Anticipating Federal Reform, States Move on Reining in Insurance Abuses and Implementation
Thursday, March 18, 2010
PERMALINK: http://www.progressivestates.org/node/24735 
Highlighting the outrage at insurance industry abuses pushing Congress towards a final decision on federal health care reform, state legislators continue to advance their own insurance reforms, even as they lay the groundwork for implementing the policies that will emerge in a federal bill.
Here is a summary of just some of the developments taking place across the country where states are enacting and proposing legislation that will complement some of the anticipated federal reforms. Other bills include establishing a state universal coverage program and creating commissions to examine how to best implement the many provisions within a federal reform bill.
Stopping Insurance Abuses: Addressing consumer anger over continued discrimination and abuses leading to bankruptcy in many cases due to medical bills, state chambers continue to enact new reforms on insurance companies:
Implementing Federal Reforms: While a few conservative state leaders are promoting symbolic opposition to federal reform, most states are preparing to take action to implement federal reforms in anticipation of increasing consumer choice, reducing abuses by providers and expanding coverage:
Universal Health Care: A number of states are already anticipating building on the frame of federal reform to move towards a more universal health care for all system:
This past week, the Dallas Morning News  revealed that a key figure who contributed to the privatization of Texas' food stamp eligibility program is now receiving taxpayer dollars to help fix the problems that the private system created. Gregg Phillips, who was Deputy Commissioner at the Texas Health and Human Services Commission (HHSC) and led the push for privatization a few years ago, now heads AutoGov Inc., a company that has received $207,500 from the state government in the past four months to assist in eliminating the errors in the provision and eligibility determination of the state's food stamp program.
As Mike Gross, Vice President of the Texas State Employees Union, relates , "The whole thing smells very bad. We're now hiring the guy who got us in the mess in the first place. It is absolutely stunning."
The "Revolving Door" Between the Government and Private Contractors: As PSN noted in our report, Privatizing in the Dark , a significant issue with privatization is the potential corruption that results from the revolving door between private contractors and state departments. Gregg Phillips personifies this trend. Before landing a key role at the Texas HHSC, he performed a similar function  in Mississippi, "where he... handed out a major state contract and then gone to work for that firm. Phillips hired Chris Britton as a consultant for designing the bidding process, after which Britton went on to work for Accenture, the winning bidder. After Phillips himself left government service, Britton’s company joined with one founded by Phillips to land a $670,000 state contract from the Texas government."
Texas' Experience with Privatization: In 2005, Texas granted Accenture a $899 million contract  to operate the state's food stamp eligibility program. However, the venture quickly turned sour, leaving thousands of people without benefits for which they were eligible. Under Secretary of Food, Nutrition, and Consumer Services at the United States Department of Agriculture (USDA), Kevin Concannon, finds that the failed privatization system resulted in "a five-year slide " in processing food stamp applicants. In fact, Texas now has the worst performing food stamp program in the entire country. Under Secretary Concannon additionally discovered  that Texas could be receiving $1 billion more in federal food stamp funds and serve over 650,000 additional applicants if it approved more applications of eligible Texans. Furthermore, Texas supermarkets are losing approximately $1 billion annually in food sales because of the problems with food stamp provision in the state. Not only has Texas failed to protect its residents, provide benefits to eligible children and families during an economic downturn, and lost almost one billion dollars in potential market activity, but the state is now paying an official who championed the privatization scheme to find remedies for its monumental errors.
These types of incidents undermine public accountability. Progressive lawmakers should take action to prevent such debacles from occurring by either halting failed privatization schemes, similar to Indiana Rep. Gail Riecken's efforts  to end privatization of social services in her state, or require corporate transparency in the state contracting  process, much like initiatives in Alabama , Arizona , Hawaii , and Vermont .
One hundred million Americans do not have broadband at home and the United States continues to lag behind a large number of our international economic competitors in broadband access and speed, according to the findings of the National Broadband Plan . The Federal Communications Commission (FCC) this week unveiled the long-awaited plan with a vast array of information and recommendations to address these problems, as well as approaches to maximize the economic and social gains from broadband adoption.
In addition to promoting universal broadband access, the plan emphasizes the role of broadband in education, health care, energy and the environment, government performance, civic engagement, public safety, and economic opportunity. The plan includes a firm recognition that broadband acquisition cannot occur without the active participation of the states.
Expanding Broadband Access: A number of recommendations have clear implications for policy action by state and local governments. On the basic issue of expanded access to broadband, the FCC recommendations include:
The FCC recommendations also focused on helping states make broadband more affordable and increasing the training needed to encourage adoption , including:
Broadband and a Greener Economy: The report also discusses the ways broadband and smart grid technologies will serve a greener economy by significantly cutting energy use -- a point Progressive States Network and our partners, the Blue Green Alliance, the Sierra Club, and the Communications Workers of America highlighted in a recent report, Networking the Green Economy .
The FCC recommendations include that States should support smart grid applications (Recommendation 12.2) and States should require electric utilities to provide consumers access to, and control of, their own digital energy information, including real-time information from smart meters and historical consumption, price and bill data over the Internet. (Recommendation 12.7) The FCC further explained, "consumers [should be given] access to, and control of, their own digital energy information, including real-time information from smart meters and historical consumption, price and bill data over the Internet.”
As our report notes, smart meters and dynamic pricing could give consumers the ability to track their own power usage and then provide a financial incentive to alter their energy consumption either  by shifting away from periods of peak demand, purchasing more environmentally friendly and energy efficient appliances, or simply decreasing overall energy usage. With the right type of consumer protections and technological metrics in place, smart meters can help individuals purchase energy more efficiently.
Other Issues: The FCC also highlighted the importance of telehealth, a national public safety broadband network, working with states to provide cyber-security protection, support for e-commerce, and state monitoring of ARRA Broadband related projects, an issue we discussed in a previous Dispatch that analyzed trends in ARRA funding .
In general, advocacy groups  and telecommunications companies  alike have praised the intentions outlined in the plan. Through their own distinct lens, however, they question how these ambitious goals would be reached. The Plan is undeniably a good first step, but some are already questioning whether it is enough. Only with Congress moving forward with the Plan’s recommendations and states taking their own actions to universalize broadband adoption within their jurisdictions will we reap the full promise of these communication technologies.
Washington state Governor Christine Gregoire signed a bill  to combat wage theft this week, adding Washington to a growing number of states and counties, including Miami-Dade County , cracking down on employers who underpay workers (many of them undocumented immigrants) and violate minimum wage and overtime rules. Progressive States Network highlighted many of the key provisions, model legislation and resources available  for wage theft and enforcement policies back in December.
Many workers' rights advocates cite wage theft as the number one complaint  heard from workers in recent months - a trend echoed by researchers In fact recent studies have found wage theft is endemic among low-wage workers: according to a 2009 National Employment Law Project study , an overwhelming 68 percent of low-wage workers surveyed throughout the nation reported wage theft in 2008, regardless of their citizenship status.
Washington's law provides the State's Department of Labor and Industries with new tools to combat wage theft, including imposing penalties on businesses that repeatedly violate wage laws and allows the Department to require wage bonds of businesses that habitually fail to pay wages owed to their workers. Wage theft continues to multiply, preventing many workers from making a fair wage and often preventing state and local governments form collecting thousands of dollars in state and local income and employer taxes. On top of other bills introduced earlier in the session in other states, wage theft bills were introduced in Illinois  (SB 3568 ) and New York state  (S 07050 ) just in the last ten days.table style="text-align: left; width: 90%;" align=center border="0" cellpadding="0" cellspacing="0">
A Formula for Decline: Lessons from Colorado for States Considering TABOR  - Colorado’s so-called Taxpayer Bill of Rights, or TABOR, has contributed to a significant decline in that state’s public services, according to this Center on Budget and Policy Priorities report. Colorado citizens voted to suspend TABOR for five years, but the long-term costs to Colorado are clear in schools with low-paid teachers, low university funding, new mothers not receiving prenatal care and other public health problems.
Prison Count 2010: State Population Declines for the First Time in 38 Years  - This first decline in prison population in nearly four decades is due, according to this report by Pew Center on the States to several states enacting reforms designed to get taxpayers a better return on their public safety dollars. These strategies included diverting low-level offenders and probation and parole violators from prison, strengthening community supervision and re-entry programs, and accelerating the release of low-risk inmates who complete risk reduction programs.
An Industry at the Crossroads: Energy Efficiency Employment in Massachusetts  - Massachusetts can get 6,000 good jobs by making the fast-growing weatherization field a “high road” industry, according to this report by the Green Justice Coalition and the Apollo Alliance. The report recommends assuring that weatherization contractors be required to meet living wage, training, local hiring and safe workplace standards to upgrade the quality of those jobs.
Expanding Access to Paid Sick Leave: The Impact of the Healthy Families Act on America's Workers  - With implications for state sick days laws, this Joint Economic Committee of the U.S. Congress report finds that, currently, going to work sick or “presenteeism” is a public health issue, with sick workers spreading contagious disease to fellow co-workers and customers. The reduced productivity of workers who come to work sick and spillover impacts on other employees is bad for businesses. Requiring paid sick days across the country would benefit over 30 million workers.
Temporary Assistance for Needy Families: Implications of Changes in Participation Rates  - This Government Accountability Office report finds that 87 percent of the decline in Temporary Assistance for Needy Families (TANF) caseloads was a result of fewer very poor, eligible families participating in the program rather than a rise in family income. The report indicates the results are due to the TANF program’s work requirements as well as the implementation of other programs intended to divert families from cash assistance.
A New Paradigm for Economic Development  - The Nelson A. Rockefeller Institute of Government finds that higher education institutions play a significant role in state economic development by providing knowledge-focused services to businesses, advancing innovation and research, and contributing to community development. Higher education’s increasingly important role builds on, but goes well beyond, the research strengths of universities — incorporating efforts as wide-ranging as job training, business consulting, housing rehabilitation and even securing seed money for new businesses.
"Mutual Responsibility": A Study of Uninsured Immigrants' Perspectives on Health Insurance in New York City  - As Congressional negotiations over federal health care reform intensify this week, this study by the New York Immigration Coalition and New Yorkers for Accessible Health Coverage notes non-citizens account for 12 percent of New York state's population, yet still make up 29 percent of the state's uninsured - and many would remain excluded from health care reform proposals. Barriers to accessing insurance include the large number of immigrant low-wage workers without employer-based health care, immigrants without at least 5 years of legal status being barred from public health programs like Medicaid; and the reluctance of many immigrants with legal status to sign up for public health insurance for fear doing so will ultimately prevent them from obtaining permanent residency or US citizenship.
PSN IN THE NEWS
GritTV: Federal Health Care Reform Is Just The Beginning: Implications of Federal Reform in the States
Enzo Pastore, PSN's Health Care Policy Specialist, joined a panel discussion with Laura Flanders of GRITtv  to discuss the importance of health care legislation in the states as Congress and the Obama Administration begin a final push towards passing federal health care reform.
Please click the screenshot to view the video.
Anticipating Federal Reform, States Move on Reining in Insurance Abuses and Implementation
Health Care for America Now - Health Insurers Falsely Claim Rising Costs Justify Soaring Premiums 
Families USA - February 2010 Issue Brief, Medical Loss Ratios: Making Sure Premium Dollars Go to Health Care-Not Profits
Progressive States Network - Letter to President Obama  urging the passage of comprehensive health care reform
Progressive States Network - Health Care Reform Resources
State Coverage Initiatives - The Impact of Health Care Reform on State Operations , a February 2010 issue brief that examines a wide range of health care reform initiatives implemented over the past few years in five states - Massachusetts, New Mexico,Tennessee, Vermont and Wisconsin - and offers recommendations that are applicable to all states.
State Coverage Initiatives - Webinar held on March 11, 2010 on the potential roles of a health insurance exchange. This follows their recent brief, Preparing for Health Reform: The Role of the Health Insurance Exchange , that discusses state-specific issues to be considered before establishing an exchange and the different ways in which an exchange might be structured and operated.
The Dallas Morning News - Exclusive: State privatization champion gets contract to help clear up welfare mess
Illinois PIRG - Privatization and the Public Interest 
Progressive States Network - Corporate Transparency in the State Budgets 
Progressive States Network - Privatization During an Economic Downturn: Still Inefficient and Problematic 
Progressive States Network - Privatizing in the Dark 
United States Department of Agriculture (USDA) - Letter to SNAP Commissioners 
Federal Communications Commission - The National Broadband Plan
Progressive States Network - "Networking the Green Economy: How Broadband and Related Technologies Can Build a Green Economic Future"
Progressive States Network - The FCC Extends E-Rate Broadband Access Program to the General Public Progressive States Network - Press Release: Progressive States Network Applauds FCC National Broadband Plan
The Washington Post- How the FCC’s New National Broadband Plan is Expected to Affect Consumers
The New York Times - FCC Questioned on Its Far-Reaching Plan to Expand Broadband Access
National Association of Telecommunications Officers and Advisors — Press Release: NATOA Applauds FCC’s National Broadband Plan 
National Employment Law Project - Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities 
Interfaith Worker Justice - Thou Shalt Not Steal: A Toolkit on Wage Theft 
Progressive States Network - Promoting Wage Law Enforcement Policies in 2010 
Talking Points Memo - Sunlight and Enforcement Are the Best Disinfectants (Against Wage Theft) 
Kim Bobo, Interfaith Worker Justice -Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It  (The New Press, 2009)
The Stateside Dispatch is written and edited by:
Nathan Newman , Executive Director
Nora Ranney , Legislative Director
Marisol Thomer , Outreach Director
Fabiola Carrion , Broadband & Green Jobs Policy Specialist
Enzo Pastore , Health Care Policy Specialist
Suman Raghunathan , Immigrant Rights Policy Specialist
Altaf Rahamatulla , Tax & Budget Policy Specialist
Julie Bero , Outreach and Administrative Specialist
Charles Monaco , Press and New Media Specialist
Mike Maiorini , Online Technology Manager
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