Immigration and Social Insurance

November 12, 2010 · Posted in The Capitol · Comment 

You hear a fair amount about immigration in the United States and you also hear a fair amount about Social Security. But you hear shockingly little about the interplay between the two. Consider, however, that the overwhelming reason Social Security is facing a post-2037 budgetary shortfall is that population growth in the United States has been decelerating:

This is a free society, and if people choose to have fewer children than they used to that’s fine by me. I think that if we had more sensible policies around child care and housing the birth rate would probably edge up a bit. But of course there’s another way to increase the population growth rate. That would be to be more welcoming to people who’d like to move here. America’s gotten into the odd habit of thinking of ourselves as a country that’s burdened by the desire of other people to move here. But nobody thinks that way about a town or a neighborhood. Being a desirable place to live is an asset that we should take advantage of. About 165 million people say they’d like to move to the United States. It obviously wouldn’t be feasible for all of them to show up tomorrow all at once, but we could accommodate many more of them than we’re currently planning on, and doing so would strengthen our country in very many ways.

It’s true that higher levels of legal immigration aren’t the most politically popular thing around. But neither are tax hikes or benefit cuts. And unlike those, more immigration will actually boost our productivity and our growth rate.


ObamaCare = A Bailout for Private Insurance Companies

November 9, 2010 · Posted in The Capitol · Comment 

By Michael F. Cannon

This Reuters headline says it all: “Cigna CEO: Don’t repeal U.S. health law.”

ObamaCare = A Bailout for Private Insurance Companies is a post from Cato @ Liberty – Cato Institute Blog

Cato @ Liberty

In New Book, Former Health Insurance Executive Details How The Industry Shaped Health Reform

November 8, 2010 · Posted in The Capitol · Comment 

In his new book, ‘Deadly Spin‘ out tomorrow from Bloomsbury Press, former Cigna communications head Wendell Potter details how the health insurance industry relies on multi-million dollar public relations campaigns to deceive the public about the nature of the health care crisis and reform itself. Following a playbook developed by the tobacco industry, Potter describes how the insurance industry relied on professional public relations firms and a wide network of news outlets and conservative think tanks to move public opinion against progressive reforms like the public option and ensure that the health law did not interfere with its profits.

After years of unease with the industry’s practices, Potter left the industry following his company’s successful campaign to deflect blame for the death of 16-year old Nataline Sarkisyan, to whom it had initially denied a liver transplant. “It became clearer to me than ever in a way that it hadn’t before, that I was part of an industry that would do whatever it took to perpetuate its extraordinary profitable existence,” Potter writes in the book, noting that the cost of the transplant — about $ 250,000 — was approximately the same amount CIGNA had spent on a six-hour ‘Investor Day’ meeting to announce its earnings just days earlier.

In a wide-ranging phone interview with me this afternoon, Potter reflected on his role in the Sarkisyan PR offensive, the industry’s exhaustive and often effective PR efforts, and how it shaped the Affordable Care Act:

Q: In the book, you describe how the industry was able to deflect blame for Nataline Sarkisyan’s death by commissioning third-party columns and articles which criticized then-Presidential candidate John Edwards for publicizing Sarkisyan’s case and vilifying the industry. How does that kind of campaign come about? Did you directly call reporters?

POTTER: It’s often done indirectly. I had my own relationships with reporters, but that is when it’s important to have an APCO on your side or a paid agency on your side because they have very good connections with think tanks, because that’s what they do.

Part of what they do is to make sure they have those third parties lined up when you need them. And the way it works is you have a big conference call with the big PR firm and they will often mention some of the folks they will reach out to, to do something to write something, whether it be a defense or present your point of view. That’s the way it happens. That’s what they do. When insurers pump money into special projects into AHIP, over and above regular dues, it’s for this kind of work.

Q: Did the industry message health care reform the same way? How did the industry spread its talking points during the reform process?

POTTER: Generally, there are two parts to the strategy. One is what they’re doing publicly, what you can see. The other is what they’re doing behind the scenes — working with PR firms like APCO and through the think tanks.

They approach this very strategically. It’s important to note that the committee that I was on for quite a while, the Strategic Communications Committee, they’ve been working on this for a long, long, time well before the elections were held in 2008. They see all these organizations as ways to communicate with public opinion.

Think tanks are particularly important because they have good connections. The Heritage Foundation, CATO, the American Enterprise Institute and the Galen Institute and a few others that issue reports and commentary and people from those organizations themselves have connections to the media, can get op-eds placed in the Wall Street Journal and other places.

Insurers also work through their PR firms with T.V. producers, in particular, the conservative talk shows like Fox. They see that as a very very important place to go to get their point of view across and the producers are probably on speed dial.

Insurers also worked for a long, long, time, as I did when I was with Cigna, to develop relationships with reporters in the mainstream media. I certainly had very good relationships with reporters from the Wall Street Journal, the New York Times, USA Today.

Q: I suppose what exemplifies this two-prong approach was the revelation that six of the nation’s biggest health insurers were quietly “pumping big money into third-party television ads aimed at killing or significantly modifying the major health reform bills” from September to December 2009 — all the while publicly embracing the idea of universal coverage. What was the industry thinking? Did they want to alter reform or did they want to kill it?

POTTER: It was to move it to the right, to weaken it, to have a greater bargaining, more leverage at the bargaining table. It was not to kill it, even though the Chamber and others were running ads that had that objective, for the insurers it was to weaken the resolve of members of Congress and the White House and to be able to get more of what they want in the final legislation and certainly, and this is part of the longer term strategy, to try to get more Republicans and industry friendly people in Congress. The work that the Chamber did certainly contributed a great deal to the changes in attitudes towards reform.

Q: What goal did the industry have going into the health care debate?

POTTER: The primary goal was to make sure that any reform that passed included an individual mandate. And they talk about making sure it was what they call, an enforceable mandate. Which is why they got very upset with the Senate version of the bill, once it finally reached the floor of the Senate, because the penalty was weakened from what they thought it would be. They also saw an opportunity with reform to have an individual mandate, because it would bring them so much more in new revenue and increase their profits.

Q: Do you think the industry believes they would have been better off without reform? Are they happy this bill passed?

POTTER: I think they have to realize that they’re better off with this. Their business models were not sustainable without reform.

They lost their means of being able to control costs like they felt they could do at the beginning of the managed care era. There was such a push back, they lost a lot of their leverage with providers, certainly with consumers. Their magic bullet now is to shift costs to consumers. You can’t keep doing that. It’s not sustainable over the long haul. You would continue to have more and more uninsured and underinsured because of the cost-shifting. You can’t keep doing that, people will ultimately decide that the coverage is not worth buying. So they have to have reform, they needed to have this infusion of new revenue [from the mandate].

Q: Is the administration doing a good job in responding and combating the industry’s communication tactics?

POTTER: I think they have not been. I was baffled during the debate that there didn’t seem to be a strategy behind their communications supporting the legislation. I kept thinking, well they’ll be coming out pretty soon, they must have a very good strategy for selling this, but in my point of view it never materialized.

It’s much easier to condemn something with a soundbite than to describe and counter that kind of stuff and to explain legislation that is very complex, clearly. But I just think they never were up to the task of doing it. It never looked to me like they knew what they were doing.

Q: The White House can’t seem to settle on a persuasive frame. They began with an economic argument, shifted to discussing the consumer protections in the law, and now they’re back to the economic messaging. If you were advising the White House, knowing how the insurance industry communicate, what would you tell them to do?

POTTER: It has to be done in a way that connects with people emotionally. I was going nuts when they were talking about bending the cost curve. You don’t talk policy wonk stuff and expect people to understand or connect with what you are saying. What they’re going to have to do going forward is figuring out a way to get the message in terms that connect with people emotionally — how people would benefit from the legislation right now and what the cost would be to repeal or retool it.

Q: How will insurers influence the implementation of health reform? It seems like they’re now focusing on influencing state governments.

POTTER: If you think they are influential in Washington, they are incredibly influential in the state capitols. Insurers have retained council in every state, they hire lobby firms in state capitols that are well connected. They are very well connected with the insurance regulators and lawmakers, Republicans and Democrats. Cigna, for example has a very significant state government affairs staff. The whole reason for its existence is to develop relationships with regulators and legislators to try to influence the way regulations and laws are written and implemented. You can rest assured they will be working very closely with the Republican Governor’s Association to persuade Republican governors to go implement an exchange model that has few consumer regulations. They will do what they can to make sure that the implementation on the state level is weak.

Interview has been condensed and edited.

Wonk Room

Federal Officials Offer New Options For High Risk Insurance Coverage In Effort To Boost Enrollment

November 6, 2010 · Posted in The Capitol · Comment 

The Department of Health and Human Services (HHS) announced new plan options and lower premiums in the 24 high risk insurance pools that are under federal control in an effort to bolster enrollment in the fledgling program. The so-called Pre-Existing Condition Insurance Plan (PCIP) functions as a bridge to the Affordable Care Act’s exchanges for people who can’t find affordable coverage in the individual market, but thus far, the program’s high premiums have kept many eligible individuals from enrolling. The program currently boasts just 8,011 beneficiaries.

Starting January 1, however, Americans enrolled in a federally-run PCIP program, will have two new coverage options: a plan with a $ 1,000 deductible and $ 250 deductible for prescriptions, a $ 2,000 deductible with $ 500 deductible for prescriptions and the exiting option of a combined medical and prescription drug deductible of $ 2,500, which will be paired with a federal health savings account.

“Adjustment in rates in existing and new premiums will be nearly 20 percent below what is currently being charged today, ” Richard Popper, Director for the Office of Insurance Programs in HHS’s Office of Consumer Information and Insurance Oversight, a said on a conference call attended by the Wonk Room. He suggested that PCIP enrollment levels are comparable to the early enrollment rates in CHIP and predicted that the program’s “enrollment continue to grow and with the change in premiums we see that trend escalate.”

In working towards that end, the government is also stepping up its outreach and enrollment efforts:

– Working with states in the federally-run pool programs to encourage their state insurance departments to require individual market insurance companies to notify those who may deny coverage about the availability of PCIP.

– Encouraging insurers to notify denied applicants about the PCIP option. A number of insurers have agreed to put notice in their denial letters about availability of PCIP.

– Working with the Social Security Administration to inform individuals under 65, who are not yet eligible for Medicare, about PCIP.

– AARP has sent out notices to their 24 million members about the availability of PCIP.

Some of the 27 states that are operating their own high risk health insurance pools are already offering similar options and all states will have “the opportunity to submit any changes they would like to make in their benefits or premiums for 2011.” “But we are not requiring the states to exactly adopt the changes that we are rolling out,” Popper said. “This program is largely build on state flexibility. With that flexibility and with the available products available we don’t feel the need to require them to copy what’s being done on the federal pool level.”

“We are doing everything we can do get as much enrollment and we’re doing as much outreach and we think premiums will help and hope that other states will follow suite,” Liz Fowler, Director for Policy in HHS’s Office of Consumer Information and Insurance Oversight said on the call.

Wonk Room

Big supporter of ObamaCare AARP hiking insurance rates for employees

November 5, 2010 · Posted in The Capitol · Comment 

“I have the opportunity to introduce the leader of the free world, our president, our beloved president, President Barack Obama”. AARP President Barry Rand, June 22, 2009.

And just look at what Rand’s “beloved president” has done now.

From AP:

AARP’s endorsement helped secure passage of President Barack Obama’s health care overhaul. Now the seniors’ lobby is telling its employees their insurance costs will rise partly as a result of the law.

In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.

And AARP adds that it’s changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.

Related posts:

AARP’s flip flop on Medicare
AARP: In the tank for “beloved president’s” health care plan
Obama jingoism: Why the AARP is losing members
Thousands bailing from AARP over ObamaCare

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Marathon Pundit

AARP to Employees: Your Insurance Costs are Going Up Thanks to That Great Affordable Health Care Plan We Promoted

November 5, 2010 · Posted in The Capitol · Comment 

**Written by Doug Powers

Nancy Pelosi said it: “We need to pass health care reform so we can find out what’s in it.” Some people were actually excited by that prospect, like contestants on Let’s Make a Deal being asked to trade the pittance in their hand for the promise of what’s behind door #1:


AARP, either in blind faith or full complicity, bet on door #1 and their employees (not to mention almost everybody else) get to pay the price:

WASHINGTON – AARP’s endorsement helped secure passage of President Barack Obama’s health care overhaul. Now the seniors’ lobby is telling its employees their insurance costs will rise partly as a result of the law.

In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.

And AARP adds that it’s changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.

Prepare for AARP to now lobby the Obama administration for a waiver from the glorious health care law they helped shove down America’s throat.

Here’s a related flashback. In August of last year an AARP representative was in Dallas trying to convince dues-paying members why they should support the Democrats’ health care plan. It didn’t go well, and the skeptics were correct:

**Written by Doug Powers

Twitter @ThePowersThatBe

Michelle Malkin

Something to watch: 3 States To Vote On Health Insurance Directive

November 2, 2010 · Posted in The Capitol · Comment 

This could be fun:

Voters in Arizona, Colorado and Oklahoma will have the chance Tuesday to reject the new health care law’s central provision to require almost everyone to have health insurance or face a tax penalty beginning in 2014.

Ballots in the three states include proposed amendments to the states’ constitutions that would prohibit the enforcement of the individual mandate and other provisions of the law. They mirror a measure that Missouri voters approved by more than 70 percent in August. Legislatures in several other states, including Georgia, Idaho, Louisiana and Virginia, have also passed state laws with similar language.

It really does suck to Obama today.  Oh, hey, Barry, any refrain of “I won” coming???

Liberty Pundits Blog

REPORT: More Small Businesses Offering Insurance As A Result Of Health Reform

November 2, 2010 · Posted in The Capitol · Comment 

The Wall Street Journal’s Janet Adamy reports that “the number of small businesses offering health insurance to workers is projected to increase sharply this year,” “a shift that researchers attribute to a tax credit in the health law“:

According to a report by Bernstein Research in New York, the percentage of employers with between three and nine workers and which are offering insurance has increased to 59% this year, up from 46% last year. The report relies on data from a September survey by the nonprofit Kaiser Family Foundation.

A full tax credit is available to employers with 10 or fewer full-time workers and average annual wages of less than $ 25,000. The credit phases out gradually and has a cap at employers with 25 workers and average annual wages of $ 50,000. The White House estimates that 4 million employers will qualify for the credit.

Over the years, these small businesses have been particularly hard hit by skyrocketing health care costs and the resulting erosion in coverage is quite striking. Between 2000 and 2009, the number of firms with less than 10 workers offering coverage dropped from 57 percent to 46 percent. During the same period, the percentage of all firms offering coverage fell from 69 to 60. This year, however, the Kaiser Family Foundation Employer Health Benefit survey — on which the Bernstein report relies — found that coverage rates increased (69% of firms reported offering health benefits), but attributed the rise to the failings of non-offering firms. Bernstein, however, is crediting the tax credits.

Separately, another poll released on Monday found that “the number of companies planning to bolster health benefits for their employees jumped more than three-fold over the past seven months,” while “the number of businesses planning health benefit cuts has remained almost constant over the same span. Thirty percent of respondents said health benefits are on the chopping block, up from 29 percent in March.”

Wonk Room

Top Insurance Lobbyist Suggests Industry Does Not Support Complete Repeal Of Health Reform

October 29, 2010 · Posted in The Capitol · Comment 

AHIP President and CEO Karen Ignagni appeared on Fox Business on Wednesday to lay out the insurance industry’s opposition to the Affordable Care Act. Ignagni wouldn’t say if insurers support repealing the law outright, but highlighted several provisions that she claims would increase costs for small businesses and individuals. She maintained that the law needs to be fixed:

IGNAGNI: I think the most important thing, Neil, is that what is being telegraphed all over the country is that people are worried about costs. […] Small businesses in 2014 are going to face an unprecedented sales tax on their health insurance premiums….. Right now, going, starting January 1, there are new regulations going into effect that cap administrative costs. It’s going to be happening overnight, a shock to the system. And it is going to lead to a number of disruptions all over the country. […]

CAVUTO: So you think that’s more likely if Republicans grab power or what?

IGNAGNI: I think that the American people are telegraphing to both sides of the aisle that this is a priority for them. They’re worried about costs. They should be worried about costs. We need to get on with that job of addressing that.

Watch it:

Ignagni’s efforts to demur are telling. Even though the health insurance industry is in the process of massively shifting its campaign donations to Republicans and independent groups dedicated to defunding or repealing the law, I’ve suspected that insurers are more interested in favorable regulations that don’t cut into industry profits than outright repeal. Ignagni’s appearance only confirms this hypothesis.

While she may genuinely have some concerns about the penalties associated with the free rider provision that goes into effect in 2014 (employers with more than 50 workers wouldn’t be required to provide health insurance, but they would face fines if their work force received a government subsidy to buy health insurance), she’s probably more worried that if employers respond to the penalties by dropping coverage (and moving their workers into the exchanges), they’ll abandon their existing insurance products.

Other companies and plans operating inside the exchanges will pick up that business, but they will probably have to operate under better regulated market conditions. And, since companies would have to compete for business in the exchange (which in some states may include a public option) those products could bring in smaller profits. Ignagni is determined to shield the companies she represents form this kind of erosion and she’s happy to inflame concerns about rising health care costs to do so.

Wonk Room

Republicans Will Likely Preserve The Health Insurance Exchanges, Since It Was Their Idea

October 27, 2010 · Posted in The Capitol · Comment 

On Friday, Joel Ario, the Director of the Office of Insurance Exchanges at HHS reiterated his claim that regulators on the state level are far more open to implementing the exchanges in the Affordable Care Act than the current political rhetoric suggests. Speaking at a panel for the Alliance on Health Reform, Ario said “that there was a lot of interest on the state level in these exchanges and that it was very focused and very specific to the fact that state markets are broken.” “It’s hard to see who’s from a red state or a blue state, you just see people who are working in their marketplaces trying to put things together.” Watch it:

Washington and Lee University law professor Tim Jost, also a member of the panel, reiterated that the idea behind an exchange “comes out of free market advocacy groups and has been endorsed by them in the past. The particular way it is shaped, we’ll see blue states taking one approach and red states taking one approach, maybe,” he stressed, referring to the two existing exchange models in Massachusetts and Utah. Blue states may follow California’s lead and adopt the Massachusetts model, which allows the authority that governs the Exchange to bargain with insurance companies on behalf of consumers and requires issuers to meet certain minimum standards. Red states, conversely, may consider the Utah model where consumers can “compare a wide variety of health plans sold by any insurers that want to participate.”

Ario also added that he first heard of exchanges from a Republican legislator in Oregon, “who had a concept paper from Ed Haislmaie at the Heritage Foundation. I followed the idea for several years there, as it made its way through the Heritage foundation. They took credit for getting Governor Romney to support the idea in Massachusetts and to date, the three states that have exchanges have all been led by Republican governors.” (Click here to read Haislmaie’s article praising the exchanges and the individual mandate.)

Heritage may now be downplaying its support for the concept, but the exchanges are still fairly popular in conservative states. Last month, for instance, 48 states — 21 of which are suing the federal government over the constitutionality of the Affordable Care Act — accepted federal grants “to invest in research and planning to get the Exchanges up and running” by 2014.

Wonk Room

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