Sharp Rise In Premiums Exposes Health Insurers’ Greed
According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.
So, why the sudden increase?
We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.
As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.
That will not stop the anti-Obamacare forces, of course, from putting the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the health insurers to falsely inflate their prices, by forcing them to do the right thing, to be a blamable offense.
Beginning next year, health insurers will be required to justify any increases in premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than 85 percent of their premium income on medical expenses. Thus, it is hardly a stretch to conclude that the insurers are simply taking their last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.
As noted by Reed Ableson in The New York Times:
Throughout this year, major health insurers have defended higher premiums—and higher profits—saying that their expenses would rise once the economy recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits consultants and others. About three-quarters of workers now pay part of the bill when they go see a doctor, and nearly a third have a deductible of at least $1,000 if they have single coverage, up from just one in 10 in 2006, according Kaiser.
So, the insurance company defense is that they expect prices to rise sometime in the future (clearly an undefined period) and they want to be ready. Somehow, this justifies them to dramatically raise their premium prices now, at time when their costs are actually less and their profits are through the roof.
Not only is such behavior astoundingly predatory, the insurers are playing a major role in keeping the economy in the dumps, as it is precisely this sort of unnecessary premium increase that causes employers to avoid hiring more employees.
For those who believe that we should leave it to the free market to establish the prices in the medical system (of which insurance will always be a necessary part), maybe they can explain how the system is working in this instance? In a time where patient control has risen dramatically as consumers decide if and how they will—or will not—spend on medical services now that they have greatly increased responsibility for the familiy medical bills as a result of much higher deductibles, and at a moment where there are substantially reduced claims coming onto health insurers’ balance sheets due to diminished use of medical services, exactly what is the free market concept that justifies an insurance company raising their premium rates? What’s more, at a time when fewer people are using physician’s services, why would costs go up?
Free market principles would suggest that lower demand should produce lower prices. But that is clearly not what is happening.
I know what some of you are thinking—but before you say it’s all the government’s fault, I would hasten to point out that, with an apples-to-apples comparison, there are no substantial new regulations hitting physicians this year that did not exist last year. And before you blame the president’s health care reform program for the insurance companies’ usurious behavior, note that the two million young people who have been added to the insurance roles as a result of Obamacare’s permitting these people to stay on the family insurance policy, would not increase an insurance company’s costs by 9% over last year’s prices. Indeed, adding all of these healthy kids to the insurance pools should help insurers spread risk more effectively while collecting additional premium revenues.
The bottom line is that there is absolutely no justification whatsoever for the health insurance industry hitting employers with a 9 percent increase. It is a simple matter of greed and it is precisely that greed that has long made access to healthcare continuously more difficult for middle class Americans.
By: Rick Ungar, Mother Jones, September 27, 2011
Why Conservatives Hate Warren Buffett
Maybe only a really, really rich guy can credibly make the case for why the wealthy should be asked to pay more in taxes. You can’t accuse a big capitalist of “class warfare.” That’s why the right wing despises Warren Buffett and is trying so hard to shut him up.
Militant conservatives are effective because they are absolutely shameless. Many of the same people who think the rich should be free to spend unlimited sums influencing our politics without having to disclose anything are now asking Buffett to make his tax returns public. I guess if you’re indifferent to consistency, you have a lot of freedom of action.
Buffett has outraged conservatives by saying that he pays taxes at a lower rate than his secretary. He’s said this for years, but he’s a target now because President Obama is using his comment to make the case for higher taxes on millionaires.
Thus did the Wall Street Journal editorial page call on Buffett to “let everyone else in on his secrets of tax avoidance by releasing his tax returns.”
Somehow, the Journal did not think to ask its friends who battle vigorously for low taxes on capital gains to release their tax returns, too. But aren’t they just as engaged in this argument as Buffett? Shouldn’t accountability go both ways? Nor did the Journal suggest that the Koch brothers could serve the public interest by releasing a full accounting of all their political spending.
Buffett’s sin is that he spoke a truth that conservatives want to keep covered up: Taxing capital gains at 15 percent means that people who make their money from investments pay taxes at a much lower marginal rate than those who earn more than $34,500 a year from their labor. That’s when the income tax rate goes up to 25 percent. (For joint filers, the 25 percent rate kicks in at $69,000.) For singles, the 28 percent bracket starts at $83,600, the 33 percent bracket at $174,400.
So if an investor such as Buffett pockets, say, $100 million of his income in capital gains, he pays only a 15 percent tax on all that money. For everyday working people, the 15 percent rate applies only to earnings between $8,500 and $34,500. After that, they’re paying a higher marginal rate than the multimillionaire pays on gains from investments. Oh, yes, and before Obama temporarily cut it by two points, the payroll tax added another 6.2 percent to the burden on middle-class workers. That levy doesn’t apply to capital gains or to income above $106,800, so it hits low- and middle-income workers much harder than it does the wealthy.
No wonder partisans of low taxes on wealthy investors hate Warren Buffett. He has forced a national conversation on (1) the bias of the tax system against labor; (2) the fact that, in comparison with middle- or upper-middle-class people, the really wealthy pay a remarkably low percentage of their income in taxes; and (3) the deeply regressive nature of the payroll tax.
(Because this column appears in The Post, I should note that Buffett heads a company that owns a substantial minority share in The Washington Post Co. and for many years held a seat on the company’s board of directors.)
It’s worth noticing that while conservatives who talk about religion get a lot of coverage — and I will always defend their freedom to speak of faith in the public square — what really get the juices flowing on the right these days are tax rates. I’m not sure that a politician who renounced the Almighty would get nearly the attention Buffett has received for his renunciation of low capital gains taxes.
Advocates of higher taxes on the wealthy do not want to “punish” the successful. Buffett and Doug Edwards, a millionaire who asked Obama at a recent town hall event in California to raise his taxes, are saying that none of us succeeds solely because of personal effort. We are all lucky to have been born in — or, for immigrants, admitted to — a country where the rule of law is strong, where property is safe, where a vast infrastructure has been built over generations, where our colleges and universities are the envy of the world, and where government protects our liberties.
Wealthy people, by definition, have done better within this system than other people have. They ought to be willing to join Buffett and Edwards in arguing that for this reason alone, it is common sense, not class jealousy, to ask the most fortunate to pay taxes at higher tax rates than other people do. It is for this heresy that Buffett is being harassed.
By: E. J. Dionne, Opinion Writer, The Washington Post, September 28, 2011
Only Conservatives Can End The Death Penalty
Every so often, one capital case makes a public spectacle of the American machinery of death. Last week, it was the controversy over Troy Davis, who was executed in Georgia after years of impassioned argument, organizing and litigation.
I honor those who worked so hard to save Davis’s life because they forced the nation to deal with the imperfections and, in some instances, brutalities of the criminal justice system.
Yet after all the tears are shed, the repeal of capital punishment is still a political question. Can the politics of this question change? The answer is plainly yes.
It’s hard to imagine now, but in 1966, more Americans opposed the death penalty than supported it — by 47 percent to 42 percent. But the crime wave that began in the late 1960s and the sense that the criminal justice system was untrustworthy sent support for capital punishment soaring. By 1994, 80 percent of Americans said they favored the death penalty, and only 16 percent were opposed.
Since then, the numbers have softened slightly. Over the past decade, the proportion of Americans declaring themselves against capital punishment has hovered around 25 to 32 percent. The mild resurgence of opposition — caused by a decline in violent crime and by investigations raising doubts about the guilt of some death-row prisoners — has opened up political space for action.
Liberals are not going to lead this fight. Too many Democratic politicians remember how the death penalty was used in campaigns during the 1980s and ’90s, notably by George H.W. Bush against Michael Dukakis in 1988. They’re still petrified of looking “soft” on crime.
Moreover, winning this battle will require converting Americans who are not liberals. The good news is that many are open to persuasion. Gallup polling shows that support for capital punishment drops sharply when respondents are offered the alternative of “life imprisonment, with absolutely no possibility of parole.” When Gallup presented this option in its 2010 survey, only 49 percent chose the death penalty; 46 percent preferred life without parole.
And a survey last year for the Death Penalty Information Center by Lake Research Partners showed that if a variety of alternatives were offered (including life without parole plus restitution to victims’ families), respondents’ hard support for the death penalty was driven down to 33 percent.
If a majority is open to persuasion, the best persuaders will be conservatives, particularly religious conservatives and abortion opponents, who have moral objections to the state-sanctioned taking of life or see the grave moral hazard involved in the risk of executing an innocent person.
Despite the cheering for executions at a recent GOP debate, there are still conservatives who are standing up against the death penalty. In Ohio this summer, state Rep. Terry Blair, a Republican and a staunch foe of abortion, declared flatly: “I don’t think we have any business in taking another person’s life, even for what we call a legal purpose or what we might refer to as a justified purpose.”
Last week, Don Heller, who wrote the 1978 ballot initiative that reinstated the death penalty in California, explained in the Los Angeles Daily News why he had changed his mind. “Life without parole protects public safety better than a death sentence,” he wrote. “It’s a lot cheaper, it keeps dangerous men and women locked up forever, and mistakes can be fixed.”
The most moving testimony against Troy Davis’s execution came from a group of former corrections officials who, as they wrote, “have had direct involvement in executions.”
“No one has the right to ask a public servant to take on a lifelong sentence of nagging doubt, and for some of us, shame and guilt,” they said. “Should our justice system be causing so much harm to so many people when there is an alternative?”
Political ideology has built a thick wall that blocks us from acknowledging that some of the choices we face are tragic. Perhaps we can make an exception in this case and have a quiet conversation about whether our death-penalty system really speaks for our best selves. And I thank those conservatives, right-to-lifers, libertarians and prison officials who, more than anyone else, might make such a dialogue possible.
By: E. J. Dionne, Opinion Writer, The Washington Post, September 25, 2011
Calling All Progressive Democrats: A Time To Fight
Should you find your enthusiasm for activist politics waning, Robert Reich has a Monday morning energizer in his latest blog entry “Don’t Be Silenced,” via RSN:
We’re on the cusp of the 2012 election. What will it be about? It seems reasonably certain President Obama will be confronted by a putative Republican candidate who:Believes corporations are people, wants to cut the top corporate rate to 25% (from the current 35%) and no longer require they pay tax on foreign income, who will eliminate capital gains and dividend taxes on anyone earning less than $250,000 a year, raise the retirement age for Social Security and turn Medicaid into block grants to states, seek a balanced-budged amendment to the Constitution, require any regulatory agency issuing a new regulation repeal another regulation of equal cost (regardless of the benefits), and seek repeal of Obama’s healthcare plan.
Or one who:
Believes the Federal Reserve is treasonous when it expands the money supply, doubts human beings evolved from more primitive forms of life, seeks to abolish the Internal Revenue Service and shift most public services to the states, thinks Social Security is a Ponzi scheme, while governor took a meat axe to public education and presided over an economy that generated large numbers of near-minimum-wage jobs, and who will shut down most federal regulatory agencies, cut corporate taxes, and seek repeal of Obama’s healthcare plan.
That’s the default scenario, the one which will become reality if Democratic apathy is allowed to fester. The rest of Reich’s column is more of a challenge to progressive/left Dems to fight for the causes that once made the Democratic Party a great champion of working people:
…Within these narrow confines progressive ideas won’t get an airing. Even though poverty and unemployment will almost surely stay sky-high, wages will stagnate or continue to fall, inequality will widen, and deficit hawks will create an indelible (and false) impression that the nation can’t afford to do much about any of it – proposals to reverse these trends are unlikely to be heard.Neither party’s presidential candidate will propose to tame CEO pay, create more tax brackets at the top and raise the highest marginal rates back to their levels in the 1950s and 1960s (that is, 70 to 90 percent), and match the capital-gains rate with ordinary income.
You won’t hear a call to strengthen labor unions and increase the bargaining power of ordinary workers.
Don’t expect an argument for resurrecting the Glass-Steagall Act, thereby separating commercial from investment banking and stopping Wall Street’s most lucrative and dangerous practices.
You won’t hear there’s no reason to cut Medicare and Medicaid – that a better means of taming health-care costs is to use these programs’ bargaining clout with drug companies and hospitals to obtain better deals and to shift from fee-for-services to fee for healthy outcomes…Nor will you hear why we must move toward Medicare for all.
Nor why the best approach to assuring Social Security’s long-term solvency is to lift the ceiling on income subject to Social Security payroll taxes.
Don’t expect any reference to the absurdity of spending more on the military than do all other countries put together, and the waste and futility of an unending and undeclared war against Islamic extremism – especially when we have so much to do at home…
Although proposals like these are more important and relevant than ever, they won’t be part of the upcoming presidential election.
The choice facing progressive Dems is between whining and hand-wringing about inadequate leadership of the Party on the one hand and doing something to change it on the other. Reich sounds the call to arms to put real progressive policies back on the agenda:
…I urge you to speak out about them – at town halls, candidate forums, and public events. Continue to mobilize and organize around them. Talk with your local media about them. Use social media to get the truth out.Don’t be silenced by Democrats who say by doing so we’ll jeopardize the President’s re-election. If anything we’ll be painting him as more of a centrist than Republicans want the public to believe. And we’ll be preserving the possibility (however faint) of a progressive agenda if he’s reelected.
Re-read that last graph. That alone is reason enough to push hard from the left inside the party — it actually strengthens Dem defenses against the GOP default scenario and it lays the foundation for a stronger progressive future for the Democratic Party, win or lose in 2012.
Still not juiced? Reich’s clincher:
Remember, too, the presidential race isn’t the only one occurring in 2012. More than a third of Senate seats and every House seat will be decided on, as well as numerous governorships and state races. Making a ruckus about these issues could push some candidates in this direction – particularly since, as polls show, much of the public agrees.Most importantly, by continuing to push and prod we give hope to countless Americans on the verge of giving up. We give back to them the courage of their own convictions, and thereby lay the groundwork for a future progressive agenda – to take back America from the privileged and powerful, and restore broad-based prosperity.
Grumble and gripe about inadequate leadership in your party, if you will. But do something this week to advance progressive policies and federal, state and local candidates who support them. Your actions add legitimacy to your critique.
By: J. P. Green, The Democratic Strategist, September 19, 2011
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