(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:
twbb
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.
McMegan
Oh, I was outraged by the Sebelius letter long before I saw this item.
twbb
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.
McMegan
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.
A_K_S
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?
And:
Franklin Delano Bluth
McMegan, I assume you've contacted HCSC and Sebelius for some info but just haven't heard back from them, right?
McMegan
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?
twbb
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...
McMegan
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.
[snip]
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"?
McMegan
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.
McMegan
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:
boomaze
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)
tominnola
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?
McMegan
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)
tominnola
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...
McMegan
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.
40 comments:
I bow to no one in my disdain for Megan McArdle, but that has nothing to do with insurers "lying" about rate increases.
My insurance company canceled my previous policy because it didn't meet Obamacare standards and the new policy was twice the monthly cost. That's not their fault. It's Obama's and Congress's fault.
The new standards start in 2014. Why is your insurance company cancelling your policy now?
And, respectfully, what does that have to do with McArdle's unsubstantiated claim that Sebelius is gagging health insurers to punish them for telling the truth about rate increases?
I love how she never answers anyone when they ask her directly "did you contact anyone for comment." She shifts the goal posts, her motivations, whatever, to avoid having to work as a journalist because journalizing is HARD!
(face/palm)
-AWS
Plus you might get an answer you don't like.
elladeon,
As Susan of Texas points out the new standards *which guarantee you good coverage/payout when you need it* haven't yet started. You can't have been terminated because of costs associated with that. You can, like every other American purchasing private health insurance, have been "churned" up to a more expensive program at "twice the monthly cost" precisely *because* you don't have the full "Obamacare" protections yet. You seem a little confused about who is protecting you here. The insurance company *absent Obama's regulations* is simply not required to provide you with a health insurance product you like. Anymore than your bank is required to provide you with free checks, or a mortgage loan. They decide what to provide to you based on their profit motive. Obama's regulations didn't shift their profit interests at all although they will eventually create better regulations and more protections for you and everyone else.
Its complicated, but its not that complicated. If you want Obama and Congress to take the responsibility to make Health Insurance affordable for you you actually need to face up to the fact that they tried to do so with the HRA. If it doesn't kick in fast enough for you take it up with the Republican party and their Health Insurance cronies like Karen Ignani--oh, wait, that's what Sebelius is trying to do. Trying to prevent Ignani from "churning" customers, forcing them into higher cost plans, and blaming anything but the insurance companies profit margins for doing so.
aimai
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.
I love the "It's Obama's fault I acted like an unprofessional idiot" defense.
Shorter Megan: If I weren't so convinced Obama was a jackbooted thug, I wouldn't be so likely to conclude that every terrible rumor proving Obama to be a jackbooted thug is true. Therefore, Obama is a jackbooted thug. QED.
It amuses me that those of you who read Sadly, No! will recognize Megan's argument here as identical in form to the argument made by the SASQUATCH ISRAEL guy. This must be "Don't confuse me with facts! I know what I know!" week at wingnut headquarters.
But, but, the Bush Administration did exactly this with respect to the Beef Farmers--it threatened them and prevented them for trying to change their practices to be more organic *so that* they could increase their market share in Japan and Canada. On behalf of the *other* beef processors who didn't want to deal with the Mad Cow scare the Bush admin prevented some beef businesses from putting voluntary controls in place. Ditto with the organic milk movement who were ordered not to use specific language touting their refusal to use hormones on their milk.
Regulatory interference with the free market is rampant under Republicans. The question is, as Megan says (incorrectly) "whose ox is gored?" As long as it is the consumer she's fine with it. The minute it is the corporation, she's against it. This isn't a principled free market stand at all and never can be or the interests of consumers would count as important, or more important, than corporate profit interests.
What an unbelievably stupid fuckup that woman is.
aimai
Well, I doubt if it will post over there but I hopped over and pointed out that the poor boob at insureblog seems to have hysterically mistaken a hyperbolic "my friends are in lockdown mode" for an actual "thing" like a legal gag order. This kind of uncritical thinking will lead him to report his own mother for Cannibalism when she says to a cute baby "I could eat you up."
If you read the "retraction" post you get the sense that these people are completely hysterical and really believe that the Obama Administration, which has been nothing but moderate and even conservative in everything it has done with respect to large corporations, is a runaway commie juggernaut crushing those innocent insurance execs (tied to their chairs unable to speak!!!!).
Also, of course, in my earlier comment I forgot to mention the "Mother of All Gag Orders" which was the Bush Administration's actual gag order preventing doctors from even discussing abortion with their patients.
aimai
Also Megan's awesome source has another nascent blog. One for medical tourism.
That's some quality journalism.
Amazing. First comment in this blog points out exactly why Sebelius needed to send the letter out. because elladeon was lied to by his/her insurance company and told that "Obamacare" is the reason his/her insurance rates have gone up. When nothing in the Health Insurance Reform shit goes into effect for another 3 years.
Very first comment. Wow. It's truly amazing how much corporations can set the narrative when they have you by the balls, isn't it?
And anyone who thinks that their rates are going up for any reason other than a down real estate market and a lousy stock market needs to research how insurance companies are funded. Your money goes into an investment portfolio - the insurance company is betting that they won't have to pay out as much as they earn on that portfolio every year. When the market is down, and real estate is down, and everything is down, your rates are going to go up because otherwise the company has to cut into profits and CEO salaries. That's how it works. They're using reform (which hasn't happened yet) as a cover to raise rates to keep their shareholders happy. That's all that is going on here, and it's been going on like that for a long time.
And to add - in good years your rates don't go down because the insurance companies just take that money and spend the surplus on dividends, reinvest it in expanding their portfolios, or paying bonuses to the investment team and the high level executives.
Nothing works out for consumers because individually we're chump change to an insurance company. Corps can demand lower rates, but insurance companies generally counter that by cutting covered service. Even on good years. Because they have to maximize that ROI for their shareholders. And the "top talent" in the investment team deserves those bonuses.
Oh, our Lady of the Rose Tongue used the f-word! She must really have been mad. Maybe it's the cumulative stress of being told she's just flat out wrong so often in the last few weeks? I know the lack of swearing on her site is a big source of pride for her imagined civility.
Megan: "I can come up with endless quite plausible examples if outrage is not mounted to stop this nonsense...
That sums up what her job really is all about, doesn't it?
I'm imagining the wording of the Command to her to write her latest "Gov is gagging-intimidating Insurance Companies!" tripe.
Did her immediate supervisor/editor say "Hey Meggie, write about how Medical Insurance companies are being ruined by Obamacare!", or was there a more formal memo with bullet-points and links to the "scary" story, and suggestions about the eeeevil Sibelius? Because I don't think she has the wit or imagination to do this without considerable 'assistance".
I'm not sure where she's getting her ideas but I have noticed that she and P. Suderman have been posting about the same topics around the same time, on occassion.
And of course she's been linking to him as well, as if he's some kind of health care or economics expert. Since he has an English degree with a minor in film studies from the University of North Florida he must have educated himself in the subjects.
Or he is making it all up as he goes along.
That thread is a classic. My older daughter is studying logic right now, as part of geometry, and I have a feeling that each one of the individual posts is some massive error, logically speaking. As you scroll down you see people splintering off from the main issue "Megan's original statement, did it have any basis in reality?" to pursue various non issues down the rabbit hole. And they never come back up even as, up on the top line, Megan is forced to recant.
aimai
What's even more disgusting is how many people "liked" some of the McMegan comments you noted. Talk about a lot of dumb people.
So writing a sternly worded letter is what constitutes a "jackbooted thug" these days? It is interesting how closely Megan hews to the Glenn Beck / Sarah Palin style of criticism, for someone who is supposedly above their level.
I'm just seeing an anonymous report that HHS has actually begun beheading insurance company CEO's.
This is unconscionable.
No, I have no information on whether or not the beheadings are happening or whom is being beheaded.
What's important is that I'm outraged by a comment from Sebelius from 2 years ago.
The question of the beheadings I mentioned earlier are just not important compared to that comment I don't remember.
I'm sure Glenn Beck thinks he's intelligent and insightful too.
McMegan
And would you be equally glad if they intervened in your line of business?
"They" already have: the Government uses our taxes to pay for the infrastructure we used 24/7, the safe food we eat, the clean water... well, we know the story, don't we?
Classic McMegan. The monster trying to lead the mob, and hoping they won't notice.
Her standards for "lying" and abuse of power are awfully revealing too, huh? If the insurance companies lie and screw over the customers, that's fine with McMegan, but if Sebelius calls them out and warns them to cut out the crap, that's lying and thuggery.
Her Republican administration examples aren't analogous and reveal her demagoguery. No one in the administration has threatened to put insurance companies out of business. (Come to think of it, as long as McMegan's playing demagogue on that point, why not make it true? Single payer universal health care!)
Strange that Megan only ever does follow-up work on a story when her sources are unidentified 'experts' in the field of being paid by conservative think tanks to agree with her predetermined narrative. It's almost like she's too lazy to pick up her fucking iPhone.
I mean, it's rude to lie and consciously misrepresent what others are saying and doing. What if she runs into someone from HHS at a cocktail party, how will she network with them properly. Asses can't kiss themselves. I guess it's a good thing Megan's definition of good manners is "however I behave".
Re Kathleen sebelius' letter, the subject of today's McOutrage -
No problems with Ari Fleischer telling Americans to watch what they say... but dont dare tell companies that routinely lie to not lie.
I thought of another example, actually even worse than the Ari Fleischer argument (which, by the way, in the comment thread at Megan's some poster magically transformed so it wasn't aimed at liberals at all but somehow aimed at fringe righties). What about the K Street Project? That was one in which top Republican officials made it dramatically clear to businesses that they could not hire Democrats as lobbyists, or for any important position, if they wanted to get their lobbying on with the federal government. That was restraint of trade in the most naked sense.
I'd also like to point out that utilities and some non profits are legally limited in what they can and can't say--and what they can't and can't use to influence consumers and its clearly well within government rights to remind corporations and such entities of where they are crossing the line.
aimai
But, but, but, it COULDA happened, and that's all that matters.
Interesting that McArdle thinks a letter from Sibelius to the poor, downtrodden health insurance industry -- in which Sibelius is merely doing her job -- unconscionable.
Here's something that McArdle wouldn't find unconscionable in a million years:
In 2006 UnitedHealth Group's CEO William W. McGuire exercised $1.6 billion in stock options. Sadly, it turned out that a significant portion of those were illegally backdated. (He would have received about a $1.2 billion in stock options without the crime. The unmitigated, boundless greed is just awesome.) So he had to pay a $468 million fine. But then, resigning while still under investigation, he was given a $1.1 billion golden parachute, the largest in the history of corporate America.
And aimai, thanks for remembering all the Bush interference in the rights of business to honestly label and market their own products. When they prohibited certain domestic beef producers from performing their own more stringent bacteria tests, the howling from the glibertarians wasn't all that deafening as I recall.
She thinks she is treading water, but in truth, she is drowning in a sea of her own bullshit. It really is past time that this woman is completely discredited and fired from her job. Rumor and innuendo? Check. False statements accomodating her worldview? Check. Actual facts and evidence? Meh, not so much...
I can't get past the "At" in her post title. Does she consider proper word usage to be a collectivist attempt to enslave a free people?
I very much hope she is never fired. She's so entertaining!
Besides, if they start admitting that their unerring judgement is a little faulty, they lose face/authority.
Plus she seems like the type who would sue.
Susan of Texas:
Why would she sue? On second thought, strike that.
it is disturbing that the actions of the folks behind ObamaCare© make claims of a gag order credible
Ooh, it's another fine example of "what does it say about [innocent person or group] that I thought them capable of [action they didn't commit]."
Absolutely great stuff, from which I stole to post my bit, which I only wrote (as you covered all the ground) mostly because of a great quote from Andrew Bacevich I've been wanting to use since I first glimpsed it and heard it scream "McArdle!" in my earl
I too,am outraged by the Sebelius letter because, well, her name is so damn hard to spell. Also, too, I confuse her with the composer.
With every McMegan paycheck The Atlantic digs itself deeper into the hole of irrelevancy.
-trollhattan
Thanks, Tom. And I loved your use of the words "case study"-that's exactly how I think of McArdle.
In case anyone is still reading this thread: I'm halfway though Krugman and Wells (Mrs. K)'s piece in the new NY Review of Books, and I thinks in my brain, "THIS is how you write about economics. It's clear, it's methodical, it has a minimum of biz school jargon."
It need hardly be said that one can write this way regardless of one's politics, however adolescent.
I have half a mind to go over to McMegan's place and tell her to read it. As soon as I find the other half, that's what I'll do. Think it'll help?
My insurance company canceled my previous policy because it didn't meet Obamacare standards and the new policy was twice the monthly cost. That's not their fault. It's Obama's and Congress's fault.
I think it's telling that the very first comment displays exactly the type of behavior Sebelius and HHS are reacting to. elladeon's policy was canceled and (or?) the rates doubled "because of Obama and Congress?" I suppose that's what the insurer told you?
None of the provisions have taken effect yet, so clearly the insurance company is jacking your rates for some OTHER reason and blaming it on Obamacare.
Hmm. Somehow I missed the fact that Nony Nony already pointed this out...
What he/she said!
I think there is a "truthiness" element to McArdle's post and it is this -- because of health care reform, for the first time in American history the American government is telling health insurers what to do, and the insurers hate it and so do corporate apologists like McArdle. This is what she is really complaining about.
"I'm not primarily concerned with the lock down."
It is purely by coincidence that she starts by placing an indirect, unsourced (and erroneous) story about a lock down IN THE FECKIN' LEDE.
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