parts of his plan. Even the insurance industry is unhappy. Although the federal government will be requiring Americans to buy their products — and providing subsidies worth billions — insurers don't think the penalties are high enough.
Tanden, now at the Center for American Progress, a liberal think tank, says she's confident the mandate will work. In Massachusetts, coverage has gone up and only a tiny fraction of residents have been hit with fines.
Brown, whose election to replace the late Democratic Sen. Edward M. Kennedy almost led to the collapse of Obama's plan, said his opposition to the new law is over tax increases, Medicare cuts and federal overreach on a matter that should be left up to states. Not so much the requirement, which he voted for as a state lawmaker.
"In Massachusetts, it helped us deal with the very real problem of uncompensated care," Brown said.
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