It is a masterful spin by the self-described not-for-profit Blue Shield of California to announce that it is returning all but two percent of its profits to its customers, as though this were some act of humble generosity. It’s a little like a supermarket announcing that from now on it’s going to give back (almost) all of your change. (It’s actually worse than that, as I’ll explain.)
The San Francisco Chronicle reported this morning on the front page about the landmark insurance reform we expect to be spending the next fifteen months working for. Insurance companies, the legislature and recent court rulings have all turned against consumers, much like they had in 1988, when California voters struck back with the toughest insurance reform in America: Proposition 103.
The California Senate Appropriations Committee is expected to vote on Thursday on AB 52, a bill which will give the California Insurance Commissioner, Dave Jones, the ability to regulate health insurance premium hikes. This is something that many other states have the power to do, but which California's health insurance companies have fought tooth and nail to prevent. Finally there's a chance they could lose this battle.
Thursday is a crucial vote -- do or die. If the bill is not passed out of the Appropriations Committee it is dead. If it does pass it will go to the Senate floor for a vote (it's already passed the Assembly), which must happen by September 8th.
There are nine committee members, six Democrats and three Republicans. None of the Republicans is expected to vote for the bill, therefore five of the six Democrats' votes are needed.
Currently we have no idea whether all the Democrats on the committee are in favor of the bill or not. Here are their phone numbers -- it's time to call them and find out exactly where they stand and indicate your support, as a California citizen, of the bill.
Senator Christine Kehoe (Chair) -- (916) 651-4039
Senator Elaine Alquist -- (916) 651-4013
Senator Ted W. Lieu -- (916) 651-4028
Senator Fran Pavley -- (916) 651-4023
Senator Curren Price -- (916) 651-4026
Senator Darrell Steinberg -- (916) 651-4006
If you find out the position of any of these Senators on AB 52, please post a comment!
Health insurance companies aren't the only ones that raked in the dough as insurance premiums rose 138% over the last decade. Health insurance brokers, who get their pay as sales commissions from insurance companies, made out like bandits, too. A recent California Department of Insurance survey of four of the five top insurers in the state found that aggregate broker income rose from from $5.8 million in 2000 to $168 million in 2010--a 2800% increase. Some of that is growth of the broker industry as insurance became a for-profit product, but a lot of it is also broker pay rising along with premiums.
Los Angeles Times business columnist Mike Hiltzik offers a stark choice to state legislators in his Wednesday column. What'll it be, has asks: the millions of dollars that the insurance industry pours into your campaigns and treasure chests, or the millions of Californians battered by health premiums that kill the family budget or company benefits account? Plus the 8.2 million Californians with no health insurance at all?
The health insurance industry's lobbying muscle in the California Legislature is legendary. It's the reason that the state's insurance commissioner remains all but toothless to reject outrageous spikes in health insurance premiums and rates, unlike in a majority of other states. So it's not a shock that a new version of a bill to let the state insurance commissioner reject or modify health insurance premiums barely squeaked through the state Assembly's Appropriations Committee late last week with the minimum 9 votes.
Washington D.C. -- It's hard to imagine that a briefing on rate regulation and a new Consumer Watchdog report would draw a fascinated audience, but this is DC. Journalists and nonprofit advocates spent 90 minutes Wednesday as Sen. Dianne Feinstein and an expert panel made an impassioned call for getting health insurance companies under control with tough regulation of the rates they can charge. As the senator put it, without mincing a single word:
“While insurance premiums continue to spiral out of control, CEO's paychecks are getting bigger, and insurance companies are spending less on medical care and more on profits. Today, in 17 states including California, state regulators do not have authority to block or modify insurance rate increases that are excessive, unjustified, or discriminatory. In order to protect consumers from skyrocketing insurance premiums, state regulators need this explicit authority to ensure rates are justified. This is why I have introduced the Health Insurance Rate Review Act of 2011, and why I have endorsed state legislation in California, AB 52, to close this loophole.”
At the National Governors Association, President Obama just threw his weight behind a bi-partisan effort in the US Senate to allow states to innovate with health reform, including adopting a public insurance system or single payer health care system by 2013 instead of 2017.
The largely peaceful revolution in Cairo and Americans' celebration of it raises the question:
What would it take to mount a peaceful revolution in America against the Wall Street and corporate powerhouses that have turned the government against the best interests of our people?"
Americans correctly believe that the most critical issue facing our nation is job creation. You would think the Republican-run House of Representatives, in its first major policy vote of the 112th Congress, would be focused on putting Americans to work. Instead, House Republicans have decided their number one priority is repealing the Patient's Bill of Rights, legislation that is creating 250,000 to 400,000 jobs a year.
The Republican repeal would return America to the dark days when insurance companies told patients and doctors what treatments to pursue, a time when insurers routinely discriminated against Americans to maximize their profits.
When Democrats in Congress passed health care reform - the Patient's Bill of Rights - last year, we put a stop to the worst abuses of the insurance industry. We told the insurance companies they can no longer drop coverage for women who become pregnant or get cancer. We told the insurance companies they can no longer deny care to children with pre-existing conditions, and by 2014, no American will be turned away from insurance because they have the misfortune of falling ill. We told the insurance companies they must allow young people under the age of 26 to be covered under their parents' plan. We've replaced the Insurance Industry's Right to Discriminate with the Patient's Bill of Rights.
After Blue Shield shocked the nation with 59% premium hikes in California last week, the company just refused a request from the elected insurance commissioner to stop the increases for 60 days.
Californians, including those stricken by autism, and their parents and caregivers, expect regulators to enforce the law, not to side with insurance companies seeking to boost their profits by denying patients the care they need.
Governor Schwarzenegger, however, a longtime and vocal supporter of the Special Olympics and developmentally disabled children, is allowing health insurers to evade state mental health laws and shift health care costs to already beleaguered taxpayers. Last Friday, Governor Schwarzenegger vetoed SB 1283 by Senate President pro Tem Darrell Steinberg (D-Sacramento). The bill would have improved, but not fixed, a broken regulatory system.
Obama's mad about insurers blaming his health care plan for big rate hikes, but he doesn't have to take it anymore. He can and should issue an executive order to stop the rate hikes immediately.Obama's mad about insurers blaming his health care plan for big rate hikes, but he doesn't have to take it anymore. He can and should issue an executive order to stop the rate hikes immediately.
The insurance industry is going directly to the White House in its latest attempt to evade a key portion of the health reform law that would force them to operate more efficiently. But instead of making the argument directly, the industry is speaking through state insurance commissioners that are either friendly to insurance companies or cowed by insurers' threats to leave a state market.
A message Thursday from Health and Human Services chief Kathleen Sebelius is unusual not just for its tough language toward health insurers, but because it exists at all. In a letter to the insurance industry's lobbying and trade association, Sebelius flatly warns insurers to cut it out with blaming their double-digit price hikes on federal health reform.
According to the Los Angeles Times, Braly's total compensation shot up from $8.7 million to $13.1 million last year. At least three other executives there did just as well, with raises of up to 75 percent. Meanwhile, 800,000 individual policyholders in California are learning of this good news for WellPoint executives a month before their own insurance rates are set to spike by double digits - an unprecedented rate increase initiated on Angela Braly's watch.
WellPoint, of course, is merely doing what it must to pursue the gold standard of excellence in its service to shareholders and customers, according to company spokesman Jon Mills:
"WellPoint wants to attract and retain top talent. In order to be the best, to be innovative, to continue delivering the best service, we do have to retain the best quality." He added: "We are in no way trying to inflate the salaries and compensation figures but trying to maintain a high level of talent at the organization."
It's all just a big misunderstanding, see. The problem is that all of us amateur, casual observers, with our pious concerns about "fairness" and "right and wrong," just don't understand the entirely rational and ultimately equitable dynamics of the free market system for labor compensation. Companies have to find and keep talented leaders, and if it takes $6.2 million in restricted stock, a $1.1 million salary increase, a $1.5 million performance bonus, $4 million in stock options and $292,036 in "other expenses" (including over $150,000 in "security-related improvements" to protect Angela Braly from us, the angry, overcharged, underinsured hordes) to retain a CEO who had the wisdom to force hundreds of thousands of Californians off the company's rolls or into bankruptcy-threatening situations in order to buoy WellPoint stock prices (which rose by close to 40% last year), then that's just how the free market works, which is nobody's fault, really, when you think about it.
Except the reality is, there is no misunderstanding. Ordinary Americans understand exactly how the free market works. In fact, it's precisely this understanding that infuriates everyone from your longtime local union activist to your freshly-minted Tea Party revolutionary. It's the Jon Millses of the world that don't get it. Their explanations illuminate nothing, except insofar as they confirm exactly what everyone suspects: that there are in fact two economic realities in America today - one that Angela Braly occupies along with Wall Street CEOs, corporate lobbyists and corrupt politicians, and the other that the rest of us experience.
In the former, forcing hundreds of thousands of everyday people to spend thousands more on their premiums to pay for the mess you've made of the healthcare system, then pointing to the increased revenue as proof of your leadership and profit-making abilities, is called "taking responsibility" and is rewarded with a $4.4 million raise. It's market meritocracy at work.
In the latter, it really doesn't matter how hard you work or how great of a job you do -- if the executives at the helm steer your company over rocky shoals, you stand a good chance of losing your wage increases, your benefits, or your job altogether. If you're not "top talent," you simply don't need to be "attracted and retained." The world doesn't work that way for you. Or to take another example, if the executives at your insurance carrier decide they didn't make enough money last fiscal quarter, you better cough up thousands of dollars more this year or lose your coverage. Never mind that you had exactly nothing to do with WellPoint's problems with rising medical costs, or its shareholder's demands for 40% increases in their stock values. It really doesn't matter who you are or what you've done or what you haven't done; you don't control your destiny, the "market" does. That's just basic economics. We don't need a WellPoint spokesman to explain that; everyone knows it already. With the economy in turmoil, we're all getting our noses rubbed in it every single day.
What's incredible is that even after witnessing the public's reactions to the taxpayer-financed AIG bonuses, the auto company CEOs flying on private jets to DC to beg Congress for bailouts, and Goldman Sachs' record profits a year after benefiting from $62 billion in publicly-financed AIG pass-throughs, corporate executives like Braly and their PR handlers still can't comprehend the outrage. But then, that points to something else we already know: that from a mansion on a hill, the riot below can sound like a distant and dull roar, or like nothing at all.
This morning I received an email from Obama For America. It asked for the following:
An alarming new study shows that health care costs increased last year at the fastest rate in more than a half century.
Health care spending rose to an estimated $2.5 trillion in 2009, or $8,047 per person -- and is now projected to nearly double by 2019. If we don't act, this growing burden will mean more lost jobs, more families pushed into bankruptcy, and more crushing debt for our nation.
The conclusion is clear: This isn't a problem we can kick down the road for another decade -- or even another year. We need to pass health reform now.
We're incredibly close. But too many in Washington are now saying that we should delay or give up on reform entirely. So we need to make it crystal clear that Americans understand the stakes for our economy and our lives, and that we want action.
Can you write a letter to the editor of your local paper right now?
In just five minutes of your time, you can tell thousands of readers about this new report on spiraling costs, and why abandoning reform is just not an option.
You can also help by posting this note on Facebook, letting your friends know about the new costs study and asking them to join you in writing a letter to a local paper.
President Obama and many allies in Congress are working hard to finish the job -- but we can't rest until it's done. Your note will help break through the Washington spin and show members of Congress and the media what local voters really believe. Click here to get started:
You know how the Republicans are all super excited to block "ObamaCare"? Which, to be honest, more resembles McCain's plan during the election than Obama's own plan. Well, this is what the tea partiers are fighting to preserve here in California:
Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage -- people not covered by group rates -- that its prices will go up March 1 and may be adjusted "more frequently" than its typical yearly increases.
The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year. (LA Times)
If my own experience with Kaiser are any guide to what the individual market is as a whole, premiums have gone up around 125%. It's completely unsustainable.
