A Permanent Slump?

Op-Ed Columnist

A Permanent Slump?

By PAUL KRUGMAN

Published: November 17, 2013

Spend any time around monetary officials and one word you’ll hear a lot is “normalization.” Most though not all such officials accept that now is no time to be tightfisted, that for the time being credit must be easy and interest rates low. Still, the men in dark suits look forward eagerly to the day when they can go back to their usual job, snatching away the punch bowl whenever the party gets going.

But what if the world we’ve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades? 

You might imagine that speculations along these lines are the province of a radical fringe. And they are indeed radical; but fringe, not so much. A number of economists have been flirting with such thoughts for a while. And now they’ve moved into the mainstream. In fact, the case for “secular stagnation” — a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between — was made forcefully recently at the most ultrarespectable of venues, the I.M.F.’s big annual research conference. And the person making that case was none other than Larry Summers. Yes, that Larry Summers.

And if Mr. Summers is right, everything respectable people have been saying about economic policy is wrong, and will keep being wrong for a long time. 

Mr. Summers began with a point that should be obvious but is often missed: The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed. 

He then made a related point: Before the crisis we had a huge housing and debt bubble. Yet even with this huge bubble boosting spending, the overall economy was only so-so — the job market was O.K. but not great, and the boom was never powerful enough to produce significant inflationary pressure. 

Mr. Summers went on to draw a remarkable moral: We have, he suggested, an economy whose normal condition is one of inadequate demand — of at least mild depression — and which only gets anywhere close to full employment when it is being buoyed by bubbles. 

I’d weigh in with some further evidence. Look at household debt relative to income. That ratio was roughly stable from 1960 to 1985, but rose rapidly and inexorably from 1985 to 2007, when crisis struck. Yet even with households going ever deeper into debt, the economy’s performance over the period as a whole was mediocre at best, and demand showed no sign of running ahead of supply. Looking forward, we obviously can’t go back to the days of ever-rising debt. Yet that means weaker consumer demand — and without that demand, how are we supposed to return to full employment? 

Again, the evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.

Why might this be happening? One answer could be slowing population growth. A growing population creates a demand for new houses, new office buildings, and so on; when growth slows, that demand drops off. America’s working-age population rose rapidly in the 1960s and 1970s, as baby boomers grew up, and its work force rose even faster, as women moved into the labor market. That’s now all behind us. And you can see the effects: Even at the height of the housing bubble, we weren’t building nearly as many houses as in the 1970s. 

Another important factor may be persistent trade deficits, which emerged in the 1980s and since then have fluctuated but never gone away. 

Why does all of this matter? One answer is that central bankers need to stop talking about “exit strategies.” Easy money should, and probably will, be with us for a very long time. This, in turn, means we can forget all those scare stories about government debt, which run along the lines of “It may not be a problem now, but just wait until interest rates rise.”

More broadly, if our economy has a persistent tendency toward depression, we’re going to be living under the looking-glass rules of depression economics — in which virtue is vice and prudence is folly, in which attempts to save more (including attempts to reduce budget deficits) make everyone worse off — for a long time. 

I know that many people just hate this kind of talk. It offends their sense of rightness, indeed their sense of morality. Economics is supposed to be about making hard choices (at other people’s expense, naturally). It’s not supposed to be about persuading people to spend more. 

But as Mr. Summers said, the crisis “is not over until it is over” — and economic reality is what it is. And what that reality appears to be right now is one in which depression rules will apply for a very long time.

A version of this op-ed appears in print on November 18, 2013, on page A29 of the New York edition with the headline: A Permanent Slump?.

No, Obama Didn't Lie to You About Your Health Care Plans

AlterNet / By Dean Baker

No, Obama Didn't Lie to You About Your Health Care Plans

The claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special.

 

 

 

November 13, 2013  |  

 

 

 

President Obama has been getting a lot of grief in the last few weeks over his pledge that with the Affordable Care Act (ACA) in place, people would be able to keep their insurance if they like it. The media have been filled with stories about people across the country who are having their insurance policies terminated, ostensibly because they did not meet the requirements of the ACA. While this has led many to say that Obama was lying, there is much less here than meets the eye.

First, it is important to note that the ACA grand-fathered all the individual policies that were in place at the time the law was enacted. This means that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA.

The plans being terminated because they don't meet the minimal standards were all plans that insurers introduced after the passage of the ACA. Insurers introduced these plans knowing that they would not meet the standards that would come into effect in 2014. Insurers may not have informed their clients at the time they sold these plans that they would not be available after 2014 because they had designed a plan that did not comply with the ACA.

However if the insurers didn't tell their clients that the new plans would only be available for a short period of time, the blame would seem to rest with the insurance companies, not the ACA. After all, President Obama did not promise people that he would keep insurers from developing new plans that will not comply with the provisions of the ACA.

In addition to the new plans that were created that did not comply with the terms of the ACA, there have been complaints that the grandfathering was too strict. For example, insurers can only raise their premiums or deductibles by a small amount above the rate of medical inflation. As a result, many of the plans in existence at the time of the ACA are losing their grandfathered status.

In this case also it is wrong to view the insurers as passive actors who are being forced to stop offering plans because of the ACA. The price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.

As a practical matter, there are many plans that insurers will opt to drop for market reasons that may or may not have anything to do with the ACA. It's hard to see how this could be viewed as a violation of President Obama's pledge. After all, insurers change and drop plans all the time. Did people who heard Obama's pledge understand it to mean that insurers would no longer have this option once the ACA passed?

If Obama's pledge was understood as ensuring that every plan that was in existence in 2010 would remain in existence, then it would imply a complete federal takeover of the insurance industry. This would require the government to tell insurers that they must continue to offer plans even if they are losing money on them and even if the plans had lost most of their customers. This would at the least be a strange policy. It would be surprising if many people thought this was the meaning of President Obama's pledge.

Finally, there will be many plans that insurers will stop offering in large part because of the changed market conditions created by the ACA. For example, last week the Washington Post highlighted a plan for the "hardest to insure" that was being cancelled by Pathmark Blue Cross of Pennsylvania.

This plan is likely being cancelled because it is unable to compete with the insurance being offered through the exchanges. The exchanges charge everyone the same rate regardless of their pre-existing health conditions. A plan that is especially designed for people who have serious health conditions would almost certainly charge a far higher rate. If these high-priced plans no longer exist because they cannot compete with the exchanges would this mean that President Obama had broken his pledge?

On closer inspection, the claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special. In the only way that the pledge could be interpreted as being meaningful, the pledge is true. The ACA does not eliminate plans that were in existence at the time the bill was approved.

If we want to play Fox News, President Obama also promised people they could keep their doctor. Since 2010 tens of thousands of doctors have retired or even died. Guess the pledge that people could keep their doctor was yet another lie from the Obama administration.

Under Obamacare We Still Have a Healthcare Oligarchy

Daily Kos

News, Community, Action

Sun Jul 05, 2009 at 10:52 AM PDT

What we have here is a healthcare Oligarchy

by aloeveraFollow

 

 

PORTLAND, Maine (AP) — Sen. Olympia Snowe, a key figure in shaping federal health care legislation, said Monday that a government-run plan that would take effect if the private insurance market fails to deliver affordable coverage could bridge the partisan divide that threatens to derail President Barack Obama's efforts to reform the system.
http://www.baltimoresun.com/...

Republicans and some Democrats are insisting that we give heath insurance companies another chance. I understand that there is concern for the people currently employed in the health insurance industry but, forcing Americans to buy private, for-profit health insurance is not the solution.

Health insurance companies are just middle men. We don’t want health insurance, we want health care. The business of health insurance companies is to make money for their investors, not to provide health care. In fact, the less health care they provide, the more money they make. They employ whole departments of people whose job it is to deny health care. The more health care they can deny, the more sick people they can keep off of their rolls, the more people they can cancel when they become ill, the more money they make for their investors. The more money they make for their investors, the more they can pay themselves.

That is a poor system for providing health care.

Why do they deserve a second chance? They have had years to do right by the American people and in fact, it has gotten worse, not better. Their only argument seems to be that we do not want bureaucrats coming between us and our doctors. But what are insurance companies but private, for-profit, highly paid bureaucrats? 

We want options. We want good health care at affordable prices. A vast majority of us are willing to pay a fair price, and even agree to a small tax increase in order to get health care for everyone in America. We don’t want to pay health insurance premiums to companies whose executives pay themselves millions of dollars a year. We don’t want to pay premiums to companies who deny care, drop us when we are sick and force us into bankruptcy even when we have insurance. We don’t want health insurance CEO’s and lobbyists controlling the health care agenda and policies for our nation.

According to Webster’s dictionary, what we have here is an oligarchy.

1. A government by the few

2. A government in which a small group exercises control, especially for corrupt and selfish purposes

3. An organization under oligarchic control

It seems that the Congress is under the control of a health insurance oligarchy. An oligarchy that claims it cannot survive with a public option and a level playing field. So what is Congress’ solution?
Instead of leveling the playing field, instead of giving us a choice, will they simply require us all to buy insurance from these very same oligarchs. The insurance companies will make billions, Senators and Representatives will continue to get their campaign donations, all Americans will have health insurance under threat of prosecution or fines and they can claim the problem solved.

If, in their arrogance, they believe we are not watching, if they believe our memories are short, if they believe that we don’t know who is looking out for us and not who is looking out for themselves and their campaign contributors, they should think again. The American people are not naive. This debate has gone on for decades. We’ve heard it all before. The same old excuses are no longer working.
We are tired and we are sick in America.

Originally posted to aloevera on Sun Jul 05, 2009 at 10:52 AM PDT.

4 Creeping Ways Capitalism Is Killing Us

  Economy  

AlterNet / By Paul Buchheit

4 Creeping Ways Capitalism Is Killing Us

 

The profit motives of this system offer little incentive to feed the hungry, treat the sick, secure us in retirement or provide job opportunities.

 

 

 

Photo Credit: Shutterstock.com/Diego Cervo

November 10, 2013  |  

 

 

The process is gradual, insidious, lethal. It starts with financial stress in various forms, and then, according to growing evidence, leads to health problems and shorter lives.

Financial stress is brought upon us by the profit motive of capitalism, which offers little incentive to feed hungry children, to treat the sick, to secure us in retirement, to provide job opportunities for middle-class Americans. Some of the steps in the process are becoming more and more familiar to us.

1. Giving Half of Your 401(k) to the Banks

The Frontline documentary The Retirement Gamble reported that a 401(k) fund earning 7% a year with 2% in fees would lose up to 60% of the value of an equivalent non-fee fund.

A 2% fee doesn't seem like much, but the documentary's claim was close to the truth. Based on the 6%historical stock market return, an employee investing $1,000 a year for 30 years in a non-fee fund and then holding the accumulated sum for another 20 years would end up with $269,000. Imposing a 2% annual fee would reduce the final total to $127,000, a 53% loss. Imposing a 1.3% fee, which according to the documentary is the industry average, would reduce the final total to $165,000, a 39% loss.

The financial industry is taking this money from more of us every year. The number of private sector workers depending on a 401(k) instead of a company pension has increased from 12 percent to 68 percent since 1983.

2. Watching 24,000,000 Children Go Hungry to Avoid Inconveniencing 20 Rich Individuals

It's an unthinkable trade-off, but it's happening. Although the 2013 SNAP (food stamp) budget of $78 billion isless than the 2012 investment earnings of 20 wealthy Americans, SNAP is being cut while not a penny extra is taken from the multi-billionaires.

The children, who make up nearly half of the 48 million recipients, will now get $1.40 for a meal instead of $1.50.

3. Listening to the "Job Creators" Mock the Truth

Casino billionaire Steve Wynn: "Guys like me are job creators and we don't like having a bulls-eye painted on our back."

Bank CEO John A. Allison IV: "Instead of an attack on the 1 percent, let's call it an attack on the very productive."

The reality is that corporate profits have doubled in ten years, and the corporate tax percent has been cut in half, while millions of jobs have been lost. Some of the job-cutting data comes from The Nation, Market Watch, and Business Insider.

How did "job creators" Steve Wynn and John A. Allison IV do? The following numbers are taken from their annual 10-K reports, submitted to the SEC:

From Wynn Resorts: A doubling or more of profits, a reduction in employees
---- 2012 Income $728,699,000 / Employees 16,000
---- 2011 Income $825,113,000 / Employees 16,400
---- 2010 Income $316,596,000 / Employees 16,405
---- 2009 Income $ 39,107,000 / Employees 18,900

From Allison's bank, BB&T: A doubling or more of profits, little difference in employees
---- 2012 Income $2,028,000,000 / Employees 34,000
---- 2011 Income $1,332,000,000 / Employees 31,800
---- 2010 Income $ 854,000,000 / Employees 31,400
---- 2009 Income $ 877,000,000 / Employees 32,400

4. Feeling the Debilitating Stress

Over 200 recent studies have confirmed a link between financial stress and sickness. In just 20 years America's ranking among developed countries dropped on nearly every major health measure.

Lack of proper health care is one source of that stress. A Harvard study estimated that nearly 45,000 Americans lost their lives in 2005 due to lack of health insurance.

In addition to its effects on our physical health, financial stress threatens our mental well-being. Stunningly, one out of every five American adults had mental illness in 2011, as reported by the Substance Abuse and Mental Health Services Administration. Another recent study found that unemployment, whether voluntary or involuntary, can significantly impact a person's mental health. But only one of two Americans needing mental health care can afford treatment.

Grimmer still is the growing suicide rate, also linked to unemployment and declining wealth. The rate hasaccelerated since the 2008 recession.

The facts show that we were a relatively healthy people until unregulated free-market capitalism began to disrupt our lives. Now, because of its winner-take-all profit motive, we're literally fighting for our lives.

Paul Buchheit is a college teacher, a writer for progressive publications, and the founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org).

5 reasons Obama shouldn’t have trusted the insurance industry

SALON

Saturday, Nov 2, 2013 1:00 PM UTC

 

5 reasons Obama shouldn’t have trusted the insurance industry

 

Conservatives forget this, but the template for the ACA was written by the healthcare industry for the GOP 

 

Steven Rosenfeld, AlterNet

Topics: AlterNet, Obamacare, health insurance, insurance industry, Affordable Care Act, Social News, Life News, Politics News

(Credit: Reuters/Jessica Gow)

This article originally appeared on AlterNet. 

President Obama has become the health insurance industry’s top salesperson. Yesterday, in Massachusetts, he urged Americans to take a long view on implementing Obamacare. While it may provide coverage to millions who now lack it, the evidence is mounting that Obama never should have trusted the private health insurance industry to begin with. Let us count the ways.

1. Obamacare was written by the industry for the GOP.

The template for the Affordable Care Act was the Heritage Foundation’s 1992 report for expanding the health insurance marketplace. Their plan had tax credits, while Obamacare has income-based subsidies paid directly to insurers to make it affordable to the poor, working class and middle class. As former Secretary of Labor Robert Reich points out, this was the Republican’s and insurance industry’s plan, not the Democrats, who wanted to expand existing government programs. Its reliance on the private sector was flawed from the start and is at the core of its current troubles.

2. Obamacare did not have meaningful price controls.

Even though the law passed in 2010, most of Obamacare was not slated to take effect until January 2014. That gave insurers several years to ratchet up premiums—with 18 percent to 25 percent annual jumps in states like California where insurance premiums are unregulated. While the law limits the percent of administrative costs that are part of premiums and that took effect in 2012, it does not regulate overall costs. Does anybody think insurers were not going to lock in profits and gouge the public when they could?

3. All insurers didn’t have to cooperate—and didn’t.

Not every health insurance company decided to participate in the ACA, which left many small states with very few options for uninsured residents. That means Obamacare is not offering a range of plans, in which competition is supposed to lower costs, in states like Maine and New Hampshire. That’s left state legislatorswondering if they will have to create interstate compacts with neighbors to create coverage pools to attract private insurers to give residents more choices. Again, insurers did what was best for their bottom lines, not for the public health.

4. Is anyone surprised policies now are canceled?

Nobody should be surprised at the latest outrage from the industry, which iscanceling hundreds of thousands of individuals’ policies, making the president eat his words that anyone can keep coverage they like. Obama ought to have known better. But as Secretary of Health and Human Services Kathleen Sebelius told Congress Wednesday, insurers are canceling policies or offering higher-priced substitutes because the old policies don’t meet the law’s minimum coverage requirements.
People might be angry that their policy is being canceled or might cost more if they can’t get a federal subsidy, but they would feel a lot worse if they were hospitalized and faced thousands in unexpected bills and hounding by debt collectors. Who’s more at fault here, Obama for being played like a card, or insurers for selling bad policies in the first place?

5. And now Republicans prefer a public option?

There’s a lot more to be seen in the Obamacare drama before the nation’s new healthcare regimen emerges. But for now, a final—and perverse—reason why the health insurance industry shouldn’t have been trusted in the first place goes beyond the previous four.

Some Republicans whose states are taking federal money to expand coverage for the poor though state-run Medicaid are predicting that the market reforms won’t work. Ohio Gov. John Kasich wants the law’s public portion to work, theNew York Times reported this week, but predicted the private insurance requiremens won’t. “It’s going to throw people out of work and not control costs,” he said.

That’s beyond ironic, as it reminds everyone that the best approach to healthcare reform is what Democrats and progressives have called for all along—a so-called public option via expanding existing government-run programs such as Medicaid and Medicare.

“Had Democrats stuck to the original Democratic vision and built comprehensive health insurance on Social Security and Medicare, it would have been cheaper, simpler, and more widely accepted by the public,” wrote Reich. “And Republicans would be hollering anyway.”
Instead, Obama and the Democrats trusted the private insurance industry, thought it would do its part, and not keep stabbing them—and policyholders—in the back. That doesn’t mean the ACA doesn’t have positive features, as Obama keeps saying in speeches, but with the President as a punching bag the industry can keep doing what it has always done: put its profits first.

Is anyone really surprised?

More Steven Rosenfeld.

The revenge of the insurance industry

DAILY KOS

News, Community, Action

Daily Kos Staff, Front Page RSS

Daily Kos editors

Sun Nov 10, 2013 at 03:15 PM PST

The revenge of the insurance industry

by Jon PerrFollow  

for Daily Kos

President Obama on Thursday apologized to Americans whose existing health insurance was being significantly altered or cancelled altogether just as enrollment for the Affordable Care Act was commencing. "I am sorry," the President announced, "that they are finding themselves in this situation based on assurances they got from me."

But those Americans waiting for a mea culpa from either their employers or their insurers shouldn't hold their breath. After all, while their premiums and deductibles have spiraled upwards, the percentage of nonelderly Americans covered by workplace insurance has plummeted from almost 70 percent to 54 percent just since 2001. Meanwhile, even as the evidence is growing that some carriers are cynically using the launch of the ACA to squeeze or drop less "desirable" customers, the Obama administration like the Bush White House before it has had to plead with insurers to protect their current policyholders.

That shouldn't be too much to ask of an industry forecast by the nonpartisan Congressional Budget Office (CBO) to gain 7 million new paying customers in 2014 alone thanks to Obamacare or that had advocated its own plan for instituting an individual mandate, ending discrimination based on pre-existing conditions and subsidizing coverage for lower-income Americans. Besides, at the March 5, 2009 White House Forum on Health Care Reform, it was Karen Ignani, the president and CEO of America's Health Insurance Plans (AHIP), who made a very bold promise to President Obama and the American people. The top lobbyist for the nation's health insurance companies pledged:

"We want to work with you, we want to work with the members of Congress on a bipartisan basis here. You have our commitment. We hear the American people about what's not working. We've taken that very seriously. You have our commitment to play, to contribute, and to help pass health care reform this year."

Of course, that was just a façade to cover an all-out blitz to ensure health care reform was dead on arrival. Behind the scenes Ignani took out the long knives to smother the ACA in its cradle and stab Obama in the back. That summer, the insurance industry spent $173 million and deployed 50,000 workers to kill the public option and other provisions designed to make coverage more affordable. By the time the ACA was signed into law in March 2010, AHIP alone had quietly poured over $100 million into the U.S. Chamber of Commerce campaign to defeat it. But still, they lost. 

Now with Obamacare the law of the land, America's health insurance companies are once again doing what they do best: maximizing profits by dropping their sickest and costliest customers while selling products designed not to be used.

Cancelling Policies and Jacking Up Costs

  With the passage of the Affordable Care Act, insurers were forced to create a new formula for keeping sicker Americans off their rolls. Prior to the ACA, insurers rejected one in five applicants in the individual market of 25 million people due to pre-existing conditions. The even more pernicious practice of "rescission" enabled the companies to drop hundreds of thousands of policyholders when they became ill. (As Ezra Klein lamented four years ago, that kind of cruelty wasn't just business as usual for the insurance industry; it was its business model.) Annual and lifetime benefits caps, limited coverage for preventive care and emergency care along with other traps helped AHIP's members keep costs down and the sick away.

But Obamacare ended all that. Its "10 essential" patient protections mean that insurers—at least theoretically—can no longer cherry-pick their customers as they have for years. Sadly, America's health insurers have devised new ways to achieve similar results.

Their tactics start with the policy "cancellations" which may affect from 50 to 80 percent of the 15 million people who buy coverage for themselves and their families in the individual market. The AP recently tallied up those whose bare-bones policies don't meet the minimum requirements under the Affordable Care Act:

In California, about 900,000 people are expected to lose existing plans, but about a third will be eligible for subsidies through the state exchange...

About 330,000 Floridians received cancellation notices from the state's largest insurer, Florida Blue. About 30,000 have plans that were grandfathered in. Florida insurance officials said they're not tracking the number of canceled policies related to the new law.
National numbers are similar: 130,000 cancellations in Kentucky, 140,000 in Minnesota and as many as 400,000 in Georgia, according to officials in those states.

For his part, Blue Cross and Blue Shield of Florida CEO Patrick Geraghty explained, "We're not cutting people" but instead "informing folks that their plan doesn't meet the test of the essential health benefits; therefore, they have a choice of many options that we make available through the exchange." But other companies are taking a different approach by either trying to hoodwink subscribers into purchasing much higher cost policies as soon as possible, or alternatively forcing them out altogether. 

TPM documented the first gambit, which often comes in the form of a "If you're happy with this plan, do nothing" letter. Looking at cases in Washington and Kentucky involving LifeWise and Humana, TPM explained:

"If Donna had done nothing, she would have ended up spending about $1,000 more a month for insurance than she will now that she went to the marketplace, picked the best plan for her family and accessed tax credits at the heart of the health care reform law... Across the country, insurance companies have sent misleading letters to consumers, trying to lock them into the companies' own, sometimes more expensive health insurance plans rather than let them shop for insurance and tax credits on the Obamacare marketplaces—which could lead to people like Donna spending thousands more for insurance than the law intended. In some cases, mentions of the marketplace in those letters are relegated to a mere footnote, which can be easily overlooked."

In other cases, insurers aren't racing to retain their current customers, but to shed them as quickly as possible. As Sarah Kliff pointed out in the Washington Post, "Employers have responded by increasing premiums by less than 3 percent, on average, to make up for the cost of these new benefits." But in the individual market, insurers are using the opportunity presented by the ACA's new coverage requirements to dump their costliest customers.  Cancer survivor Edie Littlefield Sundby is losing her policy not due to Obamacare, but because her insurer UnitedHealthcare is abandoning the California non-group market. And as Kaiser Health News documented two weeks ago:

Both Independence and Highmark are cancelling so-called "guaranteed issue" policies, which had been sold to customers who had pre-existing medical conditions when they signed up.

Policyholders with regular policies because they did not have health problems will be given an option to extend their coverage through next year.

Consumer advocates say such cancellations raise concerns that companies may be targeting their most costly enrollees.

They may be "doing this as an opportunity to push their populations into the exchange and purge their systems" of policyholders they no longer want, said Jerry Flanagan, an attorney with the advocacy group Consumer Watchdog in California.

In practice, the end result of the much larger than expected price hikes and cancellations is similar to the pre-Obamacare insurance scheme of "purging." As Ezra Klein explained it in 2009:

This is where insurers rid themselves of unprofitable accounts by slapping them with "intentionally unrealistic rate increases." One famous example came when Cigna decided to drive the Entertainment Industry Group Insurance Trust in California and New Jersey off of its books. It hit them with a rate increase that would have left some family plans costing more than $44,000 a year, and it gave them three months to come up with the cash.

With Obamacare, none of this should pose a problem for consumers, who can simply shop on the exchanges for a better deal. Unless, that is, the major insurers refuse to sell policies there. Sadly, that is exactly what has happened so far. 

Staying Away from the Exchanges

The health insurance exchanges (16 run by the states themselves and 34 for them by the federal government) are where consumers go to compare plans and pricing from different vendors and, just as important, receive any federal subsidies they may qualify for. But in May, Regence BlueCross BlueShield of Oregon—the largest insurer in the state—announced it was withdrawing from the exchange there. As the Lund Report described the shocking decision:

Onlookers came away stunned. Regence had been at the table all along, testifying in favor of the exchange during legislative hearings and had staff attending work sessions organized by Cover Oregon. Its top executives, including Mark Ganz, Jim Walton and Don Antonucci had appeared in numerous public speaking forums touting their support, giving all indications they'd be a strong player in the exchange. The Oregon Insurance Division had even scheduled a hearing in early June to review Regence's plans.

"Regence is just trying to game the system and play politics in the hopes that the exchange goes down; it's quite obvious that they're setting themselves up to compete by not participating in the exchange and not gamble on a risky population that they can't predict," according to people familiar with the marketplace.

That was just a hint of things to come. Despite their strong earnings, high stock prices and the prospect of seven million new customers in 2013 alone, America's major health insurers are choosing to avoid the exchanges for now. As USA Today recently reported ("Big insurers avoid many state exchanges"):

About a third of insurance companies opted out of participating in the exchanges in states where they were already doing business, according to a report by McKinsey & Co.

CBS News made the same point in a recent segment:

In 23 states plus the District of Columbia, there are fewer than four carriers in the individual exchange market. "You don't have Aetna, you don't have UnitedHealthcare, you don't have Cigna. Those are all national carriers who are not playing in the Illinois-federal partnership."

Why are they not? "They didn't want to take the risk." The risk of not knowing how many customers they will have."

Of course, the current financial performance and future forecasts of the big carriers would suggest they are very well positioned to take precisely that risk for more market share. As the New York Times recently found:

Because they face new regulations intended to broaden coverage and limit profit-taking, some analysts have been concerned that profits will suffer. But in the run-up to the Affordable Care Act, stock market prices have told a different story. Over the last 12 months, shares of the top five publicly traded health insurance companies—Aetna, WellPoint, UnitedHealth Group, Humana and Cigna—have increased by an average of 32 percent, while the Standard & Poor's 500-stock index has risen by just 24 percent.

As USA Today noted, Aetna and the Coventry plans it recently acquired will be available on a statewide basis in 10 state exchanges and in limited geographic areas in seven state exchanges." Spokesman Matthew Wiggin says the company "narrowed in on those states where we had the right cost structure and network arrangements to meet the specific demographic needs of exchange consumers." The result, he says, is the company's presence will deliver "long-term profitable growth." 

Especially if customers can't use the products they're paying for.

Dropping Hospitals and Physician Networks

Americans going to their state's insurance exchange may not only be surprised to find their current insurer is not there. As it turns out, their preferred doctors and nearby hospitals may not be offered either.
For insurers new to some markets, that quandary may just reflect the time it takes to build to construct a provider network from scratch. But for many others selling policies on the exchanges, that flaw is a feature, not a bug.

Take, for example, the situation in New Hampshire. Right now, almost all of the 40,000 people buying individual policies in the Live Free or Die state purchase them from Anthem BlueCross BlueShield. Anthem also happens to be the only insurer selling coverage in the New Hampshire exchange. And none of those plans pay for care at Concord Hospital, the largest in the state. As the Concord Monitor reported last month:

The president of Anthem Blue Cross Blue Shield in New Hampshire faced an unhappy audience of state senators yesterday as she defended the insurer's plan to exclude 10 of New Hampshire's hospitals from the limited network of health care providers available for people who purchase insurance through the new exchange. As the Monitor explained, "Anthem built the so-called narrow network in an effort to keep costs down for the plans it will sell on the new state insurance marketplace."

That "narrowing" is underway in other states as well. In Oregon, only one insurer in the CoverOregon exchange includes the Oregon Health Sciences University (OHSU) and its doctors in its network of hospitals and physicians. Across the border, the University of Washington Medical Center—the premier provider in the state—is similarly missing from most insurance plans on the exchange. As Seattle King5 TV told viewers, that is no accident:

Teresa wrote, "...the following hospitals are OUT OF NETWORK providers for Premera's Exchange plans: Swedish Hospital, University of Washington Medical Center, Providence Hospital, Harborview
 and Seattle Cancer Care Alliance..." Other shoppers on the exchange say even if they stay with the same insurance company they have now, they would be forced to switch doctors.

Washington State Insurance Commissioner Mike Kreidler described how insurers are keeping their costs down and profits up by making it less likely customers will actually use the health care they thought they were paying for:

"We are seeing some of the health insurers now, narrowing down their network, of who are their 'in network' doctors and hospitals. One of the ways they work in the exchange to hold down costs is to have narrower networks. Most of the carriers wound up doing that, meaning that they were much limited as to which hospitals and doctors would be participating in the 'inside the exchange' plan."

Many insurers will let their customers keep their doctors, but only if they purchase more expensive plans directly. To do that, they'll have to pay more and forego federal subsidies for which they are qualified. 

In late 2008, AHIP published its own proposal for the health care reform its CEO Karen Ignani knew the incoming president would be pushing. It included an individual mandate, ending the ability of insurers to discriminate against those with pre-existing conditions and financial assistance for Americans earning up to 400 percent of the federal poverty purchasing coverage and many other provisions of what would become the Affordable Care Act. When AHIP's Karen Ignani made her since forgotten pledge in March 2009, an excited and obviously satisfied President Obama told his White House audience:

Good, thank you. Karen, that's good news. That's America's Health Insurance Plans. (Applause.)

But just six months later, President Obama used an October 2009 address to call out the insurance industry for its betrayal:

This is the unsustainable path we're on, and it's the path the insurers want to keep us on. In fact, the insurance industry is rolling out the big guns and breaking open their massive war chest - to marshal their forces for one last fight to save the status quo. They're filling the airwaves with deceptive and dishonest ads. They're flooding Capitol Hill with lobbyists and campaign contributions. And they're funding studies designed to mislead the American people.

Four years later, the health insurers are still misleading the American people. With Obamacare now the law of the land, AHIP is still getting its profits—and its revenge—at their expense.

It’s Not Safe Out There

Posted by Leo Gerard at 6:40 am

November 5, 2013

It’s Not Safe Out There

Anthony Tenny told Clearwater Paper several times that he was concerned about working in excessive red cedar dust at its Lewiston, Idaho, sawmill. But nothing changed. So he reported his fears to the Occupational Safety and Health Administration (OSHA).

Within a month of OSHA inspecting the plant, Clearwater fired Mr. Tenny ­– despite his six-year tenure, supervisors’ praise and promotions. Five days after Clearwater sacked Mr. Tenny, another worker, John Bergen III, a 10-year Clearwater veteran, died after inadvertently stepping into a gaping opening in the floor of the adjacent paper products plant.

It’s reprehensible that thousands of workers still are killed on the job every year.  It’s unconscionable that employers punish workers for reporting hazards. And it’s outrageous that workers who are fired illegally aren’t adequately protected. The Occupational Safety and Health Act of 1970 established workers’ rights to safe workplaces, to refuse to labor in hazardous conditions and to be free from retaliation for reporting dangers.  But OSHA, the underfunded agency charged with enforcing the law, can’t effectively shield either workers or whistleblowers. The agency is a soleless work boot – fine on the surface but failing its purpose. As a result, it’s not safe at work and not safe reporting dangers at work.

Last week, OSHA filed a whistleblower complaint in federal court against Clearwater, seeking $300,000 in compensatory and punitive damages for Mr. Tenny.

It has been a long time coming for the husband and father who lives in a small town dominated by Clearwater. The Clearwater pulp, paperboard, and consumer product facilities and the sawmill, now owned by Idaho Forest Group, employ about 2,000 in the town of 32,000.

Three difficult years have elapsed since Mr. Tenny lost what was a good, family-supporting job. Now, finally, OSHA has his back. Mr. Tenny, 48, completed training and has a new job. But he felt stung again last week when some local press stories about the OSHA lawsuit noted that Clearwater gave him a drug screen before firing him but neglected to report that the test results were negative, according to his attorneys, Erika Birch and Jonathan Thorne of Jobs for Justice.

The Assistant Secretary of Labor for Occupational Safety and Health, Dr. David Michaels, said when OSHA filed Tenny’s case: “Raising a workplace safety and health concern is a courageous act of good citizenship. Not a single worker should fear harassment, intimidation or a disciplinary action for contributing to a safe and healthy workplace.”

But workers do fear retaliation. And for good reason.  OSHA doesn’t protect them. It is hobbled by antiquated legislative language and inadequate staff. That’s the assessment of the Center for Effective Government in a report it issued last month titled, “Securing the Right to a Safe and Healthy Workplace.”
OSHA is so shorthanded that it depends heavily on workers themselves, as opposed to OSHA inspectors, to report hazards. OSHA is without sufficient staff because for decades Congress has failed to properly fund the agency. In 1981, OSHA had one federal inspector for every 1,900 workplaces. Since then, as workers and employers increased, the number of inspectors declined, so that by 2011, there was one OSHA inspector for every 4,300 workplaces, one for every 62,000 workers.

The sequester cuts made matters worse, slicing the OSHA budget. The number of retaliation complaints filed with OSHA rose 46 percent between 2005 and 2012, but with budget and staff cuts, OSHA was less able to deal with them.
On top of all that is the weak whistleblower language in the law itself. It gives workers too little time – only 30 days – to file a complaint. The burden of proof is too high. OSHA takes too long to investigate, and if it declines to take action, the worker is prohibited from seeking relief through the courts himself. Newer whistleblower statutes for other agencies provide better protections, such as longer periods in which to file complaints and recognition of the right to pursue a case privately if the government declines to act.

The Center for Effective Government report says this: “several provisions of the OSH Act are too narrow and the remedies too weak to actually protect workers. . . The end result is that federal law simply does not protect workers who demand a safe and healthy workplace.”

OSHA workers themselves acknowledge that. A federal Government Accountability Office survey found less than 10 percent of OSHA inspectors believed an employee who filed a complaint would be protected from retaliation.

The Protecting America’s Workers Act would have remedied many of these problems. But Congress failed to pass it. President Obama asked for more money for the OSHA whistleblower program, but Congress refused to provide it.

Recognizing the problems on the federal level, the Center for Effective Government recommends state legislation to protect workers. And it notes that some states over the years have adopted such laws.

But just last week, another research organization, the Economic Policy Institute, issued a report detailing state legislative attacks on worker wages, rights and workplace standards over the past two years. The author, Gordon Lafer, writes that these destructive initiatives, sought by corporations, included measures undermining workplace safety protections. It doesn’t seem likely, then, that states will increase workers’ whistleblower rights and safeguards.
When employers face no sanctions for retaliating against workers who report hazards, it sends a powerful message to other workers to keep their mouths shut and accept the risk of death on the job. A country that sustains such a policy is soulless.