The video presentation by Dr. Fein is no longer available. It has been removed from the Dartmouth-Hitchcock Medical Center’s website.
National Health Insurance for the U.S.: Has its time come?
By Oliver Fein, MD – Weill Medical College of Cornell University
Presented June 11, 2010 at the Dartmouth-Hitchcock Medical Center
By David Himmelstein, Kip Sullivan & Steffie Woolhandler
PNHP 2010 Spring Newsletter
The single-payer model precludes private insurance that duplicates the public coverage – a measure required both to control costs and to avoid the emergence of two-class care. The question of how to treat nonprofit, staff- and group-model HMOs is complex because they combine a nonprofit provider of care (clearly acceptable in a single-payer model) with a private insurance plan (which is not acceptable). After much debate, PNHP decided to include such organizations in its proposals, but with tight restrictions to minimize the problems inherent in the insurance component of HMOs.
Because the term “HMO” has been used to cover a wide variety of insurers, it is important that legislation clearly define the parameters for HMOs that could participate in a single-payer system, and spell out the restrictions on participating HMOs. Failing this, private insurers would surely exploit any exemption for HMOs to maintain their stranglehold on the health care system.
Both PNHP’s proposals and H.R. 676 (the single-payer legislation sponsored by Rep. John Conyers; you can find the legislation on the PNHP website at: https://pnhp.org) have spelled out the key features that distinguish HMOs allowed to continue under a single-payer system from those that would be proscribed. Specifically, participating plans must:
(1) be nonprofit;
(2) “actually deliver care in their own facilities” through salaried
physicians who are employees (not contractors) of the HMO;
(3) not use their capitation or budget payments to cover hospital services (hospital services would be paid for through a global budget paid directly to the hospital); and
(4) not offer financial incentives based on utilization.
Very few HMOs will qualify under this definition.
When single-payer supporters in California drafted single-payer legislation (the current version is S.B. 810), they inserted language into the bill that was intended to exempt Kaiser Permanente. However, the language used in the bill leaves the door open to many private insurance firms who could label themselves “integrated health care delivery systems,” “independent practice associations,” or “integrated service networks” and hence qualify them to receive global budgets or capitation payments from the single payer.
The potential for confusion was illustrated in Minnesota where legislators introduced legislation (S.F. 2324 / H.F. 2522) modeled on SB 840 (the predecessor to S.B. 810) in May 2007. The drafters stated their intention to exclude private health plans, including HMOs. However, an analysis by the research office for the Democratic Farmer Labor Party caucus in the Minnesota House of Representatives stated that the bill did permit “health plans” to participate.
To avoid confusion, and the possibility that private insurers could slip through a loophole, we recommend that any single-payer legislation that proposes to exempt HMOs use either H.R. 676’s definition of “HMO” or a similarly narrow and specific definition.
By Avery Johnson
The Wall Street Journal
July 1, 2010
Health insurer WellPoint Inc. is backing off its plan to increase prices by as much as 39% for individuals in California, instead seeking rates for this year that it said would result in a $100 million loss for the company there.
On Wednesday, WellPoint’s Anthem Blue Cross unit told the California Insurance Department that it wants to increase prices for individual policyholders by an average of 14%, down from the 25% average it had previously sought.
“The actual rates we would need are higher than this, but we made a business decision to get a rate implemented,” said Brian Sassi, WellPoint’s president and chief executive of its consumer business unit.
Wellpoint had been hammered for months by the Obama administration and consumer advocates over the size of its initial rate proposal. Angela Braly, its chief executive, and other insurance executives contend that the rising cost of care and demands for higher reimbursement from providers are driving premiums—and that the federal health-overhaul law didn’t do enough to control costs.
WellPoint plans to file 2011 rates in California that do cover costs, they said.
Len Nichols, a health economist at George Mason University, said that WellPoint has “been asserting the point that, ‘You’ve got to understand we can’t control costs.’ And that point has been made, and the message has been heard.”
http://online.wsj.com/article/SB10001424052748704334604575339284211797328.html?mod=googlenews_wsj
Don McCanne, MD
After withdrawing a request for an average 25 percent increase in premiums for individual health plans in California, Anthem Blue Cross is now asking for an average 14 percent increase, which they claim will result in a loss that they will make up with 2011 premium increases. With medical inflation, a further increase in adverse selection, and an adjustment to eliminate losses, next year’s premium increases will be even more intolerable.
The Obama administration and members of Congress are critical of these increases, blaming Anthem Blue Cross for excessive profits – as if a $100 million loss in this market somehow reflects egregious profits (though, of necessity, they are profitable in other markets).
Obama and Congress are totally off target when they blame the private insurers. The private insurance model does not and cannot work to control costs and insure everyone, no matter how much market advocates wish it could. It is Obama and Congress who bear much of the blame because they were the ones who decided to keep the private insurers in charge.
Although we can blame our elected leaders now, if we don’t communicate to them clearly that they must bring us the reform that we need – a single payer national health program – then we will be left with only ourselves to blame.
By Katie Robbins
The following text is the testimony that Katie Robbins, national organizer for Healthcare NOW (www.healthcare-now.org), presented to the National Commission on Fiscal Responsibility and Reform on June 30 in Washington.
Thank you for this opportunity to testify. My name is Katie Robbins and I am here on behalf of Healthcare NOW, an organization founded in 2004 to support bill H.R. 676, “the U.S. National Health Care Act” or Expanded and Improved Medicare for All. With membership in 50 states, Healthcare NOW has broad support for single-payer health care.
Healthcare NOW opposes any consideration of cutting, privatizing or raising age eligibility for Social Security, Medicare, and Medicaid.
We seek to strengthen, not weaken, our social safety net. If passed, H.R. 676 would establish a national single-payer Medicare for All system granting everyone in the United States access to comprehensive, high-quality health care using our existing privately run infrastructure and a progressive financing that will guarantee coverage for all necessary medical care without financial or other barriers.
According to Harvard University studies, eliminating the waste of the multi-payer private insurance industry and moving to a single-payer system will save $400 billion a year. More savings are found in cost controls that a single-payer system can provide such as negotiating drug costs and medical equipment, and global budgeting for hospitals.
Since H.R. 676 was introduced in 2003, it has received tremendous support including endorsements by 582 union organizations in 49 states, the U.S. Conference of Mayors, 63 local governments which include 10 of the nation’s 30 largest cities, the Episcopal Church, the United Methodist Church, the Presbyterian Church, the Unitarian Universalist Church, the Union for Reform Judaism, the United Church of Christ, and the Buddhist Peace Fellowship, and the majority of nurses, patients, and physicians.
Broad support for a single-payer Medicare for All system continues even after the new health law has passed. For example, this past Saturday, June 26, America Speaks, a privately run company, organized “town hall meetings” in 20 cities across the country to discuss the nation’s deficit. America Speaks received funding linked to the Peter Peterson Foundation; the same foundation which is also funding staff to this Fiscal Commission. (Peterson is known to be vocally in support of cutting and privatizing Social Security and Medicare.)
America Speaks claimed that all options would be considered, yet the materials distributed at the events did not include an option to support single-payer health care as a means of controlling health care costs. Despite efforts to silence support for single payer, many participants demanded the option to vote on a single-payer type health care system, which would ultimately reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. Participants also voted overwhelmingly for defense cuts and for progressive taxation.
Because cost controls are notably absent from the new health law, the National Commission on Fiscal Responsibility and Reform should listen to what the public is urging them to do, and address meaningful cost control in our health care system, which only a single-payer system can provide, as a means to balance the nation’s budget.
We urge you to address cost controls immediately. Healthcare NOW and our network of supporters and allied organizations urge Congress to work to defeat any bill to cut, privatize or dismantle our social safety net – Social Security, Medicare, and Medicaid. We demand the enactment of an expanded and improved Medicare for All, H.R. 676, to fix our economy and our (still) broken health care system.
By Katie Robbins
The following text is the testimony that Katie Robbins, national organizer for Healthcare NOW (www.healthcare-now.org), presented to the National Commission on Fiscal Responsibility and Reform on June 30 in Washington.
Thank you for this opportunity to testify. My name is Katie Robbins and I am here on behalf of Healthcare NOW, an organization founded in 2004 to support bill H.R. 676, “the U.S. National Health Care Act” or Expanded and Improved Medicare for All. With membership in 50 states, Healthcare NOW has broad support for single-payer health care.
Healthcare NOW opposes any consideration of cutting, privatizing or raising age eligibility for Social Security, Medicare, and Medicaid.
We seek to strengthen, not weaken, our social safety net. If passed, H.R. 676 would establish a national single-payer Medicare for All system granting everyone in the United States access to comprehensive, high-quality health care using our existing privately run infrastructure and a progressive financing that will guarantee coverage for all necessary medical care without financial or other barriers.
According to Harvard University studies, eliminating the waste of the multi-payer private insurance industry and moving to a single-payer system will save $400 billion a year. More savings are found in cost controls that a single-payer system can provide such as negotiating drug costs and medical equipment, and global budgeting for hospitals.
Since H.R. 676 was introduced in 2003, it has received tremendous support including endorsements by 582 union organizations in 49 states, the U.S. Conference of Mayors, 63 local governments which include 10 of the nation’s 30 largest cities, the Episcopal Church, the United Methodist Church, the Presbyterian Church, the Unitarian Universalist Church, the Union for Reform Judaism, the United Church of Christ, and the Buddhist Peace Fellowship, and the majority of nurses, patients, and physicians.
Broad support for a single-payer Medicare for All system continues even after the new health law has passed. For example, this past Saturday, June 26, America Speaks, a privately run company, organized “town hall meetings” in 20 cities across the country to discuss the nation’s deficit. America Speaks received funding linked to the Peter Peterson Foundation; the same foundation which is also funding staff to this Fiscal Commission. (Peterson is known to be vocally in support of cutting and privatizing Social Security and Medicare.)
America Speaks claimed that all options would be considered, yet the materials distributed at the events did not include an option to support single-payer health care as a means of controlling health care costs. Despite efforts to silence support for single payer, many participants demanded the option to vote on a single-payer type health care system, which would ultimately reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. Participants also voted overwhelmingly for defense cuts and for progressive taxation.
Because cost controls are notably absent from the new health law, the National Commission on Fiscal Responsibility and Reform should listen to what the public is urging them to do, and address meaningful cost control in our health care system, which only a single-payer system can provide, as a means to balance the nation’s budget.
We urge you to address cost controls immediately. Healthcare NOW and our network of supporters and allied organizations urge Congress to work to defeat any bill to cut, privatize or dismantle our social safety net – Social Security, Medicare, and Medicaid. We demand the enactment of an expanded and improved Medicare for All, H.R. 676, to fix our economy and our (still) broken health care system.
WellPoint Scales Back Rate Increases Sought in California
By Avery Johnson
The Wall Street Journal
July 1, 2010
Health insurer WellPoint Inc. is backing off its plan to increase prices by as much as 39% for individuals in California, instead seeking rates for this year that it said would result in a $100 million loss for the company there.
On Wednesday, WellPoint’s Anthem Blue Cross unit told the California Insurance Department that it wants to increase prices for individual policyholders by an average of 14%, down from the 25% average it had previously sought.
“The actual rates we would need are higher than this, but we made a business decision to get a rate implemented,” said Brian Sassi, WellPoint’s president and chief executive of its consumer business unit.
Wellpoint had been hammered for months by the Obama administration and consumer advocates over the size of its initial rate proposal. Angela Braly, its chief executive, and other insurance executives contend that the rising cost of care and demands for higher reimbursement from providers are driving premiums—and that the federal health-overhaul law didn’t do enough to control costs.
WellPoint plans to file 2011 rates in California that do cover costs, they said.
Len Nichols, a health economist at George Mason University, said that WellPoint has “been asserting the point that, ‘You’ve got to understand we can’t control costs.’ And that point has been made, and the message has been heard.”
http://online.wsj.com/article/SB10001424052748704334604575339284211797328.html?mod=googlenews_wsj
After withdrawing a request for an average 25 percent increase in premiums for individual health plans in California, Anthem Blue Cross is now asking for an average 14 percent increase, which they claim will result in a loss that they will make up with 2011 premium increases. With medical inflation, a further increase in adverse selection, and an adjustment to eliminate losses, next year’s premium increases will be even more intolerable.
The Obama administration and members of Congress are critical of these increases, blaming Anthem Blue Cross for excessive profits – as if a $100 million loss in this market somehow reflects egregious profits (though, of necessity, they are profitable in other markets).
Obama and Congress are totally off target when they blame the private insurers. The private insurance model does not and cannot work to control costs and insure everyone, no matter how much market advocates wish it could. It is Obama and Congress who bear much of the blame because they were the ones who decided to keep the private insurers in charge.
Although we can blame our elected leaders now, if we don’t communicate to them clearly that they must bring us the reform that we need – a single payer national health program – then we will be left with only ourselves to blame.
By Kay Lazar
The Boston Globe
June 30, 2010
The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.
The result is that insured residents of Massachusetts wind up paying more for health care, according to the report.
“The active members subsidize some of the costs tied to those individuals who terminate within one year,” the report says.
Report:
http://www.mass.gov/Eoca/docs/doi/Companies/adverse_selection_report.pdf
By Don McCanne, MD
During the reform process the concern was expressed repeatedly that an individual mandate – requiring individuals to purchase their own health insurance – would result in gaming the system. People would enroll when they needed expensive care, and then drop out after the care was completed. The experience in Massachusetts has demonstrated that it did not take long for the public to learn this game, for this is precisely what has happened. Nevertheless, the individual mandate is now the law of the land.
Options being considered to reduce this form of adverse selection include, as examples, allowing open enrollment for only one month per year, or increasing the penalty for remaining uninsured. Although such measures might reduce this tendency to game the system, they will not eliminate it.
It is the structure of the financing system that is fundamentally flawed. It cannot be fixed merely by tweaking the mandate, nor by tweaking the thousands of other provisions in this dysfunctional system. It needs to be replaced with a structurally sound system.
With a single payer national health program the issue of an individual mandate would be moot since everyone would be enrolled, automatically, throughout life.
By HELEN REDMOND
Counterpunch, June 29, 2010
Liberals are on a mission to convince a skeptical public the Patient Protection and Affordable Care Act (known by the last three letters, ACA) should not only be supported, it’s actually a good piece of legislation, a step in the right direction. Nothing could be further from the truth.
In their article on the website Salon.com last month titled “A Practical Guide Forward for Progressives on Health Care,” authors Ellen R. Shaffer and Judy Norsigian admonish health care activists, particularly supporters of single-payer, for not enthusiastically promoting the ACA. Then they warn if we don’t stop “simmering” because we’re “convinced that it [the ACA] did too much for private insurers and too little for average Americans,” we’re playing into the “right’s hand.”
It is incomprehensible how two long-standing feminists, articulate champions of a women’s right to control their bodies, Norsigian’s Our Bodies Ourselves — a seminal book that launched the movement for women’s rights in health care — could compromise away their core values and beliefs and shill for a piece of legislation that further restricts women’s reproductive rights. The Stupak-Pitts Amendment should have been an automatic deal breaker for anyone pro-choice. In a second slap in the face to women, President Obama signed an executive order ensuring no federal money could be used for elective abortions even though the Hyde Amendment already guarantees it. Shaffer and Norsigian should have been outraged at Obama’s placating of anti-abortion fanatics. These fierce advocates for women’s health should have publicly denounced and withdrawn their support for the misogynist legislation. Instead, they supported the Democrats who bargained away a woman’s right to control her own body to rabid Blue Dogs and religious plankton, thus eroding abortion rights even further.
No mention of the restriction on abortion in their article (except to say they were “disappointed”), or the life changing impact it will have on women, especially poor women. Instead they recommend: “Progressives should appreciate that he [Obama] overcame obstacles that have sunk every reform effort over the past 10 years and managed to sign a bill into law.”
Shaffer and Norsigian, in one of America’s longest and most politically toxic traditions aimed exclusively at the left, tell us to suck it up, stop criticizing the president, the Democratic Party and inadequate legislation no matter how disgusted or disappointed you feel. Or else! Or else you, yes you the two women write, are “… handing control of the country back to the most extremist Republican Party in history.”
Really? More extreme than Reagan or the Bushes?
When Democrats in power sell out to corporate interests, pass legislation that falls far short of campaign promises and their populist rhetoric resonates less and less with an angry electorate, “progressives” in the Democratic Party set themselves two tasks: scare and spin. They create panic and fear of the Republican Party regaining congressional seats, the presidency and exaggerate, lie (or lies of omission) about the effects of reform legislation.
The passage of the ACA is a classic example. In the end, desperate for a victory no matter how hollow, establishment liberals were willing to concede anything in order to pass anything.
Norsigian and Shaffer assert the insurance industry is “predatory, dishonest and parasitic” and admit “we would be better off without it.” They’re right, but they don’t believe it’s possible to put them out of business. Instead, we must always and everywhere be vigilant, forever engaged in thousands of battles against every insurer, in every state, as well as ready to fight with employers who eliminate benefits, increase cost sharing, discriminate against women or drop coverage.
These separate battles have been going on for decades. It’s a divide and conquer loser strategy. The predatory, dishonest and parasitic insurance industry has to be eliminated. That is the lesson we have learned the hard way over decades in this country and that is the prerequisite to create the health care system Norsigian and Shaffer say they want. Yet the authors were not active in the nation-wide, grassroots single-payer movement. Instead they supported the public option: another dead end proposal and diversion from the struggle for single-payer.
Their article struggles unconvincingly and in a patronizing tone to convince those of us who wanted fundamental change (single-payer) to abandon that goal and work to improve the ACA.
Norsigian and Shaffer tell us there are four myths about the legislation that have duped us into less than sanguine support of ACA.
Myth: “Progressive activists should ignore or undermine the new law which will get us to single payer more quickly.”
Single-payer activists aren’t ignoring the new law, we are vocal critics of it. We unapologetically opposed the passage of the ACA because it enriches and further entrenches the insurance industry. Our mission is to continue exposing insurance company abuses. It’s not hard to do because of their sheer audacity. A few days after the bill was signed, insurers argued coverage of children with disabilities wouldn’t begin immediately as President Obama had publicly announced. In Massachusetts, the predators tried to increase premiums up to 30 percent. This month Obama summoned the parasites to a private meeting at the Whitehouse and warned them not to use the bill “as an opportunity to enact unjustifiable rate increases that don’t boost care and inflate their bottom lines.” Does anyone believe the insurers won’t?
Ron Pollack of Families USA, Kathleen Sebelius, the Secretary of Health and Human Services, the remnants of Health Care for America Now (HCAN) have launched a national campaign to sell the bill to the public. Single-payer supporters need to be similarly engaged but in the opposite direction, to expose and explain the not-so-fine print of the ACA: no caps on premiums; allows for gender rating in large group plans with more than 100 hundred employees; permits employers and insurers to charge three times more based on age and certain health conditions; Stupak-Pitts anti-abortion amendment; and millions of undocumented immigrants denied health care.
Myth: “The new law won’t save money because the insurance industry is still standing.”
The reality is the legislation cannot control costs. The cost drivers of the current system remain in place: no regulation on insurance premiums; excessive and wasteful administrative costs; Medicare forbidden to negotiate drug prices; and outrageous insurance and pharmaceutical profits.
Myth: “The insurance industry is still standing because President Obama made a backroom deal.”
Norsigan and Shaffer argue Obama made transparent-to the-public deals with the insurance and drug industries. What planet are they on? The fact is Obama, Kennedy, and Baucus met privately and made deals with America’s Health Insurance Plan’s (AHIP) CEO Karen Ignagi and Billy Tauzin, the former CEO of PhRMA. C’mon. The health industry spent $3 billion lobbying members of Congress from 2008-2009. That money buys behind the scenes access, influence and agreements. Like a thief in the night, Tauzin went to the Whitehouse and demanded and got from President Obama the extension of patents for biotech drugs to 12 years; no drug reimportation from Canada; and no negotiating for drug prices in the Medicare program. I don’t recall the health care summit at the Whitehouse with all the “players” at the table, cameras flashing and videos recording when that billion dollar deal
went down.
Myth: “The country is ready to go for a Medicare-for-all single-payer system, run by the government.”
The authors believe the public has “mixed feelings about the government.” Not according to numerous polls.
A Kaiser Poll in July, 2009 found 58 percent of Americans support “A national health plan in which all Americans would get their insurance through an expanded, universal form of Medicare for all.” Another Kaiser poll found 49 percent of Americans support “Having all Americans get their insurance from a single government plan.” Doctors want single-payer, too. In 2008, a survey of physicians in the Annals of Internal Medicine found 59% agreed either “strongly” or “generally” with the statement: “In principle, do you support or oppose government legislation to establish national health insurance.”
The authors have “mixed feelings” about a single-payer, government-run health system, it’s not the American people.
At the end of the article the authors assert, “With the new law, we have won policy space to further challenge corporate control, including control of the health care system.” Again, what planet are Shaffer and Norsigian on? How does giving the predatory, dishonest and parasitic insurance industry $447 billion in taxpayer money and a mandate to punish those who don’t buy their defective product help our side to challenge or control them?
John Nichols, a liberal writer for The Nation and some time supporter of single-payer, engages in scare and spin, too. In his article titled, “The Unexpected Winning Issue for Democrats: Healthcare,” he warns Republicans are gearing up to repeal the ACA. Nichols reports Republican Senate candidate Carly Fiorina still has a “Repeal It!” petition on her campaign website. We’re supposed to be afraid of that? Republican nutjob Ron Johnson who is challenging Russ Feingold is a credible threat to overturning the legislation because he asserts, “The health care bill is the greatest assault on our freedom in my lifetime. It must be repealed.” Please! LOL.
Scare tactics applied, Nichols goes on to celebrate a recent poll showing increased support for the ACA, “as imperfect as it may be.” Imperfect is an understatement. Moreover, he’s happy 51 percent of Americans trust Democrats to do a better job [than Republicans] of responding to health care issues. Should undocumented workers, women who want abortions and the 23 million who still won’t be insured in 2019 trust the Democrats?
Nichols counsels, “Smart Democrats will run as savvy backers of reform who talk about it as a first step…” The legislation is not a first step, it is a step backwards and to argue otherwise is simply dishonest.
Millions of Americans don’t support the bill because they don’t understand its implications (it’s 2000-pages and regulations are still be written), or they flat out reject the ACA because it doesn’t go far enough; it’s not change they can believe in. And those who oppose the bill are not all Teabaggers, either.
Ultimately for liberals like Shaffer, Norsigian and Nichols the reelection of Democrats trumps the needs of Americans literally dying for fundamental health care reform. Years from now when the ACA is completely discredited and understood as yet another failed attempt to reform the health care system, liberals that engaged in scare and spin tactics and provided cover for a very bad bill that betrays the majority of people will have much to answer for.
Helen Redmond is a single-payer activist with the Chicago Single-Payer Action Network. She can be reached at: redmondmadrid@yahoo.com
Editor’s note: What follows is an open letter from James Marc Leas, an attorney in Burlington to the Vermont Attorney General’s office. The letter is followed by the AG office’s original response.
June 27, 2010
Dear Attorney General Sorrell and Deputy Attorney General Janet C. Murnane:
Thank you for the letter dated June 25, 2010 from Deputy Attorney General Janet C. Murnane. I was very concerned when I submitted my June 21, 2010 letter to you. But now I am far more concerned about violation of the Vermont Commission on Health Care Reform statute than I was then. I request further reconsideration based on the following points.
1. Deputy Attorney General Murnane’s letter admits that “the AARP itself appears to have substantial financial arrangements or relations with several insurance companies; however, we are not aware of any information which shows that Mr. Leddy himself has any relation to any insurance company, official or otherwise.”
I would also respectfully ask you to consider that Ms. Murnane’s letter admits that Mr. Leddy serves as President of the Vermont AARP and servers on an advisory council of the national AARP. That role is what gives him the relation to the insurers.
Since organizations are not alive, it is the people who run organizations who carry out the official relations for the organization. In his role as top officer of the Vermont AARP Mr. Leddy has the responsibility for official relations of the Vermont AARP with the insurers with which the AARP holds lucrative contracts. In fact, the AARP itself admits that the AARP mission includes providing the health care products and that the Vermont AARP President’s job includes achieving this mission [1].
2. Subsection 901(b)(2)C recognizes that a person can have a connection with the operation of a health care insurer without being an employee of a health care insurer. Ms. Murnane’s letter does not address this possibility though she correctly quotes its terms: “the two nonvoting members with experience in health care shall not … in any manner, be connected with the operation of a health care provider or insurer…”
I would respectfully ask you to consider that facilitating sales of health care insurers connects AARP with the operation of health care insurers. While the AARP states that it does not itself sell health insurance, the AARP does offer health insurance products and license its trademark for the sale of health insurance products by the insurers. By offering itself as the public face that facilitates sales of insurance company products AARP is connected with the operation of health care insurers and is performing an operation of the health care insurers.
The President of the Vermont AARP is responsible for achieving the caring and trustworthy public face the insurers require to sell their wares and for achieving the mission of the AARP, which includes offering these health insurance products for health insurers and licensing the AARP name to health insurers in exchange for hundreds of millions of dollars of licensing revenue from the insurers.
AARP portrays itself as so caring and trustworthy that, not just Jim Leddy, but all of AARP’s state presidents, its entire national board of directors, and all its national officers serve as unpaid volunteers. Where, as here, hundreds of millions of dollars are at stake for the organization, such volunteering appears to be a strategic policy to maintain the needed kind, caring, trustworthy public face that makes the AARP name valuable for its lucrative trademark licensing and its extensive lobbying.
One cannot be a top official of the AARP and not in at least some manner be connected with its offering, licensing and public face operations. The AARP receives half its income from insurers for these operations so this is a substantial part of its efforts. The issue is whether the President of the Vermont AARP is connected with the real and substantial AARP operation of being the public face for the insurers.
Instead of addressing whether the President of the Vermont AARP is “in any manner” involved in the high dollar connection of AARP with health insurers in his role as top official of the Vermont AARP and a member of the AARP national policy council, Ms. Murnane’s letter goes elsewhere. Her letter states, “his unpaid positions with the AARP do not include the authority or responsibility to operate a health care provider or insurer, and the audited records of the AARP make it reasonably clear that the AARP itself is neither a health care provider nor an insurer.”
Her letter does not address the statutory issue of how the President of the Vermont AARP can possibly avoid any connection with the AARP offering, licensing, and public face operation of health care insurers with whom the AARP has hundreds of millions of dollars of revenue from licensing contracts. I would respectfully ask you to consider that it is the fundamental job of the President to act vigorously to ensure the success of the lucrative AARP offering, licensing, and public face operation.
3. Ms. Murnane’s letter admits that the AARP holds contracts with health care insurers. Top officers, including the President of an organization, are responsible for making and performing contracts of the organization. The President of the Vermont AARP is the top responsible person in Vermont [2].
Not only would he be responsible for making or performing business contract with health care insurers, he would also have a fiduciary responsibility to the AARP to keep such lucrative contracts going while offering advice to the commission. This is not a matter of integrity. This is a matter of fiduciary responsibility in his role as AARP President.
Nothing in Ms. Murnane’s letter recognizes or addresses how a President of the Vermont AARP can be said to be free of all such relations, connections, and responsibility for making and performing the lucrative contracts that AARP has with heath care insurers. And how the President can avoid his fiduciary responsibility to AARP to maintain those contracts for that organization while serving on the Commission.
Finally, Ms. Murnane’s letter includes a point that raises a very troubling question about the rule of law in our state. I am shocked by her statement that the level of observance of the law by government officials is determined by what a court would allow, and that in this case a court would allow a substantial level of violation, as long as it is not “a gross departure.” I believe that the public demands the highest level of respect for the rule of law and the highest standard of observing each and every one of the requirements of the law by government officials. Government officials have a duty to set an example for the rest of us. Particularly where political considerations may apply or where the individual has a good reputation for service to the community, the temptation to depart from the requirements of law may be strongest and should be more firmly resisted. The office of the Attorney General weakens his case by resorting to putting on the public record the view that government officials need only observe the absolute lowest possible standard that a court would enforce. Resort to this argument is acknowledgment that Vermont has a problem in the participation of an individual on the commission while he simultaneously serves as the President of the Vermont AARP.
I would ask you to reconsider. I urge you to issue an opinion that an individual cannot serve as the top official of the AARP while serving on the Commission, and that if Jim Leddy wishes to serve on the Commission he should step down as President of the Vermont AARP. Thank you very much for your reconsideration of this important matter.
_________________________________
[1] When Jim Leddy was named AARP Vermont State President in 2008 a news release stated that it was “a vol
unteer position working closely with both staff and volunteers throughout the state to help AARP achieve its mission in Vermont.”
The “AARP mission statement” states, “What Is the Mission of AARP? AARP is a nonprofit, nonpartisan membership organization for people age 50 and over. AARP is dedicated to enhancing quality of life for all as we age. We lead positive social change and deliver value to members through information, advocacy and service. AARP also provides a wide range of unique benefits, special products, and services for our members.”
The “wide range of unique benefits, special products, and services” includes health care insurance products.
[2] No one disputes that the President of BP has an official relation with, a connection with, and is responsible for the contract with the actual drilling company. And not just because he is paid.
Sincerely,
James Marc Leas
Law Office of James Marc Leas
37 Butler Drive, South Burlington, Vermont 05403
The letter from Jane Murmane, deputy attorney general follows:
June 25, 2010
Dear Mr. Leas and Professor Nicosia:
This is in reply to your recent messages to the Attorney General’s Office about the appointment of James Leddy to the Vermont Commission on Health Care Reform. I have reviewed your concerns with Attorney General Sorrell.
As you are aware, Act 128 created this Commission to monitor health care reform initiatives and to make recommendations to the General Assembly. The Act authorized the Speaker of the House to fill one of the nonvoting positions on the Commission. Absent a gross departure from the appointment standards established by the Legislature — something very remote from the circumstances here — the Speaker’s appointment would not be disturbed by the courts.
Nor is the Speaker’s decision subject to approval by the Attorney General. The Attorney General’s Office reviewed Act 128 and the Leddy appointment in response to a citizen complaint. We responded in a public way to the original complaint because the complaint itself was widely publicized. Your messages repeat concerns raised in the prior complaint and add to them by citing other subsections of the appointment statute. The purpose of this message is to respond to your concerns and to confirm our view that there is nothing in any subsection of the statute that would prohibit Mr. Leddy’s appointment to the Commission. The statutory prohibitions and our comments are as follows:
2 V.S.A. § 901(b)(2)(A) provides that “the two nonvoting members with experience in health care shall not … be in the employ of or holding any official relation to any health care provider or insurer or be engaged in the management of a health care provider or insurer…”
Comment: Mr. Leddy is not employed by an insurance company because the AARP is not an insurance company, nor is he “employed” by the AARP. We are informed that he holds an official relation to the AARP in the sense that he is the unpaid president of the Vermont AARP entity and serves as an unpaid member of an AARP advisory council. But, again, the AARP is not an insurance company. The AARP itself appears to have substantial financial arrangements or relations with several insurance companies; however, we are not aware of any information which shows that Mr. Leddy himself has any relation to any insurance company, official or otherwise. Nor are we aware of any information which shows that Mr. Leddy is employed by or holds any official relation to any health care provider.
2 V.S.A. § 901(b)(2)(B) provides that “the two nonvoting members with experience in health care shall not …own stock, bonds, or other securities of a health care provider or insurer, unless the stock, bond, or other security is purchased by or through a mutual fund, blind trust, or other mechanism where a person other than the member chooses the stock, bond, or security …”
Comment: We are not aware of any information which shows that Mr. Leddy owns any securities as described in this subsection.
2 V.S.A. § 901(b)(2)(C) provides that “the two nonvoting members with experience in health care shall not … in any manner, be connected with the operation of a health care provider or insurer…”
Comment: We are not aware of any information which shows that Mr. Leddy is connected with the operation of a health care provider or insurer. His unpaid positions with the AARP do not include the authority or responsibility to operate a health care provider or insurer, and the audited records of the AARP make it reasonably clear that the AARP itself is neither a health care provider nor an insurer.
2 V.S.A. § 901(b)(2)(D) provides that “the two nonvoting members with experience in health care shall not … render professional health care services or make or perform any business contract with any health care provider or insurer if such service or contract relates to the business of the health care provider or insurer, except contracts made as an individual or family in the regular course of obtaining health care services.”
Comment: We are not aware of any information which shows that Mr. Leddy renders health care services or makes or performs contracts with health care providers or insurers. Mr. Leddy holds volunteer positions with the AARP and the AARP makes contracts with health insurers. However, by its terms the subdivision (D) prohibition applies only to persons who themselves provide health care services or perform tasks fairly described as making (negotiating, drafting, signing) business contracts with care providers and insurers, or performing those contracts. It does not apply to every person “holding any official relation to” any entity that renders the services or makes or performs the contracts described in subsection (D). That broad prohibition applies only to persons having an official relation to health care providers and insurance companies, see 2 V.S.A. § 901(b)(2)(A) above, and Mr. Leddy is not such a person.
In summary, we are not aware of any information that would disqualify Mr. Leddy for service on the Vermont Commission on Health Care Reform.
You do note Jim Leddy’s long history of dedicated and honorable public service. We have little doubt that Speaker Smith weighed Mr. Leddy’s considerable experience and expertise in deciding to make the appointment that, again, was his alone to make.
We have opined and reopined that the Leddy appointment did not violate the letter of the law. You remain free to disapprove of and be disappointed by the appointment. You also remain free to express such feelings directly to the Speaker.
Sincerely, Janet Murnane
cc: Speaker Shapleigh Smith (by mail)
Janet C. Murnane
Deputy Attorney General
Vermont Attorney General’s Office
109 State Street
Montpelier, VT 05609-1001
Leas: Attorney general’s office must reconsider Leddy decision
Short-term insurance buyers drive up cost in Mass.
By Kay Lazar
The Boston Globe
June 30, 2010
The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.
The result is that insured residents of Massachusetts wind up paying more for health care, according to the report.
“The active members subsidize some of the costs tied to those individuals who terminate within one year,” the report says.
http://www.boston.com/news/health/articles/2010/06/30/short_term_insurance_buyers_drive_up_cost_in_mass/?rss_id=Boston.com+–+Health+news
Report:
http://www.mass.gov/Eoca/docs/doi/Companies/adverse_selection_report.pdf
During the reform process the concern was expressed repeatedly that an individual mandate – requiring individuals to purchase their own health insurance – would result in gaming the system. People would enroll when they needed expensive care, and then drop out after the care was completed. The experience in Massachusetts has demonstrated that it did not take long for the public to learn this game, for this is precisely what has happened. Nevertheless, the individual mandate is now the law of the land.
Options being considered to reduce this form of adverse selection include, as examples, allowing open enrollment for only one month per year, or increasing the penalty for remaining uninsured. Although such measures might reduce this tendency to game the system, they will not eliminate it.
It is the structure of the financing system that is fundamentally flawed. It cannot be fixed merely by tweaking the mandate, nor by tweaking the thousands of other provisions in this dysfunctional system. It needs to be replaced with a structurally sound system.
With a single payer national health program the issue of an individual mandate would be moot since everyone would be enrolled, automatically, throughout life.
By Nancy Remsen
Burlington Free Press
June 29, 2010
The Health Care Reform Commission recommended Monday that the Legislature hire the Harvard economist who helped Taiwan revamp its health-care system for a six-month, $300,000 health research project for Vermont.
The consultant’s task: Give lawmakers three roadmaps the state could follow to achieve a more efficient and accessible but less-expensive health-care system. One must be a government-financed system, and another must include a public option for health coverage along with private insurance.
The commission received proposals from three consultants, interviewed representatives of two Monday morning and made a unanimous choice after lunch.
Today the Legislature’s Joint Fiscal Committee is to decide whether it agrees with the commission’s choice of William S. Hsiao, professor of economics at the Harvard School of Public Health and his associates, Jonathan Gruber, an economics professor at Massachusetts Institute of Technology, and Steven Kappel, a health policy analyst who previously worked for the state and for the Legislature.
Details of the Hsiao, Gruber, Kappel proposal — and the rival bids from Lewin Group of Falls Church, Va., and Mathmatica Policy Research Inc. of Washington, D.C. — remain confidential until an agreement is signed.
“All three proposals were good on the analytical front,” said Commission Co-Chairman Rep. Steve Maier, D-Middlebury. Still, he and others agreed Hsiao’s proposal stood out, and his presentation clinched his selection.
“Dr. Hsiao’s proposal offers us the greatest value,” said Rep. Mark Larson, D-Burlington.
“His group has a track record all over the work designing health-care systems,” said Rep. Francis “Topper” McFaun, R-Barre. “He knows what works.”
The designs the winning consultant must deliver by next winter are intended to guide the Legislature’s next steps.
Hsiao had spoken to the Legislature’s health-care committees last winter about the potential savings and shortcomings of a single-payer system. Many lawmakers came away impressed.
Sen. Kevin Mullin, R-Rutland, noted some people might suggest the “fix” was in to select Hsiao to do the study. Mullin said he tried hard to find reasons to pick one of the other consultants. In the end, he agreed with the rest of the commission: “This one is the best for Vermont.”
http://www.burlingtonfreepress.com/article/20100629/NEWS03/100628014/1009/RSS01
And…
TO: All interested parties
FROM: Jim Hester, Director, Health Care Reform Commission
DATE: 6/29/10
SUBJECT: Selection of Health Care Reform Study Contractor
On June 28, the Health Care Reform Commission voted unanimously to hire the team of William Hsiao, Ph.D, Steven Kappel, and Johnathan Gruber, Ph.D to conduct the health care reform design study as laid out in Act 128 of 2010. On June 29th, the Joint Fiscal Committee voted to approve the recommendation of the Health Care Reform Commission. It is expected that a contract will be signed on or about July 15th.
By Don McCanne, MD
Today the Vermont Joint Fiscal Committee gave the final approval for a study of health care reform for the state of Vermont. The study, to be done by William Hsiao, Ph.D, Johnathan Gruber, Ph.D, and Steven Kappel, will look at three models, including a government-financed system. Especially noteworthy is the fact that this study has received the support of Republican legislators. Single payer is on the table!
By Dean Baker
TPM Café, June 28, 2010
The opponents of Social Security and Medicare are getting in high gear. After all, it makes perfect sense that after the collapse of a housing bubble has just destroyed the life savings of near retirees that we would cut their Social Security and Medicare. Okay, at least in Washington that makes perfect sense.
President Obama’s deficit commission is moving forward with Social Security and Medicare explicitly in their sights. They got a dry run for how this effort is likely to sell with the public on Saturday as the Peter Peterson funded group America Speaks sponsored a series of 19 “21st Century Town Meetings.” It seems that events didn’t quite go as planned.
The exercise was intended to show convince people that there were no options other than large cuts to Social Security and Medicare to hit their deficit targets. To ensure this result, the America Speaks crew put together a booklet that exaggerated future budget problems (the exercise was for the year 2025) by assuming a worse budget path than the country is currently facing.
America Speaks also excluded the possibility that the Fed would buy and hold more debt, in effect continuing its current course. This would substantially reduce the interest burden facing the country in 2025. While in normal times this could cause inflation, that is unlikely to be a problem in the foreseeable future. In comparable circumstances, Japan’s central bank has bought an amount of debt nearly equal to the country’s GDP (the equivalent of $14 trillion for the U.S.) and its economy is still facing deflation. There is no reason that the Fed could not follow the same path, unless the goal is to force cuts in Social Security and Medicare.
The America Speaks folks also denied participants the option of reducing public sector health care costs by reforming the U.S. health care system. As they say at America Speaks, everything is on the table, except reforms that would hurt powerful industry lobbies. The America Speaks crew also neglected to mention the Social Security trust fund and that it would have enough assets to pay all benefits through the year 2043, according to the Congressional Budget Office.
Given this stacked deck the participants rose up in revolt. They demanded the option to vote on a single-payer type health care system. The idea being to reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. They also voted overwhelmingly for defense cuts and for every progressive tax option in the book, even though many had been seriously mischaracterized. For example, they listed the potential revenue from a financial speculation tax in 2025 as $30 billion a year even though there is good reason, based on the experience of other countries, to believe that we could raise close to ten times this amount.
Remarkably, even after spending more than 6 hours with the America Speakers, participants were still very poorly informed on several key budget issues. For example, more than 80 percent of the participants thought that the country had large budget deficits in the years immediately before the recession. (The budget deficits were less than 2.0 percent of GDP in the two years prior to the downturn.)
Less than a quarter of the participants realized that average wages are projected to increase substantially over the next three decades. The fact that real wages are projected to be more than 30 percent higher in 2040 would be an important consideration in an issue like increasing the payroll tax. And, less than a quarter of participants realized that the Social Security trust fund is projected to be fully solvent for more than 25 years into the future.
All in all, this was a good day for democracy. The America Speaks gang tried to shove their agenda down the public’s throat and the public pushed back. Let’s hope that the deficit commission gets the message.
http://tpmcafe.talkingpointsmemo.com/2010/06/28/america_speaks_back_the_effort_to_gut_social_secur