Category Archives: Insurance

Alpha Natural Resources: Running Wrong

Alpha miners in Southwest Virginia (Photo by Scott Elmquist)

Alpha miners in Southwest Virginia
(Photo by Scott Elmquist)

 By Peter Galuszka

Four years ago, coal titan Alpha Natural Resources, one of Virginia’s biggest political donors, was riding high.

It was spending $7.1 billion to buy Massey Energy, a renegade coal firm based in Richmond that had compiled an extraordinary record for safety and environmental violations and fines. Its management practices culminated in a huge mine blast on April 5, 2010 that killed 29 miners in West Virginia, according to three investigations.

Bristol-based Alpha, founded in 2002, had coveted Massey’s rich troves of metallurgical and steam coal as the industry was undergoing a boom phase. It would get about 1,400 Massey workers to add to its workforce of 6,600 but would have to retrain them in safety procedures through Alpha’s “Running Right” program.

Now, four years later, Alpha is in a fight for its life. Its stock – trading at a paltry 55 cents per share — has been delisted by the New York Stock Exchange. After months of layoffs, the firm is preparing for a bankruptcy filing. It is negotiating with its loan holders and senior bondholders to help restructure its debt.

Alpha is the victim of a severe downturn in the coal industry as cheap natural gas from hydraulic fracturing drilling has flooded the market and become a favorite of electric utilities. Alpha had banked on Masset’s huge reserves of met coal to sustain it, but global economic strife, especially in China, has dramatically cut demand for steel. Some claim there is a “War on Coal” in the form of tough new regulations, although others claim the real reason is that coal can’t face competition from other fuel sources.

Alpha’s big fall has big implications for Virginia in several arenas:

(1) Alpha is one of the largest political donors in the state, favoring Republicans. In recent years, it has spent $2,256,617 on GOP politicians and PACS, notably on such influential politicians and Jerry Kilgore and Tommy Norment, according to the Virginia Public Access Project. It also has spent $626,558 on Democrats.

In 2014-2015, it was the ninth largest donor in the state. Dominion was ahead among corporations, but Alpha beat out such top drawer bankrollers as Altria, Comcast and Verizon. The question now is whether a bankruptcy trustee will allow Alpha to continue its funding efforts.

(2) How will Alpha handle its pension and other benefits for its workers? If it goes bankrupt, it will be in the same company as Patriot Coal which is in bankruptcy for the second time in the past several years. Patriot was spun off by Peabody, the nation’s largest coal producer, which wanted to get out of the troubled Central Appalachian market to concentrate on more profitable coalfields in Wyoming’s Powder River Basin and the Midwest.

Critics say that Patriot was a shell firm set up by Peabody so it could skip out of paying health, pension and other benefits to the retired workers it used to employ. The United Mine Workers of America has criticized a Patriot plan to pay its top five executives $6.4 million as it reorganizes its finances.

(3) Coal firms that have large surface mines, as Alpha does, may not be able to meet the financial requirements to clean up the pits as required by law. Alpha has used mountaintop removal practices in the Appalachians in which hundreds of feet of mountains are ripped apart by explosives and huge drag lines to get at coal. They also have mines in Wyoming that also involve removing millions of tons of overburden.

Like many coal firms, Alpha has used “self-bonding” practices to guarantee mine reclamation. In this, the companies use their finances as insurance that they will clean up. If not, they must post cash. Wyoming has given Alpha until Aug. 24 to prove it has $411 million for reclamation.

(4) The health problems of coalfield residents continue unabated. According to a Newsweek report, Kentucky has more cancer rates than any other state. Tobacco smoking as a lot to do with it, but so does exposure to carcinogenic compounds that are released into the environment by mountaintop removal. This also affects people living in Virginia and West Virginia. In 2014, Alpha was fined $27.5 million by federal regulators for illegal discharges of toxic materials into hundreds of streams. It also must pay $200 million to clean up the streams.

The trials of coal companies mean bad news for Virginia and its sister states whose residents living near shut-down mines will still be at risk from them. As more go bust or bankrupt, the bill for their destructive practices will have to borne by someone else.

After digging out the Appalachians for about 150 years, the coal firms have never left coalfield residents well off. Despite its coal riches, Kentucky ranks 45th in the country for wealth. King Coal could have helped alleviate that earlier, but is in a much more difficult position to do much now. Everyday folks with be the ones paying for their legacy.

Capitalism Triumphs Again!

RAM clinic, Pikesville Ky., June 2011. Photo by Scott Elmquist

RAM clinic, Pikesville Ky., June 2011.
Photo by Scott Elmquist

By Peter Galuszka

If there were any questions about just how capitalism has failed, one need look no farther than Wise County, where, this week, hundreds, if not thousands, of people will line up for free medical care.

The event is ably noted in The Washington Post this Sunday by a young opinion writer named Matt Skeens who lives in Coeburn in the coalfields of southwestern Virginia.

This week, the Remote Area Medical clinic will come to the Wise County fairgrounds to offer free medical and dental care to anyone who needs it.

You might ask yourself a question: why do so many people in one of the parts of the United States that is fantastically wealthy with natural resources need free medical care? Where is the magic of capitalism so often lauded on this blog?

A few insights from Mr. Skeens:

“Local representatives of Southwest Virginia will travel to the fairgrounds to stand on a coal bucket and assure us they’re fighting against President Obama and the ‘war on coal.’ These politicians won’t mention that with their votes to block Medicaid expansion, they ensured that the lines at RAM won’t be getting any shorter. But hating Obama in these parts is good politickin.”

Skeens runs through a list of mountain folk who can’t afford health care. One is a breast cancer survivor who hasn’t had a screenings in years. His grandfather, a retired electrician and coal miner, had also camped out at RAM clinics to get help.

Odd that this is the way I found neighboring West Virginia when I moved there with my family from suburban Washington, D.C. in 1962. Just as it was then, the riches that should have helped pay for local medical care went out of state. Much of the coal left by railcar or barge. Now, natural gas released by hydraulic fracking will find its way to fast-growing Southeastern cities or perhaps overseas thanks to new proposed pipelines such as a $5 billion project pitched in part by Dominion Resources.

While I have never been to the Wise County RAM clinic, I did happen to drop by one in Pikesville, Ky., a coalfield area that is one is Kentucky’s poorest county. It is not far from Wise. I was busy researching a book on Richmond-based Massey Energy, a renegade coal firm, in June 2011.

Photographer Scott Elmquist and I were on our way from Kentucky to an anti-strip mining rally in West Virginia when we noticed the RAM signs. More than 1,000 people had started lining up at the doors around 1:30 a.m. at the local high school.

It was packed inside. A Louisville dental school had sent more than 50 dental chairs that lined the basketball court. Some of the patients said they were caught in a bind: they had jobs but didn’t have enough health coverage and couldn’t pay for what they needed.

Since then, there’s been some good news. Unlike Virginia, whose legislature has stubbornly refused to expand Medicaid to 400,000 residents who need it (supposedly in a move to tighten federal spending), Kentucky expanded Medicaid last year. Now, 375,000 more people have health insurance.

Not so in Virginia. People continue to suffer while those with comfortable lives laud the miraculous benefits of capitalism.

A Landmark Day for the Rule of Law

Chief Justice John G. Roberts: "It depends on what the meaning of 'state' is."

Chief Justice John G. Roberts: “It depends on what the meaning of ‘state’ is.”

The United States Supreme Court has ruled that wording in the Affordable Care Act — that subsidies should be limited to health care exchanges “established by the State” — did not mean what it plainly said and that Congress “meant” for subsidies to be made available to federally established exchanges as well.

In a series of other dramatic rulings, the Supreme Supreme also ruled that the sky is green, one plus one equals three and the laws of physics are subject to judicial interpretation.

— JAB

Only Marginal Gains from Obamacare Insurance Overhaul

insurance_coverage_national

Percentage of adults 18-64 who lacked health insurance coverage, 1997-2004. Graphic credit: National Health Interview Survey

by James A. Bacon

After all the strum and drang over Obamacare, the restructuring of the United States health care system, the re-engineering of the medical insurance industry and dislocation to millions of Americans who discovered they could not necessarily keep their doctor or their health care plan, even if they liked it, it turns out that the piece of the program that made the biggest difference in increasing health coverage for the American people was Medicaid expansion. Take that away, and the number of Americans lacking health care coverage declined only slightly — and the reasons for that decline are not clear.

That’s not the spin put on the numbers you’ll read in the media. (See the Richmond Times-Dispatch spin here.) But it’s certainly a legitimate interpretation of the numbers reported by the 2014 National Health Interview Survey, which is not a libertarian think tank or funded by the evil Koch Brothers but a program of the National Center for Health Statistics.

The number of Americans under 65 years old covered by the infamous health care exchanges amounted to 6.7 million — or about 2.5% of that segment of the population. (Remember, that number includes Americans who previously had private insurance and found themselves bumped into an exchange.) That compares to 170 million, or 63.6%, who were covered by private health insurance plans, and 36 million (11.5%) of Americans without any kind of insurance, public or private.

A major driver behind the improved numbers was expansion of Medicaid. Among working-age adults in states that expanded Medicaid, states the report, the percentage with Medicaid coverage expanded from 17.7% in 2013 to 19.9% in 2014 — a gain of 2.2 percentage points, while comparable adults in states that did not expand Medicaid, like Virginia, saw no significant change in public coverage. Literally half the gains in the insurance-coverage rate could have been achieved by expanded Medicaid (in the states that chose to expand it) and scrapping the rest of Obamacare.

Here are the Virginia numbers for all ages:

Private health coverage — 67.0%
Public health coverage — 31.3%
Uninsured — 10.8%

Lost in the weeds is the bigger picture. Look at the chart of uninsured Americans at the top of the page. While the number of uninsured  dropped significantly between 2013 and 2014, the uninsured population had been shrinking since 2010 at the worst of the Great Recession. Significant gains in insurance coverage occurred simply as the result of increasing employment.

Now compare the 2014 numbers to the 1999 numbers — the number of uninsured is about the same. Anyone remember 1999? That was the tail end of the Clinton-era Internet boom. Unemployment was exceedingly low. The best way to ensure that Americans enjoy health care insurance is to ensure that they have a job. Not every job provides medical coverage but most do. The more employers find themselves competing for labor, the more likely they are to provide some level of medical insurance.

Instead of pursuing macro-economic reforms and institutional reforms that bolster productivity and sustainable economic growth, the United States got a one-shot stimulus plan, higher taxes, more regulation, Obamacare and sub-par economic growth. While Americans have made marginal gains in gaining access to health insurance, thanks to Obamacare, we’re also experiencing a consolidation of the hospital industry into a handful of cartel-like “health systems,” the conversion of physicians from independent providers into salaried minions of hospitals, and a consolidation of the health insurance industry. The health care industry is becoming stodgier, more bureaucratic, more risk averse, more prone to rent-seeking and less interested in innovation. For marginal gains in the percentage of the insured population, we will all be losers in the long run.

Dubious Oil Lobby Bankrolls Dubious Poll

CEABy Peter Galuszka

In a recent post, Bacons Rebellion extolled the findings of Hickman Analytics Inc., a suburban Washington consulting firm hired by the Consumer Energy Alliance, which found that according to a survey of 500 registered voters, the vast majority of Virginians support Dominion’s Atlantic Coast Pipeline.

The $5 billion project would take natural gas released by hydraulic fracturing from West Virginia southeastward through Virginia into North Carolina. Dominion has taken some strong-arm tactics to force the project through, such as suing property owners who declined to let surveyors onto their property.

Having reported on the controversy in such places as Nelson County, I was surprised to note the Hickman results showing such a strong support for the pipeline.

Maybe, I shouldn’t have been so surprised.

Let’s start with the so-called “Consumer Energy Alliance.” For starters, it is a Texas based lobbying group funded by such fossil fuel giants as ExxonMobil and Devon Energy, perhaps the largest independent oil rim in the country plus as host of utilities.

It has been traversing the United States drumming up support, often through dubious polls, against initiatives to cut back on carbon emissions. It supports the Keystone XL and other petroleum pipelines.

Says SourceWatch, quoting Salon.com, “The CEA is part of a sophisticated public affairs strategy designed to manipulate the U.S. political system by deluging the media with messaging favorable to the tar-sands industry; to persuade key state and federal legislators to act in the extractive industries’ favor; and to defeat any attempt to regulate the carbon emissions emanating from gasoline and diesel used by U.S. vehicles.”

The group was created in the late 2000s by Michael Whatley a Republican energy lobbyist with links to the Canadian and American oil sector.

The alliance’s modus operandi is to use “polls” presumably of average voters on key energy issues.

In Wisconsin, the CEA got involved in a battle over an attempt by electric utilities to hike rates if individual homeowners used solar panels to generate power. The state is dominated by coal-fired power and hasn’t done much with renewables. The utilities claim that they paid for the electricity grid and therefore home-power generators must pay extra for its use and the cost should be shared by all through rate hikes.

Many ratepayers opposed this blatant attempt to push back at solar power. Then, all the way from Texas and Washington, the Consumer Energy Alliance jumped in with the names of 2,500 local ratepayers who backed the rate hikes. It wanted to give their names to Wisconsin regulators.

The Grist asked: “What dog does CEA, a trade group from Texas, have in Wisconsin’s fight, anyway? Well, CEA represents the interests of mostly fossil fuel companies, so it is engaged in a nationwide campaign to slow the spread of home-produced renewable energy. It has a regional Midwest chapter, which pushes for fracking and for President Obama to approve the Keystone XL tar-sands pipeline.”

I was likewise puzzled by the Virginia pipeline survey that CEA paid for by Hickman Analytics, a Chevy Chase, Md. firm that does a lot of political polling. The firm is powerful and its principals were heavily involved with disgraced Democratic presidential candidate John Edwards.

There was a poll by Hickman for CEA showing that New Hampshire vote just love Arctic offshore drilling. That’s off because the Granite State isn’t anywhere close to the Arctic despite its cold winters.

There was another Hickman/CEA poll showing how much Coloradans love the Keystone XL pipeline – another curiosity because the last time I checked that pipeline doesn’t run through Colorado.

And, fresh with a “five figure” sponsorship from Dominion, Bacon’s Rebellion publisher James A. Bacon Jr. starts writing about this dubious poll from a dubious source showing that Virginians are tickled pink with the ACL pipeline. When questioned, he says it’s nothing different from a poll funded by the Sierra Club.

Maybe, on another matter, it is curious that Bacon’s Rebellion’s sponsorship deal with Dominion which Jim posted online is signed by Daniel A. Weekley, vice president for Dominion corporate affairs.

The very same Mr. Weekley signed an informational packet sent out to Virginia homeowners impacted by the proposed pipeline route telling them what a great thing the pipeline is.

Am I connecting the dots correctly?
 

Does the Gig Economy Need Fixing?

warnerby James A. Bacon

Senator Mark Warner, D-Virginia, has latched onto a fascinating issue: the “disaggregation of the workplace.” That’s wonk talk for the Uber-ization of the United States economy, in which an increasing percentage of the population engages in contingency work outside the highly regulated setting of full-time employment. Warner rightly calls this trend “the most radical transformation of the American workplace in the past 30 years,” and he thinks that people in Washington need to start talking about it.

Warner’s right about one thing: The rise of the contingency workforce is indeed rewriting the social contract between employer and employee. But I’m not so sure it’s a good idea for the politicians to get involved. I’d like to see evidence that contingency employment is broken before Congress tries to fix it.

In the gig economy, also called the sharing economy, workers engage in a contractual relationship with customers to provide services — the conveyance of passengers in Uber cars, or completion of a writing contract, or fulfillment of an IT task. The advantage is an unprecedented degree of flexibility. Workers are free to take on as much work as they can find, or as little as they want. They are more geographically mobile, not tied to one particular location. They can set their own hours. They can pick and choose whom they want to work with, and if they don’t like a relationship, they are free to leave it.

The downside is that there are no government-mandated employment benefits or protections. Free-lancers don’t get company-provided pensions or health-care benefits. They don’t get unemployment benefits, worker’s compensation or disability. “If there is no safety net,” says Warner in the USA Today interview seen here, “someone can hit a rough patch and have no alternative but to fall back on government assistance programs.”

Warner does not necessarily advocate extending the old workforce model to the contingency workforce. He wants to start thinking about how to improve the new model. Washington, he says, needs to look at things like hour banks (a currency exchange in which the unit of exchange is a person-hour of time) or opt-ins (I’m not sure what he’s referring to) or models emerging in Europe.

Contigency workers already have the option to purchase health and disability insurance on the open market, and they have the option to put money into IRAs. It’s not always easy finding the money to divert to those self-insurance programs, however, so not everyone chooses to take advantage of them. Paternalists no doubt fret that current arrangements that leave “too much” discretion to workers and that bad decisions might result in people relying upon the federal safety net.

As a contingency worker myself, living off Bacon’s Rebellion sponsorships and free-lance work, I value the freedom I have to work at home, meet with a driveway paving contractor (as I did today), pick up my kid from school (as I will do later), zip over to the neighborhood pool to swim a few laps (which I’ll do if I have enough time), and prepare dinner for when my wife gets home from her 8-to-7 job. If that freedom means working nights and weekends to get the job done, that’s my decision. I like this way of life.

I’m all in favor of expanding peoples’ choices, something that the private sector is particularly adept at doing. I would bitterly oppose legislation in which Congressmen or bureaucrats decide that they know what’s best for me and tell me how I need to allocate my income. Unfortunately, I’ve never known Congress to look at a “problem” and fail to find a “solution.” Right now, I’m not convinced there’s a problem that needs fixing, and, despite Warner’s perspicacity in spotting a new trend, I’m not sure I want Congress monkeying around with it.

Hottest Primary May Be 10th Senate District

 By Peter Galuszka

Emily Francis

Emily Francis

Primaries in Virginia used to be a bore, but no longer.

Last year, Dave Brat’s Tea Party-backed insurgency against the seemingly impregnable Eric Cantor garnered national headlines in the 7th Congressional District.

This year, you have several General Assembly races come June 9 that will seek to replace several prominent politicians who are retiring, including Republicans John Watkins of the 10th Senate District; Walter Stosch of the 12th Senate District; and Democrat Charles Colgan of the 29th.

I picked the 10th District race for a piece in Style Weekly. There, historic tax credit developer Dan Gecker, a long time Chesterfield County planning commissioner and supervisor, is up against progressive non-profit consultant Emily Francis and former delegate and lawyer Alex McMurtrie for the Democrat candidacy. Whoever wins faces Republican nominee Glen Sturtevant and Libertarian Carl Loser.

Dan Gecker

Dan Gecker

The race could well determine whether the state senate remains in Republican hands. Should the Democrat win, the mix in the senate could bounce back to 20-20; it is 21-19 now in favor of the GOP. Stephen Farnsworth, a political analyst at the University of Mary Washington,  told me this is the race to watch.

What’s also curious is that the 10th District is a true anomaly. One might assume that such as district would be comfortably GOP. It isn’t since it stretches from the blue areas of Richmond like the Museum District and the Northside. It covers parts of the more conservative mega-neighborhoods of Brandermill and Woodlake in Chesterfield and then all of Powhatan County.

Instead of having the likes of Brat saying that his opponent isn’t conservative enough, Francis says she’s the only true progressive in the race.

Another quirk is that Gecker, a moderate who says he’s a progressive, figured in the Bill Clinton impeachment.

Back in the 1990s, he was lawyer to Kathleen Willey, a Powhatan resident who claimed that Clinton groped her in the White House. Gecker represented her in a book deal. Some Democrats have said that Gecker is a Clinton-basher – an interesting claim now that part of the Democratic establishment is gearing Hillary Clinton for another presidential run.

Gov. Terry McAuliffe, a Clinton confidante, has tried to smooth things over by endorsing Gecker.

New Film Documents Horrors of Coal Mining

blood on the moutain posterBy Peter Galuszka

Several years in the making, “Blood on the Mountain” has finally premiered in New York City. The documentary examines the cycle of exploitation of people and environment by West Virginia’s coal industry highlighting Massey Energy, a coal firm that was based in Richmond.

The final cut of the film was released publicly May 26 at Anthology Film Archives as part of the “Workers Unite! Film Festival” funded in part by the Fund for Creative Communities, the Manhattan Community Arts Fund and the New York State Council of the Arts.

Directed by Mari-Lynn Evans and Jordan Freeman, the film shows that how for more than a century, coal companies and politicians kept coal workers laboring in unsafe conditions that killed thousands while ravaging the state’s mountain environment.

As Bruce Stanley, a lawyer from Mingo County, W.Va. who is interviewed in the film and has fought Donald L. Blankenship, the notorious former head of Massey Energy, says, there isn’t a “War on Coal,” it is a “war waged by coal on West Virginia.”

When hundreds of striking workers protested onerous and deadly working conditions in the early 1920s, they were met with machine guns and combat aircraft in a war that West Virginia officials kept out of history books. They didn’t teach it when I was in grade school there in the 1960s. I learned about the war in the 1990s.

The cycle of coal mine deaths,environmental disaster and regional poverty continues to this day. In 2010, safety cutbacks at a Massey Energy mine led to the deaths of 29 miners in the worst such disaster in 40 years. Mountains in Central Appalachia, including southwest Virginia, continue to be ravaged by extreme strip mining.

As Jeff Biggers said in a review of the movie in the Huffington Post:

“Thanks to its historical perspective, Blood on the Mountains keeps hope alive in the coalfields — and in the more defining mountains, the mountain state vs. the “extraction state” — and reminds viewers of the inspiring continuum of the extraordinary Blair Mountain miners’ uprising in 1921, the victory of Miners for Democracy leader Arnold Miller as the UMWA president in the 1970s, and today’s fearless campaigns against mountaintop-removal mining.”

The movie (here is the trailer) is a personal mission for me. In 2013, after my book “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” was published by St. Martin’s Press, Mari-Lynn Evans called me and said she liked the book and wanted me to work with her on the movie project. She is from a small town in West Virginia a little south of where I spent several years as a child and thought some of my observations in the book rang true.

I drove out to Beckley, W.Va. for several hours of on-camera interviews. Over the next two years, I watched early versions, gave my criticisms and ideas and acted as a kind of consultant. Mari-Lynn’s production company is in Akron and I visited other production facilities in New York near the Brooklyn Navy Yard.

Interesting work if you can get it. My only forays into film making before had been with my high school film club where he videographed a coffin being lowered into a grave (in West Virginia no less). I was greatly impressed when I saw the movie at its New York premiere.

Mari-Lynn and Jordan have been filming in the region for years. They collaborated on “The Appalachians,” an award-winning three-part documentary that was aired on PBS a few years ago and on “Coal Country” which dealt with mountaintop removal strip mining.

They and writer Phyllis Geller spent months detailing how coal companies bought up land on the cheap from unwitting residents, hired miners and other workers while intimidating them and abusing them, divided communities and plundered some very beautiful mountains.

Upper Big Branch is just a continuation of the mine disasters that have killed thousands. The worst was Monongah in 1907 with a death toll of at least 362; Eccles in 1914 with 183 dead; and Farmington in 1968 with 78 dead (just a county over from where I used to live).

By 2008 while Blankenship was CEO of Massey, some 52 miners were killed. Then came Upper Big Branch with 29 dead in 2010.

At least 700 were killed by silicosis in the 1930s after Union Carbine dug a tunnel at Hawks Nest. Many were buried in unmarked graves.

While state regulation has been lame, scores West Virginia politicians have been found guilty of taking bribes, including ex-Gov. Arch Moore.

The movie is strong stuff. I’ll let you know where it will be available. A new and expanded paperback version of my book is available from West Virginia University Press.

Blankenship is scheduled to go on trial on federal charges related to Upper Big Branch on July 13.

Dave Brat’s Bizarre Statements

 By Peter Galuszka

Almost a year ago, Dave Brat, an obscure economics professor at Randolph- Macon College, made national headlines when he defeated Eric Cantor, the powerful House Majority Leader, in the 7th District Brat Republican primary.

Brat’s victory was regarded as a sensation since it showed how the GOP was splintered between Main Street traditionalists such as Cantor and radically conservative, Tea Party favorites such as Brat. His ascendance has fueled the polarization that has seized national politics and prevented much from being accomplished in Congress.

So, nearly a year later, what has Brat actually done? From reading headlines, not much, except for making a number of bizarre and often false statements.
A few examples:

  • When the House Education and Workforce Committee was working on reauthorizing a law that spends about $14 billion to teach low-income students, Brat said such funding may not be necessary because: “Socrates trained Plato in on a rock and the Plato trained Aristotle roughly speaking on a rock. So, huge funding is not necessary to achieve the greatest minds and the greatest intellects in history.”
  • Brat says that the Affordable Care Act (Obamacare) is a step towards making the country be more like North Korea. He compares North and South Korea this way:  “. . . it’s the same culture, it’s the same people, look at a map at night, half the, one of the countries is not lit, there’s no lights, and the bottom free-market country, all Koreans is lit up. See you make your bet on which country you want to be, right? You want to go to the free market.” One problem with his argument:  Free market South Korea has had a single payer, government-subsidized health care system for 40 years. The conservative blog, BearingDrift, called him out on that one.
  • Politifact, the journalism group that tests the veracity of politicians’ statements, has been very busy with Brat. They have rated as “false” or “mostly false” such statements that repealing Obamacare would save the nation more than $3 trillion and that President Obama has issued 468,500 pages of regulations in the Federal Register. In the former case, Brat’s team used an old government report that estimated mandatory federal spending provisions for the ACA. In the latter case, Politifact found that there were actually more pages issued than Brat said, but they were not all regulations. They included notices about agency meetings and public comment periods. What’s more, during a comparable period under former President George W. Bush, the Federal Register had 465,948 pages, Politifact found. There were some cases, however, where Politifact verified what Brat said.
  • Last fall, after Obama issued an executive order that would protect up to five million undocumented aliens from arrest and deportation, Brat vowed that “not one thin dime” of public money should go to support Obama’s plan. He vowed to defund U.S. Citizen and Immigration Services but then was told he couldn’t do so because the agency was self-funded by fees from immigration applications. He then said he would examine how it spent its money.

The odd thing about Brat is that he has a doctorate in economics and has been a professor. Why is he making such bizarre, misleading and downright false statements?

Pulitzer-Winning Series Exposed Richmond Firm

HDL LogoBy Peter Galuszka

There’s been plenty of discussion about the evils of rising health care costs, but unfortunately, one only hears of government wrong-doing.

Private industry actually spearheads a lot of the price gouging — sometimes with government complicity.

And it just so turned out that a high-flying Richmond firm — Health Diagnostic Laboratory  — was at the heart of a scandal that involved ripping off the Medicare program.

The Wall Street Journal on Monday was awarded a Pulitzer Prize for investigative reporting for exposing Medicare fraud. As a result of a front-page story published last Sept. 8, Tonya Mallory, the chief executive and co-founder of HDL, resigned. A few weeks ago, HDL was fined $47 million (while admitting no wrongdoing) after  their Sept. 8 story last year, for paying doctors kickbacks to use their blood tests.

The Journal broke the story after a court battle. It fought to lift a 33-year-old injunction that kept private data regarding Medicare patients. Once the data floodgates were opened, reporters pieced together all kinds of juicy information about health care firms, including HDL.

I have the story here on my “The Deal” blog in Style Weekly.

The upshot? Unlike what you often read on this blog, the problems of rising health care costs may not exactly be government sloth and inefficiency. It can be the private sector gaming the system to their benefit.