New Health Insurance Rules Would Let Consumers Compare Plans In “Plain English”
What would your health insurance cover if you got pregnant? How much could you expect to pay out of pocket if you needed treatment for diabetes? How do your plan’s benefits compare with another company’s?
Starting as soon as March, consumers could have a better handle on such questions, under new rules aimed at decoding the fine print of health insurance plans.
Regulations proposed by the Obama administration on Wednesday would require all private health insurance plans to provide current and prospective customers a brief, standardized summary of policy costs and benefits.
To make it easier for consumers to make apples-to-apples comparisons between plans, the summary will also include a breakdown estimating the expenses covered under three common scenarios: having a baby, treating breast cancer and managing diabetes.
Officials likened the new summary to the “Nutrition Facts” label required for packaged foods.
“If you’ve ever had trouble understanding your choices for health insurance coverage . . . this is for you,” Donald Berwick, a top official at the Department of Health and Human Services, said at a news conference announcing the proposal.
“Instead of trying to decipher dozens of pages of dense text to just guess how a plan will cover your care, now it will be clearly stated in plain English. . . . If an insurer’s plan offers subpar coverage in some area, they won’t be able to hide that in dozens of pages of text. They have to come right out and say it.”
Industry representatives said complying could prove onerous for insurers. “Since most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document — which would add administrative costs without meaningfully helping employees,” Robert Zirkelbach, press secretary for the industry group America’s Health Insurance Plans, said in a statement.
Insurance shoppers would also have to keep in mind that their actual premiums could change after they finalized their application, particularly in the case of plans for individuals, which can continue to adjust benefits based on detailed analysis of members’ health history over the next three years. (After 2014, the health-care law will essentially limit insurers to considering only three questions about applicants: how old they are, where they live and whether they smoke.)
The regulation, which is subject to a 60-day public-comment period, essentially fleshes out details of a mandate established by the the health-care law. But it also clarifies a question that the law left somewhat ambiguous: How soon into the application process can shoppers get the summary from insurers?
The regulations would require insurers to provide the summary on request, rather than waiting until someone applies for a policy or pays an application fee, a position that drew praise from consumer advocates.
“If consumers are really going to be able to compare their options, they should be able to easily get this form for any plan that they would like to consider,” said Lynn Quincy, senior health policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports.
In addition to supplying the summary on demand, insurers would have to automatically provide it before a consumer’s enrollment, as well as 30 days before renewal of their health coverage. Plans must also notify members of any significant changes to their terms of coverage at least 60 days before the alterations take effect.
The summary form, which can be sent by e-mail, must be no longer than four double-sided pages printed in 12-point type. In addition to listing a plan’s overall premiums, co-pays and co-insurance amounts, it must include charts specifying the out-of-pocket costs for a range of specific services. A copy can be viewed at www.healthcare.gov/news/factsheets/labels08172011b.pdf.
By: N. C. Aizenman, The Washington Post, August 17, 2011
Republican House Bills: A Glimpse Into The Tea Party’s Vision For America
If the House ran America, what would America look like?
It would no longer have a far-reaching health-care law. The House voted to repeal that legislation in January.
It would no longer have federal limits on greenhouse gases. The House voted to ax them in April.
And it would not have three government programs for homeowners who are in trouble on their mortgages. The House voted to end them all.
These and many other changes are included in an ambitious slate of more than 80 bills that have passed since Republicans took control of the chamber this year.
Most of these measures will die in the Democrat-controlled Senate. Still, they are a revealing kind of vision statement — the first evidence of how a tea-party-influenced GOP would like to reshape the country.
That vision is aimed at dismantling some Democratic priorities. The GOP’s philosophy holds that paring back an expensive and heavy-handed government bureaucracy would help restore the country’s financial footing and give private businesses the freedom to grow and create jobs.
After seven months, it is still only half a vision.
On major issues such as health care, climate change and bad mortgages, the House has affirmed that fixes are needed — if it can ever manage to repeal the old ones.
It hasn’t said exactly what those changes should be.
“The Republican Party is sort of united in terms of what they’re against. But there’s not a great deal of consensus right now in terms of what they’re for,” said Michael D. Tanner, a senior fellow at the libertarian Cato Institute and an expert on health-care reform and recent GOP history.
This month, a divided Congress finally staggered into its summer recess. Its business has been split between the terrifyingly urgent — including standoffs that threatened a government shutdown and a national debt default — and the purely theoretical.
The theoretical part has come because neither the House nor the Senate is likely to approve big ideas dreamed up by the other. The Democrat-held Senate has reacted to this by withdrawing into legislative hibernation.
House Republicans have instead been passing bills that tell a story — about the country they want but can’t quite get.
“The new House Republican majority was voted into office to change the way Washington does business and make the government accountable to the American people once again. Our agenda has reflected these goals,” said Laena Fallon, a spokeswoman for House Majority Leader Eric Cantor (Va.).
But even within the Republican ranks, there is a desire for more details about the party’s vision for replacing Democratic policies.
Rep. Trey Gowdy (S.C.) said the GOP must put forward its own solutions on issues such as health care, job creation and mortgage assistance. He said he is not convinced that there is a need to take on climate change in the same way.
“Being the party of ‘no’ . . . is an appropriate response” in some cases, Gowdy said. “It’s not appropriate when you’ve been extensively critical of someone else’s ideas” and have none to replace them, he said.
“For substance reasons, and for credibility reasons, we also need to have a comprehensive . . . alternative that goes beyond saying, ‘Your plan is bad,’ ” Gowdy said.
The best-known part of the House’s vision has to do with spending. The chamber passed a budget that calls for a Medicare overhaul that would force new recipients to buy private insurance after 2022. It also passed, with five Democratic backers, a bill that demanded a balanced budget amendment: essentially, a spending limit written into the Constitution.
But the House’s measures have gone far beyond the budget.
It has passed legislation to forbid new energy-efficiency standards for light bulbs and to punish shining a laser pointer at an airplane in flight. It voted to take away federal funding for National Public Radio and for public financing of presidential campaigns.
The House also took a stand against President Obama on the military campaign in Libya, rejecting a motion to approve U.S. involvement. And it voted to rein in Environmental Protection Agency efforts against “mountaintop-removal coal mines” by requiring the EPA to defer to decisions by state regulators.
On three major issues, the House seemed to acknowledge that simply repealing a Democratic idea might not be enough — and that it did not have its own solutions.
On Jan. 19, for instance, 242 Republicans and three Democrats voted to repeal the landmark health-care law.
In place of the legislation, Republicans had said they would craft their own solutions for problems involving high costs and the denial of coverage for preexisting conditions. Their slogan, outlined in last fall’s Pledge to America, was “Repeal and Replace.”
No replacement has occurred.
A bill that would limit liability in malpractice lawsuits has passed in committee. Other ideas are being developed, aides said.
On climate change, the EPA is requiring larger power plants and industrial facilities to reduce greenhouse gas emissions to obtain new permits.
But many in Congress worried that the effort would drive up energy prices and kill jobs. So in April, 236 House Republicans and 19 Democrats voted to make the EPA stop in its tracks.
In place of regulations, they approved only a vaguely worded “sense of the Congress” about climate change.
“There is established scientific concern over warming of the climate system,” the bill says. It adds that Congress should attack the problem “by developing policies that do not adversely affect the American economy, energy supplies, and employment.”
But how? When? The measure doesn’t say.
And it doesn’t need to, said Tim Phillips, president of the conservative group Americans for Prosperity. He said his group thinks that simply repealing this legislation — and the health-care law — is enough for now.
“The big-government assault [has been] so damaging to the economy and the government. They’re doing the right thing by just trying to stop and reverse,” Phillips said.
Environmental groups have said that the House’s bill would leave the nation powerless to fight an escalating global problem.
“They clearly aren’t going to pass any legislation themselves that would address that pollution,” said Dan Lashof of the Natural Resources Defense Council.
The House also has voted to eliminate three federal programs meant to aid homeowners in danger of foreclosure. Two help modify loans to create lower payments. The third gives no-interest loans to borrowers who are in trouble. All have been criticized for moving too slowly and helping too few.
In March, the House decided to do away with them. The Congressional Budget Office said that doing so could save taxpayers $2.4 billion.
“None of the programs . . . have been successful,” Michael Steel, a spokesman for House Speaker John A. Boehner (R-Ohio), wrote in a statement.
By: David Fahrenthold, The Washington Post, August 17, 2011
Corporate Dysmorphia: Why “Business Needs Certainty” Is Destructive
If you read the business and even the political press, you’ve doubtless encountered the claim that the economy is a mess because the threat to reregulate in the wake of a global-economy-wrecking financial crisis is creating “uncertainty.” That is touted as the reason why corporations are sitting on their hands and not doing much in the way of hiring and investing.
This is propaganda that needs to be laughed out of the room.
I approach this issue as as a business practitioner. I have spent decades advising major financial institutions, private equity and hedge funds, and very wealthy individuals (Forbes 400 level) on enterprises they own. I’ve run a profit center in a major financial firm and have have also operated a consulting business for over 20 years. So I’ve had extensive exposure to the dysfunction I am about to describe.
Commerce is all about making decisions and committing resources with the hope of earning profit when the managers cannot know the future. “Uncertainty” is used casually by the media, but when trying to confront the vagaries of what might happen, analysts distinguish risk from “uncertainty”, which for them has a very specific meaning. “Risk” is what Donald Rumsfeld characterized as a known unknown. You can still estimate the range of likely outcomes and make a good stab at estimating probabilities within that range. For instance, if you open an ice cream store in a resort area, you can make a very good estimate of what the fixed costs and the margins on sales will be. It is much harder to predict how much ice cream you will actually sell. That is turn depends largely on foot traffic which in turn is largely a function of the weather (and you can look at past weather patterns to get a rough idea) and how many people visit that town (which is likely a function of the economy and how that particular resort area does in a weak economy).
Uncertainty, by contrast, is unknown unknowns. It is the sort of risk you can’t estimate in advance. So businesses also have to be good at adapting when Shit Happens. Sometimes that Shit Happening can be favorable, but they still need to be able to exploit opportunities (like an exceptionally hot summer producing off the charts demand for ice cream) or disaster (like the Fukushima meltdown disrupting global supply chains). That implies having some slack or extra resources at your disposal, or being able to get ready access to them at not too catastrophic a cost.
So why aren’t businesses investing or hiring? “Uncertainty” as far as regulations are concerned is not a major driver. Surveys show that the “uncertainty” bandied about in the press really translates into “the economy stinks, I’m not in a business that benefits from a bad economy, and I’m not going to take a chance when I have no idea when things might turn around.”
The “certainty” they are looking for is concrete evidence that prevailing conditions have really turned. But with so many people unemployed, growth flagging in advanced economies, China and other emerging economies putting on the brake as their inflation rates become too high, and a very real risk of another financial crisis kicking off in the Eurozone, there isn’t any reason to hope for things to magically get better on their own any time soon. In fact, if you look at the discussion above, we actually have a very high degree of certainty, just of the wrong sort, namely that growth will low to negative for easily the next two years, and quite possibly for a Japan-style extended period.
So why this finger pointing at intrusive regulations, particularly since they are mysteriously absent? For instance, Dodd Frank is being water down in the process of detailed rulemaking, and the famed Obamacare actually enriches Big Pharma and the health insurers.
The problem with the “blame the government” canard is that it does not stand up to scrutiny. The pattern businesses are trying to blame on the authorities, that they aren’t hiring and investing due to intrusive interference, was in fact deeply entrenched before the crisis and was rampant during the corporate friendly Bush era. I wrote about it back in 2005 for the Conference Board’s magazine.
In simple form, this pattern resulted from the toxic combination of short-termism among investors and an irrational focus on unaudited corporate quarterly earnings announcements and stock-price-related executive pay, which became a fixture in the early 1990s. I called the pattern “corporate dysmorphia”, since like body builders preparing for contests, major corporations go to unnatural extremes to make themselves look good for their quarterly announcements.
An extract from the article:
Corporations deeply and sincerely embrace practices that, like the use of steroids, pump up their performance at the expense of their well-being…
Despite the cliché “employees are our most important asset,” many companies are doing everything in their power to live without them, and to pay the ones they have minimally. This practice may sound like prudent business, but in fact it is a reversal of the insight by Henry Ford that built the middle class and set the foundation for America’s prosperity in the twentieth century: that by paying workers well, companies created a virtuous circle, since better-paid staff would consume more goods, enabling companies to hire yet more worker/consumers.
Instead, the Wal-Mart logic increasingly prevails: Pay workers as little as they will accept, skimp on benefits, and wring as much production out of them as possible (sometimes illegally, such as having them clock out and work unpaid hours). The argument is that this pattern is good for the laboring classes, since Wal-Mart can sell goods at lower prices, providing savings to lower-income consumers like, for instance, its employees. The logic is specious: Wal-Mart’s workers spend most of their income on goods and services they can’t buy at Wal-Mart, such as housing, health care, transportation, and gas, so whatever gains they recoup from Wal-Mart’s low prices are more than offset by the rock-bottom pay.
Defenders may argue that in a global economy, Americans must accept competitive (read: lower) wages. But critics such as William Greider and Thomas Frank argue that America has become hostage to a free-trade ideology, while its trading partners have chosen to operate under systems of managed trade. There’s little question that other advanced economies do a better job of both protecting their labor markets and producing a better balance of trade—in most cases, a surplus.
The dangers of the U.S. approach are systemic. Real wages have been stagnant since the mid-1970s, but consumer spending keeps climbing. As of June, household savings were .02 percent of income (note the placement of the decimal point), and Americans are carrying historically high levels of debt. According to the Federal Reserve, consumer debt service is 13 percent of income. The Economist noted, “Household savings have dwindled to negligible levels as Americans have run down assets and taken on debt to keep the spending binge going.” As with their employers, consumers are keeping up the appearance of wealth while their personal financial health decays.
Part of the problem is that companies have not recycled the fruits of their growth back to their workers as they did in the past. In all previous postwar economic recoveries, the lion’s share of the increase in national income went to labor compensation (meaning increases in hiring, wages, and benefits) rather than corporate profits, according to the National Bureau of Economic Analysis. In the current upturn, not only is the proportion going to workers far lower than ever before—it is the first time that the share of GDP growth going to corporate coffers has exceeded the labor share.
And businesses weren’t using their high profits to invest either:
Companies typically invest in times like these, when profits are high and interest rates low. Yet a recent JP Morgan report notes that, since 2002, American companies have incurred an average net financial surplus of 1.7 percent of GDP, which contrasts with an average deficit of 1.2 percent of GDP for the preceding forty years. While firms in aggregate have occasionally run a surplus, “. . . the recent level of saving by corporates is unprecedented. . . .It is important to stress that the present situation is in some sense unnatural. A more normal situation would be for the global corporate sector—in both the G6 and emerging economies—to be borrowing, and for households in the G6 economies to be saving more, ahead of the deterioration in demographics.”
The problem is that the “certainty” language reveals what the real game is, which is certainty in top executive pay at the expense of the health of the enterprise, and ultimately, the economy as a whole. Cutting costs is as easy way to produce profits, since the certainty of a good return on your “investment” is high. By contrast, doing what capitalists of legend are supposed to do, find ways to serve customer better by producing better or novel products, is much harder and involves taking real chances and dealing with very real odds of disappointing results. Even though we like to celebrate Apple, all too many companies have shunned that path of finding other easier ways to burnish their bottom lines. and it has become even more extreme. Companies have managed to achieve record profits in a verging-on-recession setting.
Indeed, the bigger problem they face is that they have played their cost-focused business paradigm out. You can’t grow an economy on cost cutting unless you have offsetting factors in play, such as an export led growth strategy, or an ever rising fiscal deficit, or a falling household saving rate that has not yet reached zero, or some basis for an investment spending boom. But if you go down the list, and check off each item for the US, you will see they have exhausted the possibilities. The only one that could in theory operate is having consumers go back on a borrowing spree. But with unemployment as high as it is and many families desperately trying to recover from losses in the biggest item on their personal balance sheet, their home, that seems highly unlikely. Game over for the cost cutting strategy.
And contrary to their assertions, just as they’ve managed to pursue self-limiting, risk avoidant corporate strategies on a large scale, so too have they sought to use government and regulation to shield themselves from risk.
Businesses have had at least 25 to 30 years near complete certainty — certainty that they will pay lower and lower taxes, that they’ will face less and less regulation, that they can outsource to their hearts’ content (which when it does produce savings, comes at a loss of control, increased business system rigidity, and loss of critical know how). They have also been certain that unions will be weak to powerless, that states and municipalities will give them huge subsidies to relocate, that boards of directors will put top executives on the up escalator for more and more compensation because director pay benefits from this cozy collusion, that the financial markets will always look to short term earnings no matter how dodgy the accounting, that the accounting firms will provide plenty of cover, that the SEC will never investigate anything more serious than insider trading (Enron being the exception that proved the rule).
So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their ‘certainty’ amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.
By: Yves Smith, Salon, August 14, 2011
Former Sen. Phil “Mental Recession” Phil Gramm Endorses His “Protege” Rick Perry
Texas Gov. Rick Perry (R) yesterday jumped in the 2012 GOP presidential primary, saying that “it is time to get America working again.” “I will work every day to make Washington, DC, as inconsequential in your lives as I can, and free our families, small businesses and states from a burdensome and costly federal government so they can create, innovate and succeed,” he said. And Perry quickly picked up the endorsementof former Sen. Phil Gramm (R-TX):
Former senator and current banker Phil Gramm of Texas — well-connected to big donors but controversial for his role in preventing tighter regulation of Wall Street — told The Huffington Post yesterday that he is endorsing his former student and political protege, Texas Gov. Rick Perry...”I’m for Rick and I will do what I can to help,” Gramm said in an interview in Detroit. “He has been an effective governor. He is a determined guy from a small town who knows how to get things done.”
In 2008, Gramm, who was advising Sen. John McCain’s (R-AZ) presidential campaign (and was floated as McCain’s choice for Treasury Secretary) gained notoriety for saying that the country was “a nation of whiners” that was only in a “mental recession.”
But Gramm’s legacy goes much deeper than that. In 2001, he tucked the Commodity Futures Modernization Act into an unrelated, 11,000 page appropriations bill. That act ensured that the huge market in over-the-counter derivatives stayed unregulated, laying the groundwork for the 2008 financial crisis (and the implosions of AIG and Lehman Brothers). He also believes there should be no minimum wage and has derided the working poor by saying, “we’re the only nation in the world where all our poor people are fat.”
Perry was a student of Gramm’s at Texas A&M, and when Perry became governor “Gramm and his bank pushed a controversial proposal to allow the company to take out insurance polices on teachers and other workers, even though the workers themselves would not benefit.” If Gramm’s support is any indication, Perry’s zeal for financial deregulation will know no bounds.
By: Pat Garofalo, Think Progress, August 14, 2011
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