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Obama’s dare to SCOTUS could screw patients and help insurers

4:27 pm in Uncategorized by Consumer Watchdog

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In a remarkable act of either stupidity or brinksmanship, the Obama Administration challenged the US Supreme Court to either keep the federal individual mandate to buy health insurance or throw out with it some of the most important consumer protections in the federal health care overhaul.

The Justice Department argues in a brief to SCOTUS that if the mandate is unconstitutional, then insurance companies cannot be forced to sell health insurance to people regardless of their preexisting conditions or to price their policies based on factors other than a patient’s medical condition.

In other words, give us mandatory health insurance or take from sick patients the right to have access to insurance at an affordable price.

WTF? Has the White House lost its mind?

New York has a system with NO mandatory health insurance, but the very take-all-comers provision and community rating pricing, which excludes price gouging based on illness, that the Justice Department says cannot work without the mandate.Obama advocated for such a system while running for president and distinguishing himself from Hillary Clinton. Now, according to his Justice Department, it’s just not possible?

New York may have high premiums, but so does Massachusetts, which has mandatory health insurance. Both states have recently adopted premium regulation to deal with reining in premiums. Consumer Watchdog’s study earlier this year found premium regulation to be the essential component for health reform to work, not mandatory insurance.

Obama’s attempt to force the hands of a Supreme Court that couldn’t even be shamed out of throwing the 2000 election to George W. Bush seems to be more than legal sophistry. The President seems to have said to himself so many times that mandatory health insurance is necessary for any pro-consumer reform that his Justice Department believed it.

Lower courts have ruled the mandatory purchase provision — which is wildly unpopular with public, unfair without premium regulation and possibly unconstitutional — could be struck from the federal law without losing the pro-consumer provisions. Now the Justice Department just gave the Supreme Court the blade it needed to gut the prohibitions against insurance companies refusing to sell insurance to people who need it most. Read the rest of this entry →

Greater inequality on Wall Street than in Egypt or Tunisia

6:36 pm in Uncategorized by Consumer Watchdog

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After spending some time at Occupy LA last week, and seeing the worldwide protests the occupation inspired this weekend, I have a firm sense that the cold of winter will not freeze the passion at the heart of the movement. This is no flash mob. It’s a movement about occupying space to stand against gross inequality, pitching a tent and asking the like-minded to stand together.

The New York Times’ Nicolas Kristof hits the nail on the head by calling out the inequality at the heart of the protests, and what it shares with protests in the Middle East.

The frustration in America isn’t so much with inequality in the political and legal worlds, as it was in Arab countries, although those are concerns too. Here the critical issue is economic inequity. According to the C.I.A.’s own ranking of countries by income inequality, the United States is more unequal a society than either Tunisia or Egypt.

Three factoids underscore that inequality:

- The 400 wealthiest Americans have a greater combined net worth than the bottom 150 million Americans.

- The top 1 percent of Americans possess more wealth than the entire bottom 90 percent.

- In the Bush expansion from 2002 to 2007, 65 percent of economic gains went to the richest 1 percent.

As my Times colleague Catherine Rampell noted a few days ago, in 1981, the average salary in the securities industry in New York City was twice the average in other private sector jobs. At last count, in 2010, it was 5.5 times as much. (In case you want to gnash your teeth, the average is now $361,330.)

More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies.

Such inequality cannot withstand the force of public opinion in America, no more than it could in the Middle East. The only questions are ones of timing and tactics.
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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Blue Shield admits to overcharging California customers by about half a billion since 2010

6:27 pm in Uncategorized by Consumer Watchdog

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It is a masterful spin by the self-described not-for-profit Blue Shield of California to announce that it is returning all but two percent of its profits to its customers, as though this were some act of humble generosity. It’s a little like a supermarket announcing that from now on it’s going to give back (almost) all of your change. (It’s actually worse than that, as I’ll explain.)

All told, Blue Shield will have returned about $475 million in profits – $283 million that Blue Shield is crediting back in December plus about $167 million credited back earlier in the year for 2010 premiums as well as the $25 million the company distributed to doctors, hospitals and an as yet unnamed “community investment.” But this should not be thought of as a sincere gift from a community-oriented nonprofit. Rather, it’s nearly half a billion dollars that Blue Shield overcharged its policyholders and then held onto for months.

Worse still, Blue Shield had to be pushed and prodded to do anything; this refund didn’t just happen. Blue Shield is only giving some money back because there was huge public pressure this year – from California Insurance Commissioner Dave Jones, from nurses and consumers who protested at their corporate offices, from lawmakers like Assemblyman Mike Feuer carrying legislation to regulate insurance companies and from news reporters investigating their rates and salaries.

What’s more, the $283 million that will go to reducing policyholders’ December premium payments is utter chump change when given a full context: Read the rest of this entry →

“Fracking” for natural gas gets some attention, but so far it’s just yakking

5:45 pm in Uncategorized by Consumer Watchdog

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ExxonMobil, which is making big bets worldwide on hydraulic fracturing for deeply buried natural gas, is also making big bets on its sincere, earnest advertising about clean, safe natural gas. The ads turn me into a crazy person, yelling at the television during halftimes and seventh-inning stretches.

Their claim that they ensure compliance with all “applicable environmental and safety regulations” is my personal turning point, because in the U.S. those regulation barely exist. It’s easy to comply with nothing, so Exxon can get away with telling us that fracturing bedrock thousands of feet deep, drilling through the aquifers that supply our drinking water, using scarce water supplies spiked with an unidentified slew of toxic chemicals, is as safe as braiding a a daisy chain.

Some other countries, however, are starting to act on their doubts.

France has outlawed this drilling, known as “fracking,” until doubts about what it does to water supplies and how its waste poisons the land are dealt with. Britain’s Advertising Standards Authority banned one of the Exxon ads, stating that its claim on liquefied natural gas as one of the world’s cleanest fuels is misleading.

In the U.S., enviro and consumer groups grumble, and SolarDave has made an on-target spoof of the Exxon ads, but our lawmakers and regulators are still mostly twiddling their thumbs. There isn’t a federal requirement that drillers tell us what chemicals they’re squirting into the ground, or a law to prevent dumping their wastewater into the rivers from which we drink.

After a slew of investigative reporting (special kudos to ProPublica) on the health and environmental fallout from fracking, government is starting to ask questions. This week, Sen. Jeff Bingaman of New Mexico led off a Senate Energy and Commerce hearing on fracking, ticking off the water issues, land poisoning and air pollution issues, and adding on fracking’s release of highly potent climate-change gases, particularly methane. But a show of sympathy is a long, long way from effective regulation. Read the rest of this entry →

Take Action on Gas Prices

8:45 pm in Uncategorized by Consumer Watchdog

Photobucket Here’s a petition from our ally Public Citizen, calling on federal regulators to quit stalling and rein in the financial speculators who are jacking up gasoline prices. It’s well worth the few seconds to click on the link and sign the petition. Fight back against Goldman Sachs and the other big banks whose speculation costs you at the pump!

The speculators are counting on the public not understanding or caring about commodities regulation. Prove them wrong.

Here’s OilWatchdog’s earlier post on the damage the speculators are doing. And here’s the text of the e-mail message sent by Tyson Slocum at Public Citizen, explaining the technical point at issue:

Did you know that for every gallon of gas you buy, 65 to 70 cents goes right into the pockets of Wall Street traders?

Speculation on Wall Street, while currently legal, artificially inflates the price purely to make traders richer. It has nothing to do with how much it costs to find, refine or distribute oil. It’s just the manipulation of markets for the sake of greed.

American consumers end up paying millions and millions more for fuel. And the distorted profits contribute to perpetuating our addiction to oil.

You can do something about it. Read the rest of this entry →

Is Your Smartphone Stalking You?

8:08 pm in Uncategorized by Consumer Watchdog

Photobucket We launched this new animated video today to welcome him. Called “Supercharge,” the third avatar animation in our “Don’t Be Evil” series exposes actual quotes by Schmidt and new Google CEO Larry Page, showing the two Google executives stalking a US Senator through the signal in his Android mobile phone.

If a stranger followed us all day and took notes, it would be called stalking. But Google tracks us all day and night online and through our mobile phones, then profits wildly from the personal information.

The video and campaign is designed to dramatize Google’s information monopoly and make the case for Do Not Track Legislation. Please watch the 1 minute “Supercharge” video and share it with your friends.

Eric Schmidt recently said, “Your phone knows who you are, where you are and where you are going. It can see your path.” Page’s idea of “supercharging” the Android is to give it greater power to follow you, collect information about you, and market you based on your location.

As Congress takes on Google’s consolidation of the Internet and mobile phone markets, it’s time to raise the issue of how Google’s information monopoly threatens our privacy.
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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Last Night Of CA Legislature, What Damage Done?

5:47 pm in Uncategorized by Consumer Watchdog

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The clock ticking down on the last night in the California statehouse is always a lot like waiting for last call at a rowdy bar around 2 AM — you wonder how much damage will done before the last shot.

For years my colleagues and I have stood watch on the California legislature,into the wee hours of the morning, to make sure that politicians and companies didn’t a pull a fast one at the last moment. There have been a lot of close calls over the years, and some lost ones too.

Here’s the roundup from Friday night’s/Saturday morning’s last call in the statehouse before 2012:

• Last day legislation to move all ballot initiative measures to the November 2012 ballot, and stop ballot measures on the June primaries, cleared both houses of the legislature. Senate Bill 202 passed every committee and both houses in a single day. It’s not clear whether Governor Brown will sign SB 202, but if he did, the public would win big. Special interest groups often target the low turn-out June primary to pass measures the majority of Californians would never approve of. It’s better to have the real sentiment of the most Californians voting on ballot measures, rather than allowing corporations, for example, to target a much more friendly electorate in June, when Republicans will turn out big for their presidential primary. Mercury Insurance CEO George Joseph is trying to qualify his insurance surcharge initiative in June, a repeat of the failed Prop 17 from June 2010, for this very reason. He would stand even less a chance of pulling the wool over the eyes of the majority of real California voters in November. Turns out SB 202 stands on strong principle. For decades, prior to 1978, initiatives only went on the November general election ballot, which is what the California constitution requires. Then the legislature officially changed the protocol. If the legislature can change the definition of “general election” to include primary election, it can change the definition back.

• Legislation requiring health insurance companies to cover behavioral therapy for autistic children went to the Governor’s desk, SB 694. Consumer Watchog sued Governor Schwarzenegger’s Department Of Managed Health Care to force such continued coverage for autistic children in 2009, when the state started allowing insurance companies to deny the treatment as “educational.” A 9th Circuit decision recently strengthened our legal case, which is still pending, that the Mental Health Parity Law requires behavioral therapy to be covered. The insurance companies no doubt hope the new legislation will undermine our lawsuit and other pending cases against them, because they don’t want to have to pay for the therapy they have denied since 2009. Senator Steinberg, however, testified that he believed such therapy was always required and the legislation was clarifying existing law. We expect to prevail.

* The bill to force health insurance companies to get prior approval from state insurance regulators before raising rates never came up for a vote on the Senate Floor. AB 52, authored by Assembly Member Mike Feuer, was shelved for the year because the legislation did not have enough votes in the insurance-friendly state Senate. Consumer Watchdog is exploring a November 2012 ballot measure to regulate health insurance premiums, rollback rates by 20% and gives patients new options. Stay tuned for developments as our opinion research and drafting continues this fall.

Governor Brown hosted a kegger in his office for the legislature after it closed down in the early morning hours. For the public, there wasn’t much to celebrate this session, other than that more damage wasn’t done.
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Jamie Court is the president of Consumer Watchdog and author of The Progressive’s Guide To Raising Hell.

AT&T Execs and Shareholders Should Pay $3 Billion “Merger Termination Fee”

5:56 pm in Uncategorized by Consumer Watchdog

"What should the caption be?"

"What should the caption be?" by John Taylor on flickr. AT&T CEO Randall Stephenson (left) is chatting with Deutsche Telekom CEO Rene Obermann (right) at a May 26 Congressional hearing on AT&T's bid to takeover T-Mobile USA.

Did AT&T really think we’d fall for its broken record promises that the AT&T/T-Mobile merger would help consumers?

Just a few weeks after Consumer Watchdog wrote a letter urging regulators to block the AT&T/T-Mobile merger, the Department of Justice gave the AT&T merger a big thumbs down by filing a civil antitrust complaint challenging the deal.

AT&T agreed to pay T-Mobile a whopping $3 billion “termination fee” if the merger isn’t approved. AT&T probably figured they’d use this as a bargaining chip with the feds to get the deal done (“we’ll have to charge our customers $3 billion more if you don’t approve the merger”). Here’s an idea: AT&T’s CEO and shareholders should pay that fee out of their own pockets. They don’t seem to think twice about slapping early termination fees on unsuspecting customers. After the 2004 AT&T/Cingular merger, AT&T deliberately downgraded its network to the point that its customers’ cell phones became unusable. Customers who wanted out were hit with early termination fees of anywhere between $175 and $400. Maybe forcing AT&T’s greedy execs to pay the “merger termination fee” would make them think twice about pushing a merger which is not in the public interest.

DOJ’s move today marks the beginning of the end for AT&T’s proposed deal, which would have resulted in increased prices, degraded wireless service, and unexpected fees for many consumers throughout the country.

Consumer Watchdog applauded the Department of Justice today for filing a civil antitrust complaint to block the AT&T/T-Mobile Merger. Read about it here.
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Posted by Laura Antonini, research attorney for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Time For A 1988-Style Voter Revolt?

4:52 pm in Uncategorized by Consumer Watchdog

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The San Francisco Chronicle reported this morning on the front page about the landmark insurance reform we expect to be spending the next fifteen months working for.
Insurance companies, the legislature and recent court rulings have all turned against consumers, much like they had in 1988, when California voters struck back with the toughest insurance reform in America: Proposition 103.
By 2014, all of us will be required to buy health insurance or face tax penalties. The problem is that health insurance companies can charge whatever they like and raise premiums at will in California. This is the same scenario that drivers faced in 1988 when mandatory auto insurance laws forced drivers to pay for policies many couldn’t afford. Voters then required auto insurers to pay drivers a 20% refund and to get permission before they ever raised rates again.
Just like in 1988, insurance stalwarts in the statehouse are now holding insurance premium regulation hostage. The companies have given the politicians millions so they can make billions overcharging you. And, as in 1988, the California Supreme Court has issued several rulings taking away the right of policyholders to hold insurance companies accountable.
If we go to the ballot with a 1988-style 20% rollback in health insurance premiums, will you be with us?
Our “Proposition 103 Part Two” ballot measure will have to be filed by November 2011 in order to begin signature collection so it gets on the ballot for November 2012.
The main provisions of the ballot measure are as follows:
1- A 20% rate rollback in health insurance rates to reverse five years of unwarranted double-digit price gouging;
2- Require health insurance companies to seek permission from the elected insurance commissioner before raising rates, as auto insurance companies must, and application of other Prop 103 protections to health insurance companies;
3- Prohibit all insurance companies from raising your rates or refusing to renew you because of your credit score, claims or insurance history;
4- Allow consumers to join a non-profit public health plan administered by CALPERS instead of having to buy insurance from private insurance companies;
5- Correct court rulings that have misinterpreted the law to benefit the insurance industry;
6- Create a “three strikes and you’re out of California” law for insurance companies that repeatedly violate the state’s consumer protection laws
7- Prohibit health insurance companies from forcing you to sign arbitration agreements as a condition of enrollment.

We want to go to the ballot in November 2012. Will you be with us? Click here to sign up!
Together we can move health care reform forward in California and America.
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Jamie Court is president of Consumer Watchdog and author of The Progressive’s Guide To Raising Hell.

Tracking, for Profit, Whether You Take Your Drugs — How Wrong Is This?

8:34 pm in Uncategorized by Consumer Watchdog

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FICO, the company that decides your credit score, is now predicting, for profit, whether you’re likely to take your prescription drugs on schedule. No matter why FICO says they’re doing it (insurance companies are their obvious clients) this is wrong in so many ways that it’s hard to know where to start.

For one thing, information wants to be free: Your health insurance provider or doctor group won’t be the only companies that see your “FICO prescription drug adherence score.” In some cases, your employer is effectively your insurer, and could hardly be denied access to your drug score. If you’re tagged as at risk for not taking your insulin, you might be out of the running for a promotion.

Want to know if FICO is tracking you or what your score is? FICO won’t tell you. Call your insurance company or doctor, they say. Want to know exactly why they think you’re a risk? FICO won’t tell you, and probably won’t tell your doctor–it’s a proprietary algebraic formula. Want to protest your score? Good luck.

Insurance companies swear they only want to be able to remind high-risk patients to take their medicine, and that they won’t use the information to hike your health insurance premiums. However, the score would be even more attractive in deciding whether to deny you treatment if you’ve been disobedient, even if you just couldn’t afford your drugs.

FICO also apparently intends to sell your scores to pharmaceutical companies so they can sell us billions of dollars worth of more drugs. From FICO’s press release:

The FICO Medication Adherence Score provides valuable insight to pharmaceutical marketing teams that until now has not been readily available,” said Eric Newmark, Research Manager at IDC Health Insights. “Considering that non-adherence to prescribed drugs is estimated to cost the pharmaceutical industry more than $35 billion in lost revenue annually, the FICO Medication Adherence Score can offer great value for marketing optimization and insight into ways to improve patient health. The solution is likely to drive synergies in other investments as well, such as remote patient monitoring and better ‘connected’ Medication Adherence.”

Once the information exists, promises about how it will or won’t be used aren’t binding.

Even the way the score is created is questionable. From the New York Times:

The score was created using data from a large pharmacy benefits manager that provided information for a random sample of nearly 600,000 anonymous patients with diabetes, heart disease and asthma. Using the data set, FICO was able to track the patterns of patients who filled and refilled prescriptions and those who didn’t. The company used the data to identify the variables most associated with medication adherence and developed a risk score on a scale of 0 to 500.

Now, to identify your personal risk of falling off the drug wagon, FICO matches “publicly available” data like your neighborhood, your employment (or not) status, age, sex, marital status and home ownership with the data about the original sample of 600,000 (for which they knew who adhered to their prescription drug schedule and who didn’t). Exactly what FICO looks at is secret, as is their formula for developing the score. FICO doesn’t have to reveal whether it is accurate, or to what degree. And the score is really never better than an informed guess.

Drug companies have been seeking information on your “drug adherence” for years. They say it’s only so they can send reminders. But they’re already using it in a few places to try to sell you more and different drugs. They might also be sending you reminders to take a drug that your doctor has advised you to stop, because of side effects. Consumer Watchdog helped stop the drug companies from using this scheme in California and other states have also rejected it. But now Big Pharma has your FICO drug score, and so does the rest of the medical-industrial complex.

Why would insurance companies pay FICO gobs of money for this information, since it’s far less accurate for any individual than just checking whether they are refilling their prescriptions under their drug coverage? Ostensibly the FICO drug score would be cheaper than actually checking individual records, and would let insurers call and monitor the high risks (scores under 200) without bothering the rest of us.

But combining secrecy and profit with your personal information is a recipe for misuse. Especially when it has anything to do with your health.
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Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.