Scott Messick is a 54-year-old retired health insurance consultant from Conroe, Texas. His wife runs a small yarn shop. They're both on his former employer's health insurance plan for retirees, and Messick says that he and his wife together pay $964 a month in premiums, and a $12,000 annual deductible (the amount of money they have to pay out-of-pocket each year before the insurer will pay any expenses). Starting in January, their premiums will shoot up to $1,283 a month, he says.
Earlier this month, Messick logged on to the federal insurance exchange website to shop for a new plan. (The federal government's health insurance website has so many problems that many Americans are not able to register for the site, let alone compare plans. But Messick got through.) Although the Messicks' income is too high to qualify for a subsidy, they found a plan that would save them $6,000 a year in premium payments, and another $5,000 or so on their deductible.
Despite the fact that Obamacare could cut their health care costs almost in half, the Messicks might not switch plans. Why? Because Republicans might repeal the law. "My wife is concerned that Republicans will try to get rid of this thing, and if they do, we've jumped out of a retiree plan," Messick says. "We'd be left with nothing."
Many retiree health plans stipulate that you can only enroll in the plan once, and if you drop coverage—say, by buying cheaper insurance on the exchange—you're out for good. "The door swings one way," Messick explains.
That one-way door could be a problem for many Americans if Obamacare is repealed, says Tim Jost, a health care law scholar at Washington and Lee University School of Law who has consulted with the administration on the implementation of the law. If people like the Messicks buy cheaper insurance on the exchange and Republicans gut the Affordable Care Act, insurance industry prices and practices could return to what they were pre-Obamacare. That means insurers could go back to rejecting older folks, who tend to have chronic health problems, or charging them astronomical prices. Messick has chronic back problems; his wife has suffered a minor stroke and has migraines. "Both my wife and I are uninsurable" in the private market, Messick says, adding that a few years ago he ran an "experiment" and tried to purchase insurance outside of his employer plan and was "turned down flat."
On Thursday morning, Republicans on the House energy and commerce committee held a hearing about what is wrong with the federal health insurance exchange site, who is responsible, and what needs to be done to fix it. In attendance was Cheryl Campbell, the senior vice president at CGI Federal, the main contractor building the website, as well as three other top executives from smaller contractors working on the federal insurance site. Although members of Congress managed to pry some key information out of the witnesses—the contractors, predictably enough, pinned blame on the Department of Health and Human Services (HHS) for failing to adequately test the whole system early enough—a good part of the hearing was devoted to partisan bickering, sometimes only tangentially related to the problem-plagued website.
Here are four topics addressed in Thursday's hearing that had nothing to do with fixing healthcare.gov:
1. Delay Obamacare, because why not: The GOP failed in its effort to delay Obamacare by shutting down the government and threatening default. But Republicans are not dissuaded. Some, like Sen. Marco Rubio, (R-Florida), have suggested delaying the individual mandate for six months because of the problems with the website. Rep. Joe Pitts (R-Penn.) and other Republicans at Thursday's hearing echoed this proposal. (The White House already announced Wednesday night that it will compensate for the delays caused by the website by giving Americans up to six extra weeks to sign up for insurance.)
2. Obamacare Could Steal Your Data: Both Rep. Marsha Blackburn (R-Tenn.) and Rep. Joe Barton (R-Tex.) used the hearing to heap another healthy dose of Obamacare fear-mongering on Americans. Barton said that Obamacare violates the Health Insurance Portability and Accountability Act (HIPAA), the law that protects Americans' personal medical information, because Healthcare.gov requires applicants to enter personal information into site. "Do you think that should be a requirement to sign up for Obamacare?" Barton demanded of the contractors. "You know [that's] not HIPAA compliant… It's a direct contradiction of privacy and you know it!"
Except that the health insurance website only asks for very basic personal data, not medical information. "There is no health information in the process," Rep. Frank Pallone (D-N.J.) snapped in response. "You're asked about your address, your date of birth. You are not asked health information. So why are we going down this path? Because you are trying to scare people so they don’t apply, and so therefore the legislation gets delayed, or the Affordable Care Act gets defunded, or it’s repealed. That’s all it is, hoping people won’t apply."
Blackburn raised the HIPAA issue, too, asking if all the contractors had been trained in HIPPA compliance, if they have physical access to HHS's databases, and how many separate servers were being used to store Americans' medical information.
3. Remember the Government Shutdown?: Toward the end of the four-and-a half hour hearing, Rep. David McKinley (R-W.Va.), expressed annoyance that he had not yet heard an apology from any of the contractors for screwing up uninsured Americans' ability to finally get health coverage. "I've not heard the word I'm sorry," he said. "I know men have a hard time saying that, but the whole panel." Rep. Henry Waxman (D-Calif.), the top Democrat on the committee, jumped at the opportunity to skewer Republicans over the government shutdown. "Can we get an apology for shutting down the government because people didn’t like the health care bill?" he asked.
4. What About Climate Change?: Campbell of CGI and the representatives for the other website contractors divulged as little information as they possibly could about the missteps and confusions that contributed to a barely functioning health exchange website. Committee members asked how many total applicants had registered so far through the site, what kind of hacking protections each contractor uses, and who exactly at HHS was in charge of ensuring that the website was adequately tested before the launch date. Each time Republicans received an "I don't know" from the contractors, they demanded the information be furnished by "9 a.m. tomorrow."
In response, Waxman noted that he and fellow energy and commerce committee member Rep. Bobby Rush (D-Ill.) have asked Republicans on the committee numerous times to hold climate change hearings,and said it would be nice if GOP committee members would respond to their requests by "9 a.m. tomorrow," too. In the last Congress, Waxman and Rush sent 21 letters to Chairmen Fred Upton (R-Mich.) and Ed Whitfield (R-Ky.) requesting that the committee hold hearings on climate change, and received no response. In the current Congress, Waxman and Rush have sent seven letters requesting hearings on this topic, and the committee has held one hearing.
Justice is blind, except when it's backed by millions in political spending. In the wake of Citizens United, the Supreme Court case allowing unlimited spending on elections by outside groups, judicial races in the thirty-eight states that conduct elections for their high courts have become indistinguishable from ordinary political campaigns, according to a new report released Thursday by the Brennan Center for Justice and Justice at Stake, which analyzed the 2011-2012 judicial election cycle. Check it out:
The last election cycle saw record spending: Special interest groups and political parties spent an unprecedented $24.1 million on state court races in the last election period, a jump of more than $11 million since 2007-08. The most expensive high court elections were in the four states where courts most closely divided by either judicial philosophy or political party: Michigan, Wisconsin, Florida, and North Carolina.
Top funders were mostly conservative: Business and conservative groups accounted for 7 of the top 10 spenders in 2011–2012.
Special interest group donations escalated: The independent groups empowered by Citizens United spent a record $15.4 million to persuade voters in high court races in the last election period, accounting for more than 27 percent of total spending on high court races. The previous record was $11.8 million in 2003–2004.
Koch-type national groups invaded judicial races: Big spenders in judicial races in the last election cycle included the Koch brothers' group Americans for Prosperity in Florida and North Carolina, the NRA-affiliated group Law Enforcement Alliance of America in Mississippi, the Republican State Leadership Committee in North Carolina, and the progressive advocacy group America Votes in Florida.
Super spenders dominated: Thirty-five percent of all funds spent on state high court races, or $19.6 million, came from only 10 special-interest groups and political parties. That's compared with 21 percent in 2007-2008.
TV ad spending jumped: During the 2011-2012 cycle, a record $33.7 million was spent on television ads for state high court races, far more than the previous record of $28.5 million in 2007-2008. Negative advertisements aired in at least ten states. The Ohio Republican party said that Ohio Supreme Court justice candidate Bill O'Neill "expressed sympathy for rapists." In Wisconsin, an incumbent justice was accused of protecting a priest accused of molestation. And in Michigan, one candidate was described as having "volunteer[ed] to help free a terrorist."
JPMorgan Chase is probably going to have to pay a record $13 billion fine because it created and sold dicey financial products that helped cause the financial crisis that sparked an economic crash in 2008. JPMorgan CEO Jamie Dimon has groused that this an unfairly large sum. But some experts beg to differ, noting that if the world were fair, Dimon's bank would have to pay a lot more.
On Saturday, JPMorgan reached a tentative deal with the Department of Justice, which has investigated the megabank for having packaged poor quality mortgages into securities that it sold to investors. (Some of the securities were peddled by Washington Mutual and the investment bank Bear Stearns, two failing firms that JPMorgan absorbed in 2008.) The $13 billion penalty, which is not yet final, would cover about $9 billion in fines paid to the federal government and $4 billion in relief for struggling homeowners. It would be the largest penalty that a single company has ever paid in settling a case with the Justice Department.
The historic deal is a sign that the Obama administration's crackdown on Wall Street is finally gaining steam. But experts note that the $13 billion fine—which seems a gargantuan amount—is not nearly enough. First, the fine is really only $9 billion, says William Black, an associate professor of economics and law at the University of Missouri-Kansas City and a former bank regulator who led investigations of the savings and loan crisis of the 1980s. The $4 billion in relief to homeowners, he explains, represents loan modifications that the bank would have made in any event to minimize losses and avoid foreclosures. (And that $9 million, he adds, is tax-deductible.) Second, Black says, the total damages JPMorgan, Washington Mutual, and Bear Stearns inflicted directly on purchasers of the shoddy mortgage-backed securities is estimated to be $100 billion. "The normal rule in terms of remedies for frauds of this scope," he says, "is that you pay for your damages that you caused." And if those damages were caused by fraud as opposed to mere negligence, Black adds, the US legal system often makes the fraudster pay punitive damages of at least twice that amount. "A normal recovery would be in the range of $200 billion," he says.
This past weekend, the Department of Justice slapped a record fine on JPMorgan Chase for packaging and selling the mortgage-backed financial products that helped cause the financial meltdown. But Sen. Elizabeth Warren (D-Mass.) wants the administration to know that fines are not enough. On Wednesday, she called on Wall Street regulators to hold all those responsible for the 2008 crisis accountable.
Although the budget for TARP's inspector general was "a small fraction of the size of the budgets and staffs at your agencies," Warren pointed out, the program's watchdog has brought criminal charges against nearly 100 senior executives; obtained criminal convictions on 107 defendants, including 51 jail sentences; and suspended or banned 37 people from working in the banking industry.
How about you guys, Warren asked. She called on the Fed, the SEC, and the OCC to provide records on the number of people the agencies have charged criminally and civilly, the number of convictions and prison sentences they have obtained, the number of people banned or suspended from working in the industry, and the total amount of fines leveled against Wall Street ne'er-do-wells.
Earlier this year, U.S. Attorney General Eric Holder seemed to concede that some banks are "too big to jail." But Warren doesn't buy it. "There have been some landmark settlements in recent weeks for which your agencies and others deserve substantial credit," Warren said in the letter. "However, a great deal of work remains to be done to hold institutions and individuals accountable for breaking the rules and to protect consumers and taxpayers from future violations."