The news announced today that Switzerland will not extradite Roman Polanski to the United States, and that he will now be allowed to return to his home in France. Visiting the United States is still something that he cannot do, as the warrant for his arrest here still stands. Steve Cooley, the Los Angeles District Attorney is not happy with this turn of events.
What Steve Cooley does not say is how much money the city of Los Angeles has spent on this extradition. Roman Polanski entered a guilty plea to one count of unlawful sexual intercourse. That was in 1977. When he was 43. He raped a 13-year-old girl. Now, I don't condone his behavior, but I do question why we are still pursuing this. Polanski has spent the last 33 years outside of the United States, and not allowed to come back here. That is punishment. He has also been forced to avoid other countries that have extradition agreements with the United States, which is also punishment.
But to Steve Cooley, nothing short of jail time will do. Steve Cooley apparently does not understand that justice comes in many forms. To spend millions of dollars to bring this man back to Los Angeles only for the pleasure of trying him, and possibly convicting him, thus allowing him to be placed in our jails, which will cost us more money, is an exercise in lunacy. Cooley is not looking at the big picture. The victim has asked that this case be dropped, there is no point in pursuing it and yet Cooley persists.
The purpose of incarceration is to rehabilitate criminals. When a crime is committed and the perpetrator is caught, they are incarcerated in order to teach them that they must not do this again. Polanski is now in his 70s. Is it likely that he will do this again? In the past 33 years that he has been on the run, have any charges been brought against him? It seems that the purpose of incarceration has been negated in this case and therefore, it would be unnecessary at this point.
Not to Cooley. Apparently, not to Barbara Blaine either. Blaine is the President of SNAP, the Survivors Network of those Abused by Priests. She and her group are in Chicago picketing the Swiss consulate for the actions of the Swiss government. Now, Blaine has to keep abuse by priests in the spotlight because this is how she makes her money. In 2006 and 2007 she was paid $75,000 in salary for her position as president. In 2008 she was raised to $75,750 (these figures are from the Form 990 filed with the IRS for these years). The 2009 filing is not yet available.
My question to Blaine is, when did Polanski become a priest? Her organization is specifically against Priests (hence the name) yet she is speaking out against Polanski because, why? Is he Catholic? Is that enough for SNAP now? Blaine made the claim that she heard there might be another victim, but since no charges have been filed, this claim is spurious at best. It would not be admissible in court, yet she still makes the claim. That doesn't speak well of her credibility.
Let's do the best thing we can in this situation, and drop it. If Cooley wants to keep the warrant in place, that's fine. It's pointless, but he can have it. Polanski can stay in France or Poland, where he is free from extradition. And Blaine can shut up and mind her own business and collect her $75,000 whether she actually earns it or not.
Monday, July 12, 2010
Monday, May 24, 2010
Los Angeles Unified School District Reform
The system is broken, and when something is broken, it needs to be fixed. Fixing the Los Angeles Unified School District (LAUSD) won't be easy, but it can be done. To do this, we need sweeping changes in the way the district is run, and in the people who work for the district.
First, we need to balance the budget. LAUSD has operated for many years without the needed funds, and the money that comes in is often spent badly. This is the second largest school district in America for the number of students, yet it has a high school drop-out rate of over 25%. More than one quarter of the young people attending schools in the district never finish, which severely limits their potential for jobs in the future. This also reduces their earnings potential, which manifests itself in their ability to pay taxes. Drop-outs hurt all of us.
To start reforming this mess the district needs additional money. The mortgage meltdown has reduced the amount of money that all school districts receive, and LAUSD is no exception. In order to help alleviate this shortage, we need to charge tuition for all students. This amount can be nominal; $100 per student per year. This would give the district nearly $70 million additional dollars. Note that this money comes with certain restrictions; first, the state is not allowed to reduce money to the school based on the tuition money. This wouldn't alleviate the problems, but merely transfer a small part of the financial burden.
Second, the tuition money is paid directly to the school where the student attends and not to the district. Third, the money is controlled by the teachers in each school, and only by the teachers. The administration and parents do not have any say in how the money is spent. Lastly, the money cannot be used to pay any salaries. It can only be used for those things that the school needs, either as a whole or in individual classrooms.
Next, we need to limit the amount of money being spent, and much of the money is being spent on salaries. We need to cap the salary of the Superintendent of School at $100,000 annually, and cap all other salaries at $80,000. This includes over-time and bonuses. Benefits for all employees will be the same, and will be limited to medical, dental and vision insurance, paid holidays and paid vacation with the following restrictions:
Insurance premiums (medical, dental and vision) shall be paid 60% by the district and 40% by the employee. Spouse and dependents can be added to the policy and will be paid 40% by the district and 60% by the employee. Any other insurance (life, AD&D, etc.) will be paid 100% by the employee.
Holidays will be based on the Federal list of holidays (not the state list). Any other days off will be unpaid.
Vacation will be paid at the rate of three weeks per year. Upon completion of ten years of service, the employee's vacation time will increase to four weeks per year. Four weeks is the maximum for any employee.
These changes will save the district millions of dollars annually.
Next, the students must be encouraged to participate and work better. This can only come partially from the classroom, but must also come from home. In order to do this, all parents of students attending school in the district will be required to provide 10 hours of service to the school (not the district, but the individual school) per year. This 10 hours is per student, so a parent with five children in school will contribute 50 hours of volunteer time per year.
Additionally, any child who arrives at school unwashed, unfed or in any way unkept, or who has not completed the required homework assigned will be immediately sent to the principal's office. The principal will contact both parents (as is applicable) and those parents must report to the school within two hours to explain the condition of their child. Failure to appear will result in an arrest warrant being served, and the parents will immediately be taken into custody and will be fined $500 per parent. At this time they will also face charges of violation of the school code resulting in a maximum fine of $1,000 and 100 hours of community service.
Finally, any changes made to balance the budget in the forms of reduction of salaries or services may only have 25% of the total coming from classrooms and teachers. The remainder must come from the administration, either of the school in question or the district as a whole.
These changes are radical, but they would result in a better school district. They would allow the teachers the financial resources to teach properly, while eliminating the constant threat of cutting teaching jobs while administrators run amok. They would increase the role of parents in the education of their children and lower the drop-out rate, while ensuring that all children are performing at their best.
These changes are sorely needed at the LAUSD, but will never happen by the current school board. In order to really change the district, we need an initiative placed on the ballot so the people of this city can vote on it. Only then will we see our district improve.
First, we need to balance the budget. LAUSD has operated for many years without the needed funds, and the money that comes in is often spent badly. This is the second largest school district in America for the number of students, yet it has a high school drop-out rate of over 25%. More than one quarter of the young people attending schools in the district never finish, which severely limits their potential for jobs in the future. This also reduces their earnings potential, which manifests itself in their ability to pay taxes. Drop-outs hurt all of us.
To start reforming this mess the district needs additional money. The mortgage meltdown has reduced the amount of money that all school districts receive, and LAUSD is no exception. In order to help alleviate this shortage, we need to charge tuition for all students. This amount can be nominal; $100 per student per year. This would give the district nearly $70 million additional dollars. Note that this money comes with certain restrictions; first, the state is not allowed to reduce money to the school based on the tuition money. This wouldn't alleviate the problems, but merely transfer a small part of the financial burden.
Second, the tuition money is paid directly to the school where the student attends and not to the district. Third, the money is controlled by the teachers in each school, and only by the teachers. The administration and parents do not have any say in how the money is spent. Lastly, the money cannot be used to pay any salaries. It can only be used for those things that the school needs, either as a whole or in individual classrooms.
Next, we need to limit the amount of money being spent, and much of the money is being spent on salaries. We need to cap the salary of the Superintendent of School at $100,000 annually, and cap all other salaries at $80,000. This includes over-time and bonuses. Benefits for all employees will be the same, and will be limited to medical, dental and vision insurance, paid holidays and paid vacation with the following restrictions:
Insurance premiums (medical, dental and vision) shall be paid 60% by the district and 40% by the employee. Spouse and dependents can be added to the policy and will be paid 40% by the district and 60% by the employee. Any other insurance (life, AD&D, etc.) will be paid 100% by the employee.
Holidays will be based on the Federal list of holidays (not the state list). Any other days off will be unpaid.
Vacation will be paid at the rate of three weeks per year. Upon completion of ten years of service, the employee's vacation time will increase to four weeks per year. Four weeks is the maximum for any employee.
These changes will save the district millions of dollars annually.
Next, the students must be encouraged to participate and work better. This can only come partially from the classroom, but must also come from home. In order to do this, all parents of students attending school in the district will be required to provide 10 hours of service to the school (not the district, but the individual school) per year. This 10 hours is per student, so a parent with five children in school will contribute 50 hours of volunteer time per year.
Additionally, any child who arrives at school unwashed, unfed or in any way unkept, or who has not completed the required homework assigned will be immediately sent to the principal's office. The principal will contact both parents (as is applicable) and those parents must report to the school within two hours to explain the condition of their child. Failure to appear will result in an arrest warrant being served, and the parents will immediately be taken into custody and will be fined $500 per parent. At this time they will also face charges of violation of the school code resulting in a maximum fine of $1,000 and 100 hours of community service.
Finally, any changes made to balance the budget in the forms of reduction of salaries or services may only have 25% of the total coming from classrooms and teachers. The remainder must come from the administration, either of the school in question or the district as a whole.
These changes are radical, but they would result in a better school district. They would allow the teachers the financial resources to teach properly, while eliminating the constant threat of cutting teaching jobs while administrators run amok. They would increase the role of parents in the education of their children and lower the drop-out rate, while ensuring that all children are performing at their best.
These changes are sorely needed at the LAUSD, but will never happen by the current school board. In order to really change the district, we need an initiative placed on the ballot so the people of this city can vote on it. Only then will we see our district improve.
Thursday, May 13, 2010
Proposition 17
By now you've probably heard the ads for Prop 17 that state that there is a "flaw in the law" that allows you to have a discount on your auto insurance, but only with your current carrier. The ads state that passage of Prop 17 will allow you take this discount to any insurance company, and on the surface that sounds good. It's not the entire truth.
Currently, if you have had bodily injury liability coverage your insurance company MAY offer you a discount. They don't have to. You can only use that discount with the carrier you are currently using. The term used in the current law is Persistency of Coverage. Persistency exists even if there is a lapse of coverage of up to two years while serving in the military, or 90 days in the last five years for any other reason.
Prop 17 would change the law to allow the discount with any insurer, not just the current insurer. Note that it doesn't guarantee you a discount, it only says the insurance company MAY offer it. By that argument, an insurance company could just as easily reduce the premiums if they wanted to. What really changes is the persistency period. Service in the military is still a valid reason for lapse of coverage, but the 90 days in the last five years for any other reason will be changed to "90 days in the last five years for any reason other than nonpayment of premium." In other words, anyone whose coverage has lapsed because they weren't able to pay premiums for three months will lose the discount. In short, the insurance companies get to raise their rates.
In a time when unemployment is at an all-time high and people are trying to pay their mortgages and put food on the table, it doesn't seem fair to allow an insurance company to raise their rates. That's what Prop 17 does. It was sponsored by Mercury Insurance Company as a change to Prop 103 that was passed in 1988. Mercury is spending millions on this campaign, knowing that no grass roots organization has the financial means to stop them.
This is where you come in. First, send this email to your friends in California. Even if they don't vote, they probably know people who do. Get the word out on what this initiative really is.
Second, if you are able to donate to get this message out, go to http://www.stopthesurcharge.org and make a donation.
Lastly, if you need additional information, you can read the entire text of the Proposition in the California Statewide Direct Primary Election, Tuesday, June 8, 2010 Official Voter Information Guide that came from the Secretary of State's office. The text begins on page 76. If you didn't receive this document in the mail, you can also read it here: http://voterguide.sos.ca.gov/pdf/english/text-proposed-laws.pdf
Monday, April 12, 2010
New Life for Gay Marriage
Few things in this world happen in a vacuum and the announcement in today's news on gay marriage is no exception. It was revealed today that the supporters of placing a ban on Prop 8 did not get enough signatures to put the measure on the November ballot. Supporters of Prop 8 see this as a victory but they might be premature.
Proposition 8 was passed in California in a previous election and makes the legal definition of marriage in this state between one man and one woman. This is not only a blow for those of us who support gay marriage, but also for anyone who wants to have more than one spouse. Both are outlawed in our state (as they are in most states).
A move was enacted to garner enough signatures to put a measure on the November ballot to allow the voters another try and hopefully overturn the original initiative. This attempt has failed, since not enough signatures were gathered, but another measure has made the ballot that should be of interest to our side.
In November the voters of California will decide whether or not to continue the current law outlawing the recreational use of marijuana. In recent polls, over 50% of likely voters have said they would vote to legalize its recreational use (it is already legal medically), and this can be good news to the people looking to overturn Prop 8.
In November we will likely pass the marijuana initiative, which will allow adults age 21 and over to have and use up to one ounce of marijuana, as well as grow their own (within certain limits). The sale of marijuana will also be eligible to be taxed, thus giving much-needed revenue to our state.
What this means for supporters of overturning the gay marriage ban is that they have another year to gather enough signatures for the ballot in 2011. By that time, a good portion of the population of this state will have spent the past year smoking pot any where and any time they want, and will undoubtedly be so mellow that they'll vote for just about anything.
So, for the people who joined the movement to overturn Prop 8, kick back, light up a bowl and bide your time. By next year, it will be a whole new world.
Proposition 8 was passed in California in a previous election and makes the legal definition of marriage in this state between one man and one woman. This is not only a blow for those of us who support gay marriage, but also for anyone who wants to have more than one spouse. Both are outlawed in our state (as they are in most states).
A move was enacted to garner enough signatures to put a measure on the November ballot to allow the voters another try and hopefully overturn the original initiative. This attempt has failed, since not enough signatures were gathered, but another measure has made the ballot that should be of interest to our side.
In November the voters of California will decide whether or not to continue the current law outlawing the recreational use of marijuana. In recent polls, over 50% of likely voters have said they would vote to legalize its recreational use (it is already legal medically), and this can be good news to the people looking to overturn Prop 8.
In November we will likely pass the marijuana initiative, which will allow adults age 21 and over to have and use up to one ounce of marijuana, as well as grow their own (within certain limits). The sale of marijuana will also be eligible to be taxed, thus giving much-needed revenue to our state.
What this means for supporters of overturning the gay marriage ban is that they have another year to gather enough signatures for the ballot in 2011. By that time, a good portion of the population of this state will have spent the past year smoking pot any where and any time they want, and will undoubtedly be so mellow that they'll vote for just about anything.
So, for the people who joined the movement to overturn Prop 8, kick back, light up a bowl and bide your time. By next year, it will be a whole new world.
Monday, March 29, 2010
Taking Back Our Country
The Tea Party movement is spreading its message across the country by visiting cities and holding rallies, and garnering quite a bit of media attention. From all the news reports you would think it was a very large movement, but in reality, it's not. Just a very vocal one. It can, however, do quite a bit of damage if left unchecked.
To that end, it is important to counter their rhetoric, particularly to our elected officials. This is the time to write to your Senator and Congressman and tell them what you want to see from your government. If you believe health care reform is a good thing, tell them. If you think student loans need to be modified, let them know that. If you believe the wars in Afghanistan and Iraq need to be ended, be sure they understand you.
You can find your Senators by going to http://www.senate.gov and clicking the link on the upper right that says "find my senators." To find your representative, go to http://www.house.gov and on the upper left enter your zip code. If your zip code has more than one representative, you will need to know your four digit extension. If you don't know it, go to the United State Postal Service website at http://www.usps.com and click on "Find a Zip Code." Enter your address and city and you will get back your zip with extension. Then enter that on the House site to find your representative.
Letters and telephone calls are the best ways to reach your elected officials, followed by faxes and emails. You can also write to representatives outside of your area, but they generally will not respond to you. It is, however, a very good way of letting them know your feelings. So, for example, when I write to Barbara Boxer (one of my Senators) and tell her how pleased I am that the government has finally modified health care in this country, I make sure I copy Mitch McConnell on that message so he'll stop lying to the American people about how many of us don't want such reform.
If we all get involved, the system works.
To that end, it is important to counter their rhetoric, particularly to our elected officials. This is the time to write to your Senator and Congressman and tell them what you want to see from your government. If you believe health care reform is a good thing, tell them. If you think student loans need to be modified, let them know that. If you believe the wars in Afghanistan and Iraq need to be ended, be sure they understand you.
You can find your Senators by going to http://www.senate.gov and clicking the link on the upper right that says "find my senators." To find your representative, go to http://www.house.gov and on the upper left enter your zip code. If your zip code has more than one representative, you will need to know your four digit extension. If you don't know it, go to the United State Postal Service website at http://www.usps.com and click on "Find a Zip Code." Enter your address and city and you will get back your zip with extension. Then enter that on the House site to find your representative.
Letters and telephone calls are the best ways to reach your elected officials, followed by faxes and emails. You can also write to representatives outside of your area, but they generally will not respond to you. It is, however, a very good way of letting them know your feelings. So, for example, when I write to Barbara Boxer (one of my Senators) and tell her how pleased I am that the government has finally modified health care in this country, I make sure I copy Mitch McConnell on that message so he'll stop lying to the American people about how many of us don't want such reform.
If we all get involved, the system works.
Wednesday, March 3, 2010
Mitch McConnell on Healthcare Reform
With the Democrats getting closer to passing a healthcare reform bill the Republicans are characteristically gathering forces and bombarding the media with rhetoric. Take Senate Republican Leader Mitch McConnell as an example. He stated that the actions of the Democrats are against the will of the American people, and that healthcare reform will be the undoing of the Democratic majority in Congress.
What Mitch doesn't bother with are the facts.
According to the most recent Gallup poll on healthcare reform, 49% of Americans are for it while 47% are against it. While this is certainly close, it does not substantiate McConnell's argument that the American people are against it. Clearly, the majority (albeit a very slim majority) are for this reform.
What McConnell also doesn't bother to mention are the breakdown of Americans polled. When split into parties, 82% of Democrats support healthcare reform, while 13% are against it. The remaining 5% had no opinion. One can't help but wonder what kind of healthcare those 5% currently have.
Among Republicans only 20% support the measure, while 76% are against it. Again, the remainder (4%) had no opinion.
Since Republicans insist on stretching the truth, or completely ignoring facts in order to press their point, why can't Democrats do the same? For example, using the recent polling numbers, let's spin it this way:
82% of Democrats and 20% of Republicans support healthcare reform. 82 + 20 = 102, therefore 102% of Americans support healthcare reform. By this same logic we would be left with 89% who are against it, but we'll simply ignore that number just as we ignore the 9% who don't have an opinion and only concentrate on the 102% who are in favor. Republicans are experts at ignoring anything that doesn't agree with their arguments so why can't the Democrats do the same?
Of course this is absurd and we, the Democrats do not manipulate the truth in this manner for one very simple reason; we are not liars. We present to the American people what is true. In this country our healthcare system is out of control. Insurance companies are making decisions that should be left to the doctors. Premiums are ridiculously high and not because of rising healthcare costs, but simply because insurance companies are greedy. Insurers have been making record profits and paying their executives exorbitant salaries, all the while denying coverage to those who need it most.
Mitch McConnell is a liar. The American people DO want healthcare reform. More importantly, America NEEDS healthcare reform.
What Mitch doesn't bother with are the facts.
According to the most recent Gallup poll on healthcare reform, 49% of Americans are for it while 47% are against it. While this is certainly close, it does not substantiate McConnell's argument that the American people are against it. Clearly, the majority (albeit a very slim majority) are for this reform.
What McConnell also doesn't bother to mention are the breakdown of Americans polled. When split into parties, 82% of Democrats support healthcare reform, while 13% are against it. The remaining 5% had no opinion. One can't help but wonder what kind of healthcare those 5% currently have.
Among Republicans only 20% support the measure, while 76% are against it. Again, the remainder (4%) had no opinion.
Since Republicans insist on stretching the truth, or completely ignoring facts in order to press their point, why can't Democrats do the same? For example, using the recent polling numbers, let's spin it this way:
82% of Democrats and 20% of Republicans support healthcare reform. 82 + 20 = 102, therefore 102% of Americans support healthcare reform. By this same logic we would be left with 89% who are against it, but we'll simply ignore that number just as we ignore the 9% who don't have an opinion and only concentrate on the 102% who are in favor. Republicans are experts at ignoring anything that doesn't agree with their arguments so why can't the Democrats do the same?
Of course this is absurd and we, the Democrats do not manipulate the truth in this manner for one very simple reason; we are not liars. We present to the American people what is true. In this country our healthcare system is out of control. Insurance companies are making decisions that should be left to the doctors. Premiums are ridiculously high and not because of rising healthcare costs, but simply because insurance companies are greedy. Insurers have been making record profits and paying their executives exorbitant salaries, all the while denying coverage to those who need it most.
Mitch McConnell is a liar. The American people DO want healthcare reform. More importantly, America NEEDS healthcare reform.
Tuesday, March 2, 2010
Anthem Blue Cross' 39% Rate Increase
When I heard the news that Anthem Blue Cross intended to raise premiums by as much as 39% for Californians, I was a bit puzzled as to why such a hefty increase would be necessary. When the reason was stated as "rising healthcare costs" I realized that Anthem Blue Cross was not being honest.
While it is true that healthcare costs do increase, those increases do not have any effect on the profits of an insurer. Let me give an example that will help to explain this:
Dr. Jones and Dr. Smith are both medical doctors, sharing an office in Los Angeles. They both charge $100 for a physical exam, with an additional $50 for x-rays. Dr. Jones accepts all PPO insurance plans (including Anthem), but is not an in-network provider. Dr. Smith also accepts PPO plans, but is in-network with Anthem.
Mary and Blanche are patients of Dr. Jones and Dr. Smith, respectively. Both women are policy holders of Anthem Blue Cross and have PPO insurance plans. When Mary sees Dr. Jones, her insurance is charged $100 for the visit and $50 for the x-rays for a total of $150. When Blanche sees Dr. Smith her insurance is charged the same.
According to Anthem's Fee Schedule, they allow $60 for an office visit, paid at 100% and $30 for x-rays, paid at 75%. This means that Anthem will pay $60 for the office visit and $22.50 (75% of $30) for the x-rays for a total of $82.50. Since Dr. Smith is an in-network provider, he has agreed to accept Anthems fees rather than his own. His $150 invoice is reduced to $90 (he writes-off the remaining $60) of which Anthem pays $82.50 and Blanche pays the remaining $7.50. Since Dr. Jones is not an in-network provider, he accepts Anthem's payment of $82.50, but then bills Mary for the remaining $67.50. He does not have an agreement to accept Anthem's fee schedule, so his fees are what he charges.
Note that in both cases Anthem pays the same amount.
Now, let's assume that Dr. Jones and Dr. Smith both raise their rates by 10%. This increase only matters to the policy holders. Anthem does not raise their fees because doctors raise theirs. In fact, they have limitations on how often a doctor may raise their fees. For out-of-network doctors, the increase in their fees will be passed along to their patients. For in-network providers, the increase in their fees must be written-off as they are still bound by Anthem's fee schedule. Anthem agrees to pay $60 for an exam. Whether an in-network provider charges $100 or $1,000 they still can only collect the $60 agreed-upon fee.
What this means is that Anthem blatantly lied when they claimed that rising healthcare costs were the impetus for their increase in premiums. Under questioning from the legislatures, however, Leslie Margolin (President of Anthem) and her cronies changed their tune. They claimed that due to the economic downturn many healthy individuals had dropped their healthcare coverage as it had become too expensive to keep. Those people who needed the coverage because of existing medical conditions kept the coverage, but were now costing the company too much money resulting in $68 million in losses.
From the sound of it, it would seem that Anthem has a good argument for raising rates, but consider that with $68 million in losses Anthem still managed to pay $39 million in bonuses and spent another $27 million on executive retreats. If these unnecessary bonuses and retreats had been curtailed, their losses would effectively have been reduced to $2 million. Added to this, if their need for revenue was due to policy holders dropping coverage because they could no longer afford the premiums, reducing the premiums would have kept those policy holders, and possibly attracted more, resulting in increased revenue for the company, since by their own testimony many of those who had dropped their coverage were healthy and rarely used the coverage.
It seems that Anthem did just the opposite of what it should have done. Rather than a) reducing spending and b) lowering premiums to hold on to policy holders, Anthem chose to a) spend wildly and b) raise premiums, which would result in even more loss of policy holders.
Now Leslie Margolin is surprised that the legislature wants the government to regulate insurance rate increases. Go figure.
While it is true that healthcare costs do increase, those increases do not have any effect on the profits of an insurer. Let me give an example that will help to explain this:
Dr. Jones and Dr. Smith are both medical doctors, sharing an office in Los Angeles. They both charge $100 for a physical exam, with an additional $50 for x-rays. Dr. Jones accepts all PPO insurance plans (including Anthem), but is not an in-network provider. Dr. Smith also accepts PPO plans, but is in-network with Anthem.
Mary and Blanche are patients of Dr. Jones and Dr. Smith, respectively. Both women are policy holders of Anthem Blue Cross and have PPO insurance plans. When Mary sees Dr. Jones, her insurance is charged $100 for the visit and $50 for the x-rays for a total of $150. When Blanche sees Dr. Smith her insurance is charged the same.
According to Anthem's Fee Schedule, they allow $60 for an office visit, paid at 100% and $30 for x-rays, paid at 75%. This means that Anthem will pay $60 for the office visit and $22.50 (75% of $30) for the x-rays for a total of $82.50. Since Dr. Smith is an in-network provider, he has agreed to accept Anthems fees rather than his own. His $150 invoice is reduced to $90 (he writes-off the remaining $60) of which Anthem pays $82.50 and Blanche pays the remaining $7.50. Since Dr. Jones is not an in-network provider, he accepts Anthem's payment of $82.50, but then bills Mary for the remaining $67.50. He does not have an agreement to accept Anthem's fee schedule, so his fees are what he charges.
Note that in both cases Anthem pays the same amount.
Now, let's assume that Dr. Jones and Dr. Smith both raise their rates by 10%. This increase only matters to the policy holders. Anthem does not raise their fees because doctors raise theirs. In fact, they have limitations on how often a doctor may raise their fees. For out-of-network doctors, the increase in their fees will be passed along to their patients. For in-network providers, the increase in their fees must be written-off as they are still bound by Anthem's fee schedule. Anthem agrees to pay $60 for an exam. Whether an in-network provider charges $100 or $1,000 they still can only collect the $60 agreed-upon fee.
What this means is that Anthem blatantly lied when they claimed that rising healthcare costs were the impetus for their increase in premiums. Under questioning from the legislatures, however, Leslie Margolin (President of Anthem) and her cronies changed their tune. They claimed that due to the economic downturn many healthy individuals had dropped their healthcare coverage as it had become too expensive to keep. Those people who needed the coverage because of existing medical conditions kept the coverage, but were now costing the company too much money resulting in $68 million in losses.
From the sound of it, it would seem that Anthem has a good argument for raising rates, but consider that with $68 million in losses Anthem still managed to pay $39 million in bonuses and spent another $27 million on executive retreats. If these unnecessary bonuses and retreats had been curtailed, their losses would effectively have been reduced to $2 million. Added to this, if their need for revenue was due to policy holders dropping coverage because they could no longer afford the premiums, reducing the premiums would have kept those policy holders, and possibly attracted more, resulting in increased revenue for the company, since by their own testimony many of those who had dropped their coverage were healthy and rarely used the coverage.
It seems that Anthem did just the opposite of what it should have done. Rather than a) reducing spending and b) lowering premiums to hold on to policy holders, Anthem chose to a) spend wildly and b) raise premiums, which would result in even more loss of policy holders.
Now Leslie Margolin is surprised that the legislature wants the government to regulate insurance rate increases. Go figure.
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