With this epic FAIL maneuver on the budget, Arnold Schwarzenegger signaling here that his little state employee wage cut gambit didn’t work.  It didn’t produce the kind of compromise he wanted and it sent him tumbling in the polls as he attempted to cynically hold innocent bystanders hostage in an unrelated fight.  So he had to cut off all bills instead.  Maybe now, he thinks, the legislators will take notice.

But let’s understand what he’s doing here.  Yesterday, as a culmination of four years of work, Alan Lowenthal’s bill to clean up the ports of Oakland, LA and Long Beach passed the State Senate.  Eliminating the toxic pollution at the ports would save 3,700 lives annually according to the California Air Resources Board.  The bill would enact a $30 container fee on every import, using that money ($300 million annually) for investment in reducing pollution and improving freight rail.  It’s a milestone bill that is sorely needed to improve the air quality of these communities.

It’s not an exaggeration to say that Arnold’s latest stunt will actually kill thousands of people from reversible diseases.

There’s a bill pending in the Senate Appropriations Committee authored by Fiona Ma (AB 2716) which would deliver guaranteed paid sick days to all California workers.  This bill has the support of 73% of the public and would make the state the first in the nation to provide this to their residents.  Arnold would rather stamp his feet and issue ultimatums than improve the lives of Californians and do the bidding of the overwhelming majority of the public.

On health care, while we cannot expect a comprehensive plan to come out of this legislative session, there is a deal coming together that would improve health care for those who have insurance by mandating some strict rules for the industry:

In the final weeks of the legislative session, they are negotiating measures that would limit insurer profits on individual plans, require plans to provide a minimum set of benefits and restrict insurers’ ability to cancel policies retroactively […]

Three million Californians buy health insurance on their own rather than through employers. Insurers keep premiums low — and profits high, their critics say — on some individual policies by limiting the services they cover. Such plans may exclude prescription drugs and maternity services, for example; others may cover only hospital visits.

Many of the policies have big deductibles and require patients to pay large portions of their expenses, costing them much more than coverage obtained at workplaces.

The game-playing by Arnold on the budget means that, in all likelihood, these rules will not go into effect, and individual consumers of health insurance (like me) will remain incredibly vulnerable to the vicissitudes of the insurance industry, which has shown already a penchant to deny coverage and jack up premiums.  That too will put the lives of Californians at risk.

There’s a human cost to the bullshit that Terminator Boy isn’t accounting for.  His head is in the clouds, and he thinks he can bully the legislature liked he bullied people in scripted movies for decades.  But the recklessness will cost money, pain, suffering, and even lives.

Dan Weintraub has a stupid column about single-payer health care that uses the same rhetoric that has locked us into a broken status quo for the history of the Republic.  He claims that a new legislative analyst’s report of the costs of SB840, if implemented today, would leave the state $40 billion dollars in the red after just one year.  That’s true, but as Sheila Kuehl explains, that’s because health care costs have soared while wages remain stagnant, and thus the numbers from the original assessment of the bill are completely out of date.  Weintraub then achnowledges this, but asserts that only 50 percent of the deficit can be attributed to a run-up in health care costs.

Of course, that’s $20 billion dollars.  And one element that Weintraub refuses to consider is cost control, which is the only way any fundamentally new health care system will survive, be it single payer or a collective-responsibility plan like that rejected by the State Senate last year.  Weintraub never tries to factor in cost control.  He never manages to analyze whether or not a system that takes middle men out of the process and removes the profit driver might be able to reduce the price of quality care.  In the same way he never considers whether mandating that insurance companies spend a high percentage of premium revenue on treatment and care would reduce those costs he sees as fixed.

Spending on health care is out of control because there is a patchwork quilt of delivery services, diced up between insurers, hospitals, managed-care organizations, and other elements who add cost without impacting quality.  It’s, in short, an efficiency problem; the United States is grossly inefficient in its delivery of services, and despite superior technology and high spending has a life expectancy which trails 30 other countries and has the highest rate of underweight babies in 40 years, to cite just two examples.  Subjecting a fiscal analysis of a system that would eliminate or sharply reduce the fiscal burden of this quilt to the old rules, and the old costs, makes no sense whatsoever.  It’s like doing an fiscal analysis in the 21st century of the naval budget, factoring in the effects of ships falling off edge of the world.

There’s also the moral argument that we have over seventy million uninsured and underinsured Americans in a country which lists “life” as a fundamental inalienable right.  But I’ll shove that aside for a moment to deride Weintraub’s limiting analysis.

There actually are some things going on outside the primaries, here’s what’s piqued my interest the past few days:

• Matt Stoller has more on the Barbara Boxer/climate change bill debacle.  What hurts the most is that she shut down any debate on the left flank, called progressive groups like Friends of the Earth “defeatists,” and pressed forward with a muddled bill that rewards polluting industries without doing the work necessary to provide pushback from the inevitable corporate-funded conservative narratives.  I wish she’d just pull it before she causes lasting damage; we’d be in a much better position next year to get something legitimate passed.

• Here’s a very good profile in The Nation of almost-a-Congressional candidate Lawrence Lessig and his “Change Congress” movement.  I’m kind of waiting for the innovative steps to get this done, but Lessig is a sharp guy.  He’s giving the keynote address at Netroots Nation next month.

• There’s an LA Times exploration of the various health care-related bills moving through the legislature.  They’re all fairly small-bore but I think they will improve the situation out here, by eliminating rescission, mandating that insurers spend 85% of premium revenue on treatment, and including more procedures in baseline coverage, like maternity.  As long as we have the insurance system, we need to do what we can to make sure it’s not as thieving as possible.

• There’s a new Field Poll on Arnold and the legislature out today that is a cavalcade of bad news – the right track/wrong track numbers are 22/68, the Governor’s approval rating is down to 41%, and the legislature is at 30%.  Californians don’t like their government right now.  Some leadership might solve the problem.

• The salmon are dying in the Sacramento/San Joaquin Delta because of ammonia runoff from sewage treatment plants, and purifying the Delta could cost up to $1 billion.

• Here’s another personal story of how the foreclosure crisis is hurting individuals, this one in the Central Valley town of Merced.  It’s impacting practically the entire economy of the town.  Just another example of the mess we’re in from over-speculation and lax oversight of the financial industry.  

( – promoted by David Dayen)

A couple more from Dave:

Advocacy group Families USA has put out a shocking report (PDF), “Dying For Coverage,” detailing how Californians are impacted by a lack of health insurance.  The number “47 million” that designates Americans without health insurance is too abstract and detached from meaning.  Californians are dying because of their inability to afford or acquire insurance.

• Families USA estimates that more than eight working-age Californians die each day

due to lack of health insurance (approximately 3,100 people in 2006).

• Between 2000 and 2006, the estimated number of adults between the ages of 25

and 64 in California who died because they did not have health insurance was

nearly 19,900.

•Across the United States, in 2006, twice as many people died from lack of health

insurance as died from homicide.

The factors that lead to death include: 1) a lack of preventive care and screening, 2) unnecessary delays for medical care because of affordability concerns, 3) no access to care outside an emergency room, and more.

Some of our Democratic members of Congress have commented on the report.

“This new Families USA study highlights a sad statistic that more people in our country died from lack of health insurance than from homicide between 2000-2006,” U.S. Rep. Pete Stark (D-CA) said today. “In California alone, nearly 20,000 people in that time frame died because of being uninsured.”

“Our nation has more people in jail than anywhere else in the world in its effort to combat crime,” Stark said. “Yet, we allow 47 million people to go without health insurance-which translates into going without needed medical care-each year. It’s time to take action and combat the real killer in our country-the lack of universal health care.”

“It is appalling and irresponsible that more than eight working-age Californians die due to lack of health insurance each day,” U.S. Rep. Hilda L. Solis (D-CA) said today. “In California , 60 percent of the uninsured are Latinos, which means that nearly five Latinos die each day because we cannot ensure access to quality, affordable health care.”

“I am fighting in Congress to improve the health of communities of color and strongly support improving access to health care for all populations,” Solis said.

When Republicans talk about “cost control” in medical care, they want a world very much like this.  They believe that the problem with health insurance is that people have too much of it.  They would rather it be limited and used only when necessary, and they would rather Americans hold out and comparison shop when they are ill or infirm.  In other words, the conservative vision of health care aligns with the for-profit insurance company vision which directly leads to 8 dead Californians every single day.

As we pick up the pieces from the failure of health care reform from earlier this year, this powerful report shows the dire need to repair the broken system and ensure affordable care for everyone.

It looks as if the Foundation for Taxpayer and Consumer Rights is planning on going to the ballot in 2010 with a proposal to basically do to the health insurance industry what Proposition 103 did to the auto insurance industry.

“We are going ahead with this,” said Jamie Court, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. “The only thing that would block this is if the single-payer (universal health care) folks want to go ahead and go to the ballot, or if a new president wants to do something more ambitious. In that case, we would back off.” […]

The plan would remove HMOs from the regulatory authority of the state Department of Managed Health Care, which is headed by an appointee of the governor, and place them in the California Department of Insurance, which is run by a publicly elected commissioner. It would order HMOs and others to get their rates approved in advance by the state and force them to justify those rates; rates judged to be “arbitrary or capricious” would be thrown out. Rescinding coverage after an illness sets in would be outlawed. Extra costs for special services, the so-called “out-of-pocket maximums” – would be capped, as would prescription drug costs. Patients would not be penalized for changing doctors or care plans. The HMOs and others would be required to submit detailed financial information to state regulators, who would have the authority to penalize companies for violations and seize and operate companies whose fiscal condition was suspect. There would be language making it easier to sue HMOs and others, and those who bring lawsuits in furtherance of the initiative would be compensated for their time – as in Proposition 103.

This would spark maybe the most expensive initiative fight since Prop. 87 in 2006.  In general, if you’re going to remain with a for-profit health insurance system, then regulating it to provide for the fairness of California citizens seems apt.  Prop. 103 has somehow not left Californians without car insurance.  This is a valuable market for that industry, and the same with health insurers.

This could get interesting…

Health care reform in California is in stall mode right now, and with each passing day the price tag for gathering signatures rises.  But between the twin fundraising efforts of the Speaker and the Governor, as long as they cancel travel for a month they should be fine.

What’s working against the proponents of health care reform, in my view, is the continuing tragedy of Nataline Sarkysian.  By November 2008 this will be out of the headlines, but within weeks the State Senate will be debating the merits of a reform measure that keeps the insurance companies in business to do this:

A Friday funeral was set for the Northridge teenager who died last week after her insurer refused to pay for a liver transplant and then reconsidered. Meanwhile, the girl’s health plan stood by its initial decision Monday.

Philadelphia-based Cigna HealthCare has a record of approving coverage for more than 90% of all transplants requested by its members, as well as more than 90% of the liver transplants, company President David Cordani said in a memo addressed to employees and distributed to members of the media.

This is definitely a time to be citing statistics.

CIGNA clearly makes decisions based on corporate profit and lawsuit threats.  They decide what treatments are “experimental” based on flowcharts and spreadsheets, not by looking into their customer’s eyes.  And their complete lack of empathy proves that they’re willing to let this continue.

Just the other day, a state appeals court ruled that insurers cannot play the game of canceling coverage because of faulty applications only when the patient actually needs to use their health care.

California health insurers have a duty to check the accuracy of applications for coverage before issuing policies — and should not wait until patients run up big medical bills, a state appeals court ruled Monday.

The court also said insurers could not cancel a medical policy unless they showed that the policyholder willfully misrepresented his health or that the company had investigated the application before it issued coverage […]

The decision came in a closely watched case involving Steve Hailey, an Orange County small-business owner whose coverage was canceled by Blue Shield of California after he had a disabling car accident. The ruling in favor of Hailey sends the case back to the lower court for trial and requires Blue Shield to pay Hailey’s appellate costs.

The types of tricks of the trade employed by CIGNA and Blue Shield are a nationwide trend.  Legislation and lawsuits have yet to stop them.  They’ll claim that they can’t do business without this kind of chicanery.  At some point, government must grant their request.

Let me clear out my Inbox and set you on your weekend way:

• The Megan’s Law website apparently is being used as a hit list and may have led to at least one death.  This is the downside of a “what about the children?” über alles mentality.

• I’m not entirely certain about this claim that state lawmakers could have solved the mortgage crisis back in 2001 by cracking down on predatory lending practices.  It’s a boilerplate story, a typical “they bought off the politicians” frame.  But the problem, as Paul Krugman notes today, is that home prices lowered, leading to negative equity for homeowners.  Not sure what the lawmakers could have done about that.  This is a national crisis that required federal action.  And what action could be taken on the state level is in the purview of the Attorney General.  Jerry Brown is investigating home loans from Countrywide Financial for improprieties, particularly forcing buyers with good credit into subprime mortgages.

• For all the talk about Steve Poizner, he is doing his job in suing Blue Shield for their loathsome practice of dropping patients retroactively after they seek coverage.  Blue Shield’s response?

The state’s interpretation of laws governing policy cancellations “is simply wrong.”

Stupid state, not knowing their own laws as well as a private entity!

• Nancy Pelosi is under fire for saying that Republicans like this war.  Juan Cole is right to slam her for assuming that Republicans would act in good faith and help to end the war after the 2006 elections.  What Republican Party was she talking about?

• Anthony Wright has the new amendments released to the public on the new health care reform.  I should have a lot more on this over the weekend.

• I know that I didn’t execute a House roundup in November, but honestly there wasn’t a whole lot going on in the races.  So I postponed it and will have a December roundup in the next few days.

• And finally, I would be remiss if I didn’t mention the California Democratic Party buying three grand in French wine from Fabian Nuñez, who’s now a wine salesman, I guess.  I have to acknowledge Kevin Spillane (two Republicans in one day, I know) from the No on 93 campaign for the funny move of sending a bottle of Two Buck Chuck to Nuñez’ office.  It is an award winner.

It’s an open thread.

This is the benign face of the industry that will undeniably get richer in a forced-market “universal” health care approach:

One of the state’s largest health insurers set goals and paid bonuses based in part on how many individual policyholders were dropped and how much money was saved.

Woodland Hills-based Health Net Inc. avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006. During that period, it paid its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies, documents disclosed Thursday showed.

The revelation that the health plan had cancellation goals and bonuses comes amid a storm of controversy over the industry-wide but long-hidden practice of rescinding coverage after expensive medical treatments have been authorized.

Cancellation GOALS.  That’s right.  One man’s catastrophic medical and financial situation is another man’s new boat.

This is of course nothing new.  It’s standard practice for most insurers.  When you get sick and put in a claim to actually use your health insurance, your file is immediately sent to the cancellation department and people review it for the slightest rationale to dump your coverage.

Now, market reforms like guaranteed issue, which would mandate that insurance companies cover anyone who wants health insurance regardless of pre-existing condition, would stop this practice.  California’s latest iteration of a health reform bill includes this policy.  But let’s not be so naive that insurers will not find other ways to stop paying their claims, and use the spectre of “affordability” to do so:

Insurers maintain that cancellations are necessary to root out fraud and keep premiums affordable. Individual coverage is issued to only the healthiest applicants, who must disclose preexisting conditions […]

The documents show that in 2002, the company’s goal for Barbara Fowler, Health Net’s senior analyst in charge of rescission reviews, was 15 cancellations a month. She exceeded that, rescinding 275 policies that year — a monthly average of 22.9.

More recently, her goals were expressed in financial terms. Her supervisor described 2003 as a “banner year” for Fowler because the company avoided about “$6 million in unnecessary health care expenses” through her rescission of 301 policies — one more than her performance goal.

In 2005, her goal was to save Health Net at least $6.5 million. Through nearly 300 rescissions, Fowler ended up saving an estimated $7 million, prompting her supervisor to write: “Barbara’s successful execution of her job responsibilities have been vital to the profitability” of individual and family policies.

Let’s not claim that “but in the future, this will be illegal” and clap our hands in self-congratulation.  This is ALREADY illegal in the state of California.  You can’t tie bonuses to claims reviews.  But they did it nontheless.

So when you make deals with a for-profit health insurance industry, don’t be surprised if they ever so slightly go back on them.