Senate Health Care Debate Begins; Polls Show Support Slipping
Nov. 30, 2009 – Members of the U.S. Senate today began the opening jabs of a contentious debate on national health care reform as yet another major public opinion poll shows declining support for federal lawmakers’ efforts to reform the nation’s $2.5 trillion-a-year health care industry.
While the Senate debate is scheduled to last until Dec. 18, several Capitol Hill pundits anticipate eroding public support could push the debate into next year. Gallup today released results of its national telephone survey of 1,017 adults conducted Nov. 20-22, and a plurality indicated they would “advise” their respective representatives in Congress to vote against a health care reform measure while 44 percent indicated they would advise voting for reform.
Even fewer want federal lawmakers to take action this year. Only 35 percent of those surveyed said they favor voting on health care reform this year while 42 percent said they prefer Capitol Hill lawmakers take more time before enacting major legislation that won’t take effect for several years.
Gallup’s polling results corroborate similar recent findings by Rasmussen Reports, which last week reported some 56 percent of those polled oppose federal health care reform efforts while only 38 percent indicated support. The support of federal efforts hadn’t dipped below 41 percent in prior weekly polling, according to Rasmussen Reports.
The recent Rasmussen survey also indicates most people don’t think reform efforts will help. Some 54 percent of those polled said the Senate and House bills would harm and not help health care, and 60 percent said the federal legislation likely would increase costs for everyone. Only 16 percent of those polled believe Congressional reform efforts will lower costs.
The Senate’s proposal requires all American citizens purchase health insurance and creates regional insurance exchanges where individuals can shop for health insurance coverage tailored to more specific needs. People earning too little to afford health insurance would receive federal subsidies to purchase coverage.
The Senate bill also creates a federal health insurance option in which state legislatures would choose to participate and prevent health insurance companies from refusing coverage to individuals with pre-existing health problems. Some 17 new taxes have been proposed to pay for the estimated $849 billion cost of initiating the Senate plan over a 10-year period.
While Senate Democrats needed 60 votes to advance the measure to a floor debate, independent Senator Joe Lieberman of Connecticut – who sits with the Democratic Caucus – has said he would oppose the Senate version even though he voted to allow the floor debate.
Lieberman, who was Democrat John Kerry’s running mate during the 2004 presidential election, opposes a public option as provided in the Senate bill and earlier announced he would filibuster the measure unless amended to remove the public plan proposed by Senate Majority Leader Harry Reid (D-Nevada). Lieberman says a public option would drive up costs for people with health insurance. Reid contends states would have the option of whether or not to participate in the proposed federal health care option.
AIG Settles $20 Billion Legal Dispute with Former Executives
Nov. 30. 2009 – Officials for embattled insurer American International Group (AIG) recently agreed to settle a legal dispute with its former chief executive for nearly 40 years, Maurice “Hank” Greenberg, who remains the single largest individual holder of stock in the insurance giant recently involuntarily rescued by U.S. taxpayers.
AIG officials agreed to return to Greenberg several treasured items he left at his AIG office upon his hastened departure from the firm in 2005. AIG also will reimburse up to $150 million in legal costs to Greenberg and Howard Smith, AIG’s former chief financial officer. AIG officials announced the settlement in a federal filing earlier this month.
The settlement means AIG no longer will have to spend money on costly legal fees, and Greenberg will have access to company-controlled materials so he can write his memoirs about his 40 years at the helm of what once was the world’s largest insurance company.
The lawsuit filed by AIG accused Greenberg and other former company officials of violating their fiduciary duties and misappropriating company stocks in a deal involving another company controlled by Greenberg. In an order issued Dec. 4, New York State Supreme Court Justice Charles E. Ramos denied motions to dismiss the breach-of-fiduciary-duty lawsuit filed by AIG in early 2008.
The AIG suit claimed Greenberg, Smith and others misappropriated AIG shares valued at about $20 billion in March 2005, but they remained as AIG directors until June 2005, which Greenberg and Smith deny. Greenberg controls Starr International and was AIG’s chief executive officer of 40 years at the time of the deal in question. Greenberg and Smith resigned from AIG in March 2005, but Greenberg remains the single largest holder of shares in the struggling insurer.
The AIG suit also claims Greenberg oversaw a takeover of Starr International’s board of directors in March 2005 and went back on a deal in which a block of AIG shares controlled by Starr International were used to fund a deferred-compensation benefit for some AIG executives and protect AIG from hostile takeover.
Formerly the world’s largest insurance company, AIG became the world’s most indebted insurer after federal officials last year agreed to extend the company an $85 billion loan in exchange for an 80 percent share of company stocks. Federal officials said allowing AIG to go bankrupt would have a devastating impact on U.S. and international financial markets and later revised lending terms, making it a $153 billion loan with a lower interest rate and longer repayment period.
Under the new plan, the Federal Reserve provided AIG $60 billion in loans and the U.S. Treasury another $40 billion so company officials could buy up preferred stock. Federal officials also approved $53 billion to purchase the company’s risky mortgage-backed assets and other debt contracts.
AIG is attempting to sell off its overseas life insurance units and other subsidiaries to repay up to $60 billion in loans this year. Company officials intend to focus future business on property and casualty insurance markets and maintain a minority financial interest in some profitable overseas ventures.
AIG has raised more than $2 billion through the sale of several subsidiary units. Industry analysts say the insurer could raise up to $50 billion through the sales of AIG’s U.S.-based and overseas life insurance units and retirement savings units.
Thanksgiving is Deadliest Travel Day
Nov. 25, 2009 – Driving along U.S. roadways on the Thanksgiving Holiday was about five times deadlier than on the average day last year, making it the deadliest travel day in the United States, according to a recent federal report.
Some 502 people died while traveling on U.S. roadways during the 2008 Thanksgiving Holiday, according to the National Highway Traffic Safety Administration. The 502 fatalities is nearly five times the daily average of 102 deaths on U.S. roadways in 2008, according to AAA.
A combination of increased roadway travel and alcohol consumption is the primary reason Thanksgiving ranked as the deadliest holiday last year.
“More vehicles create greater conflict potential. And unfortunately, during holiday times, celebratory actions, people drink and get out on the road, and that leads to a problem, too,” according to AAA spokesman Robert Sinclair. U.S. roadways see an about 50 percent increase in traffic on Thanksgiving compared to normal travel days, he added.
Although about five times above the normal daily average for roadway deaths, the 502 fatalities reported last year were less than the prior 26-year average of 556 highway fatalities on Thanksgiving Day. Sinclair attributed higher gas prices last year with lowering the number of people traveling last Thanksgiving and subsequent highway deaths. But with gas prices average $2.63 per gallon this year, he anticipates more people and more deaths this year.
Of people traveling during the Thanksgiving Holiday, about 91 percent will travel by car, according to the U.S. Department of Transportation. The average distance traveled will be 214 miles. The average distance driven during Christmas and New Year’s is 275 miles while the national average is 261 miles during other times of the year.
On average, holiday travel is at least four times deadlier than normal, according to the National Highway Traffic Safety Administration. And alcohol plays a role in at least 41 percent of all holiday traffic fatalities.
New Year’s and Christmas have the lowest average highway fatalities among the six most-traveled holidays with an average of 401 and 414 deaths, respectively, each year since 1982. Labor Day has the second-deadliest travel date after Thanksgiving with an annual average of 544 highway fatalities. Some 487 people died in traffic accidents on Labor Day in 2008.
Independence Day 2008 saw 491 people die on U.S. roadways – down from its average of 542. Memorial Day had 425 fatalities – 83 fewer than its average of 508 deaths since 1982.
While the top four holidays for vehicular deaths posted lower-than-average fatalities last year, Christmas and New Year’s saw slight increases. Some 420 people died in traffic accidents on Christmas Day 2008, six more than the holiday’s average of 414. New Year’s Day had 423 fatalities – 22 more than its 401 average.
Federal Report: Chinese Drywall Likely Harmed Homes
Nov. 24, 2009 – A recent federal study of 51 U.S. homes equipped with drywall manufactured in China indicates a “strong” link between in-home corrosion and drywall material.
Investigators from the U.S. Consumer Product Safety Commission with the help of Chinese officials recently conducted an indoor air study of dozens of homes recently equipped with drywall manufactured in China. Without declaring results conclusive, researchers say there is merit to the more than 2,000 complaints the federal agency has received from U.S. homeowners.
“We now can show a strong association between homes with the problem drywall and the levels of hydrogen sulfide in those homes and corrosion of metals in those homes,” investigators for the Consumer Product Safety Commission said in their announcement of results.
Research results indicated hydrogen sulfide gas emitted by contaminated drywall is the primary culprit in corroding copper and silver in homes equipped with Chinese drywall. Researchers also discovered elevated levels of formaldehyde in newer homes – whether or not they had Chinese drywall. Modern cabinetry and carpeting emit low levels of formaldehyde, according to researchers. Although formaldehyde and hydrogen sulfide gas amounts detected were too low to pose safety risks, federal investigators suspect a combination of them and other compounds commonly found in homes potentially might be harmful to structures and public health.
Officials for the Consumer Product and Safety Commission intend to work with federal lawmakers to implement corrective measures and look into potential health problems tied to the substandard drywall.
As the U.S. housing boom hit its peak near the turn of the century, a shortage of construction materials forced many builders to utilize drywall manufactured in China. Unfortunately, some Chinese drywall contains gypsum and trace elements of strontium sulfide, which can emit corrosive sulfuric compounds and an odor similar to rotten eggs.
A recent report by the Associated Press indicates some 500 million pounds of Chinese gypsum board was imported to meet domestic construction demands – particularly between 2004 and 2008 when thousands of homes along the Gulf of Mexico were being rebuilt in the wake of four hurricanes slamming into Florida during a month-long stretch in 2004 and Hurricane Katrina and Hurricane Rita destroying large areas of New Orleans and other Gulf Coast communities in 2005.
Federal officials estimate about 100,000 homes in the United States contain Chinese drywall. The total cost of replacing the faulty drywall could reach $25 billion, according to the Towers Perrin consulting firm. Some Chinese drywall manufacturers have said their products are safe and suggested bad gypsum tainted only some of the materials shipped to the United States in recent years.
Many homeowners have blamed the Chinese drywall for corroding their homes’ copper pipes, causing other property damage and making family members ill. Among potential resolutions sought are having the Chinese government pay at least a portion of the cost to replace the faulty drywall and implementing regulatory standards to ensure similar products aren’t sold in the United States. But federal officials caution Chinese officials simply can refuse to cooperate.
Health Care Reform Support Plummets; U.S. Senate Votes to Debate
Nov. 23, 2009 – Even as public support for proposed health care reform efforts hits a new low, debate is slated to begin Nov. 30 on the U.S. Senate’s proposed revamping of the $2.5 trillion-a-year national health care system after the chamber on Saturday night voted 60-39 to take up the measure after Thanksgiving.
The vote went strictly along party lines with 39 Senate Republicans voting against debating the Senate’s proposed health care reform measure. Democrat Mary Landrieu of Louisiana consented to the floor debate only after securing a provision that, if approved, would provide at least $100 million for special Medicaid funding not available to states other than Louisiana.
Although the Senate is scheduled to take up the issue, results of a recent poll by Rasmussen Reports indicates public support for federal health care reform has hit an all-time low.
Some 56 percent of those polled oppose federal health care reform efforts while only 38 percent indicated support. The support of federal efforts hadn’t dipped below 41 percent in prior polling, according results from the Rasmussen Reports’ latest weekly national telephone survey.
Respondents with strong views against health care reform efforts were more than double those strongly in favor, with 43 percent indicating strong opposition to federal health care reform and only 21 percent indicating strong support for it.
The Rasmussen survey also indicates most people don’t think reform efforts will help. Some 54 percent of those polled said the Senate and House bills would harm and not help health care, and 60 percent said the federal legislation likely would increase costs for everyone. Only 16 percent of those polled believe Congressional reform efforts will lower costs.
The Senate’s proposal requires all American citizens purchase health insurance and creates regional insurance exchanges where individuals can shop for health insurance coverage tailored to more specific needs. People earning too little to afford health insurance would receive federal subsidies to purchase coverage. A majority of those polled
The Senate bill also creates a federal health insurance option in which state legislatures would choose to participate and prevent health insurance companies from refusing coverage to individuals with pre-existing health problems. Some 17 new taxes have been proposed to pay for the estimated $849 billion cost of initiating the Senate plan over a 10-year period.
While Senate Democrats needed 60 votes to advance the measure to a floor debate, independent Senator Joe Lieberman of Connecticut – who sits with the Democratic Caucus – has said he would oppose the Senate version even though he voted to allow the floor debate.
Lieberman, who was Democrat John Kerry’s running mate during the 2004 presidential election, opposes a public option as provided in the Senate bill and earlier announced he would filibuster the measure unless amended to remove the public plan proposed by Senate Majority Leader Harry Reid (D-Nevada). Lieberman says a public option would drive up costs for people with health insurance. Reid contends states would have the option of whether or not to participate in the proposed federal health care option.
Because Democrats would need 60 votes to quell a potential filibuster, at least one Republican would have to vote to end any filibuster initiated by Lieberman. But no Republicans have voiced support for the plan proposed by Reid and have been unified in their opposition thus far.
U.S. Senate Plans Saturday Night Vote on Health Care Debate
Nov. 20, 2009 – The U.S. Senate is scheduled to hold a rare Saturday night vote on whether or not to schedule debate on the Senate’s proposed national health overhaul plan seeking to expand health care coverage to 31 million people and levy at least 17 new taxes to cover the plan’s estimated $849 billion price tag over 10 years.
Although the plan would not take effect until 2014, Senate leaders want to schedule debate to begin Nov. 30. The 2,074-page overhaul of the $2.5 trillion per-year U.S. health care system would start a year later and cost an estimated $151 billion less than a version proposed by the U.S. House of Representatives. The House version would begin in 2013 with an estimated cost of more than $1 trillion over 10 years to expand coverage to an estimated 36 million people, according to the non-partisan federal Office of Management and Budget.
Among taxes proposed to pay for the Senate version of national health care reform is a “marriage penalty” levied on “families” earning at least $250,000 per year. Because the tax on individuals isn’t levied until their annual income levels reach at least $200,000 while married couples would be taxed on dual incomes of $250,000 or more, opponents have dubbed the proposed tax a “marriage penalty.” The “marriage penalty” would not be assessed unless both spouses earn at least $150,000 per year, but an unmarried couple living together and earning the same amount would not be taxed until their individual incomes reach at least $200,000 annually.
Other proposed taxes include a 5 percent tax on elective plastic surgeries – popularly called the “Botox tax” – and levying a 40 percent tax on individuals with “generous” health care plans. Whether such a tax would be levied only on benefits received as an employee or on any “generous” health care plan – whether purchased individually or through a group plan – is yet to be determined in the Senate’s more than 2,000-page version of national health care reform. The Senate plan also would increase the Medicare payroll tax on high-income employees.
The Senate’s proposal requires all American citizens purchase health insurance and creates regional insurance exchanges where individuals can shop for health insurance coverage tailored to more specific needs. People earning too little to afford health insurance would receive federal subsidies to purchase coverage.
The Senate bill also creates a federal health insurance option in which state legislatures would choose to participate and prevent health insurance companies from refusing coverage to individuals with pre-existing health problems.
Senate Democrats need 60 votes to advance the measure to a floor debate. But independent Senator Joe Lieberman of Connecticut – who sits with the Democratic Caucus – has said he would oppose the Senate version even though he likely would vote to allow the floor debate.
Lieberman, who was Democrat John Kerry’s running mate during the 2004 presidential election, opposes a public option as provided in the Senate bill and earlier announced he would filibuster the measure unless amended to remove the public plan proposed by Senate Majority Leader Harry Reid (D-Nevada). Lieberman says a public option would drive up costs for people with health insurance. Reid contends states would have the option of whether or not to participate in the proposed federal health care option.
Because Democrats would need 60 votes to quell a potential filibuster, at least one Republican would have to vote to end any filibuster initiated by Lieberman. But no Republicans have voiced support for the plan proposed by Reid and are unified in their opposition thus far.
Any differences between the House and Senate bills would have to be worked out and approved by both chambers before President Barack Obama could sign a health care reform package into law.
Ford Receives Most Awards for Vehicle Safety
Nov. 19, 2009 – The Ford Motor Company beat out other domestic and foreign auto manufacturers in garnering “Top Safety Pick” awards for new vehicles, the Insurance Institute for Highway Safety announced.
Ford and its subsidiary, Volvo, received a total of six awards for 2010 models from the non-profit highway safety institute. Ford’s Taurus and Lincoln MKS sedans received top safety marks along with subsidiary Volvo’s XC60 and XC90 sport utility vehicles, S80 sedan and C30 two-door hatchback. The organization bestowed a total of 27 “Top safety Pick” awards on domestic and foreign auto manufacturers.
Winning vehicles were chosen based on their ability to protect motorists and passengers front-, rear- and side-impact crashes. Vehicles also must have electronic stability control systems and receive the highest possible score for roof strength to qualify for the Insurance Institute for Highway Safety awards.
The addition of roof-strength testing meant the institute bestowed fewer “Top Safety Pick” awards this year. Some 72 vehicles received the top award last year.
“With the addition of our roof strength evaluation, our crash test results now cover all four of the most common kinds of crashes,” said Adrian Lund, president of the Insurance Institute for Highway Safety. “Consumers can use this list to zero in on the vehicles that are on the top rung for safety.”
Japanese auto manufacturer Subaru tied Germany’s Volkswagen with the second-highest number of awards with five vehicles earning “Top Safety Pick” designation. The Subaru Legacy, Outback and Impreza sedans and Tribeca and Forester sport utility vehicles won top safety marks. Subaru was the only auto manufacturer to win awards in all vehicle classes in which it competes.
A Subaru official cited the company’s boxer engine design as a main reason for its high safety marks. Because a boxer engine has horizontally opposed cylinders, it has a lower profile and a lower center of gravity than traditional counterparts, such as V-6 engines. The lower center of gravity makes Subaru models handle well, and the engine tends to go beneath instead of into passengers during front-end collisions, according to the company representative.
Germany’s Volkswagen and its subsidiary, Audi, received safety awards for the Volkswagen Golf, Jetta and Passat sedans and Tiguan sport utility vehicle and the Audi A3 sedan.
Chrysler received the second most awards among U.S. auto manufacturers with the Chrysler Sebring and Dodge Avenger sedans with optional electronic stability control, the Jeep Patriot with optional side air bags and midsize Dodge Journey sport utility vehicle getting top marks.
General Motors received awards for the Chevrolet Malibu and Buick LaCrosse sedans. Honda earned awards for its Civic sedan with option electronic stability control and Honda Element. The Kia Soul, Mercedes C Class sedan and Nissan Cube also won “top Safety Pick” awards.
Auto manufacturers BMW, Mazda, Mitsubishi and Toyota did not have any vehicles qualify for top awards.
Report: Medicaid, Medicare Wasted at Least $55 Billion in 2009
Nov. 18, 2009 – U.S. taxpayers paid at least $55 billion more than necessary for federal Medicare and Medicaid programs during the 2009 federal fiscal year, according to a federal report released yesterday.
The report issued by the U.S. Office of Management and Budget indicates the federal government wasted a total of $98 billion on improper payments to third parties contracted to provide various federal services. Medicare and Medicaid programs accounted for at least $55 billion and more than 56 percent of total funds wasted by the federal government in 2009. The federal government wasted about $72 billion on all programs in 2008, according to the report.
While some might find alarming the reported amount of waste, a federal lawmaker says the actual amount wasted each year could be much greater.
“Unfortunately, these numbers may still be just the tip of the iceberg since they don’t even include estimates for several major programs, including the Medicare prescription drug plan,” U.S. Senator Tom Carper said in a statement. “It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits.”
The Office of Management and Budget report comes as federal lawmakers debate various health care reform measures in the U.S. House of Representatives and Senate. Medicare generally provides health care services for elderly U.S. citizens while Medicaid provides health care services for the poor.
The report indicated the error rate for payments made through the federal Medicare Advantage program increased by about 50 percent, rising from a 10 percent error rate in 2008 to a 15 percent rate costing about $12 billion in waste during fiscal year 2009. The Medicare Advantage program allows private insurers to provide Medicare coverage to qualifying individuals.
Some of the increase in wasteful spending is attributed to more stringent reporting requirements and increased government spending on federal programs due to the recent recession partly explain the increased waste in 2009, according to the federal report. Fraud also was cited among reasons for the increased waste, but federal officials said they have no idea to what extent fraud occurs.
Federal lawmakers are weighing various reform measures and penalties to reduce the amount of waste and fraud tied to Medicare, Medicaid and other federal programs. Penalizing individuals and organizations knowingly accepting improper payments for federally contracted services are among reform measures being considered, according to Reuters. Currently, no penalties exist for accepting improper payments, and federal law only requires funds be returned when excess payments are received.
Study: Medicare Patients, Uninsured More Likely to Die from Trauma
Nov. 17, 2009 – A recent study conducted by Harvard University researchers indicates Medicare patients stand a 56 percent greater chance of dying from traumatic injuries and the uninsured an 80 percent greater chance than their counterparts with traditional health insurance coverage.
Focusing on people suffering “unintentional injuries,” Harvard University researchers found auto accidents the number-one cause of unintentional injuries. Information on 2.7 million trauma patients was obtained from the National Trauma Data Bank for the years 2002 through 2006. Researchers then compared patients based on their age, race, sex, how they were injured and to what extent. Results then were compared based on the reported insurance status of patients.
“Unintentional injuries” rank among top 10 causes of death for every age group in the United States and is the top cause of death for Americans under age 44, according to the U.S. Centers for Disease Control and Prevention. The most common unintentional injuries are caused by vehicular accidents.
Results showed Medicare patients were 56 percent more likely to die from traumatic injuries than their counterparts, and people without health insurance coverage of any kind were 80 percent more likely to die after suffering traumatic injuries than those with health insurance coverage.
While significant differences seem to arise based on whether or not a patient had health insurance coverage, researchers acknowledge no direct correlation can be made between insurance status and survivability. In most cases, injury severity was the deciding factor.
Researchers speculated the severity of trauma rather than access to care was the primary reason people were more likely to die than others. Among young adults, gunshot wounds as well as auto accidents ranked among the top causes of traumatic injury. Because young adults are more likely to have no health insurance than older adults and they on average suffer much more life-threatening injuries, the severity of injuries suffered rather than access to health insurance is the main reason youth die more often from traumatic injuries, according to the Harvard University research team.
Among older Americans receiving treatment through Medicare, the higher mortality rate due to traumatic injuries likely stems from a greater likelihood of suffering from long-term, more debilitating illnesses and injuries, according to researchers.
While death rates from traumatic events among younger and older Americans without health insurance coverage are more readily explained, researchers suggest middle-age Americans without health insurance coverage tend to suffer more than their insured counterparts and die more often due to delays in obtaining medical care, lapses in treatments and other causes.
The federal Emergency Medical Treatment and Active Labor Act of 1986 ensures people seeking treatment at hospital emergency rooms are treated regardless of whether or not they have health insurance coverage. But when uninsured individuals suffer a traumatic injury, they often have complicating conditions that increases odds of dying from a traumatic injury, several medical professionals contend.
AIG’s Top Executive Threatens to Quit, Recants Over Executive Pay
Nov. 16, 2009 — Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, the newest chief executive officer of taxpayer-rescued American International Group (AIG) last week threatened to quit and later recanted over potential federal limitations on executive pay at firms rescued by U.S. taxpayers.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, last week reportedly threatened to resign his new position after President Barack Obama’s “Pay Czar,” Kenneth Feinberg, said he would limit executive compensation at corporations that accepted funds through the $700 billion federal Troubled Asset Relief Program (TARP), which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
The Wall Street Journal last week reported Benmosche might step down after the AIG chief executive informed AIG’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Feinberg in October ordered an average 50 percent pay cut for the top 25 executives at AIG and six other corporations that accepted taxpayer funds through the federal TARP program. Another decision is coming regarding the next 75-highest paid positions at the same seven firms.
Although Feinberg’s decision only applies to the remainder of 2009, executives at affected companies anticipate he will base 2010 compensation levels on the same criteria. Proponents say the scaled-back compensation amounts are justified for firms that would be bankrupt but for taxpayer intervention. But opponents say the reduced pay levels only punish people not responsible for current company woes and make it harder for struggling firms to get back on their feet and retain critical staff capable of finding jobs elsewhere – as well as make it more difficult for firms to repay their respective debts to U.S. taxpayers.
AIG officials last year accepted what has become a nearly $183 billion, taxpayer-funded federal rescue package after what formerly was the world’s largest insurer became its most indebted on bad bets tied to various mortgage markets. Federal officials approved the bailout funds for AIG and other firms to stave off what they claimed would be a devastating domino effect on global financial markets.
Poll: Potential Health Care Reform Costs Making Voters Wary
Nov. 16, 2009 – By a narrow margin, the percentage of Americans recently polled who support current health care plans being assessed in Congress is less than those opposed to health care reform efforts with potential cost generally being the tipping point.
Some 43 percent of those participating in a recent Associated Press poll indicated they oppose current health care reform efforts while 41 percent indicated support. Some 15 percent of respondents indicated no preference.
Factoring in an about 3 percent error margin, poll results indicate no statistically significant difference between those supporting and those opposed. But lawmakers at-risk of losing their seats in the 2010 elections won’t be emboldened by such results clearly indicating no strong amount of support or a “mandate” for federal health care reform efforts.
A month ago, the Associated Press poll showed an equal 40-40 split among those supporting and those opposing health care reform plans. The slight shift toward pessimism suggests current Congressional efforts do not resonate well among poll participants, and potential cost is their primary concern.
Current legislative proposals would prevent health insurance companies from refusing to insure people due to pre-existing medical conditions, and some 82 percent of those polled in October by the Pew Research Center support requiring health insurers cover people with pre-existing medical conditions.
But when informed their health insurance premiums likely would rise to cover the added costs of providing health insurance coverage to people with pre-existing medical conditions, support for current health care reform proposals declined sharply, with only 43 percent of those participating in the Associated Press poll saying they still would support reform efforts while 31 percent said they would oppose them due to the higher cost.
Adding to potential health insurance costs increases is a legislative proposal limiting the amount health insurers can charge the elderly for coverage. Instead, health insurers would have to increase rates charged to a group already comprising a large percentage of the uninsured – healthy people in their 20s.
Current measures in the U.S. House and Senate also require all Americans purchase health insurance coverage or obtain it through an employer or government program. Low-income people and families with mid-level incomes would have access to state and federal subsidies to help pay for health care, if approved and signed into law, which also would increase health care costs for most of the more than 80 percent of U.S. citizens with health insurance coverage, according to the Associated Press.
Stanford University researchers conducted the telephone poll of 1,502 adults from Oct. 29 to Nov. 8 and has a margin of error of 2.5 percent.
New York Auto Insurers Claim Fraud, Abuse Are Driving Up Medical Costs
Nov. 13, 2009 – Fraud and abuse of the state of New York’s no-fault auto insurance law has driven up average medical claims costs for accident victims by about $3,133 and 56 percent over a five-year period.
Auto insurers in New York on average paid out an average $5,615 toward medical care per auto insurance accident claim in late 2004, according to the non-profit Insurance Information Institute. But during the second quarter of 2009, New York’s auto insurers paid out an average $8,748 in medical costs per accident claim – a steep increase since 2004 and more than double the current national average.
“In less than five years, New York’s auto insurers have seen an extraordinary 56 percent increase in the average cost of no-fault claims – to a great extent the result of abuse and outright fraud in the system,” said Robert P. Hartwig, president of the Insurance Information Institute. “The costs of fraud and abuse of the state’s no-fault system ultimately are borne by New York’s honest policyholders. New York’s no-fault claim costs are now the second highest in the country and are 111 percent higher than the U.S. average of $4,152.”
“No-fault” auto insurance refers to any statewide auto insurance program allowing policyholders to be reimbursed for financial losses and medical costs from their own auto insurance provider no matter who was at fault in an accident. Several states have no-fault auto insurance laws, which are designed to decrease the number of accident-related disputes that wind up in court and reduce costs.
But instead of saving money through tort reform, New York’s auto insurance companies have been subject to an increasing amount of auto insurance fraud – particularly after the recent economic meltdown has boosted unemployment and poverty in the Empire State.
In a report published last year, the New York Insurance Department’s Frauds Bureau claimed a 22 percent increase in fraud tied to no-fault auto insurance claims since 2006, which has spurred a subsequent increase in the number of auto insurance fraud investigations conducted by the state. Prior to 2006, reports of insurance auto insurance fraud had declined by 35 percent since 2003.
With the recently steep increase in auto insurance fraud rates being reported in New York, state officials are weighing several measures designed to curb the rising trend.
Potential reforms include establishing guidelines for treating specific types of injuries sustained in auto accidents. New York’s current no-fault auto insurance law allows insurers to pay health care providers up to $50,000 without requiring any type of review to prevent fraud.
New York officials also might require arbitration proceedings to resolve disputes and avoid potential court trials that cost much more. Although no-fault insurance laws are designed to reduce the number of court battles over vehicular accidents, the state’s courts have a more than one-year backlog and are scheduling cases as far off as 2011.
State officials also are considering requiring plaintiffs produce at least one witness with “personal knowledge” of relevant facts in order to determine the plaintiff’s right to receive no-fault auto insurance benefits, according to the Insurance Information Institute. Statements regarding medically necessary treatments wouldn’t be accepted unless made by licensed medical professionals or witnesses with personal knowledge of the incident in question.
New York law currently only requires medical services providers prove auto insurers received a bill for medical services in order to receive payments from insurance companies regardless of whether or not fraud may have occurred. Auto insurers are held to a much higher standard and must produce witnesses, including at least one qualified medical professional, indicating a treatment was not medically necessary to deny a potentially fraudulent claim.
State officials also might increase the penalty for third parties acting as liaisons to enable fraudulent insurance claims. Known as “runners,” they facilitate fraudulent insurance claims by acting as the middle man between medical professionals and attorneys intent on committing insurance fraud. If implemented, new state regulations would make it a felony instead of a misdemeanor for facilitating fraudulent insurance transactions.
Stalled Ida Claims at Least 5 Lives Along Atlantic Coast
Nov. 13, 2009 – Communities along the U.S. Atlantic Coast are suffering the effects of highs tides and roiling seas as the remnants of Tropical Storm Ida continues to erode beaches and flood local areas from the Carolinas north into New York and New Jersey, claiming at least five lives in the process.
Meteorologists say a lower pressure system over New England is causing the remnants of Ida to stall over the mid-Atlantic region, enabling high seas to continually erode protective beaches and barrier islands over an extensive area.
The storm has claimed at least five lives in three states, and the U.S. Coast Guard has ceased searching for three fishermen from New Jersey whose vessel sank during the storm Wednesday evening. A falling pine tree reportedly killed an elderly North Carolina resident while standing in his yard, a 36-year-old surfer was drowned in New York City and three motorists were killed in weather-related accidents in Virginia.
The deaths bring the total caused by the storm to more than 150 since it first made landfall as a hurricane in Central America last week.
Hurricane Ida killed an estimated 144 people in El Salvador, but the deadly storm weakened into a tropical storm as it landed in Alabama earlier this week, becoming likely the last Atlantic storm to make landfall in the United States during what has been one of the calmest storm seasons in recent history.
Hurricane Ida peaked at Category 2 status on the Saffir-Simpson scale with sustained winds of up to 110 mph as it brushed past Central America over the weekend, drenching the mountainous region with torrential rains and causing mudslides, flooding and other natural disasters that claimed a reported 144 lives in El Salvador.
As the storm continued into the Gulf of Mexico, oil companies evacuated endangered offshore oil-production facilities, shutting down nearly 30 percent of Gulf oil rigs as the storm passed and inflicted only minimal damage.
Ida is the second tropical storm to make landfall in the United States this year. Tropical Storm Claudette in August landed in the Florida panhandle region but caused little damage. Hurricane Bill in August claimed two lives as it bypassed the United States en route to Canada. Despite not landing in the United States, the hurricane created strong seas that drowned a 7-year-old girl in Maine and a 54-year-old man in Florida who attempted to bodysurf as the storm passed by the Sunshine State.
Mostly due to a strong El Nino event, the peak of the 2009 Atlantic hurricane season passed without a single major storm or hurricane making landfall in the United States and only moderately affecting other areas where weakened tropical storms have made landfall. An El Nino is an unusual warming of waters in the Pacific Ocean that creates varying upper-level winds capable of decapitating large tropical storms and preventing hurricane formation.
Thus far, the 2009 storm season has been the least active in more than a decade, according to the National Hurricane Center in Miami. The Atlantic storm season generally runs from June through November and has been much calmer than predicted.
Opinion: Biased Study Claims 2,266 Uninsured U.S. Veterans Died in 2008
Nov. 11, 2009 – Results of a new Harvard University study conducted by a group advocating a national health care plan and elimination of private health insurance suggest thousands of U.S. military veterans died in 2008 due to a lack of health care services.
The study claims 2,266 U.S. veterans lacking health insurance and ineligible for care through the U.S. Department of Veterans Affairs likely died in 2008 due to a lack of health care. Harvard University researchers advocating a national public health plan used Census Bureau polling data indicating about 1.46 million veterans had no health insurance in 2008.
Researchers then applied results from an earlier study they had conducted estimating Americans without health insurance stand a 40 percent greater chance of dying than their counterparts who have health insurance. When applying their prior 40 percent greater mortality rate estimate to the estimated 1.46 million veterans without health insurance, researchers concluded 2,266 veterans died because they could not get health care in 2008.
Conducted by proponents of a national health care plan, the study concludes a lack of health care killed thousands of military veterans lacking health insurance last year, but it’s methodology casts doubt on researchers’ conclusions.
Potential research bias aside, the researchers applied general estimates of a much larger population to a specific and much smaller subset, which means alternative explanations have not been eliminated. One of the first principles of academic research requires an elimination of alternative explanations, such as obesity, genetic dispositions and other potential variables, in order to isolate a specific variable – such as a lack of health insurance.
Not every subset population suffers the same fate. Some populations are more prone to dying from swine flu or West Nile disease than others, for example. And ailments can vary greatly based on geographic area, such as an unusually high incidence of cancer among residents of the former Love Canal community in New York.
Military veterans generally suffer from ailments quite different than the general population, according to the National Library of Medicine and the National Institutes of Health. Among long-term ailments more likely to be suffered by veterans than the general population are amputations, recovering head injuries, prior exposure to environmental hazards, anxiety, depression, post-traumatic stress disorder and substance abuse.
Because researchers knowingly applied a general finding to a specific subset without eliminating alternative explanations, they knowingly or otherwise engaged in a deceptive form of research clearly aimed at a specific outcome – creating a single-payer health care system and elimination of private health insurance plans. The study’s lead authors, Dr. David Himmelstein and Dr. Stephanie Woolhandler, are highly active members of the non-profit Physicians for a National Health Program, which advocates eliminating private health insurance plans in favor of a government-run, single-payer system. Woolhandler helped found the organization, and Himmelstein has been its national spokesman for several years.
Given the inherent flaws in the study’s methodology combined with the strong likelihood of research bias, while an interesting read, no valid conclusions can be drawn from the study by Himmelstein and Woolhandler.
(Opinion by Mike Heuer, a former news reporter, political writer and holder of a master’s degree in marketing-based public relations from Michigan State University)
AIG Borrows Another $2.1 Billion from Fed
Nov. 10, 2009 – Officials for taxpayer-rescued American International Group (AIG) accessed another $2.1 billion of its $182.5 billion federal bailout in order to purchase shares of its subsidiary aircraft-leasing unit, the International Lease Finance Corporation (ILFC).
AIG officials revealed the $2.1 billion request on its quarterly federal filing last week. Company officials are attempting to sell its interest in the ILFC, which is one of the largest aircraft-leasing firms in the world and considered by many industry analysts to be the top customer of large jet aircraft manufacturers Boeing and U.K.-based Airbus.
The $2.1 billion will be withdrawn from a special federal lending facility created specifically for AIG through the Federal Reserve Bank of New York. AIG officials anticipate receiving the funds by Friday, according to its recent federal filing.
AIG, bailed out last year by the government, is trying to sell ILFC. It was able to draw from a credit facility established by the Federal Reserve Bank of New York, and said in the Securities and Exchange Commission filing it expects to receive the funds on Nov. 13.
AIG in March loaned $1.7 billion to the aircraft-leasing unit to meet the subsidiary’s debt obligations and extended another $2 billion to it in October. The firm has been trying to sell the large aircraft-leasing unit, but tightened global credit markets during a down economy have made it difficult to for suitors to obtain financing. Officials for the Federal Reserve Bank required ILFC officials to sign papers naming the aircraft-leasing firm the loan’s guarantor.
The ILFC owns about $7.4 billion worth of aircraft and other assets acting as collateral for the federal loans. Officials for the aircraft-leasing firm said they fully would repay the loans if AIG sells its interests in the unit.
Formerly the world’s largest insurance company, AIG became the world’s most indebted insurer after federal officials in September 2008 agreed to extend the company an $85 billion loan in exchange for an 80 percent share of company stocks. Federal officials said allowing AIG to go bankrupt would have a devastating impact on U.S. and international financial markets and later revised lending terms, making it a $153 billion loan with a lower interest rate and longer repayment period.
Under the new plan, the Federal Reserve provided AIG $60 billion in loans and the U.S. Treasury another $40 billion so company officials could buy up preferred stock. Federal officials also approved $53 billion to purchase the company’s risky mortgage-backed assets and other debt contracts.
AIG attempted to sell off its overseas life insurance units and other subsidiaries to repay up to $60 billion in loans this year, but a combination of tightened global credit markets, a shortage of qualified buyers and decreased market values during a global economic downturn have caused the firm to fall short of its lofty goal. Company officials intend to focus future business on property and casualty insurance markets and maintain a minority financial interest in some profitable overseas ventures.
AIG has raised more than $4 billion through the sale of several of its subsidiary units. Industry analysts say the insurer could raise up to $50 billion through the sales of AIG’s U.S.-based and overseas life insurance units and retirement savings units.