Category Archives: Insurance

Is Virginia Now the “Mother of Dictators?”

Dictator_charlie3315 By Peter Galuszka

One of the serious problems in this state that has been called the “Mother of Presidents” is that its electoral process is in many ways anything but a democracy.

In far too many districts, especially rural and suburban ones, gerrymandering and autocratic party diktat mean that the races are utterly non-competitive and devoid of much debate on issues essential for the state’s well-being.

In 2013, for instance, only 12 or 14 of the 100 races for the House of Delegates were actually competitive, according to the Sorenson Institute for Political Leadership at the University of Virginia. That’s an odd fact to ponder.

And that is why you get unneeded legislative sessions such as the one starting today to try and sort out Medicaid expansion and a $96 billion, two year budget. My view is that both the expansion and the budget are being held hostage by hard-line social and fiscal conservatives who are unwilling to consider the needs of moderates or even their own constituents, many of whom are receiving Medicaid or who benefit by its expansion. Indeed, polls show that more Virginians are in favor of expanding Medicaid. A broad coalition of activists, Democrats, business executives and moderate Republicans favors it.

For more, check this opinion piece I wrote this Sunday in The Washington Post.

The bottom line is that Virginia is changing but how fast is held in check by engineered voting districts. More people from other states or countries are moving here and that is certain to shake up the old ways of doing business. More millennials are leaving rural areas for cities where there are more jobs and progressive ideas. Eventually, their voices will be heard but not until there’s a level playing field.

According to Leigh Middleditch, a Charlottesville lawyer and Sorenson founder, a crucial task for the Old Dominion is to address redistricting issues. He’s part of the bipartisan Virginia Redistricting Reform Coalition, to bring elections back into balance. As he notes, they’re getting the money and haven’t given themselves six years to complete the job.

I wish them well. If that happens you won’t have a tiny, hard-right cadre representing maybe three percent of the eligible electorate dictating who the candidate is because they only have to worry about a primary in a rigged district.

It’s become “the Virginia Way.”

The Terrible Link Between Income and Longevity

RAM in Wise County

RAM in Wise County

By Peter Galuszka

Call it a tale of two Virginias.

One is rich with military retirees, ample benefits and gated communities. The other is remote, poor and polluted, where the life expectancy for men is merely 64 years.

The former is Fairfax County at the heart of NOVA, Virginia’s economic engine, the land of federal largesse. The other is 350 miles away in McDowell County, in the coal belt of southern West Virginia just a stone’s throw from the Old Dominion border.

In one of the best and most glaring reporting of income disparity in this country, Annie Lowery of The New York Times lays out the stunning contrasts in two very different places maybe a six-hour car ride distant. The nut of her report is that higher income means longer lives thanks to better access to decent food, retirement benefits and medical care.

In Fairfax County, men live to be 82 and women 85. In McDowell County, men (as noted) live to 64 and women to 73. Even more astonishing is that this is happening in 21st century America, the supposed land of plenty. If ever there were a call to do something about health care, this is it.

Think what you will about the Affordable Care Act, the prior system of managed care with Big Insurance calling the shots just isn’t working. One also wonders, in the case of McDowell, where Medicaid and Medicare are. Where are the benefits from the coal companies that used to dominate employment in the area?

This hits home for me because I grew up partially in West Virginia when my father, a Navy doctor, decided to retire and go into practice there. I also traveled about researching a recent book on the coal industry. I spent a lot of time in Mingo County, the next one over from McDowell. I drove plenty of times through the small town of Williamson, a major rail marshaling yard, and was struck by how many elderly people I saw pacing slowly with oxygen tanks strapped to their aluminum walkers. Coal-related black lung? Too many cigarettes? Breathing air dirty from coal trains and trucks  and strip mines? Over in Fairfax, people of a similar age are more likely to be in a warm swimming pool at an aquatic aerobics class.

Back in the Appalachians, one morning my photographer Scott Elmquist and I were traveling from Kentucky back into Mingo County and I happened to see a Remote Area Medical free clinic at a high school in Pikesville. We turned in and found more than 1,000 people thronging the gymnasium floor waiting for doctors or for their turns at the more than seven dozen dental chairs for free care they couldn’t otherwise afford. Some I spoke with had been waiting there since 1:30 that morning. RAM runs a circuit that includes Wise County in Virginia, also in coal country.

So how did these people slip through the cracks? The Times notes that in McDowell, there aren’t any organic food stores or Whole Foods. The place in inundated with fast food and convenience stores that sell ready-to-go hot dogs, energy drinks and salty chips.

Another reason is the connection with the coal industry which has been so lucrative over the years that it should have provided plenty for the elderly. Instead, as coal seams play out and natural gas usurps coal’s role in electricity generation, coal firms are setting up to skedaddle. One is Patriot Coal, an offshoot of St. Louis giant Peabody, that took over its Appalachian interests so the mother firm could concentrate on richer areas in the U.S. West and Asia. Patriot was set up to fail and perhaps take retirement benefits with it. It’s an obvious scam. You spin something off to get some distance between you and having to pay pensions and health benefits.

Another factor is what they are doing with the local environment. Mountaintop removal is a powerful instrument in places around McDowell. At the blog Blue Virginia, they ran an intriguing map showing just how this highly destructive form of mining that rips up thousands of acres overlays with high poverty areas. Out of sight out of mind. It’s a shame how many in the green movement are forgetting the horrors of mountaintop to beat up on fracking which may be closer to home for them. Continue reading

Flood Insurance: Subsidizing the Rich

Flags show coastal property that FEMA moved out of flood zones, allowing owners to benefit from cheaper insurance.

Flags show coastal property that FEMA moved out of flood zones, allowing owners to benefit from cheaper insurance.

Owners of expensive condos and beach houses along the coastline are petitioning the Federal Emergency Management Agency to redraw flood-zone maps to exclude their maps from the flood zones. Getting the maps redrawn saves as much as 97% in flood insurance — but gives petitioners the same protection as their neighbors inside the flood zones. NBC News has identified more than 530 sections of coastal property — eight of them in Virginia — where the lines have been redrawn.

NBC News also found that FEMA has redrawn maps even for properties that have repeatedly filed claims for flood losses from previous storms. At least some of the properties are on the secret “repetitive loss list” that FEMA sends to communities to alert them to problem properties. FEMA says that it does not factor in previous losses into its decisions on applications to redraw the flood zones.

And FEMA has given property owners a break even when the changes are opposed by the town hall official in charge of flood control. Although FEMA asks the local official to sign off on the map changes, it told NBC that its policy is to consider the applications even if the local expert opposes the change. …

Because waterfront properties are expensive, and it costs thousands of dollars to hire an engineer to press a case with FEMA, the remapped properties tend to be luxurious, either the first or second homes of industrialists, real estate developers and orthopedic surgeons.

That’s 21st-century America — get rich, hire a bunch of lawyers, engineers and tax accountants, lobby the government for special privileges, and sponge off the less well-to-do. FEMA is doing the right thing by raising insurance rates on coastal properties to reflect real risks of flood damage. But a morally corrupt system allows the wealthy and well connected to evade paying their share. Populist conservatives like me don’t mind people getting rich — creating wealth is a good thing. But we resent like hell when the rich use their wealth and power to win privileges not enjoyed by others.

– JAB

A Free-Lunch No-Brainer: Pay-As-You-Drive Insurance

pricing

by James A. Bacon

Pay-As-You-Drive (PAYD) automobile insurance bases premiums on the number of miles the customer drives. It stands to reason: the less you drive, the less likely you are to be involved in a traffic accident. As it also happens, the less you drive, the less you contribute to traffic congestion. Thus, it is in the interest of state transportation policy makers to encourage the adoption of PAYD insurance.

PAYD is one of the pricing strategies explored in Smart Growth America’s new policy manual, “The Innovative DOT: a handbook of policy and practice.” In the third of eight focus areas, the manual also makes a case for congestion pricing on toll roads. That’s a topic I have addressed extensively elsewhere, and Virginia is already a leading practitioner, so I will not dwell upon it. Instead, I will focus on PAYD, which has only recently entered the Virginia insurance marketplace.

According to the SGA manual, the Brookings Institution has calculated that PAYD insurance implemented nationally could reduce the number of vehicle miles traveled (VMT) by eight percent and save $50 billion to $60 billion a year by reducing the number of crashes and other driving-related externalities. Moreover, two-thirds of households would save an average of $270 per car per year, making insurance more affordable and decreasing the number of uninsured drivers on the road.

If the Brookings estimate of eight-percent VMT savings is anywhere near accurate, a shift to PAYD would be the closest thing to a free lunch imaginable. In Virginia, an eight percent reduction in traffic would translate into tens of billions of dollars in construction dollars that would not have to be spent. Add hundreds of millions of dollars yearly in reduced accident-related costs, and the policy is the closest thing to a public policy “no brainer” I can think of.

There are two predictable sources of resistance. One is the alliance of contractors, engineers and related vendors who make their livings building transportation infrastructure. Another is people who drive a lot more than average; they will miss their subsidies from low-mileage drivers. But arrayed against them is a politically potent group: Everyone else.

From the standpoint of conservative philosophical principles, PAYD is a two-fer. First, it is fiscally conservative, potentially saving billions of dollars in transportation spending and reducing pressure for tax increases. Second, it is non-coercive and market-based. No one would force insurance companies to provide PAYD, and no one would compel drivers to adopt PAYD policies.

What Virginia state government can and should do is encourage the spread of PAYD insurance. First, eliminate any laws that might interfere with the adoption of the PAYD rate structure. Even better, join other states in explicitly allowing insurance companies to offer the product.

SGA suggests that it also might be helpful to adopt a pilot project.

One of the biggest obstacles to widespread adoption of PAYD is a lack of knowledge on the part of insurance companies and state decision makers about how to structure it. A pilot program can be an effective way to test potential payment structures and data collection methods and reduce the start-up costs to insurance companies. It can also be a means to collect state-specific data about the benefits of PAYD, by monitoring changes in driver behavior. State transportation agencies can play an important leadership role and, in many cases, will be in the best position to administer such a program.

Privacy issues are minimal. Most new cars already record odometer data electronically onto internal computers, and millions of cars provide the data through GPS-tracking services like On Star. Progressive Insurance also installs an odometer-tracking device for subscribers. If people are wigged out by privacy concerns, they should be free to opt out of PAYD and subscribe to traditional insurance policies.

One last thought. Think of the powerful impact created by adopting a Mileage Based User Fee (MBUF) for funding road maintenance (as described here) in conjunction with PAYD. For a typical driver, PAYD premiums would amount to about 6.5 cents per mile. In Virginia, a mileage-based user fee could cover the state’s maintenance budget for about 2.6 cents per mile. Add it up, and that’s about 9.5 cents per mile. If people calculated that it cost them a dime for every mile they traveled, they would likely find ways to drive less.

West Virginia’s Lessons on Fracking

water in W.Va. By Peter Galuszka

Tap water is now drinkable for most of the 300,000 residents in the environs of  Charleston, the capital of Virginia’s sister state to the west, but the mess has ample warnings for future problems notably fracking for natural gas.

The national newspapers are filled with interesting pieces this morning about the problems of now-bankrupt Freedom Industries where 7,500 gallons of a chemical used to treat coal spilled 1.5 miles upstream from a municipal water system intake, making water unusable in Charleston and nine surrounding counties for about a week.

The affected area would be about the size of Chesterfield or Henrico counties individually or more than the entire city of Richmond. Imagine the business losses from the inability to wash dishes in restaurants, wash cars, or even make toilet trips in state office buildings. Think of the unknown health impacts.  Incredibly, that’s what happened in Charleston, the epicenter of the anti-regulation “War on Coal” propagandists.

The takeover warning for Virginia is that it could happen here and did back in the 1970s when Allied Chemical tried to sidestep pollution regulations by setting up a dummy company in a converted gas station in Hopewell to make the highly toxic pesticide chemical Kepone.

One cause for future concern here, as well as in West Virginia, is what happens when hydraulic fracturing for natural gas comes. Fracking, which involves using high pressure water with special chemicals to help break up before-unreachable pockets of natural gas has really taken off in recent years.

Combined with newer horizontal drilling methods, fracking has yielded a cornucopia of natural gas with a huge impact. It is utterly changing the dynamics of the U.S. energy picture and positioning the country to become an exporter of both gas and oil for the first time in decades.

Fracked gas has its pluses. It emits half the carbon dioxide of coal and has nowhere near the death toll for employees. It doesn’t destroy entire mountains. But it can increase the chances of fire, pipeline leaks, rail accidents and threaten water supplies depending on the types of chemicals used in the process.

The West Virginia case provides chilling inadequacies with regulation. The tanks at Freedom Industries were inspected for air emissions but not for leaks, even though they were built in the 1940s and 1950s. Ownership wound around a polyglot of corporations.

Within one week of the spill and facing hundreds of millions of dollars in lawsuits, Freedom promptly went bankrupt to protect itself against claims. That means that victims of the spill are doubly screwed. They have to eat the losses from the disaster and now they will find it much harder to get legal compensation.

More chilling is the fact that West Virginia’s legislative and regulatory climate will make it harder to know what’s in gas fracking chemicals when companies move south from Pennsylvania to exploit Marcellus Formation shale that covers most of the state.

The New York Times notes that in West Virginia, state regulators can issue regulations but they can’t be enforced until the lobbyist-heavy legislature approves. A law last year would have required that companies disclose the types of chemicals they use for fracking but under pressure from oil equipment giant Halliburton, lawmakers decided to make them confidential.

The same aura of confidentiality in favor of industry pervades Virginia which prides itself on being “business friendly. Much of what the State Corporation Commission does when it deals with firms or handles electricity rates is immune from the Freedom of Information Act. When former Gov. Robert F. McDonnell set up committees to study uranium mining and the nuclear industry in general, they were likewise immune from the FOIA. A lawyer working for former Attorney General Kenneth Cuccinelli was rebuked by a judge for advocating for energy companies in a lawsuit over natural gas rights.

Fracking could come to Virginia although it isn’t certain when or how much. The state already has more than 7,500 older gas wells near the Southwestern coal fields that do not use fracking.

A sliver of frackable Marcellus formation skirts the West Virginia border west of  Interstate 81 in mountainous regions unused to energy extraction. Rockingham County has already blocked a special land use permit sought by an energy firm. Washington area drinking water officials are seeking limits of fracking in the nearby George Washington National Forest at the headwaters of the Potomac River and other municipal water sources.

Another possibility is the so-called Taylorsville Basin which runs from west of Annapolis to east of Fredericksburg and Richmond and Petersburg in areas better known for crab pots and pine forests. It isn’t known how much gas is actually there, but a Dallas firm, Shore Exploration and Production Corp. is looking.

I don’t know offhand what rules Virginia actually has in place to reveal the chemicals companies use for fracking, but it is obviously something to watch. One example not to follow is that of the Mountain State.

Journalism’s Death Is Greatly Exaggerated

rachel_maddowBy Peter Galuszka

“Investigative reporting, R.I.P. In-depth reporting is dead. If not dead, it’s comatose. Reeling from declining revenue and eroding profit margins, print media enterprises continue to lay off staff and shrink column inches.”

Err, maybe not. James A. Bacon Jr., meet Rachel Maddow.

The quote comes from advertised “sponsorships” in which an outside entity can help fund reporting and writing on this blog. It’s a morphed form of traditional journalism and there’s nothing wrong with it, provided the funding source is made clear.

But what might be jumping the gun is the sweeping characterization that in-depth reporting is dead. That is precisely the point of Maddow’s monthly column in The Washington Post.

She notes that it was local traffic reporters and others who broke the story about Chris Christie’s finagling with toll booths to punish a political opponent. She shows evidence of other aggressive reporting in Connecticut and in South Carolina, where an intrepid reporter got up early one morning, drive 200 miles to the Atlanta airport and caught then disappeared Gov. Mark Sanford disembarking from an overseas flight to see his Latin American mistress when he had claimed he was hiking the Appalachian Trail.

Closer to home, it was the Post, which has seen more than 400 newsrooms layoffs over the past years, that broke GiftGate, the worst political scandal in Virginia in recent memory. The rest of the state press popped good stories, including the Richmond Times-Dispatch that has been somewhat reinvigorated despite nearly 10 years of corporate cheerleading and limp coverage under publisher Tom Silvestri. The departure of the disastrous former editor Glenn Proctor, Silvestri’s brainchild, helped a lot as did the sale of the paper by dysfunctional Media General to Warren Buffett.

To be sure, there are sad departures. The Hook, a Charlottesville alternative, did a great job reporting the forced and temporary ouster of University of Virginia President Teresa Sullivan, but it has folded.

Funding, indeed, remains a huge problem, even at Bacon’s Rebellion where we all write pretty much for free. One solution, Maddow notes, happened in a tiny Arkansas town that found it was located over a decaying ExxonMobil fuel pipeline. The community raised funds to help hire more reporters to break through the news.

She suggests: “Whatever your partisan affiliation, or lack thereof, subscribe to your local paper today. It’s an act of civic virtue.”

Hear! Hear!

Where the Poor Are

ram wise countyBy Peter Galuszka

With expanding Medicaid about to become a major issue with the incoming Terry McAuliffe administration, it is curious to see exactly where the poor people in Virginia live. An intriguing New York Times interactive graph provides clues and allows one to draw some rather disturbing conclusions.

The single worst pocket of poverty of 76.7% appears to be in an inner city part of Hampton. Trailing not far behind are inner city parts of Norfolk (67.8%) and Portsmouth (64.9%).

Much-touted RVA is a hotbed for low-income people as defined by individuals making less than $11,945 a year or a family of four making $23,283 a year. Despite all the hoopla you read about Richmond becoming an artsy draw for white, educated millennials, the capital, at least its downtown and east end, is as poor as church mice.

An east end section near Fairfield Avenue is 67.% poor. Manchester south of downtown has rates of 35% and farther south it is 50.7%.

Zip over the mostly white Short Pump area where the fancy stores are in Henrico and poverty is about 2 percent. I tried to look up where Jim Bacon lives but the chart said it was a “low population area” and rates weren’t available. My area in southwestern Chesterfield is about 3 percent.

A cursory scan around the state did not show any poverty rates anywhere close to those of the inner cities of Tidewater or Richmond –certainly not in Northern Virginia although Winchester seemed a little sketchy.

In more rural areas, Halifax County in the dying tobacco and textile belt was high but the surrounding area was low. An area near Lynchburg showed 50 percent levels.

Another curiosity was that once you get to the Southwest, you can see the black hand of coal. The Virginia coalfields are generally just west of U.S. 19. Giles County to the east of it has poverty rates of about 13 %. But cross to the western counties and watch it double (Buchanan 23%; Dickenson, 21.3% and Wise, 25.6%).

What do these counties have in common? A dying coal industry and even dying is a misnomer. One would think that these areas would be swimming in money thanks to black diamonds. Anything but. They’ve been stripped and raped with the wealth flowing elsewhere. This is something to keep in mind when you hear about “The War on Coal.” Turns out the “War on People Living Near Coal Mines” has been going on since the late 19th century.

The Times chart is a wonderful reality check. It should have huge applications as expanding Medicaid is considered. The lesson seems to be that extreme poverty is concentrated in neglected inner city neighborhoods and abused rural areas.

If (God forbid!) poor people start flocking to emergency rooms once they get Medicaid, those emergency rooms are likely to be in large, downtown teaching hospitals like the Virginia Commonwealth University Health Systems and Sentara Norfolk General Hospital. They won’t be in rich, white suburban areas for the simple reason that public transit is lacking. In rural areas, the poor may well have to find rides to take them dozens of miles to find care.

(Hat tip to Scott Elmquist) 

Expand Free Clinics, Not Medicaid

Meadowview Health Clinic

Meadowview Health Clinic

by James A. Bacon

So, what’s the alternative to expanding Virginia’s Medicaid program? Let an estimated 400,000 Virginians continue without health insurance? That option was workable in the past because the federal government gave financial aid to hospitals to help offset some of the cost of providing health care to indigent patients. But the Affordable Care Act (Obamacare) is cutting that aid on the grounds that, between Medicaid expansion and the new health exchanges, most people will have health insurance now. Thus, a decision by the General Assembly to reject Medicaid expansion would force Virginia hospitals either to stop treating uninsured patients or to eat tens of millions of dollars in unpaid bills (some $100 million just for the University of Virginia and Virginia Commonwealth University health centers) every year. 

Del. Bob Marshall, R-Manassas, has proposed strengthening the non-governmental safety net instead. His idea is far from a complete solution — it can’t possibly make up the loss of hundreds of millions of dollars in federal Medicaid payments. But the proposal would put into place an important piece of a broader, market-based health system.

Marshall’s alternative to expanding Medicaid is to expand the network of free health clinics across Virginia by encouraging physicians and nurses to donate more of their time. His House Bill 39, co-patroned by Del. Patrick Hope, D-Arlington, would exempt voluntary health providers from civil damages for any injury or death resulting from volunteer treatment (excepting in cases of gross negligence or willful misconduct), and would have the Attorney General’s office represent volunteers if such immunity were challenged.

Marshall envisions churches, neighborhood groups and hospitals setting up neighborhood primary care centers staffed with volunteer labor. As it stands, Virginia already self-insures 3,400 physicians for care they provide in free clinics. No lawsuits are pending against free clinic care.

One could argue that free clinics staffed by volunteer labor cannot possibly provide the scope of coverage of an expanded Medicaid program. But, as Marshall observed in a recent Times-Dispatch op-ed, Medicaid has significant problems of its own. Medicaid pays less than Medicare or private insurance, and there are concerns that many Medicaid patients will have difficulty finding a doctor. Indeed, the reimbursement for Medicaid services is so low and the paperwork cost of complying with the program is so high that some doctors may conclude that it’s preferable to treat the indigent in free clinics.

Marshall’s idea would strengthen the primary care network for the indigent but it is not a comprehensive solution. There is no guarantee that doctors and nurses will volunteer in sufficient numbers to provide care to 400,000 patients — even assuming the free clinics had the capacity to handle such a number. And his bill would not cover the cost of providing tests, medication and procedures best performed in a surgical facility, much less a procedure requiring intensive care.

HB 39 is best seen as a small part of a larger package of state- and federal-level, market-based reforms that decouple health insurance from employment, create price and quality transparency, spur innovative treatment models and promote hospital competition and productivity.

Behind a Massey Energy Lawsuit Settlement

don-blankenship By Peter Galuszka

It might have otherwise gone unnoticed, but Bristol-based Alpha Natural Resources, one of the country’s largest coal companies, has agreed to settle a leftover securities fraud lawsuit for $265 million involving Massey Energy Co., the notorious, formerly Richmond-based firm that Alpha bought in 2011.

The settlement with the Pension Reserves Investment Management Board, which oversees pensions in Massachusetts, is just one of a number of lawsuits by shareholders and investors challenging Massey’s safety record which led to a 2010 mine blast in West Virginia that killed 29 miners and was the worst such incident in the U.S. in 40 years.

Massachusetts Treasurer Steven Grossman, who is chairman of the investment board, says the settlement shows that businesses need to be “open and transparent to people who invest in them.”

Massey, which had the worst safety record in the country before the mine blast at Upper Big Branch, was forced into sale and was bought by Alpha for $7.1 billion. Since then, Alpha has been working to clean up various lawsuits and improve safety by retraining the Massey employees who started working for Alpha after the sale. By June 2012, federal prosecutors said that Alpha seems to have made progress improving safety conditions.

Donald Blankenship, the hard-nosed former chief of Massey who got a golden parachute worth at least $86 million after resigning in 2010, is still the possible target of a federal probe in West Virginia.

Indeed, one unresolved issue is what exactly the culpability of corporate executives and directors is if they know something is badly wrong with their firm but don’t do anything about it. A bill in Congress that would toughen oversight and set higher levels of responsibility for corporate boards has gone nowhere.

Unless, federal prosecutors take indictments against former Massey officials, perhaps including Blankenship, it seems that any kind of justice will have to come from lawsuits such as that by the Massachusetts pension fund.

The Massachusetts lawsuit, which claimed that Massey misrepresented its safety record to artificially prop up its stock price, has been just one of a slew of legal actions on public criticism by investors in New York, Connecticut and other states.

Not all of the suits have been successful. A federal judge in West Virginia recently ruled against a suit by one shareholder, saying that his concerns had been addressed in other settlements. Blankenship’s payout, part of the accusation, was remarkably generous but legal, the judge decided.

An Alpha spokesman said that the firm decided to settle the Massachusetts lawsuit so it could move on to other things. Part of the buyout price included a legal fund to settle Massey’s claims, including a $1.5 million payout to each of the families of Upper Big Branch victims.

But that’s a core part of the problem. Bad companies do their damage and people die or the environment is destroyed. Prosecution is nonexistent to sluggish, especially in a place like West Virginia where King Coal rules. The current federal probe has been going on for about two years with only three convictions of fairly low- to middle-level employees.

In the 1970s, for instance, former Gov. Arch Moore, who later served time in prison for corruption involving payoffs from coal firms, personally dropped penalties sought in a lawsuit against Pittston Coal (an Alpha predecessor) from $100 million to $1 million. Pittston was involved in building flimsy waste dams on Buffalo Creek which breached in heavy rain in 1972. The ensuing tsunami of filthy water, 30-feet high, killed 125 people as it washed out downstream towns.

With history as a judge, it may show progress that Alpha is paying out $265 million to get rid of yet another Massey lawsuit. In reality, though, it isn’t that big a deal by today’s standards. Much of the cost had already been factored in during the $7.1 billion buyout. Massey former executives are either long gone or were absorbed into Alpha’s structure.

Alpha has built memorials to the dead miners at Upper Big Branch and is a major donor to politicians and do-good projects, such as West Virginia Public Broadcasting’s popular “Mountain Stage” radio show.

The largesse naturally plays out in Alpha’s home state of Virginia where it favors Republicans but can be pragmatic. Alpha gave Republican Ken Cuccinelli at least $92,500 in the recent gubernatorial election and only $10,000 to Democrat Terry McAuliffe. Now that McAuliffe has won, Alpha is giving him $25,000 for his Jan. 11 inauguration.

But then, giveaways are standard for coal companies, regardless of how they treat their employees or the environment. Under Blankenship, Massey Energy gave away millions to local colleges and to his home town of Matewan, W.Va. Massey’s previous, Richmond-based owners handed over millions in the capital area, creating such institutions as the Massey Cancer Center.

The cycle may alter a little, but it continues.

The writer is author of “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” St. Martins Press, 2012.

Woman on the Spot: Jacqueline Cunningham

Jacqueline Cunningham

Jacqueline Cunningham

by James A. Bacon

President Barack Obama threw the health insurance industry for a loop yesterday when he declared that insurers can extend by a year those policies that they had canceled for failing to meet the provisions of the Affordable Care Act. Here in Virginia that puts an obscure government official — Commissioner of Insurance Jacqueline K. Cunningham — on the hot seat.

The National Association of Insurance Commissioners has expressed strong concerns about Obama’s action, which upsets the delicate transition from the previous regulatory regime to a system of state health exchanges. Stated the NAIC yesterday: “It is unclear how, as a practical matter, the changes proposed today by the President can be put into effect.  In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”

How the implementation delay will work out in Virginia is unclear. The State Corporation Commission, an independent branch of government in Virginia, has issued no statement. But the situation will likely thrust Cunningham, a career SCC staffer, to the forefront. Having worked at the commission since 1993, she was appointed as Commissioner of Insurance in 2011.

Cunningham was appointed by Virginia’s three SCC judges who, thanks to their life-time tenure, are insulated from the rough-and-tumble of partisan politics. I could find no information online regarding her attitude toward Obamacare, but her NAIC bio suggests that she has been working diligently to carry out the law: “Cunningham has been actively engaged in efforts of the NAIC regarding state responses to the requirements of federal health care law.”

A political furor has erupted as stories proliferate of millions of Americans receiving cancellations of their policies in contravention of Obama’s promise that, “If you like your health plan you can keep it.” Not all plans were canceled but many were. No numbers have been calculated for Virginia but some 73,200 people have lost their policies in Maryland and 183,800 in North Carolina, according to the Associated Press

The logistics of un-canceling the plans would be difficult. Insurers would have only a few weeks before the Dec. 15 deadline to figure out rates, reprogram computer systems, send notices to policyholders and enroll customers. The actuarial uncertainties — not knowing how many would re-enroll, and what their health profile looked like — would make it difficult to set rates. Making things even more complicated, allowing some people to keep their old plans would change the profiles of people entering the health exchanges, possibly throwing those actuarial calculations out of whack. The American Academy of Actuaries details the problems here.

Cunningham and the SCC will have to thread the needle between widespread outrage at Obamacare regulations that precipitated the cancellations and the incredibly complex task of resuscitating the cancelled plans. Even more fundamentally, the SCC also has to decide whether Obama’s executive action, which exempts the plans from mandated benefit standards, is even legal. Insurance commissioners in Washington state and Washington, D.C., have stated they would not allow insurers to continuing plans that do not comply with the law.

What a mess.

Update: I got this response from SCC spokesman Ken Schrad:  ”Given the extensive amount of changes needed to include the ACA requirements, the Bureau of Insurance advised insurance companies that it believed it would be easier for consumers to understand if a new policy were issued rather than rewriting the old policy.  The Bureau of Insurance did not have the legal authority to force insurers to allow consumers to keep their old plans without bringing them into compliance with the ACA.  The sale and issuance of these old plans would violate the ACA.

“To the extent the President’s announcement creates the possibility that insurers may be able to offer non-compliant plans for an additional year, the Bureau of Insurance will evaluate that possibility, including whether it comports with state law passed to comply with the ACA.”