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Industry Questions McCain’s Plan: Proposes Regional Purchasing Pools, Not Individual Markets

mccainindustry.JPGThe Wonk Room has previously written that Sen. McCain’s plan to have families purchase health insurance on their own in the individual market will leave us without protection from the power of large health insurance companies. Instead of bringing families together through employers, McCain’s radical approach would have families seek coverage by themselves. Jane Bryant Quinn’s piece in Sunday’s Washington Post offers the latest support for the Wonk Room’s position.

While not addressing the McCain plan directly, Quinn talks about health policy perspectives from ERIC, The ERISA Industry Committee. (ERISA is a federal law that helps governs how employers offer employee benefits, like health care.) With a membership of 110 companies that reads like a who’s who of American business, including Boeing, 3M, Lockheed Martin, and Exxon, ERIC proclaims itself as the, “organization dedicated exclusively to representing the employee benefits and compensation interests of America’s major employers.”

Quinn discusses ERIC’s concept to build regional purchasing pools so that employers can band together in negotiating with insurance companies. The reason?

“On their own, ‘even large companies don’t have much negotiating power when facing large health plans,’ said ERIC President Mark Ugoretz.”

The largest companies in the world are trying to find ways to band together as purchasers, while McCain wants the country to move in the opposite direction and leave families on their own to buy coverage. If Boeing, 3M, Lockheed Martin and Exxon all feel like they can’t successfully take on the insurance industry by themselves, what is an individual family supposed to do?

Progressives are trying to find ways to bring purchasers together to buy health insurance so that there is a fair and equitable marketplace. In fact, the purchasing pool idea isn’t new at all, as asserted by Quinn. A year and a half ago, John Edwards’ health plan would have let businesses purchase coverage through his regional purchasing pool model. Sen. Obama wants to create a “connector” to allow individuals to come together to purchase coverage, like the Massachusetts plan. In contrast, McCain would leave families to fend for themselves to hope for the best against health insurers.

Industry Influence Undermines OSHA’s Mission

During an appearance on CBS’s 60 Minutes last night, Ed Foulke, head of the Occupational Safety and Health Administration — the agency charged with overseeing workplace safety — snubbed the recommendations of the federal government’s Chemical Safety Board and conceded that the agency would not adopt a “combustible dust standard” to prevent dust fires at the nation’s “sugar, corn or metal” factories.

Despite the deaths of 133 workers since 1980, Foulke maintained that sporadic inspections of factories and voluntary enforcement of safety regulations could still protect employees from dust explosions:

Foulke has 1,029 inspectors, and told 60 Minutes about 50 of them have already had extensive dust training. He says OSHA sends inspectors to companies with the greatest risk of a dust explosion. And it turns out there are a lot of those. “You’ve identified 30,000 workplaces that are at risk. How many of those will you inspect over the next year?” Pelley asks.

“Well, approximately 300 or more,” Foulke says.

“If you do 300 a year, it’ll take you 100 years to inspect all those places that you’ve identified,” Pelley remarks.

“We’re not gonna get in every work site every year. It would be physically impossible from a monetary standpoint and on a personnel standpoint to get in every facility once a year. Or even every five years,” Foulke says.

Watch It:


The administration’s budget cuts and deregulatory approach to workplace-safety standards have indeed made it “physically impossible” to inspect at-risk factories. In fact, the Bush administration has issued the fewest standards in the agency’s history and has instead adopted a “voluntary compliance strategy,” gently nudging businesses to adopt stricter workplace safety rules.Since 2001, Bush administration has “eased regulations or weakened enforcement of rules“:

- OSHA’s budget has been cut each year President Bush has been in office.

- Since reaching an all-time high in FY 2001, OSHA’s overall budget has fallen more than five percent under Bush.

- Funds appropriated for enforcement activity fell almost 8 percent from FY 2001 to FY 2008.

- The budget for compliance assistance, programs which allow federal regulators to work with businesses to promote voluntary compliance has increased.

Smaller budgets have weakened the agency’s inspection capabilities. According to the 60 Minutes investigation, “of all the dust explosions in the last two years, OSHA missed the problem almost every time“:

60 Minutes went through OSHA’s own records and discovered that of 67 factories hit by dust explosions, only one was cited by OSHA inspectors for a dust hazard before the blast. In one case, a plant exploded only three days after a visit by an OSHA inspector, who found no problem with dust.

The agency’s hands-off attitude towards enforcement comes from the top down. As the New York Times reported last year, Ed Foulke “has a history of opposing regulations produced by the agency he now leads.” Before coming to Washington in 2006, Foulke worked “for a law firm that advises companies on how to avoid union organizing” and “led a successful effort to weaken the agency’s enforcement authority.”

As head of the agency, Foulke is doing just that, skirting the consensus of safety experts to ensure that industries are not pestered with regulatory standards.

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