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Obama Warns Insurers - El Diablo Remix

Written by Subject: Economy - Economics USA

Two different articles on two different Presidents

Reuters - Fight Over Food Raises Stink Before Venezuela Vote
New York Times - As Law Takes Effect, Obama Gives Insurers a Warning

CARACAS, June 18 (Reuters) - Mountains of rotting food found at a government warehouse, soaring prices and soldiers raiding wholesalers accused of hoarding: Food supply is the latest battle in President Hugo Chavez's socialist revolution.

WASHINGTON, June 21 (New York Times) — President Obama, whose vilification of insurers helped push a landmark health care overhaul through Congress, plans to sternly warn industry executives at a White House meeting on Tuesday against imposing hefty rate increases in anticipation of tightening regulation under the new law, administration officials said Monday.

Venezuelan army soldiers swept through the working class, pro-Chavez neighborhood of Catia in Caracas last week, seizing 120 tonnes of rice along with coffee and powdered milk that officials said was to be sold above regulated prices.

The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than covering claims. The administration is also closely watching investigations by a number of states into the actuarial soundness of double-digit rate increases.

Jose Guzman, an assistant manager at a store raided in Catia, watched with resignation as government agents pored over the company's accounts and computers after the food ministry official and the television cameras left.

“Our message to them is to work with this law, not against it; don’t try and take advantage of it or we will work with state authorities and gather the authority we have to stop rate gouging,” David Axelrod, Mr. Obama’s senior adviser, said in an interview. “Our concern is that they not try and, under the cover of the act, get in under the wire here on rate increases.”

"We are bringing order to prices," Trade Minister Richard Canan told Reuters during the Catia raid. "There are traders who are taking these products to the black market ... That is a crime and our government will continue to target these stores."

The law does not grant the federal government new authority to regulate health care premiums, which remains the province of state insurance departments. But with important provisions taking effect this summer and fall, the Obama administration has repeatedly reminded insurers — and the public — that it will expose industry pricing to what the health secretary, Kathleen Sebelius, has called a “bright spotlight.”

Fighting back, Chavez says he is in an economic war against the "parasitic bourgeoisie" that tries to convince Venezuelans that socialism does not work by twisting facts and taking advantage of honest mistakes.

"They know where we are headed, we are going to take from the Venezuela bourgeoisie the hegemony of dominance in this country," Chavez, who calls himself a Marxist, said to applause from supporters on his TV show on Sunday.

He has also revived threats to take over the country's largest private food processor, miller and brewer, Polar.

The White House meeting coincides with Monday’s release of a survey by the Kaiser Family Foundation, a nonprofit health policy research group, that found that premiums for the policies most recently bought by individuals had increased by an average of 20 percent.

Food prices are up 41 percent in the last 12 months during a deep recession, government figures show, despite the government's growing network of state-run supermarkets that sell at discounts of up to 40 percent and are popular with his poor supporters.

“The survey shows that the steep increases we have been reading about over the last several months are not just extreme cases,” said Drew Altman, the foundation’s president.

Mr. Obama’s message to insurers will serve to put the industry on notice and position the White House politically should voters start to link premium increases to the new law. With the law expected to play a significant role in the midterm elections, the president has been using his platform to sell the bill’s most immediate benefits and, by extension, to defend Democrats in Congress who risked their careers to vote for it.

South America's top oil exporter, Venezuela imports about 70 percent of its food and analysts say the economic hardships could give the opposition a boost at the ballot box -- although most expect Chavez to retain a reduced parliamentary majority

He will do so again Tuesday; after his private meeting, Mr. Obama will appear in the East Room, where he will highlight new regulations to protect consumers from discriminatory insurance practices, end lifetime limits on coverage and ban unjustified revocations of coverage.

Mr. Axelrod likened them to “essentially a patients’ bill of rights, the strongest in history.”

"They are not going to stop us in the plan, which is to give the people what is their right," Chavez said on Friday during the inauguration of a supermarket chain the government bought this year from French retailer Casino.

White House officials said Tuesday’s attendees will include top executives from 13 leading health insurers, as well as Karen M. Ignagni, the president of America’s Health Insurance Plans, the industry trade group. Five state insurance commissioners also are expected to attend.

The insurers have attributed this year’s increases to skyrocketing medical costs and to the economic downturn, which has prompted healthier consumers to forgo health insurance, leaving a sicker and costlier pool to cover.

“Our companies are receiving rate increase requests from hospitals across the country of 40, 50 and 60 percent,” said Robert Zirkelbach, a spokesman for the trade group. “That has a direct impact on the cost of health care coverage.”

Critics accuse him of steering the country toward a communist dictatorship and say he is destroying the private sector.

They point to 80,000 tonnes of rotting food found in warehouses belonging to the government as evidence the state is a poor and corrupt administrator.

"The government is pushing this type of establishment toward bankruptcy," said Guzman, who linked the raid to the rotten food scandal. "Somehow they have to replace all the food that was lost, and this is the most expeditious way."


Much of the wasted food, including powdered milk and meat, was found last month in the buildup to legislative elections in September. The scandal is humiliating for Chavez, who accuses wealthy elites of fueling inflation and causing shortages of products such as meat, sugar and milk by hoarding food.

But a report released Monday by Health Care for America Now, a coalition that supports the new law, stressed that the growth in premiums in the first eight years of this decade had far exceeded medical inflation — 97 percent to 39 percent.

The new law requires the health secretary to work with states to establish a process for annual reviews of “unreasonable increases in premiums.” Administration officials said Monday that they were still writing regulations to define “unreasonable increases.”

Chavez supporters are grateful for a network of cheap state-run supermarkets and they say the raids will slow massive inflation.

Mr. Obama’s approach to the health insurance industry has rarely been subtle, starting with his campaign, when he spoke of his dying mother’s struggle to persuade her insurer to cover her cancer treatments.

In March, with his health bill hanging by a thread in Congress, Mr. Obama ducked into a White House meeting with insurance executives to deliver a letter from an Ohio cancer survivor who had dropped her coverage after learning her premiums were rising 40 percent.

But for all of Mr. Obama’s browbeating, the new health care law stopped short of giving the administration the power to reject or limit rate increases. Instead, it established the annual reviews, starting next year, and makes available $250 million in grants to states to implement the review process.

States that accept the grants must recommend whether insurers with patterns of excessive pricing should be allowed to market policies through newly created exchanges, which will help individuals and businesses shop for coverage starting in 2014. Insurers also will be required to justify increases deemed unreasonable on their Web sites.

In the closing weeks of the health care debate, the White House offered a proposal to give the health secretary authority to deny unreasonable increases. It did not make it into the final legislation, but Senate Democrats have reintroduced it as a standalone bill.

The president rushed to give public support to Oil Minister Rafael Ramirez, who as the boss of PDVSA is also responsible for food unit PDVAL, over the case of the rotting food.

Two former PDVAL managers have been jailed in the scandal, but that has not stifled opposition charges of government incompetence.

The regulatory clout of state insurance departments varies widely, with some having minimal power to block rate increases. But in recent months, several states have taken unusually assertive steps.

In California, state regulators announced that they would order independent reviews of increases being sought by four large health insurers. That move came after the department discovered miscalculations in rate requests by Anthem Blue Cross, prompting the company to withdraw its plan to raise premiums by as much as 39 percent.

In Massachusetts, the administration of Gov. Deval Patrick, a Democrat, used long-untapped power to deny 9 of 10 rate increases requested by the state’s insurers, provoking a lawsuit from the industry. A court in Maine recently upheld a smaller rate increase for that state’s largest insurer — 10.9 percent instead of 18.1 percent — that had been ordered by the insurance superintendent.

In New York, Gov. David A. Paterson, a Democrat, signed legislation this month giving the state power to block unreasonable rates. And in Pennsylvania, Gov. Edward G. Rendell, also a Democrat, announced two weeks ago that his insurance commissioner, Joel Ario, would investigate large increases by the state’s biggest insurers.

“The plans are cherry-picking the best risk,” Mr. Ario, who will attend the White House session, said in an interview.

The federal law, which will require that most Americans obtain insurance, includes a number of provisions intended to slow the growth of premiums. For instance, insurance companies soon will have to spend at least 80 percent of revenue from premiums on claims, as opposed to administration and profit.

Insurers have warned since early in the debate that the overhaul might result in increased premiums for many consumers. The Congressional Joint Committee on Taxation and the nonpartisan Congressional Budget Office found otherwise, projecting that it would have minimal effect on group premiums, which account for 83 percent of the market. Their analysis forecast that premiums for individual policies would rise faster than they would without the new law, but that the increases would largely be offset by government subsidies.

Whatever the law’s ultimate effect, many of this year’s most egregious rate increases were announced well before it was clear the bill would pass.

"The battle for food is a matter of national security," said a red-shirted official from the Food Ministry, resting his arm on a pallet laden with bags of coffee.

It is also the latest issue to divide the Latin American country where Chavez has nationalized a wide swathe of the economy, he says to reverse years of exploitation of the poor.

A string of expropriations and buyouts of companies during the last couple of years means the government now controls between 20 percent and 30 percent of the distribution of staple foods.

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