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Ezra Klein has done the discussion on health reform a big disservice by making false claims about what could, in fact, start a race to the bottom in the insurance market. He writes:
What it doesn’t allow is for insurers to simply sell their wares in any state. Aetna could not, for instance, decide that Indiana’s lax insurance regulation made it an appealing state to headquarter in, and then sell insurance that conformed to Indiana’s standards in New York. Thus, there’s no race to the bottom unless states want to have a race to the bottom. But it’s not clear why they’d want that.
That is completely wrong. The Senate bill would allow for things called “nationwide plans.” These plans would be based in one state, and could sell in any other state (unless the states pass a law opting-out of the program, but Snowe is working to get rid of the opt-out), while ignoring those other state’s regulations. To quote the bill section 1333:
(b) Authority for Nationwide Plans-
(1) IN GENERAL- Except as provided in paragraph (2), if an issuer (including a group of health insurance issuers affiliated either by common ownership and control or by the common use of a nationally licensed service mark) of a qualified health plan in the individual or small group market meets the requirements of this subsection (in this subsection a `nationwide qualified health plan’)–
(A) the issuer of the plan may offer the nationwide qualified health plan in the individual or small group market in more than 1 State; and
(B) with respect to State laws mandating benefit coverage by a health plan, only the State laws of the State in which such plan is written or issued shall apply to the nationwide qualified health plan.
It clearly says right there in the bill that Aetna could set up shop in Indiana and sell insurance in New York that only meets Indiana’s lower standards. This could produce a race to the bottom. The worst part is that it is an “opt-out” and not an “opt-in” program (unless Snowe succesfully removes the opt-out). States would not be able to act in time to prevent their regulations from effectively being gutted by “nationwide plans.” Nationwide plans nullify state laws regulating what kinds of health insurance must be sold in their state.
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Now, will Klein respond on this matter I ask?
Hasn’t this been a GOP talking point since the beginning? “If only we would let insurance companies sell their plans across state lines, we’d all save money and live happily ever after.”
JOE LIEBERMAN’S OFFICE PHONE in CT is 860-549-8463. I just left him a message stating I think he is a total sellout piece of crap for what he did to health care reform. The girl who answered the phone said she’ll give him the message. FEEL FREE TO CALL HIS OFFICE and voice your displeasure. 860-549-8463.
Race to the bottom? What nonsense.
Just look at the credit-card market … oh, never mind.
Among other things this exposes the hypocrisy of the conservatives who clamor always for “states rights!” “states rights!” “states right”!
Unless, of course, that interfers with profits.
Ezra, Ezra, Ezra, your East Coast naivete is so adorable. I guaran-damn-tee the morons who run Arizona will be all over it. Right wing politicians here are forever banging on about the need to let insurers cross state lines. Is he serious?
Oh shit. And you have done us a great service, Jon. The bolded language is scary. How can the guy get it so wrong?
Yup. that and tort reform, which most states have also been doing on their own.
[sigh] as if nationwide plans were just the same thing as national regulation.
(Whose time I think will soon be here —especially if the critters get their nationwide plans.)
and I answer.. Don’t hold yer breath. Yer head will ‘splode.
BHO’s ass-kissing, careerist wonks — Klein, Yglesias, Drum, and even Marshall — are pulling out all the stops. All lies, all the time, 24-7.
No.
It’s really simple.
Don’t contaminate the Great Lakes.
That is your goal. Achieve it.
only the State laws of the State in which such plan is written or issued shall apply to the nationwide qualified health plan.
I’m not sure you’re reading this right. I could be wrong, but the “or issued” part sounds to me to support what Ezra said: if the plan is issued in New York, New York law applies. If the plan is written for Arizona’s crappy standards and doesn’t meet New York’s high standards, it’s not going to qualify within the exchange as a nationwide plan. No?
Yeah, there weren’t many admin people out explaining or selling the plan but now that Howard Dean makes a good case against the admin’s deals with Pharma and the hospitals and doctors, NOW we see them everywhere, trashing Dean, and trashing us. THAT is not leadership.
good point
He’s a Californian. UCLA ’05.
Again, though, I find myself asking the question why this kid should have a national soapbox on this issue. I’m not saying that one has to be the former head of HHS to be a healthcare policy pundit, but shouldn’t one have to have some relevant bone fides.. or at least the sum of one’s bone fides should be greater than 0?
I mean, did Mr Klein write an award winning thesis on healthcare? is he a healthcare professional? an insurance expert? a public policy specialist? Did he struggle with paying for healthcare during a long illness.. or illness of a close family member?
No, as far as I can tell. The only notoriety he’s achieved that isnt directly linked to his fame as a blogger, was his 2008 recognition by Jezebel.com as one of the sexiest bachelors in America. At some point, probably in high school, he decided he wanted to be famous. Since then, his career has been devoted to becoming famous. To say that he’s qualified to be a credible healthcare policy expert is like saying Paris Hilton is qualified to be an expert on the inheritance tax, isn’t it?
I’m sorry to keep on harping on this issue, but for me the fact that a guy like this – whose only qualifications are youth and fame – can be seen as an “expert” is indicative of what is wrong with American politics.
pinson@13
When you look two more paragraphs down in the bill text, here’s your answer:
(iii) must clearly notify consumers
that the policy may not be subject to all
the laws and regulations of the State in
which the purchaser resides.
That makes Ezra dishonest if indeed he’s read the bill.
The Fucker.
I agree. I can’t watch any of the cable news these days. I don’t know how these people could be considered “experts”. I guess the definition of expert has been changed to mean everything they say is absolutely wrong.
They always wanted to current Senate plan to pass. That is why they blew the month of August, the bill has gotten progressively worse. Now it is completely gutted and is nothing more than a winfall for Insurance Companies and a bankrupcy sentence to many thousands. That is what Barack and Rhambo promised their pals all along.
Ezra won’t respond in any that makes the WH unhappy. He, Klein, is now part of the veal pen expect nothing more from him.
You’d think that would either A) solve the “cross state lines” argument for the Republicans or B) Get them howling made about “States Rights.”
That’s not happening.
Take that together with the fact that since the Republicans aren’t yammering about removing the individual mandate tells you all you need to know:
The Senate is in agreement about shoveling cash at the insurance industry, period.
well.. Happy Hanukkah Joe. Enjoy your holiday. At least you can’t filibuster anything if you’re off skiing somewhere.
A real religious guy, isn’t he?
Same thing Bush allowed the credit cards to do.
Hello? Is that YOU Mr. Bush? I thought we had an election?
That fact is what turned ME around completely. The WH is not letting the Constitutional process do it’s job in some idyllic, purist sense. They’re not hapless victims of the corruption in Congress. They can summon the Senatorial troops into near lockstep at a moment’s notice.
For me, that was evidence enough. I have to say I saw this coming. All of these Senators have been saying, “We’ll have a good plan with a strong public option… don’t you worry your pretty little heads. It’s not over yet, blah blah blah”
This is three card Monte. Liberals will be left holding the bag for stopping “reform.”
Wait. I thought Ezra Klein knew pretty much everything. After all, he is 25 years old. (I had to recheck the arithmetic just to make sure I wasn’t hallucinating.)
Ah, now that’s explicit. Thanks Kelly. But still, I’m wondering about what the context is here. This part is about “health care choice compacts under which 2 or more States may enter into an agreement…” Yes? Wouldn’t a state have to purposefully waive their own laws? Seems like they don’t have to enter a compact if they don’t want to.
The whooshing sound you’ll hear if this passes is economically distressed states racing to weaken their insurance laws in order to attract health insurers to locate corporate headquarters within them.
It’s as Jon points out; it’s an “opt-out” rather than an “opt-in” right now.
It’s complex legislation. You also have to read Section 1324; “Level Playing Field.”
That’s why it’s great that we have Jon Walker to read. You can look at the posts, and pretty much call them gospel. I was a paralegal in a past life, and I can never find fault with where Jon reads the pending law.
I agree. I don’t wish to hold Mr. Klein’s youth against him, but many of his arguments reveal a startling level of naivete. As someone on here, maybe it was you, so sagely observed: “He’s a bit young to be shilling already.”
Ezra Klein’s a sell-out. Have you noticed how much better he looks physically after getting his gig at WaPo? He lost all kinds of weight, looks a lot cuter, because, now, he is a pretty little golden boy for the establishment that is D.C.
Whatever kinds of people he likes, I am sure his sex life and social life have climbed MASSIVELY since he’s now an “important” health care “expert” writer for the long long long ago turned conservative Washington Post (The WaPo is the Washing Times’ conservative ditto-head cousin now).
Oh, and btw, NOT to be rude and sound petty, but how on EARTH or WHAT on EARTH did a 25yo do to get a gig as a leading health care voice at the Post? Hmmmm. I wonder what his salary is now and WHO EXACTLY gave him his job there?
hehe. or as Krugman wrote somewhere: “He’s very, very young.”
I’m not holding his youth against him. There are plenty of young stars I respect. But they have bone fides other than “sexiest bachelor” and an insatiable appetite for self-promotion.. as well as more intellectual maturity. Frankly, I read his stuff and I just don’t think he’s very smart. He’s certainly no Doctor Maddow, who did write a well regarded thesis on healthcare policy.
A distressing number of liberal news commentators, columnists, cable and broadcast shows apparently do not understand that the current Senate bill will allow health insurance companies to sell across state lines and move their headquarters to states with little regulation and then sell the resulting bad plans in states with good regulations. This is dangerous and they are in a position to enlighten the public. Even writers like Paul Krugman, sadly, do not seem to understand that passing this bill will be much, much more of a gift to the insurance companies than they currently think it is. I am sure that the WH knows this and does not care.
Blackstone, Goldman Sachs, Credit Suisse and ING Launch Independent Insurance Group
Posted by Alex Finkelstein 07/07/09
(NEW YORK, NY) — Already among the behemoths of the real estate capital industry, The Blackstone Group, Goldman Sachs, ING and Credit Suisse are branching out into a new field – insurance.
The companies today jointly announced the formation of Insphere Insurance Solutions, Philip J. Hildebrand, a nationally known health industry executive, is CEO of the new group.
Philip J. Hildebrand
Hildebrand says that as one if its initial solutions, Insphere Insurance Solutions plans to have a marketing agreement with ING, a leading global banking and insurance company, to distribute the company’s term life and universal life insurance products.
Hildebrand says Insphere Insurance Solutions expects to be the largest independent career agent insurance distribution group in America, with a force of 3,500 agents and offices in over 40 states when the company commences services in 2010.
This new company expects to be the nation’s largest independent career agent distribution group offering life, health, long-term care and retirement products for small businesses and the middle-income market.
Prior to being named CEO of Insphere Insurance Solutions, Hildebrand had over a 30-year career with New York Life, serving in several executive management positions with the company including Head of Distribution. He was named Vice Chairman in 2006. Hildebrand retired from New York Life in 2007 and has since served in other advisory and executive positions in the insurance industry.
(Excerpt)
NOTE: Goldman Sachs is the leader in “viaticals”-that’s when folks surrender their life insurance for cash value usually to get cash for emergency reasons.
A few years ago there was a big scandal about viaticals and AIDS patients,btw.
Massaccio did a piece on viaticals here a couple of months ago.
Interesting that this deal was put together way back in July.
Link to follow.
@35
Blackstone, Goldman Sachs, Credit Suisse and ING Launch …Blackstone, Goldman Sachs, Credit Suisse and ING Launch Independent Insurance Group. Alex Finkelstein. Posted by Alex Finkelstein 07/07/09 3:06 PM EST …
http://www.realestatechannel.com › US Markets › Commercial Real Estate – Cached
It’s a good idea to make available nationwide plans, so long as the provision is accompanied by firm Federal regulations, and local-level regulators.
Blackstone:
The firm was founded in 1985 as a mergers and acquisitions boutique by Peter G. Peterson and Stephen A. Schwarzman, who had previously worked together at Lehman Brothers, Kuhn, Loeb Inc. Over the course of two decades, Blackstone has evolved into one of the largest private equity investment firms globally….WIKI
A trip to the Wikipedia entry for Blackstone is VERY enlightening.
The partners in mergers and acquisitions over the years have included Carlyle ,Goldman Sachs,and Bain Capital-Mitt Romney’s Group-among many others.
Quite an assembly of worthwhile info,imho.
Their holdings are extensive and varied and run the gamut of various categories,from the Weather Channel to Hilton Hotels-with MANY other interests in between.
Then there’s no point to letting insurance be sold across state lines. They want to be able to do it because they want to be able to sell policies subject to more lax regulations.
Arizona will want to, trust me! The morons in our state legislature will whore us out to the lowest bidder in a hot second.
Ezra Klein has always been overrated. I’m not sure why anybody reads him — or if they do, takes him seriously. His analysis is often shallow or simply wrong, as in this case.
Shit, Arizona will dismantle its entire Insurance Department, if it can.
The Nationwide Plans only gut regulations if the rather stringent requirements it takes for a plan to be deemed “Nationwide” guts regulations. And of course your piece, in its eagerness to nail Ezra Klein, does not take this into account. Want to see what makes a qualified plan according to this legislation? Hope you have quite a bit of time to sit down and read:
http://thomas.loc.gov/cgi-bin/query/F?c111:4:./temp/~c1119GyLGj:e140844
The argument for health insurance that crosses state lines is the same one they made for credit card regulations crossing state lines. Doing it would open the market to more competition and drive down credit card rates.
Shortly after it passed credit cards moved to South Dakota with very weak consumer protections and no usury laws. Credit card companies consolidated leaving fewer choices and rates and fees went sky high.
I always thought the “Ezra Thing” was due to his Hawtness and all the — ahem — “favors” he dispenses.
No?
Some basics:
1. Klein never read the bill. He’ll find it hard to get the egg off his face. Nationwide plans have been a basic part of the Senate scheme. That he missed this is bad enough; that he dismissed it means he is a nincompoop. He’s what you get when the political culture races to the bottom, which may be why he can’t see such a race even after the gun’s been fired and everything goes down.
2. The allowance for nationwide plans kicks in very quickly if not from day one. By contrast two or more states are allowed to enter into compacts allowing sales amongst themselves, but not until 2015. So the insurers can cover the earth while states are unable to develop larger pools on their own based in part on an assessment of one another’s regulations. If you can’t smell the stench, get a good decongestant.
3. The opt-out means that states that are cozy with the one or two companies that sell there can keep competitors out, so even if Indiana gets better regs it will do the real backwaters no good.
4. That this hasn’t been page one stuff is just astonishing! It’s as dreadful as the mandate and the slow demise of the public option. But then we have been relying on the likes of Ezra Klein to publicize what’s in the offing.