Welcome to our new blog, "The Watchdog," which will keep a close eye on regulatory agencies and how their actions impact the lives of everyday Americans. Though the rules and regulations they write -- from determining how much arsenic is allowable in your drinking water to whether your favorite TV show can drop the F-bomb in primetime -- affect all of us, their deliberations and the way that lobbyists influence their decisions receives very little coverage.
To make sense of these debates, follow the implementation of health care reform and financial reform and decipher the minutia of the Federal Register, "The Watchdog" is on the case. If you have any tips or suggestions, send them to email@example.com.
03/10/2011 11:49 AM EST
Wall-Street-Owned 'Junk' Insurer Gets Obamacare Exemption
A notorious company that has been temporarily banned from selling insurance in at least one state and faces allegations of peddling "junk insurance" elsewhere is getting the first waiver from the 2010 health care overhaul's requirement that insurers spend at least 80 percent of premiums on care, according to federal regulators.
Maine is the first state to get the temporary waiver -- New Hampshire, Nevada and Kentucky have applications pending -- allowing the three insurance companies in the state to keep their existing 65 percent medical loss ratio, successfully persuading the U.S. Department of Health and Human Services that higher costs would drive insurers out of the market.
As The Watchdog reported in January, Maine's insurance commissioner sought the exemption on behalf of HealthMarkets Inc., which is largely owned by funds run by Goldman Sachs and Blackstone -- the insurer's subsidiary, Mega Life and Health Insurance, controls about 37 percent of the market for individual insurance in the state.
HealthMarkets and its subsidiaries have a troubled history and have long been dogged by accusations that their coverage is inadequate. The insurer has been banned for at least five years from selling insurance in Massachusetts after a probe by the state's attorney general, who accused the firm of waging a "campaign of deception and unfair practices," finding that the insurer's coverage didn't cover such basics as doctors' office visits, prescription drugs, chemotherapy and even some lab tests and X-rays.
Last October, the city of Los Angeles sued HealthMarkets and its Mega Life unit for allegedly selling “junk insurance” that left customers “without coverage when they needed it most,” according to court documents. In response to the complaint, which is still pending, the company issued a statement: "No company in the service business is without issues involving customer satisfaction, and HealthMarkets is no exception. We encourage our customers to contact us directly with their questions and concerns so we can resolve issues." It has also set up a page on its website to address allegations.
Since 2002, the company has been fined by at least seven states and faced lawsuits from dozens of policyholders. A three-year probe of the insurer by 29 states, including Maine, found multiple problems involving consumer disclosure, oversight and training of agents, claims handling and complaint handling practices, resulting in a $20 million settlement in 2008.
03/10/2011 10:49 AM EST
The Wake-Up Call: Yoga Teachers Fight Texas Regulation
- The most unexpected anti-regulation zealots: yoga teachers in Texas, who are planning a mass rally on the lawn of the state capitol next week.
- Lax IRS rules help groups shield names of their campaign donors
- SEC chief Mary Schapiro makes plea for more funds
- IRS steps up its regulation of tax-return preparer industry
03/09/2011 12:51 PM EST
Rep. Inslee Mocks Climate Change Skeptics
At yesterday's House Energy and Commerce Committee hearing on EPA's authority to regulate greenhouse gases, both sides came away with their views intact.
Not for a lack of effort by Democratic Rep. Jay Inslee, who came armed with a 2-foot-high stack of studies and reports to demonstrate the scientific consensus around global warming.
After stating that Republican lawmakers skeptical of climate change were suffering from an "allergy to science and scientists," he quipped:
“If Copernicus, Galileo, Newton and Einstein were testifying today, the Republicans would not accept their views until all the Arctic ice has melted and hell has frozen over, whichever comes first.”
03/09/2011 10:32 AM EST
SEC's Shapiro In The Hot Seat For Hiring Madoff-Linked Lawyer
Two years after the SEC was pilloried for missing Bernie Madoff's Ponzi scheme despite plenty of warnings, the agency's embattled commissioner Mary Schapiro is under fire for hiring as the S.E.C.’s general counsel someone with a Madoff financial interest.
The key graf from the story by the NYT's dynamic duo of Gretchen Morgenson and Louise Story:
Perhaps the most significant Madoff matter involving Mr. Becker is a proposed reversal of the agency’s recommendation on how to compensate victims of the scheme, according to two people briefed on the S.E.C.’s discussions who asked not to be identified because they were not authorized to discuss the matter. While the agency had agreed on a deal that would return to investors only the money they had put into their Madoff accounts, Mr. Becker argued that the commission should change its stance to allow victims to keep some of the gains their investments had generated, since the investment would have grown somewhat over time even in a low-interest account. The Becker family would benefit from this approach.
03/08/2011 1:01 PM EST
The Wake-Up Call: Who's Against Reducing Dangers To Children?
- This afternoon, a House Judiciary subcommittee will hear testimony on the REINS Act, introduced by sponsored by Sens. Rand Paul (R-Ky.) and Jim DeMint (R-S.C), which requires congressional approval for major regulations.
- NIH rules miss subtleties of corporate influence on medical research, reports Project on Government Oversight's Paul D. Thacker.
- Republicans seek to slow new Commodity Futures Trading Commission rules on derivatives, wielding agency budget cuts as a threat.
- Classic intro of an op-ed in today's Wichita Eagle about a hometown lawmaker's bid to scuttle a Consumer Product Safety Commission database: "One would think it hard to find a politician who opposes reducing preventable dangers to children. Rep. Mike Pompeo, R-Wichita, has stepped up to this challenge."
03/07/2011 1:58 PM EST
More Toyota Recalls
Troubled automaker Toyota, which has seen its sterling reputation take a hit in the wake of the recall of more than 14 million cars since 2009 largely due to problems with unintended acceleration, has a new problem on its hands.
The company is recalling 22,000 vehicles -- includign the Sequoia, FJ Cruiser, Land Cruiser, Tacoma and Tundra models for the years 2008 through 2011 -- due to concern about the reliability of tire-pressure alerts, in which drivers may not be aware that a tire is going flat.
Chrysler and Honda also announced recalls of Jeep Wranglers and Civic hybrids, respectively.
03/07/2011 1:23 PM EST
House GOP Bill's Cuts To EPA More Ideological Than Budgetary
Must-read in the LA Times today about the sheer scope of the House GOP's budget bill, which targets environmental regulation so widely "it appears to be as much an ideological gambit as a budgetary one."
From fish protections in California to water pollution limits in Florida and regulation of greenhouse gas emissions nationwide, environmental programs were targets of the Republican budget resolution, which appears to have been as much about setting a political agenda as about deficit reduction...
The continuing resolution adopted by the House two weeks ago swings a much bigger ax than similar proposals that helped stall a spending measure, resulting in a government shutdown in 1995. "I've never seen anything remotely like this. The sheer scope of it is overwhelming," said Sean Hecht, executive director of the UCLA Environmental Law Center...
The proposal slices the Environmental Protection Agency budget by 30% — the largest cut to any agency. It bars the EPA from regulating greenhouse gas emissions and from implementing new water pollution limits in the Chesapeake Bay watershed and in Florida.
03/07/2011 1:05 PM EST
The Wake-Up Call: SEC Is Severely Understaffed
- The SEC is severely understaffed (by about 400 employees), which does not bode well for its enhanced role under Dodd-Frank, according to a new report.
- Four deaths spur suspension of Pfizer, Sanofi vaccines in Japan.
- Lax regulation of property tax exemptions for benevolent institutions, churches and nonprofit hospitals is costly, reports the Milwaukee Journal-Sentinel.
- A new blog worth checking out is Exemption Watch: How FOIA Works.
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