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Health

Why Are Insurers Reporting Lower MLRs Ahead Of The New Regulations?

Reuters is reporting that shares of Aetna and Wellpoint “slid on Wednesday and weighed on industry peers despite the fact that both posted strong quarterly earnings and raised their 2010 forecasts.” “A main reason for the industry’s uncertainty about the impact of the U.S. healthcare overhaul is that rules determining how much the health insurers must spend on medical costs have yet to be determined. Those details are expected to be ironed out in the next couple of months.”

Wellpoint, the nation’s largest insurer by membership, “reported a 4% increase in profit for the second quarter that helped generate earnings of $1.6 billion since the beginning of the year – a 26% increase over the same period in 2009″ and Aetna said its “second-quarter profits rose 42 percent, with a net income of $491 million, compared with $346.6 million for the same quarter last year.”

Both companies also reported lower medical-loss-ratios, as enrollment numbers declined. Kaiser Health News has this breakdown:

For the quarter, Aetna’s combined medical-loss ratio for its commercial, Medicare and Medicaid businesses was 81.8 percent, compared with 86.8 percent in the same quarter last year. The ratio for its commercial business declined to 80.1 percent for the second quarter from 85.9 percent for the same quarter in 2009…[Wellpoint] said it spent 82.9 percent of customers’ premiums on medical care during the second quarter, down from 83.9 percent during the same quarter a year ago. For all of 2010, WellPoint now expects its so-called medical loss ratio to be 83.9 percent, down from its April forecast of 84.3 percent.

In other words, insurers earned more partly because they spent less on medical care and some Democrats in Congress are already arguing that these profits should preclude insurers from raising premiums next year. “Wellpoint and Aetna are on track for great years with multi-billion dollar profits. Now it’s time for them to return those windfalls to their enrollees in the form of reduced premiums. With business booming, there is no excuse for any premium hikes or benefit cuts next year by Wellpoint or Aetna in their private sector or Medicare Advantage plans,” Rep. Pete Stark (D-CA), Chairman of the Ways and Means Health Subcommittee said in a statement.

The MLR indicator is closely watched by Wall Street investors as a sign of insurer profitability and companies have spent years strictly defining “medical care” to ensure that the so-called “loss” to profit is not too great. But now that the health care law will require insurers to spend at least 80 percent of premiums on medical care, and 85 percent for large group plans, insurers are lobbying to expand the definition to include services they had previously classified as “administrative.”

It’s unclear why insurers’ medical loss ratios are decreasing just as the government is preparing to issue new, presumably more stringent regulations. Are beneficiaries spending less on health care during an economic downturn or are insurers dropping sicker patients, stashing cash away in reserves, and investing in other business activities? The lower the MLR rate today, the more insurers would have to spend on medical expenses to meet the new requirements (if they’re at 80% today, they’ll have to jump 5 percentage points to get to 85%, which is far more difficult than starting at 84% and moving just 1 point to the new requirement). But this lower starting point gives insurers the opportunity to whine about “unreasonable” government regulations and could even convince the Secretary to use her discretion to lower the target rates. If she doesn’t of course, it could all backfire.

Climate Progress

After the hottest decade on record, it’s the hottest year on record, hottest week of all time in satellite record* and we may be at record low Arctic sea ice volume

But how about the world’s heaviest hailstone?

FoxNews had me on twice for the big snowstorms (during the hottest winter on record), but no invitations during the record-smashing heat waves hitting the nation and world.  Go figure!

This is Roy Spencer’s much rejiggered UAH satellite data comparing 2010 lower trososphere temperatures (green) with average temps (blue) and record highs since 1979 (purple):

UAH 7-10

*It would appear we’ve set the all-time record high absolute temperature in the satellite dataset for the last week or two, but see John Christy caveat below.

NOAA’s annual State of the Climate Report for 2009 (video here) reports that “Past Decade Warmest on Record According to Scientists in 48 Countries“:

Read more

Security

Could Afghanistan’s Local Police Forces Fuel Feudalism?

Our guest blogger is Farha Faisal, a national security intern at the Center for American Progress.

Last week, Afghan President Hamid Karzai agreed to implement coalition commander General David Petraeus’ new plan to develop local police forces as a “temporary solution” for securing remote areas against the Taliban. However, this poses serious concerns for long-term stability, peace, and reconciliation in Afghanistan. While the idea of “partnering with tribes” to protect neighborhoods (as advocated by Maj. Jim Gant) seems enticing given the slow-paced training efforts of the formal Afghan security forces, we must not forget recent history. Training local militias has been tried in the past in Afghanistan—and failed.

In the 1980s, Afghanistan’s communist government spent thousands of dollars on Russian-recruited local militias, since its own security forces were unable to suppress an Afghan uprising beginning in 1979. After the Soviet withdrawal, these militias grew into powerful private armies controlled by brutal warlords, who terrorized the population as they fought each other in a devastating civil war in the 1990s, until the Taliban seized power in 1996.

Our current efforts could produce a similar outcome. By multiplying arms in local communities, coalition forces may well promote, rather than quell, the conflict. U.S. military officials and the Karzai administration retain hopes that the incorporation of these forces under the Interior Ministry, as “government formed, government paid, and government uniformed” units, will prevent such disaster. Their hope is founded on Petraeus’ earlier success in implementing such militias in Iraq in 2006 by hiring large numbers of Sunnis as local protection fighters against the insurgency. This rosy picture of local security, however, has fundamental problems.

First, the use of such local police units has been tested in the past year in Afghanistan with the creation of the Afghan Public Protection Program (2008) and the Local Defense Initiative groups (2009), but they have not yielded promising results. The efforts stumbled upon several obstacles, including units demanding bribes and imposing taxes, as well as major vulnerability in the face of insurgent attacks. NATO even disbanded their local police programs due to legitimate concerns about sedition, which still remains a worry amongst Afghan officials and even Ambassador Eikenberry. They fear individuals who will change their allegiance to the Taliban.

Second, the ethnic and political make-up in Afghanistan is vastly different from that of Iraq—the “tribal” understandings of Afghanistan do not accurately depict the social landscape, in which there are numerous forms of social organization. Yet, such tribal assumptions could actually heighten ethnic cleavages, and possibly lead to civil war. This seems even more plausible with Karzai’s current reintegration efforts. By moving the Taliban, who are mostly Pashtun, back into the political process, this could easily anger other minorities -– the Uzbeks, Tajiks, and Hazaras — who could then mobilize their local police forces on ethnic lines.

The creation of these local police forces could present a serious issue for the central government over the long term. Such units could participate in the corruption and bribery that plagues the government structure. And the attention and resources directed at these units will inevitably undermine the training efforts of the Afghan National Security Forces, which is more integral to securing our long term security objectives in the country, particularly if we hold to Obama’s July 2011 call for initial withdrawal of combat forces. Afghans themselves have expressed concern over the use of local militia in recent polls. A BBC poll from December 2009 found that 68 percent were either “not very” or “not at all” confident in the ability of local militias to provide security in their neighborhoods, and a survey by the 2004 Afghan Human Rights Research and Advocacy Consortium found that 88 percent wanted to reduce the power of former warlords.

Regardless of the name, arming local groups in Afghanistan for short-term security is a risky bet. History illustrates the potential for powerbrokers to attract the unpredictable loyalty of local armed units. With the region’s stability and long-term U.S. security objectives at stake, failure could be costly.

Politics

GOP Lawmaker Slips Up, Admits Tax Cuts Will ‘Increase The Debt’

At the end of the year, President Bush’s tax cuts are set to expire. President Obama and many Democrats in Congress favor extending those tax cuts for the middle class. But Republicans — seemingly not worried about the $700 billion cost — want tax cuts for the rich included as well.

Rep. Devin Nunes (R-CA) seems to be one of those Republicans. But when C-Span host Steve Scully asked the California Republican about the tax cuts issue on Washington Journal this morning, Nunes went slightly off message:

SCULLY: Tax cuts, do they increase the debt or do they spur economic growth?

NUNES: Well, I think that they increase the debt. If you let them expire at the end of the year we’re going to have a huge, the largest tax increase in American history.

Nunes drifted back on message later, saying that the deficit is “going to grow” if all the Bush tax cuts expire. But when asked why, he couldn’t provide any specifics. “Because it’s going to throw the economy into a tailspin,” he said. Watch it:

Nunes is right about one thing: Tax cuts do increase the debt, but he’s dead wrong in claiming that they reduce the deficit. In fact, as the Center for Budget and Policy Priorities pointed out, the Bush tax cuts will cause $3.4 trillion in deficits between 2009 and 2019 while the “debt-service costs caused by the Bush-era tax cuts, amount[] to more than $200 billion through 2008 and another $1.7 trillion over the 2009-2019 period — over $330 billion in 2019 alone.”

Moreover, the Washington Post’s Ezra Klein has noted just how the federal debt will skyrocket if the Bush tax cuts are extended as opposed to allowed to expire:

twoscenarios2

“If they’re willing to let the tax cuts expire,” Klein writes, “it’s good evidence that they’re serious about cutting the debt. If they’re not willing to let the cuts expire, it’s irrefutable evidence that they’re not.”

Security

Former STRATCOM Commanders Come Out In Support Of START – Debate Is All But Done

600px-USSTRATCOM_emblemThe debate over the new START treaty is essentially over. Today all but one former commander of the US Strategic Command – the Generals and Admirals in charge of our nuclear weapons – came out in support of the New START treaty. In a letter these Generals write:

As former commanders of Strategic Air Command and U.S. Strategic Command, we collectively spent many years providing oversight, direction and maintenance of U.S. strategic nuclear forces and advising presidents from Ronald Reagan to George W. Bush on strategic nuclear policy. We are writing to express our support for ratification of the New START Treaty… We will understand Russian strategic forces much better with the treaty than would be the case without it.

The letter was signed by Generals Larry Welch, John Chain, Eugene Habiger, Bennie Davies, Lee Butler and Admirals Henry Chiles and James Ellis. We can now add them to the endless and constantly growing list of military leaders and former senior Republican officials and defense experts that support that treaty.

The debate over START has essentially reached its end. No matter what evidence is shown, the far-right consisting of Senators Jim DeMint and James Inhofe, as well as the Heritage Foundation, will oppose the treaty. After months of back and forth it is clear they do so not because of the specifics of the treaty, but because it is both a treaty and it is arms-control. They are extreme ideologues that oppose arms-control, want to build new nuclear weapons, and want to restart a new Cold War with Russia by developing and then targeting a mythical missile defense system specifically at Russia. While this is entirely nuts, their opposition is at least because they are ideologically and substantively opposed to the treaty.

But fortunately for America, they are also really in the minority. Besides DeMint and Inhofe, and perhaps a sign of declining influence, few Republicans in the Senate are publicly taking Heritage’s stance on the treaty.

In fact, having made little headway on the merits of the treaty, many Republicans, such as Senators Bob Bennett, Lamar Alexander, and Bob Corker, are now signaling that they may support the treaty. But of course there is a but – and that brings us to the leadership of the Senate GOP, specifically Senator Kyl. While Heritage at least openly oppose the treaty on ideological grounds, Senator Kyl has chosen to make this not about START but about shaking down the Administration to put even more funds into the nuclear weapons complex.

In other words, Kyl and the Senate GOP aren’t talking about the START treaty anymore – they know they have lost the factual debate – and they aren’t even really talking about how the Senate is “rushing” the treaty, since the debate is now going in repetitious circles – they are now talking about what they can extract from the Administration in exchange for passing the treaty. After all their complaints about backroom health care deals, they are now threatening to kill a treaty they now concede is vital to our nuclear security just for some more wasteful nuclear pork.

Justice

New Poll Finds Only 1-In-5 Californians Now Believe Proposition 8 Was A ‘Good Thing’ For The State

GayMarriagePoll3As Judge Vaughn Walker prepares to issue a verdict in Perry v. Schwarzenegger, the landmark case against California’s Proposition 8, a new poll released last week by Public Religion Research Institute finds that a significant percentage of Californians, including people of faith across the California religious landscape, “say they have become increasingly supportive of gay rights over the last five years”:

– Only one-in-five (22%) Californians believe the passage of Proposition 8 was a “good thing” for the state.

– One-in-four Californians report that their views on rights for gay and lesbian people has become more supportive over the last five years, compared to only 8% who say they have become more opposed.

– If another vote similar to Proposition 8 were held tomorrow, a majority (51%) say they would vote to allow gay and lesbian couples to marry, compared to 45% who say they would vote to keep same sex marriage illegal.

– An overwhelming majority of Californians say they favor laws that would protect gay and lesbian people from job discrimination and favor allowing gay and lesbian people to serve only in the military (75% and 69% respectively). A majority (56%) favors adoption rights for same-sex couples.

Interestingly, the poll also found that “although concerns about the impact of legalizing same-sex marriage on children figured prominently in arguments by Proposition 8 supporters during the 2008 campaigns, few Californians view this as a concern.” Sixty percent actually “disagree that children would be more likely to experiment with homosexuality if same-sex marriage were legal.”

Californians were also more willing to support marriage if reassured that “no church or congregation would be required to perform marriages for gay couples” and that the law “only provided for civil marriages like you get at city hall.” When these assurances were made, support for marriage increased by a 12 to 19 points. The poll also found a correlation between how Californians saw God and support for same-sex marriage. Californians who say they are extremely likely to identify with specific images of God as judge, father, or liberator are more likely than those who less strongly identify with these specific images of God to say they would vote to keep same-sex marriage illegal.” Similarly, Californians “who believe the Bible is a book written by men and is not the word of God” were more likely to support rights for gays and lesbians.

A Field Poll released a day before the Public Religion Research Institute survey also found that “if a vote was held on Proposition 8 now, 51 percent of all Californians would vote it down.”

Politics

Iowa GOP Supports Amendment To Strip Obama’s Citizenship Because He Won The Nobel Peace Prize

rpi_logo-300x300At its state convention in Des Moines last month, the Iowa GOP adopted a new party platform that includes the repeal of mandatory minimum wage laws, the elimination of the U.S. Department of Education, and even clarification on the definition of manure. Out of the “387 enumerated planks and principles,” Newsweek’s Jerry Adler found the most “startling” section of the platform calls for “the reintroduction and ratification of the original 13th Amendment.”

Adopted in December 1865, the current 13th Amendment of the Constitution prohibits “slavery” and “involuntary servitude” in the United States or any place under its jurisdiction. The Iowa GOP is not trying to overturn this amendment to reinstate slavery. Instead, it wants to reintroduce the “original 13th Amendmentfirst offered by senator Phillip Reed of Maryland in 1810. The amendment states that “if any citizen of the United States shall accept, claim, receive or retain any title of nobility or honor” from a “foreign power, such person shall cease to be a citizen” and “shall be incapable of holding any office of trust.” In receiving only 12 out of the 13 votes needed for ratification, the amendment was never adopted.

Traditional supporters of the idea are known as “Thirteenthers,” who seek to prevent those with the title of “esquire,” such as lawyers and bankers, from participating in government. But according to its spokeswoman, Danielle Plogmann, the Iowa GOP supports it as an attack on President Obama’s Nobel Prize win:

There are, of course, other implications of Thirteenthism, such as ensuring that the United States never again suffers the humiliation of having a president win the Nobel Peace Prize. That was just what the Iowa Republicans had in mind, according to Plogmann, who wrote in an e-mail that the plank “was meant to make a statement about the delegates’ opinion about Mr. Obama receiving the prize.” (Presumably they didn’t mind if, in the process, they were also making a statement about any American scientist or writer unlucky enough to win a Nobel.) Unfortunately for them, the Department of Justice looked into whether Obama needed Congressional approval to accept the Nobel under the existing emoluments clause, and based on the meaning of “foreign state” (which would not cover the Nobel Prize Committee) concluded that he did not.

Iowa is currently “the only state where this type of plank has been introduced into the GOP platform.” While chances are indeed remote that such a measure would pass, should the Iowa GOP and “Thirteenthers” successfully push their belief, “every act of federal government since 1819,” including the abolition of slavery, “would be delegitimized.” (HT: Iowa Independent)

Yglesias

Endgame

Pour qui tu dansais pendant ta vie sans moi?

— Big legislative win on crack/powder sentencing disparities.

— Big win on Arizona immigration law.

— Masjid Manhattan has been near Ground Zero since before the World Trade Center was even completed.

Improve the CLASS Act, don’t scrap it.

— The real problem with “gifted” programs.

— Robert Gates takes a dark view of scouting.

— John Thune and Greta Van Susteren don’t understand what a 10 percent annual reduction means.

Stereo Total, “Je Rêve Encore de Toi”.

Security

AZ Law Enforcement Agencies ‘Supplement’ SB-1070 With Their Own Policies

police_badge_for_web_When Arizona legislators enacted SB-1070, they argued that it would compel police to uniformly enforce immigration law, rather than relying on discretion or local community policing policies. However, the Arizona Republic reports that “there is anything but a uniform approach.” Although all Arizona officers have reviewed a training video, according to a survey of local law enforcement agencies, many “have supplemented that training with their own policies.” The Arizona Republic summarizes the distinct approaches that five different law enforcement entities plan on taking if and when they are required to check immigration status:

• Arizona Department of Public Safety officers will work through the agency’s dispatch centers, which will determine whether officers should contact U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection or federally trained local agents to verify the immigration status of a suspect.

• Flagstaff has instructed officers to enforce the statute as written, although Lt. Ken Koch said the statute isn’t entirely clear. “That statute is subject to interpretation,” he said. “It’s a very fluid and dynamic situation.”

• In Yuma County, where sheriff’s deputies patrol an area that includes a shared border with Mexico, deputies will continue to work with Border Patrol agents when there are questions about a suspect’s immigration status, sheriff’s Capt. Eben Bratcher said.

• Phoenix police officers will be required to contact federal authorities to verify the immigration status of everyone they arrest, regardless of whether the suspects have one of the “presumptive IDs” such as an Arizona driver’s license that the statewide training outlined.

• Maricopa County Sheriff Joe Arpaio’s department, the most fervent agency in the state when it comes to rooting out illegal immigrants, won’t be attempting to determine anyone’s immigration status unless deputies are taking that suspect into custody for another crime.

Reporter Jeffrey Kaye notes in the Huffington Post that the training process itself has been inconsistent across Arizona. “Some agencies require officers to attend sessions of three hours or more and distribute manuals; others simply oblige their officers to watch a 94-minute video,” writes Kaye. Meanwhile, the 287(g) program which was established by Congress and allows police to cooperate with federal immigration agents in enforcing immigration law provides a four-week training program. Despite the fact that 287(g) participating officers receive significantly more training than Arizona police will, the Department of Homeland Security (DHS) inspector general released a stinging critique of the 287(g) program last year.

The Obama administration has argued that it is suing the state of Arizona in part because the U.S. cannot have a “patchwork” of immigration laws. The vague provisions of SB-1070 have only added to the confusion within the state of Arizona. The law requires police officers to verify the immigration status of individuals, when “practicable,” during a lawful lawful stop or detention if they establish “reasonable suspicion” that they are undocumented. However, SB-1070 doesn’t define “practicable” or “reasonable suspicion.” And though a federal judge enjoined several of the most problematic provisions of SB-1070, including the provision requiring police to check immigration status, Judge Susan Bolton still has to issue final rulings on the multiple lawsuits challenging the law. All of her decisions will likely be repealed all the way up to the Supreme Court, regardless of how she rules.

Politics

Meg Whitman Won’t Join Fellow California Candidates At A Faith Forum For Minority Voters

megwhitman2Ever since she won the Republican nomination, California candidate for governor Meg Whitman has aggressively backtracked from her primary campaign’s harsh anti-immigration reform stance and courted Latino support through Spanish-language ads, billboards, and special campaign websites.

Today, though, BeyondChron notes a flaw in Whitman’s minority outreach efforts — she’s refused to attend this Saturday’s California Gubernatorial Faith Forum, “an event where each candidate for Governor and Lieutenant Governor will separately answer questions from an audience of mostly African American and Hispanic church members.”

Last week, KTVU reported on the so-called “scheduling conflict” preventing Whitman from attending the forum:

Earlier this month, the Whitman campaign sent a letter saying she could not attend because of a scheduling conflict.

But KTVU has looked at a series of back and forth communications between the Whitman campaign and the faith forum organizers and it appears that if there really is a scheduling conflict, it came up very recently.

Back in May, the Whitman campaign wrote ‘We aren’t scheduling yet for the month of July. We will be back in touch with you.’ Despite back and forth emails for nearly two months, the Whitman campaign gave no answer until just over a week ago when Whitman declined the invitation.

In the past two days, KTVU asked Whitman’s spokeswoman to explain what the scheduling conflict with the forum was. Despite repeated phone conversations and emails, we never got an answer.

As a political science professor quoted in the article notes, “Let’s face it; campaigns use scheduling conflict as a way to excuse something that they don’t want to do.” Loran Simon, one of the event’s organizers, thinks “it is not her priority or there is no appetite to come and have a conversation with this community.” Jerry Brown, the Democratic nominee for governor, and Abel Maldonado, GOP nominee for lieutenant governor, will both attend the forum.

Beyond this incident, BeyondChron’s Harrison Chastang reports that Whitman’s campaign has also refused to engage with African-American media in the state through ads or interviews:

Whitman’s has reportedly spent a record $50 million dollars on TV, radio and print ads with the promise of spending just as much, or more between now and the November election. African American owned media outlet throughout the state say that the Whitman campaign has not spent a dime on radio or print ads with the Black owned media.

Joe Stinson, sales director for the Black owned Sacramento Observer, said that the Whitman campaign has not only refused to buy any ads in their paper, but that the Whitman campaign did not respond to repeated invitations to appear before the Observer’s editorial board. Stinson said the Whitman campaign was also personally contacted by the West Coast Black Newspaper Publishers Association, an organization that represents Black owned newspapers throughout California. Officials with other Black owned newspapers and radio stations around California say they have not received a dime in advertising revenue from the Whitman campaign.

Chastang compares Whitman to California’s Republican nominee for Senate, Carly Fiorina, who “appeared unannounced at a South Central Los Angeles Juneteenth event, a bold decision in that African American audiences like the LA Juneteenth crowds can be hostile to conservative Republican candidates.” He argues Fiorina “gave the impression that if she defeats Barbara Boxer, her door will be open to African Americans — even if they did not vote for her in large numbers.”

- William Tomasko

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