(See Updates Below)
Megan McArdle: What Hath Sebelius Wrought At the Health Insurers?
I literally have no idea what this means ("lock down mode"?) but it sure doesn't sound good:An anonymous (but vetted) reader tells us that HCSC (the holding company for Blue Cross Blue Shield franchises in Illinois, Texas, Oklahoma and New Mexico, and the fifth-largest health insurer by enrollment) is in "lock down mode" following a gag order imposed last Friday (September 10, 2010). If any of our readers have details, we'd appreciate a heads' up as soon as possible.
Any readers have any information on this?
Whatever the facts of this specific case, I'm struggling to come up with a description of the administration's attempt to prevent companies from telling anyone that their legislation cost money, which doesn't start with "creepy" and end in "thuggery". Oh, I'm sure other administrations have done similar things to other industries, and "creepy thugs" is the thought that springs immediately to mind when I contemplate this.
I can see debate over whether corporations ought to be able to donate to campaigns. I cannot see debate over whether politicians ought to be able to silence criticism of their legislation by threatening regulatory retaliation. In what way is the country made better off by giving the administration "soft power" to suppress dissent? And before you answer that, let me be a little more specific: in what way is the country made better off by giving an administration from the other party the power to suppress dissent by groups on your side?
"Whatever the facts...." That's McArdle in a nutshell. The facts are not important. Ginning up a controversy is the important part!
This is the post at her link, in its entirety:
HCSC Info Bleg
An anonymous (but vetted) reader tells us that HCSC (the holding company for Blue Cross Blue Shield franchises in Illinois, Texas, Oklahoma and New Mexico, and the fifth-largest health insurer by enrollment) is in "lock down mode" following a gag order imposed last Friday (September 10, 2010). If any of our readers have details, we'd appreciate a heads' up as soon as possible.
Just drop us a line here, and your information will be treated as confidential.
Some of McArdle's commenters happily jump into the Sebelius-bashing but others point out one itsy-bitsy problem:
Is this a self-imposed gag order? For something that you "literally have no idea" what it means, you've literally implicated Sebelius and the administration.
Oh, I was outraged by the Sebelius letter long before I saw this item.
Ok, what does any letter have to do with the current gag order, which may or my not be imposed by HCSC themselves? I'm not trying to be confrontational, I really don't get it.
Sorry, broke the link. Here: http://www.hhs.gov/news/press/2010pres/09/20100909a.html
The link is to Sebelius' letter, which McArdle has not connected to her rumor of a gag order. A few commenters ask for more information.
Completely agree with Megan with respect to Sebelius, thuggery and creepiness.
But I don't see anything in the linked post that connects said gag order to Sebelius's comments. Why does Megan think the two are in any way connected -- just the date of said gag order?
Franklin Delano Bluth
McMegan, I assume you've contacted HCSC and Sebelius for some info but just haven't heard back from them, right?
What info? That they wrote a letter I consider to be an unconscionable abuse of their regulatory power? What "info" do you think I'm missing?
I don't see the problem with the letter. Of course the HHS Secretary doesn't want any insurers to Trojan horse premium increases in the name of the ACA, which I think is equally unsconscionable. She admits premiums will go up 2% at least. She just says any suspected "unreasonable" rate increases will be investigated. If that is the bar for thuggery now...
No, she also quite clearly threatens to punish anyone who ties rate increases to PPACA.
The "unconscionable act" was for Sebelius to write a letter to the national association of health insurers to tell them stop lying about rate increases. But we understand McArdle's confusion. Lying, telling the truth, eh, what's the difference?
Sebelius' letter includes the following:
Dear Ms. Ignagni:
It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act. I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases.
Given the importance of the new protections and the facts about their impact on costs, I ask for your help in stopping misinformation and scare tactics about the Affordable Care Act. Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections.
Already, my Department has provided 46 states with resources to strengthen the review and transparency of proposed premiums. Later this fall, we will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers. We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014. Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.
Americans want affordable and reliable health insurance, and it is our job to make it happen. We worked hard to change the system to help consumers. It is my hope we can work together to stop misinformation and misleading marketing from the start.
A commenter suggests McArdle do some--what's the word? Oh yeah--reporting, and find out what's going on.
Franklin Delano Bluth
Uh, the "lock down mode" at HCSC that you have no idea what it means? Wouldn't some information directly from HCSC be pertinent to this story? Or even a reaction from Sebelius/Administration about the rumored "lock down"?
I'm not primarily concerned with the lock down. I'm primarily concerned with the secretary of HHS writing letters to insurers threatening regulatory retaliation if they say (truthfully) that PPACA has contributed to rising costs.
I'm sure any minute now McArdle will admit that she jumped the gun and does not, in fact, at this time have any proof of her allegation that Sebelius is punishing health insurance carriers for stating that their rate increases are due to the health insurance reforms.
The administration has quite a bit of power to do quite a lot more than write sternly worded letters, and Sebelius seems to be threatening to deploy their regulatory power against insurers who step out of line.
"Seems to"? If only there were a way to find out the truth!
In conclusion we just wish to say:
I'm outraged by this anonymous readers vague, unsubstantiated claim on a random blog. Outraged by it, I tell you.
Jesus Christ, do you even try anymore? I mean, this is really, really kinda pathetic.
ADDED: McArdle's link, Insureblog, has added updates:
Clarification: I was very hesitant to run with this because so many details are lacking, but my correspondent is very credible, and there does seem to be some urgency involved. I did leave voicemail with both HCSC media contacts (and emailed them, as well). There's nothing about it on the corporate website, but that's not necessarily indicative of anything untoward. There may be nothing to this, but again, this came from a reliable source, and it seems relevant to what we do here at IB. We'll keep you posted.
UPDATE [1:10PM]: Just spoke with HCSC media contact Ross Blackstone, who assured me that there is no "gag order" in place.
It's worthwhile noting that, as Megan McArdle hints, it is disturbing that the actions of the folks behind ObamaCare© make claims of a gag order credible. Thankfully, these fears appear to be unfounded in this case.
By the way, I ran this story early because, if there had been a gag order, there was no way to know if and/or when I would have received corroboration. A vicious circle.
I don't think I would call chasing my own tail "a vicious circle."
SECOND UPDATE: McMeltdown! (TM TBogg and John Cole)
The threat, as I understand it, is to track insurers who jack up rates and lock them out of the exchanges in 2014. I guess I understand why people opposed to HCR and the administration would be uncomfortable with this, but as someone who hopes to be self-employed and purchasing my own plan from an exchange in a few years, I'm glad that regulators are publicly putting them on notice that they're paying attention and won't tolerate bullshit rate hikes. But I guess that probably makes me some kind of socialist or something?
And would you be equally glad if they intervened in your line of business? I imagine you think that isn't likely, but that only tells me that you're happy to have others get their ox gored as long as you're being taken care of. Moreover, the objection is not to the rate hikes, which no one has proven are "bullshit" (as far as I know, Massachusetts, which denied rate hikes to insurers on similar grounds, *still* hasn't found a single actuary willing to sign off on its notion of a "reasonable" hike.) The objection is to hiking rates and telling people that the rate hikes are related to PPACA--even though as Sebelius's own letter concedes, at least a portion of them indisputably are. That's political ass-covering, not reasonable regulation. If you think their claims are fraudulent, that's the province of the FTC, not HHS--but I suspect that Sebelius knows quite well that this would never qualify as banned commercial speech, so instead she's threatening to throw them off the exchanges--and since there's some talk of forbidding companies to sell insurance anywhere else, she seems to literally be threatening to put them out of business if htey dare say anything bad about PPACA.
(Edited by author 39 minutes ago)
I understand the theoretical outrage here, but there have been so few instances in my lifetime in which the the feds have taken on corporate entities that have sophisticated political arms and monopolize a marketplace for products that people depend on to not die, that I am having a hard time imagining an analagous outrageous hypothetical. I'm sure you can think of one?
Let's say the Palin administration sent a letter to deregluated nuclear power plants warning them not to blame any future meltdowns on the "Nuclear Free Markets Act" of 2013. I guess that would piss me off...
Sure. How about a hypothetical Republican administration telling telecoms firms that point out the negative effect of new decency standards or the administration's net neutrality policy to shut the fuck up or they'll do their best to put you out of business? How about a hypothetical Republican administration telling organic farmers or vegetarian food lines who criticize the ludicrous food pyramid that this is going to put them at risk of regulatory retaliation? I can come up with endless quite plausible examples if outrage is not mounted to stop this nonsense.
Important Third Update!: After HCSC corrects her, McArdle admits she was wrong and apologizes.