Stark, Miller urge insurers to ban rescission now

Hours after House leaders including two East Bay members sent a letter calling upon seven major health insurers to immediately end rescission – the practice ending someone’s coverage when he or she gets sick – ahead of new health care reform requirements kicking in soon, the nation’s largest health insurer did just that.

Wellpoint – parent company of Blue Cross and Blue Shield affiliates across the nation, including Anthem Blue Cross in California – issued a statement saying it will end the practice May 1.

“Rescissions, while rarely used, are one process insurers employ to reduce fraud and protect members,” the company said in its news release. “The standard contained in the federal legislation requires insurers not to rescind policies except in cases of fraud or intentional misrepresentation of material fact. WellPoint welcomes greater uniformity among insurers in this area.”

But although Wellpoint already had been the first insurer to embrace another part of the new health care reform bill – extending coverage to policyholders’ dependents up to age 26 – its move on rescission comes just one week after the company was widely berated for what many called an egregious abuse. Reuters reported the company had been using a computer algorithm that automatically targeted every policyholder recently diagnosed with breast cancer, triggering an immediate fraud investigation as the company searched for some pretext to drop their policies.

Among the House leaders who signed the letter to health insurers earlier today were Education and Labor Committee Chairman George Miller, D-Martinez, and Ways and Means Health Subcommittee Chairman Pete Stark, D-Fremont. Stark later issued a statement saying Wellpoint’s rapid response today means “the race is on.”

“WellPoint took the first step, now it’s up to the other insurance companies to show they’re serious about making health reform work,” he said. “They need to end rescissions, and put in place a system where every proposed cancellation is reviewed by an independent third party.”

UPDATE @ 11:19 A.M. WEDNESDAY: UnitedHealthcare announced this morning it’s also ending its use of rescissions immediately, ahead of the new law’s Sept. 23 impelementation date.
“In the spirit of the recently passed health reform legislation, UnitedHealthcare moved quickly to eliminate the practice of rescissions, except in cases of fraud or intentional misrepresentation of material fact,” said President Gail Boudreaux. “We continue to find ways to ensure that the new health care reform law can be implemented effectively for the benefit of all Americans and achieve broader access to quality health care.”


McNerney votes to nix pay raise, Lee doesn’t

The House today passed a bill, HR 5146, that would cancel an automatic $1,600 pay raise for members of Congress in Fiscal Year 2011, keeping their salaries at $174,000. The bill passed on a 402-15 vote; the U.S. Senate passed a similar measure by unanimous consent last week.

Among the 15 House members voting against the bill today were Rep. Barbara Lee, D-Oakland, and Rep. Lynn Woolsey, D-Petaluma.

“Congresswoman Lee has consistently voted in favor of cost of living increases for federal workers,” said Nicole Williams, Lee’s communications director.

All other Bay Area members voted for the bill. Even its supporters admit it’s mainly symbolic, saving about $1 million amid an estimated $1.3 trillion federal budget deficit this year – that’s about .07 percent.

But it’s the thought that counts, said Rep. Jerry McNerney, D-Pleasanton, probably the Bay Area’s only embattled House incumbent in November’s midterm elections. He issued a statement saying he’d been among the bill’s cosponsors and consistently has worked to eliminate automatic pay raises for Congress.

“At a time when families are struggling to make ends meet, it’s just not right for Members of Congress to get a pay raise,” he said. “That’s why I’ve donated my automatic pay increase to local charities and why I’m going to keep fighting to stop these unnecessary increases.”

UPDATE FROM LISA VORDERBRUEGGEN: Josh beat me to the punch on this one, but I have some additional information about McNerney that readers might find interesting.

This the second year that Congress and McNerney have voted to suspend the automatic pay raise. But in the past couple of years, McNerney contributed his pay raise to local charities. He will have donated an estimated $9,400 to groups such as Tri-Valley Haven in Livermore and Village Commmunity Resource Center in Brentwood.


Legislative Analyst: State building sale a bad idea

The nonpartisan Legislative Analyst’s Office today issued a report on a proposal that the state sell some of its office buildings to private interests in order to raise some fast cash and then lease back the same properties to state agencies for 20 years at market rate rents.

The conclusion: It’s a bad idea.

Elihu Harris building in OaklandAmong the state buildings proposed for sale are the Elihu Harris Building, at 1515 Clay St. in Oakland; the Earl Warren/Hiram Johnson complex that houses agencies including the state’s Supreme Court, at 350 McAllister/455 Golden Gate Ave. in San Francisco; and the Public Utilities Commission Building, at 505 Van Ness Ave. in San Francisco.

Here’s the LAO report’s summary (with my emphasis added):

Recent legislation authorized the Department of General Services (DGS) to sell and then lease back 11 state-owned office properties. The sale-leaseback is designed to free up the state’s equity in the buildings to provide one-time revenue for addressing the state’s current budgetary shortfall. We estimate that the sale of buildings would result in one-time revenue to the state of between $600 million and $1.4 billion, but that annual leasing costs would eventually exceed ownership costs by approximately $200 million. Over the lives of these buildings, we estimate the transaction would cost the state between $600 million and $1.5 billion. The Legislature will need to weigh how these costs compare to other alternatives for addressing the state’s budget shortfall. In our view, taking on long-term obligations—like the lease payments on these buildings—in exchange for one-time revenue to pay for current services is bad budgeting practice as it simply shifts costs to future years. Therefore, we encourage the Legislature to strongly consider other budget alternatives.

This gibes with criticisms of the “fire sale” raised in recent weeks by state Controller John Chiang, university economists, land development experts and labor groups; two weeks ago they were touting a report by economic forecasting firm Beacon Economics that foresaw more than $4 billion in hidden costs for taxpayers. State Treasurer Bill Lockyer said the Beacon report “provides a valuable warning about sacrificing the state’s long-term financial health for short-term gain.”

The state already has started accepting bids, but Gov. Schwarzenegger vowed last week that the sales wouldn’t go forward if it didn’t make sound fiscal sense. I’ve asked the governor’s office for a comment today; when I hear back, I’ll update this post.

UPDATE @ 2:10 P.M.: State and Consumer Services Agency Secretary Bill Leonard doesn’t see the LAO report as an obstacle to going through with the sales:

“The LAO’s report correctly concludes that the state is successfully negotiating a potential sale of state buildings, as authorized by the Legislature last summer. The Department of General Services worked with commercial real estate experts to market a world-class portfolio, which drew a world-class number of competitive offers and exceeded expectations. DGS needs to complete its negotiations with buyers and conduct a full analysis of the numbers before any final conclusions can be made. The bottom line is that the state should not be in the business of owning commercial real estate given the inherent cost risks. This transaction – if the numbers add up for the taxpayers – will generate cash that will help the state avoid further public service program cuts.”


CD11: GOP hopefuls sharpen their campaigns

The East Contra Costa Republican Women and the East Contra Costa TEA Party co-hosted a very insightful candidate forum last night in Brentwood for the four 11th Congressional District GOP primary hopefuls. (Click here to read the news story.)

The sponsors delivered smart and pointed questions. They also limited the candidates’ responses to one minute, which kept the candidates on their toes, tested their knowledge of the issues and ensured that the audience didn’t fall asleep. (Having moderated quite a few of these forums, candidates will drone on as long as you let them, often repeating themselves.)

The candidates vying for the chance to compete against incumbent Rep. Jerry McNerney, D-Pleasanton, are retired U.S. Marshal Tony Amador of Lodi; former business executive and disabled children’s advocate Elizabeth Emken of Danville; grapegrower and agricultural businessowner Brad Goehring of Clements; and Dougherty Valley attorney David Harmer.

It was a two-hour forum and my FlipVideo only has capacity for an hour, but I have posted below the candidates’ opening and closing statements, and the segment where they posed questions of each other.

Others were videotaping the entire forum, and as soon as I receive links, I will post them here.


Conservative hero pitches Poizner in new radio ad

Conservative hero and U.S. Rep. Tom McClintock, who has stood steadfastly behind Insurance Commissioner Steve Poizner in his longshot bid for the governorship, makes a pretty effective appeal to conservatives in this 60-second radio ad.

It’s running statewide, and dovetails on a series of recent TV spots in which Poizner has effectively questioned front-runner Meg Whitman’s conservative credentials — and shaved off a good 20 points from the 50 percentage point-lead she held in polls until recently.

In the ad, McClintock, lashes out at Whitman, the billionaire ex-CEO of eBay who has poured $59 million of her personal wealth into the campaign so far, for “spending her eBay millions” in an attempt to buy the governorship, smearing Poizner along the way. And he ends by saying, “We don’t need to rebrand our principles. We need to return to them.”


Former minuteman blasts AZ immigration law

David LaTour, 23, of Hayward, is an activist in the “open carry” movement; one of the Ron Paul followers who got elected to, was then sued on, and then resigned from the Alameda County Republican Central Committee; and a former president of the Castro Valley Minutemen.

The Castro Valley Minutemen’s current home page says members “don’t want our country, our culture, or our language – the very foundation that was handed down to us by our forefathers who toiled and died for our freedom, to be diluted by gate crashing illegal aliens aided by bleeding heart liberals, cheap and greedy business owners, and worse yet, self-serving elected government officials!”

Yet LaTour today sent me an invitation to join a Facebook group called “Against SB 1070,” in opposition to Arizona’s new anti-illegal-immigration law which many people say institutionalizes racial profiling. That page’s administrator’s latest post says:

Although SB 1070 has passed, we must continue to stand against this new and despicable law, the fight is still not over Arizonans! “The true test of the American ideal is whether we’re able to recognize our failings and then rise together to meet the challenges of our time. Whether we allow ourselves to be shaped by events and history, or whether we act to shape them.” – Barack Obama

Now, I know LaTour is no fan of President Obama, but I found it interesting that a former Minuteman leader would be inviting Facebookers to stand up in opposition to Arizona’s new law. I e-mailed him, and here’s what he said:

“I am opposed to SB 1070, Real ID, and any other “show me your papers” law that violates natural rights. Specifically, SB 1070 allows law enforcement officers to stop any individual that is ‘suspicious’ and arrest if they fail to provide proof of citizenship. This is clearly unreasonable search and seizure. Rather than resorting to police state tactics, we could address the issue by removing the incentives that encourage workers to ignore the legal immigration process and come here illegally. Laws like SB 1070 are a direct attack on the American tradition of liberty and represent reactionary politics at its worst. Unfortunately, it seems the immigration issue is being used much like the War on Terror and the War on Drugs, as an excuse to erode civil liberties and turn America into a police state.”

He also recommended that I watch this video:

So it seems there’s a bloc of conservatives out there who are much more afraid of expanded police powers than of illegal immigrants. Yet despite what the guy in the video said, it appears U.S. Homeland Security Secretary Janet Napolitano and the Obama Administration are not on board with Arizona’s law. From Reuters this morning:

A new Arizona law aimed at cracking down on illegal immigrants could divert resources from pursuing those in the country illegally who have committed more serious crimes, U.S. Homeland Security Secretary Janet Napolitano said on Tuesday.

The new law, set to take effect later this year in the state bordering Mexico, requires police there to determine if people are in the country illegally, but critics have said it enables racial profiling and may be unconstitutional.

The Obama administration is reviewing its options for possible challenges to the new state law and Napolitano told U.S. senators that its resources for pursuing more dangerous criminals committing felonies could be sapped.

“We have some deep concerns with the law from the law enforcement perspective because we believe it will detract from and siphon resources that we need to focus on those in the country illegally who are those committing the most serious crimes,” she told the Senate Judiciary Committee.

The Arizona law requires police officers to arrest those unable to provide documentation proving they are in the country legally. It also makes it a crime to transport someone who is an illegal immigrant, and to hire day laborers off the street.

“We have concerns that at some point we’ll be responsible to enforce or use our immigration resources against anyone that would get picked up in Arizona,” Napolitano said.