Strengthening Communities

BY Nathan Newman

Stopping Toxic Toys

This summer and fall has been a parent's nightmare as toymakers recalled millions of foreign-made toys tainted by lead and other toxic hazards. In a blockbuster report, Toxic Trade: Globalization and the Safety of the American Consumer, the Campaign for America's Future highlights that this situation is no accident, but deliberate federal policy as corporate interests have taken over the federal Consumer Product Safety Commission and gutted consumer protections. The problem is clear:

World imports have increased by 338% since 1974, with imports from China alone increasing nearly 3,900% just since 1985. Yet the budget of the Consumer Product Safety Commission, the government agency responsible for monitoring consumer goods in the United States, is less than half the level it was when it started in 1974... As a result of budget cuts, the CPSC has closed more than 40 field offices and cut its port inspection staff to 15 people nationwide.

With 80% of toys coming into the U.S. from China, having just 15 people nationwide monitoring product safety in our ports is obviously a recipe for poisoning our children.

States Leading on Toxic Toy Safety

Luckily, states have stepped into the breach of federal inaction in recent decades. California is a leader in this area, having enacted Proposition 65, the Safe Drinking Water and Toxic Enforcement Act as a ballot initiative in November 1986. Groups like California's Center for Environmental Health have used the law to win legal agreements to eliminate lead threats from diaper creams, children's medicines, home water filters, vinyl lunch boxes, and baby bibs. To emphasize the importance of this state action, even if federal law was being enforced (which it isn't), the federal CPSC legally allows 350 times more lead in products than are allowed under California law.

Another key state initiative has been the Toxics in Packaging Act, drafted by the Coalition of Northeastern Governors in 1989 and adopted by 19 states, which requires that concentrations of four toxic metals (including lead) be reduced to less than 100 parts per million -- a far lower level than the 600 parts per million allowed by the federal government.

In 2006, the City of San Francisco became the first city to ban the sale, distribution and manufacture of baby products containing any level of bisphenol A and certain levels of phthalates, key toxics often used in childrens' toys. With the state of California following suit in 2007 with the passage of AB 1108 banning most phthalates, many manufacturers removed these toxins from plastic bottles, teething rings and other toys. 

Stopping Federal Preemption

As we've highlighted in the past, the biggest danger to this state action are federal laws that preempt stronger state leadership. As Ed Mierzwinski, Federal Consumer Program Director for the U.S. Public Interest Research Groups, said in Congressional testimony, the government may trade “passage of a weak federal law for ”Ëœfederal uniformity’ in response to the baseless demands of self-interested industry organizations.”?

In current Congressional debates, Mr. Mierzwinski praises language in one proposed law, the Safety Assurance for Every Consumer Product Act, HR 3691, which declares that no federal rule "shall contain a preemption provision" voiding stronger state action unless expressly authorized by statute.

Another federal bill, approved by a U.S. Senate committee, would strengthen state enforcement by giving state attorneys general the authority to enforce its provisions, a way to assure that enforcement of federal child safety laws would not be gutted when corporations buy off the White House.

If new Congressional laws don't undermine their authority, states will continue taking leadership on fighting toxic toys; leadership sadly lacking for decades by federal officials.

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Valuing Families

BY Adam Thompson

Privatizing Health Care at Taxpayers' and Patients' Expense

A perfect storm is brewing around the shady business practices of a private Florida insurance company that covers 2.3 million Medicaid and Medicare beneficiaries nationwide, including a raid by federal and state agents, allegations of fraud, a subsidiary in the Cayman Islands, signing up dead people, and excessive profits gleaned from government contracts. This sounds like a bad B-movie caper directed by Dick Cheney, but it is an all-too-real account of Medicaid and Medicare privatization going sour. 

Earlier this month, 200 federal and state agents raided the offices of WellCare Health Plans of Tampa, Florida, amid growing questions about the company's substantial profits and business practices. The raid comes a few months after WellCare and other insurers voluntarily suspended marketing after federal officials alleged the companies engaged in illegal and aggressive sales tactics, including enrolling dead people, impersonating Medicare representatives, and exploiting personal information stolen from federal records. 

Privatization Leads to Taxpayer-Subsidized-Profits... and Questions

WellCare is Florida's largest private Medicaid carrier and has Medicare Advantage members in 7 states. In 2006, the company had $4 billion worth of Medicaid and Medicare contracts, earning $139.2 million in profits. These profits - and those of other insurers - should be a "canary in the coal mine" warning for state and federal lawmakers and taxpayers. Only 81% of Wellcare's revenue was spent on medical care for its members; the rest went to profits, bonuses, and overhead. To push more Medicare beneficiaries into private plans, the Bush Administration pays private companies 12% to 19% more for every senior they enroll in Medicare Advantage versus traditional fee-for-service Medicare. Said one financial analyst,

These companies are making a lot of money off this Medicare Advantage product, and you just have to wonder if maybe something is wrong here.

Wall Street analysts are skeptical of WellCare's profits and business dealings, and so they should be. WellCare has a subsidiary in the Cayman Islands which provides the company with reinsurance coverage, a form of insurance for insurance companies. How convenient that WellCare pays itself for coverage - shifting money around in the form of reinsurance premiums. Adding to the controversy, WellCare is being audited by the State of Georgia, where the company has over 440,000 Medicaid and SCHIP members, most of whom are children. Health care providers are questioning the timeliness and the quality of coverage WellCare is providing under these programs.

To its credit, WellCare has given back for the generosity it has received - $105,000 to the Florida Republican Party this year; $66,000 to federal candidates, all Republicans, in 2006; and, its generosity knowing no bounds, $5,000 to the Florida Democratic Party this year.

Privatization - A Boon for Corporations, A Bust for Consumers

The problems arising from health care privatization are not unique to Medicare and Medicaid. A New York Times report details the substandard, and too often, deadly care nursing home residents receive after public nursing homes are acquired by private investment firms. In addition to reduced staff levels, higher death rates, and dirty facilities, the private corporations set up complex mazes of ownership that make it virtually impossible for disaffected seniors and their families and government regulators to exert any level of accountability over the medley of for-profit entities running the homes.

Medicare, Medicaid, and nursing home privatization is a serious problem for Americans who want accountability in health care programs and thoughtful stewardship of taxpayer dollars.

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