Comments on: Lynn Woolsey turns on the Senate health care bill

By: Mike Devx

Mike Devx — Tue, 26 Jan 2010 01:26:57 +0000

Thx to everyone as well for the enlightenment! Especially SueK and Ymar. This looks like a glass-half-full and half-empty situation to me. My principles tell me, being a 10th Amendment guy, to leave it to each state. But trust them, along with the federal ERISA enforcement, to completely muck it up for the citizens within each state.

Maybe we could have Barney Frank throw the entire framework out and rewrite it from scratch! As he is “proposing to do” for Fannie Mae and Freddie Mac. Heh. After twenty years spent guiding those, ahem, revered institutions, and never offering any complaint of any sort until now, he’s clearly a principled fellow who will do what is best for all Americans.

Snark.

By: Richard Johnston

Richard Johnston — Mon, 25 Jan 2010 21:08:47 +0000

Thanks for the thoughtful responses to my points. Started to reply but it became a bit ungainly so I turned it into a blog post. So go here: http://problemiserisa.blogspot.com/2010/01/of-across-state-lines-and-erisas-roots.html to see my response to some of the points above. Thanks.

By: Ymarsakar

Ymarsakar — Mon, 25 Jan 2010 16:38:42 +0000

Here’s been here before, Suek. So I can qualify him as a good guy who isn’t very good at deceiving himself concerning the realities of government corruption. That doesn’t make him flawless, but it does make him better than the average conception of a lawyer.

and one that appears to me to have been influenced by federal regulation to the claimants loss.

The dichotomy is that ERISA is a union backed federal regulation which was intentionally designed to loot businesses to favor unions, and which coincidentally motivated businesses to setup the job-healthcare connection. Yet even knowing this, Johnston views the solution in the prism of the law, of changing or creating regulations, rather than of a political science or philosophy of life that originates from elsewhere.

but at the same time there _does_ need to be an overarching regulation.

Regulatin or de-regulation isn’t the point. Who controls that regulation, whether it is evil corrupt Dems or somebody else, is what matters. Because there’s no guarantee that we can control who does the regulations, the best solution is to knock the petty aristos from the monument of power. Since we can’t count on government to regulate things like Fannie Mae, which they should have, we can only excise the cancer entirely and reduce the potential for corruption, rather than trying to fix it after it starts to kill the patient.

I suspect the problem lies within the court system, with those of a mind to argue how many angels can dance on the head of a pin rather than to simply enforce contracts.

I suspect this mostly has something to do with ERISA. The contract is with the business, not the individual. So there will always be less protection for the individual because you aren’t negotiating as equals (anyone who has done labor vs management knows about this kind of power dichotomy). If the individual had sued the businesses, perhaps there may be better odds. But if laws prevent that, then ERISA has probably insulated insurance companies from this liability.

It doesn’t make sense.

The entire system was built to make money for those controlling the strings. That’s not cynicism so much as it is a strategic perspective of how human beings function in the midst of too much wealth and luxury.

By: suek

suek — Mon, 25 Jan 2010 16:23:18 +0000

Looking at Richard Johnston’s site, it appears that he is engaged in fighting against injustices being “legally” forced upon his clients. So it seems reasonable to me that he wants tighter regulations on insurance companies, not looser ones. He is also unquestionably more familiar with how insurance companies and claims work than anyone else here – but that familiarity is with a different kind of claim, and one that appears to me to have been influenced by federal regulation to the claimants loss. It’s for that very reason that I’d prefer to see individual states controlling the insurance instead of the federal government, but at the same time there _does_ need to be an overarching regulation.

It also appears to me that his cases go to court because courts are permitting insurance companies to avoid what seems to be very reasonable terms of contract – he describes a case where the company was attempting to avoid settlement because the beneficiary couldn’t absolutely without question have had an accidental fall without any possible contributing factor. That’s absurd, which the court decided. If it’s absurd, however, why did the insurance company go to court to fight the settlement? IMO, it’s because they had been successful in avoiding claims in prior similar cases – though I don’t know this. I suspect the problem lies within the court system, with those of a mind to argue how many angels can dance on the head of a pin rather than to simply enforce contracts. I understand there can be contributory factors – but the courts need to minimize the blame game when the goal is to negate the intent of the original contract.

And I don’t think the insurance he describes is the same as the health insurance situation – one of the reasons it’s difficult to buy insurance across state lines is, as he has said, because states put different requirements in place. The feds also require “equality” so that men have to pay for reproductive insurance just as women do, because it’s “unfair” to charge women more. Ditto for various optional operations. And dental care. Obviously, the more you include, the more it’s going to cost everybody. If people could choose a basic package – or check off a list of what they want covered, maybe it would be different – but they can’t. They have to buy the whole package, as specified by legislators. It doesn’t make sense.

By: Ymarsakar

Ymarsakar — Sun, 24 Jan 2010 23:19:18 +0000

Which means that what you seem to see as a detriment to insurance being sold across state lines, is viewed by many of us as The benefit.

By: Ymarsakar

Ymarsakar — Sun, 24 Jan 2010 23:18:26 +0000

“All of their senior people used to say it,” Mr. Janklow said. “That South Dakota saved Citibank. I believe it did. That South Dakota saved Citibank.” ***

My view is that if this is de-regulation, then even if it was half way applied to healthcare, things would improve.

By: Ymarsakar

Ymarsakar — Sun, 24 Jan 2010 23:16:34 +0000

It’s a visual editor problem, not something that you should know off hand. Now things require two spaces for double space. The look as you write and how many spaces appear, are not the same.

By: Richard Johnston

Richard Johnston — Sun, 24 Jan 2010 20:54:35 +0000

And finally, re Delaware, credit cards, and lax regulation across state lines:

http://www.nytimes.com/1981/03/17/business/19810317BANK.html?ex=1103259600&en=c010543948675c8b&ei=5087

By: Richard Johnston

Richard Johnston — Sun, 24 Jan 2010 20:49:26 +0000

You know there were supposed to be some paragraph breaks in the previous response. Sorry ’bout that.

By: Richard Johnston

Richard Johnston — Sun, 24 Jan 2010 20:48:30 +0000

In response to Ymarsakar, no. 12:
I am referring not to ERISA insurers as such but to the proposal that insurance companies be allowed to sell “across state lines,” i.e. to sell policies in a state with no oversight by that state’s regulatory authorities. As I noted it is the “race to the bottom” concern about states competing to be the most lax in regulation so as to attract insurers to set up shop there. No the credit card situation does not directly impact the health care issue. I cite it as an analogy and as an example of what could well happen in the insurance industry if you gut the ability of states to regulate products sold within their borders, in favor of the lax regulation of another state. Background about the credit card situation is, among other places, here: http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/rise.html A quote from the cited article illustrates what I would expect insurance companies to do if the “across state lines” idea is effectuated: *** Had circumstances been less dire, the news of four urgent phone calls from a New York bank in a single day likely would have been easier to ignore. “Nobody’s historically more suspicious of outsiders than South Dakotans,” Bill Janklow, the former governor of South Dakota, told FRONTLINE in a recent interview. But it was 1980, South Dakota’s economy was a mess, and suspicion was an instinct that Janklow could not afford. “We were in the poor house,” he recalled. “It cost 42 cents a bushel in 1980 to haul wheat. When something’s only selling for $2.20 a bushel, you certainly can’t afford to be paying almost 50 cents a bushel to ship it.” The calls were from Citibank, which was having a serious problem of its own. “It was very simple,” said Walter Wriston, then the chairman of Citibank. “We were going broke.” The bank had lost more than $1 billion on its audacious foray into the credit card business, and the future looked even worse. The trouble, simply put, was that the rate of inflation exceeded the amount of interest Citibank was allowed to charge its credit card customers under New York usury laws. But the bankers saw opportunity and salvation in the plains of South Dakota. Within days of those first phone calls, a team of top executives arrived from New York with a proposal for Mr. Janklow: If South Dakota would quickly pass legislation that would enable Citibank to move its credit card operations to the state, they would bring hundreds of high-paying white collar jobs to the state. The unlikely alliance would clear the way for Citibank to turn a money-losing credit card operation into a vastly profitable business. “All of their senior people used to say it,” Mr. Janklow said. “That South Dakota saved Citibank. I believe it did. That South Dakota saved Citibank.” ***