Why Ryan’s New Anti-Poverty Plan Is Another Missed Opportunity

On the surface, Rep. Paul Ryan may seem to be an advocate for those in poverty. His policy proposals, however, would undermine anti-poverty efforts by systematically weakening successful safety net programs like the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) and rental housing vouchers. Previously, we did the math on how much his “Path to Prosperity” FY 2015 budget resolution would damage the safety net and hurt those in poverty. Ryan’s new proposal for anti-poverty reform, introduced recently at the American Enterprise Institute, is in effect more of the same.

Ryan calls his plan, Expanding Economic Opportunity in America, a “discussion draft.” On that point, we agree. Ryan does need to have more discussions—with poor people. This newest plan is just a repackaging of ideas we’ve already seen.

The cornerstone of the proposal is the Orwellian-named “Opportunity Grant,” which would consolidate 11 existing benefit assistance programs, including SNAP, housing subsidies, cash welfare (Temporary Assistance for Needy Families, or TANF), and child care assistance, into a single block grant to states. States would choose whether to participate in the program and receive an Opportunity Grant, which would replace their current system of receiving funding under each individual program. States wishing to participate in this pilot program would have to submit a plan for approval by the federal government. Because the Ryan plan is deficit-neutral, the overall amount of federal funding would not change for participating states.

Under an Opportunity Grant, aid would be distributed to beneficiaries in a way that mirrors how the states would receive their funding: consolidated. Eligible individuals and families in those states would receive a “single payment” intended to cover multiple forms of aid. These Opportunity Grants would have to be administered by “at least two service providers” in each state—in addition to the state government offices, for-profits and non-profits could also be service providers. All of this is problematic for a number of reasons.                                             

According to Ryan, current federal programs “don’t see how people’s needs interact.” And yet, his proposal to consolidate these very different programs into a single, capped funding stream virtually guarantees that fewer individuals’ and families’ needs will be met and understood. Turning safety net programs into block grants with fixed levels of funding is one of the quickest ways to undermine the safety net’s effectiveness, as block grants by design are not responsive to economic changes. Although Ryan says a countercyclical element could eventually be incorporated into the block grant, it would not happen in the pilot stage. In addition, history shows that virtually every program that has been converted into a block grant has had its funding cut significantly in subsequent years.

The flat funding structure of a block grant also means its value depreciates over time. In the case of the Opportunity Grant, if a number of programs are combined and then the price of housing goes up, the amount allotted toward housing costs doesn’t necessarily follow that increase. In other words, the amount of funding is no longer tied to the real-world cost. This alone would greatly diminish both the reach and effectiveness of the Opportunity Grant. According to the Center for American Progress, “consolidating multiple programs into a single funding stream can reduce accountability for program outcomes and leave needed services vulnerable to later cuts.”

We’ve already seen how this played out with the cash assistance program. Since its transformation into TANF in 1996, the program’s funding has been flat. As a result, the real value of TANF has decreased by almostone-third. The program TANF replaced, Aid to Families with Dependent Children, used to reach nearly 70% of families with children living in poverty. Today, just 25%of families with children living in poverty receive assistance. The fact that Ryan repeatedly lauds this reform as an exemplary model does not bode well for the safety net under his new plan.

The Opportunity Grant would pose a special threat to SNAP and housing vouchers and other rental assistance programs, since they make up three-quarters of the funding being combined into the Opportunity Grant and would be most impacted by future cuts. These programs are our most effective anti-poverty tools, with SNAP currently lifting five million people out of poverty and rental assistance lifting three million people out of poverty.  

While states would be subject to few requirements in implementing Opportunity Grants, beneficiaries would have to comply with new, harsh standards. This includes extending work requirements for eligible recipients to every type of aid that would be consolidated within the Opportunity Grant. All recipients would also have to fill out what Ryan calls a “customized life plan” with their caseworkers that would actually amount to a binding contract punishable by the loss of assistance if broken. In addition, families and individuals would face time limits for how long they could receive any sort of assistance. Effectively, Ryan wants to add more barriers to accessing the programs that help people escape poverty.

Despite his professed concern with efficiency and holding down costs, Ryan has proposed a plan that would not only require additional funding to support, but would also create more administrative delays and roadblocks for people receiving assistance for even the most basic needs. For example, contrast the current operation of the SNAP program with how assistance would be distributed under the Ryan proposal. SNAP is currently one of the most efficient social services around. Administrative costs make up just 5% of the budget. In addition, SNAP can also be expedited—destitute families and individuals can receive benefits in just seven days. If every SNAP participant had to sit down with a caseworker and create a plan complete with benchmarks and employment requirements, as would be the case under Ryan’s proposal, the program’s ability to reach those in need quickly and efficiently would be dramatically impaired. Moreover, had Ryan listened more closely to those in poverty, he would have learned that the majority of SNAP participants are already working.  

One element in Ryan’s proposal we agree with is expanding the Earned Income Tax Credit (EITC) to childless adults aged 21 and over, and doubling the maximum credit and phase-in and -out rates. Currently, only adults aged 25 and older are eligible for this credit. Unfortunately, Ryan wants to pay for this by eliminating “a number of ineffective programs.” Ironically, one of those “ineffective programs” is the Social Services Block Grant (SSBG), a program just like the Opportunity (Block) Grant. Before 1981, the SSBG was actually a number of separate social services, including child care, adoption, counseling, and employment services. Since the combination of these services into the SSBG, the block grant “has lost 77% of its value due to inflation, cuts, and funding freezes.” As a result, Ryan has called for the elimination of the program, saying it “is duplicative and does not have accountability.” And yet, Ryan is proposing the same plan with the Opportunity Grant.

If eliminating the SSBG and other services, including two nutrition programs (the Fresh Fruit and Vegetable Program and the Farmers’ Market Nutrition Program), still isn’t enough of an offset, Ryan says he’ll then “eliminate corporate welfare.” Considering he just included major tax cuts for the wealthiest 2% and major corporations in his budget, we’re doubtful.

There’s nothing like missing the opportunity to give others more opportunities—and that’s exactly what Ryan did with this latest proposal. His tour around the country may have provided a valuable introduction to the extremely complex issues of poverty. But Ryan’s understanding of poverty is just that: rudimentary. A contract will not help people fight against the systemic causes of poverty. They are fighting already, with or without a contract. What they need—and what Ryan needs to understand—are policies that provide more true opportunities. No one says it better than Tianna Gaines-Turner, who testified at Ryan’s last Budget Committee hearing:

Families are [already] working. We don’t need to be placed in more work programs, we need our jobs to pay living wages, and to offer family-oriented policies like paid sick and paid family leave. This way, we can earn more, save money, and create our own safety net so that we never have to turn to the government for help again.

Ryan’s plan to combine all assistance programs into a single block grant with burdensome work and contract requirements would only limit those opportunities.

The author thanks Kali Grant, Economic Justice and Opportunity VISTA, for her extensive work on this blog.

PART I: What level of reimbursement are non-participating (out-of-network) providers entitled to when providing non-emergency services to plan policyholders?

On August 1, 2014, Orthopedic Specialists of California (OSSC), a provider group, urged an appellate panel to revive its putative class action alleging that California Public Employee’s Retirement System (CalPERS) health plan did not properly compensate out-of-network health care providers for non-emergency services rendered to its subscribers. Orthopedic Specialists of Southern California v. California Public Employees’ Retirement System (Cal. Ct. App. July 15, 2014) B248535, 2014 WL 3749525.

OSSC argued that a lower court wrongly denied its right to seek usual, reasonable and customary (UCR) reimbursement for out-of-network services provided to CalPERS-covered patients. Additionally, OSSC argued that CalPERS' paid unreasonably low rates, though its plan calls for non-emergency, out-of-network care providers to be paid based on factors including the value of the services rendered, geographical region and the provider's charge patterns. CalPERS countered with the argument that non-emergency providers are not protected or restrained in the same way emergency health providers are. Emergency care doctors are entitled to UCR payment because they are legally compelled to provide treatment regardless of insurance coverage or ability to pay.

At center stage in Orthopedic Specialists was the following question: What level of reimbursement—(1) reimbursement terms located in a Plan’s Evidence of Coverage; or (2) UCR rates as calculated by the Department of Managed Health Care’s subjective regulatory factors (described below)—are non-participating (out-of-network) providers entitled to when providing non-emergency services to plan policyholders? Typically, medical groups, independent practice associations, hospitals and emergency physician groups will contract with health care payors and negotiate fees for services rendered to payors’ policyholders. When no such contract exists between payor and provider, providers will charge fees that do not reflect any negotiation and which may be more or less reflective of the actual costs of providing such services. When payor and provider are not bound by the terms of a contract (which lays out fees for services to be rendered) patients are left caught in the middle of a payor-nonparticipating provider reimbursement dispute.

For example, imagine you suffer from chronic lower back pain. You feel numbness up and down your left arm and begin to lose significant functional mobility in your back and arm. You spend two years attempting to manage the pain and functional decline by utilizing conservative treatment methods, such as cortisone injections, inverted table therapy or other non-invasive treatment options. Finally, your neurosurgeon specialist recommends that you undergo medically necessary lumbar spinal fusion surgery. The procedure has been shown to provide high efficacy rates and provides more long-term pain relief than any option. You undergo the non-emergency procedure and begin to experience the benefits of this aggressive treatment option. Your neurosurgeon bills your insurance company $150,000 for the procedure. Months or even years later you come to find out that your neurosurgeon was reimbursed only $11,000 for the procedure, and now wants to be paid the rest. Do you have to pay him, or should your insurance company? (Never mind, you don't really have to answer that!)

Now imagine the following scenario involving the same neurosurgeon. You experience a freak off-road biking accident and sustain a life-threatening head and neck injury. You are rushed into the emergency room at the local hospital and the same neurosurgeon performs life-saving cranial and neck surgery on you. You undergo the emergency procedure and the neurosurgeon bills your insurance company $150,000. Months or even years later you find out that the neurosurgeon was reimbursed $11,000 for the procedure that saved your life. What happens next? What are the provider and the patient’s legal rights as it relates to the outstanding fee bill?

California law provides two very different outcomes for these scenarios. Furthermore, the type of plan the policyholder has—HMO or PPO —will also determine what law will be applied to resolving a reimbursement dispute in court. Thus, this series of posts seeks to address three aspects of provider-nonparticipating provider reimbursement disputes: (1) Who can sue in a reimbursement dispute; (2) How can providers or patients sue in a reimbursement dispute; and (3) What rules will a court employ to determine a reimbursement rate for providers in resolution of such a dispute.

Stay tuned for more....

Utilizing Framing to Achieve Anti-Poverty Wins in an Age of Political Polarization

Recent research finds that Congress is more polarized than at any time since the end of reconstruction. These findings are evidenced by the Shriver Center’s recently published Poverty Scorecard, which graded 97% of the Senators and 95% of the Representatives at one extreme or the other. This polarization has led to partisan gridlock in Congress, which is especially detrimental to poor people, who have the most to lose under the status quo. Given these realities, what can be done to ensure access to justice and opportunity for all? Perhaps a more useful question is how can we work with, rather than against, this ideological divide in order to achieve political wins for our clients?

Using Moral Psychology to Understand the Roots of the Ideological Divide
As a first step it is important to understand the roots of the ideological and political divide. Jonathan Haidt, a moral/social psychologist, sheds much light on this in his recent book, The Righteous Mind: Why Good People Are Divided by Politics and Religion, as well as in his earlier articles. Haidt explains that the first rule of moral psychology is “feelings come first and tilt the mental playing field on which reasons and arguments compete.” This is why, more often than not, no number of good facts can turn political tides—our gut reaction dictates the facts and arguments we use to then rationalize that gut reaction.

The second rule of moral psychology, according to Haidt, is that “moral domains vary across cultures.” Haidt argues that his extensive research shows that morality has six major foundations, which different cultures emphasize or deemphasize to varying degrees. It turns out that Democrats utilize only three of the moral foundations, while Republicans utilize all six (granted to varying degrees). Morality is not just about caring for the vulnerable, liberty from oppression, and achieving fairness (as most liberals think); it is also about binding groups together through loyalty, supporting essential institutions through authoritative frameworks, and living in a sanctified and noble way (all six of which guide Republican ideology). Haidt challenges Democrats to appeal to the broad spectrum of moral foundations when campaigning and framing as a way to achieve wider buy-in.

Haidt’s final rule of moral psychology, is that “morality binds and blinds”—we are not sensitive to threats to other people’s moral systems, and they are not sensitive to threats to ours. However, if we make an effort to understand the threats to the opposite party’s moral system, there may be room for partnership. For example, Democrats and Republicans may be able to come together by acknowledging that one way to lay the foundation for healthier family partnerships (conservative goal rooted in authoritative institutions) is by improving educational outcomes for all Americans (liberal goal rooted in freedom from oppression and fairness).

Reframing as a Tool for Social Change
Haidt’s emphasis on looking to cognitive science and moral psychology to understand political ideology aligns nicely with Bill Kennedy’s 2010 Clearinghouse Review article on effective political messaging for social-change, Framing in Race Conscious Anti-Poverty Advocacy. Like Haidt, Kennedy explains that cognitive science dictates that the common ways people think about issues that affect our clients (poverty, homelessness, race, etc.) is not through facts, but through existing frames. Frames are sets of unconscious, internalized concepts and values that are “mapped into our brains by experience” and which help us to assign meaning to information and events.

Kennedy suggests, therefore, that as advocates we can and should use reframing techniques to achieve better outcomes for our clients. With reframing, we can “signal an appropriate shared value system that gives our audience permission to reach the conclusion we want them to reach.” Many of the reframing suggestions for racial justice in Kennedy’s article incorporate the moral foundations that Haidt critiques Democrats for underutilizing. For instance, “we are all one nation of shared fates” (group loyalty), and “fix the system to get fair outcomes” (fairness means proportional outcomes for the work you do).

Kennedy’s quick advice on good messaging for reframing includes:

  • Lead with solutions so the problem seems fixable.
  • Lead with values to activate a frame.
  • Never lead with facts.
  • Control the “we.” Define clients in a way that bolsters public identification with them, not in a way that reinforces “otherness” (i.e. don’t use "the poor," "vulnerable," "marginalized"; try "hard-working Americans" or "working class").
  • Do not argue against your opponent’s frame; reassert your own.

It is unclear when or how the rise of political polarization, and thus gridlock, will begin to dip in the direction that leads to better outcomes for our clients. In the meantime, advances in cognitive science and social psychology have improved our understanding of the origins of this divide. As anti-poverty advocates, we cannot afford to forgo the well-established tools of messaging and reframing to achieve shifts in attitudes toward our clients, and bring them into the “we.”  

 

Discovery of Initial Claims Investigation Documents

A recent opinion out of the United States District Court for the Eastern District of Pennsylvania illustrates the ongoing and vexing problem of determining whether documents created during an insurer’s early claims investigation are protected from disclosure in subsequent litigation under an attorney-client or work-product privilege.

In Henriquez-Disla v. Allstate Prop. and Cas. Ins. Co., 2014 WL 2217808 (E.D.Pa. May 29, 2014), a homeowner filed an insurance claim following an alleged theft at the home. The insurer conducted a preliminary coverage and subrogation investigation and ultimately retained counsel within one month of the loss. Counsel later conducted an examination under oath of the insured. The claim was ultimately denied when the insurer determined that the claim was fraudulent.

In the ensuing “bad faith” lawsuit brought by the insured against the insurer, the insured sought production of claims log entries, emails and other documents that included communications with counsel before suit was filed as well as materials relating to the insurer’s subrogation investigation including a cause and origin report (interestingly, the court described the cause and origin report as having been commissioned as part of the subrogation investigation and not as part of the coverage review). The insurer resisted producing these materials and the homeowner brought a motion to compel discovery.

The court ordered production of the early communications with counsel that collected factual information only, and did not contain legal advice, finding that the “collection of information for the EUO’s, are part of the ordinary business function of claims investigation and therefore fall outside the attorney-client privilege.” With respect to the insurer’s materials relating to subrogation, including the cause and origin report, the court likewise ordered that these be produced, finding that such information was part of the “ordinary business functions in claims investigation” and was not protected by a work-product privilege.

This case demonstrates that while early retention of counsel is an important factor considered by the courts in determining the applicability of attorney-client and work-product privileges, it is not the only factor, and that if ordinary claims functions are assigned to counsel, the factual information collected by counsel may ultimately be discoverable. Similarly, subrogation materials collected in the ordinary course of claims investigation, and not in anticipation of litigation, are likewise at risk of being discoverable.

Political Polarization Harms Poor People

Recently, the Shriver Center released the 2013 Poverty Scorecard, which measures how every member of the U.S. Senate and House of Representatives voted on the most significant poverty-related proposed legislation of 2013. Not surprisingly, the results revealed a deep polarization within Congress, with 97% of the Senators and 95% of the Representatives graded at one extreme or the other, receiving an A, D, or F. Only a small handful of moderates received a B or C.

Recent research by Keith Poole and Howard Rosenthal aggregated congressional roll call votes since 1879 and contextualized what is documented by the Poverty Scorecard. Pool and Rosenthal’s research shows that after decades of relatively little polarization, the congressional parties began pulling apart in the mid-1970s. Today Congress is more polarized than at any time since the end of reconstruction, with political ideology accounting for 93% of roll call voting choices in the 113th House and Senate.

This increase in polarization not only affects Congress. A recent Pew Research Center study reveals the American public has seen an increase in political party polarization and sorting in the past few decades as well. Looking at a survey of 10 dichotomous political values questions tracked since 1994, Pew found that the overall share of Americans who express consistently conservative or liberal opinions has doubled over the past two decades, from 10% to 21%. It is also clear that ideological thinking has a much stronger correlation with party affiliation than in the past; today, 92% of Republicans are ideologically to the right of the median Democrat (compared with 64% in 1994), and 94% of Democrats are ideologically to the left of the median Republican (compared with 70% in 1994).

Of course, the majority of Americans continue to choose some mix of liberal and conservative ideological preferences in the survey. What’s significant, however, is those who express ideologically consistent views are much more likely to participate in the political processtogether, Solid Liberals, Steadfast Conservatives and Business Conservatives make up only 36% of the American public, but they represent 43% of registered voters and 57% of the more politically engaged. One can practically conclude that the higher political engagement of politically consistent voters leads to an increased ideological polarization of the officials they disproportionately elect.

It is impossible to conclude which came first—the polarization of Congress or of the wider public—but one thing is certain: these overlapping forms of polarization reinforce one another and ultimately lead to partisan gridlock. As we noted in our blog on the 2013 Poverty Scorecard, gridlock is especially detrimental to poor people, who have the most to lose under the status quo.

Low-income people also have a lot to lose within the current partisan divide because as long as ideological attitudes increasingly fall on partisan lines, attitudes about poverty, which are deeply ideological, will continue to fall on partisan lines as well. This point is reinforced by the second part of the Pew series on political polarization, which studies “political typology” by sorting people into eight cohesive political types (Steadfast Conservatives, Business Conservatives, Young Outsiders, Hard Pressed Skeptics, Next Generation Left, Faith and Family Left, and Solid Liberals) based on their responses to 23 dichotomous questionsThree of these questions addressed views on economic fairness, the safety net, and the poor. These are some notable findings:

  • The public is evenly split on whether they believe that government aid to the poor does more harm than good. But, when broken down, 86% of Steadfast Conservatives, 80% of Business Conservatives, and 86% of Young Outsiders said that government aid does more harm to the poor than good, while 91% of Solid Liberals said it did more good than harm.
  • Slightly more than half of all people surveyed said the government can’t afford to do more to help the needy; in contrast, over 85% of Steadfast Conservatives said that the Government can’t do more to help, while 83% of Steadfast Liberals said the Government should do more to help the needy.
  • The public is just about evenly split on attitudes about the poor, but there are deep ideological divides among typologies: 86% of Steadfast Conservatives say that the poor have it easy because they get government benefits without doing anything, while 86% of Solid Liberals say the poor have it hard because government benefits don’t go far enough to help them live decently.
  • Two-thirds of Americans continue to hold the belief that people can get ahead if they are willing and work hard, while a bit less than one-third agreed that hard work is no guarantee of success for most. The American myth that anyone can pull him or herself up by the bootstraps clearly continues to carry tremendous weight, obfuscating the power of social systems and structures, such as racism, classism, and sexism, to oppress and perpetuate poverty, and making it more difficult to achieve systemic solutions.

What can we learn from these findings? More importantly, in an age of congressional gridlock, clearly rooted in polarized beliefs in both Congress and the wider public, what can possibly be done to ensure access to opportunity and justice for all? Read Part II of this blog tomorrow to learn how advocates can utilize messaging and reframing to ensure access to justice and opportunity for low-income people in an age of political polarization.

 

Political Polarization Harms Poor People

Recently, the Shriver Center released the 2013 Poverty Scorecard, which measures how every member of the U.S. Senate and House of Representatives voted on the most significant poverty-related proposed legislation of 2013. Not surprisingly, the results revealed a deep polarization within Congress, with 97% of the Senators and 95% of the Representatives graded at one extreme or the other, receiving an A, D, or F. Only a small handful of moderates received a B or C.

Recent research by Keith Poole and Howard Rosenthal aggregated congressional roll call votes since 1879 and contextualized what is documented by the Poverty Scorecard. Pool and Rosenthal’s research shows that after decades of relatively little polarization, the congressional parties began pulling apart in the mid-1970s. Today Congress is more polarized than at any time since the end of reconstruction, with political ideology accounting for 93% of roll call voting choices in the 113th House and Senate.

This increase in polarization not only affects Congress. A recent Pew Research Center study reveals the American public has seen an increase in political party polarization and sorting in the past few decades as well. Looking at a survey of 10 dichotomous political values questions tracked since 1994, Pew found that the overall share of Americans who express consistently conservative or liberal opinions has doubled over the past two decades, from 10% to 21%. It is also clear that ideological thinking has a much stronger correlation with party affiliation than in the past; today, 92% of Republicans are ideologically to the right of the median Democrat (compared with 64% in 1994), and 94% of Democrats are ideologically to the left of the median Republican (compared with 70% in 1994).

Of course, the majority of Americans continue to choose some mix of liberal and conservative ideological preferences in the survey. What’s significant, however, is those who express ideologically consistent views are much more likely to participate in the political processtogether, Solid Liberals, Steadfast Conservatives and Business Conservatives make up only 36% of the American public, but they represent 43% of registered voters and 57% of the more politically engaged. One can practically conclude that the higher political engagement of politically consistent voters leads to an increased ideological polarization of the officials they disproportionately elect.

It is impossible to conclude which came first—the polarization of Congress or of the wider public—but one thing is certain: these overlapping forms of polarization reinforce one another and ultimately lead to partisan gridlock. As we noted in our blog on the 2013 Poverty Scorecard, gridlock is especially detrimental to poor people, who have the most to lose under the status quo.

Low-income people also have a lot to lose within the current partisan divide because as long as ideological attitudes increasingly fall on partisan lines, attitudes about poverty, which are deeply ideological, will continue to fall on partisan lines as well. This point is reinforced by the second part of the Pew series on political polarization, which studies “political typology” by sorting people into eight cohesive political types (Steadfast Conservatives, Business Conservatives, Young Outsiders, Hard Pressed Skeptics, Next Generation Left, Faith and Family Left, and Solid Liberals) based on their responses to 23 dichotomous questionsThree of these questions addressed views on economic fairness, the safety net, and the poor. These are some notable findings:

  • The public is evenly split on whether they believe that government aid to the poor does more harm than good. But, when broken down, 86% of Steadfast Conservatives, 80% of Business Conservatives, and 86% of Young Outsiders said that government aid does more harm to the poor than good, while 91% of Solid Liberals said it did more good than harm.
  • Slightly more than half of all people surveyed said the government can’t afford to do more to help the needy; in contrast, over 85% of Steadfast Conservatives said that the Government can’t do more to help, while 83% of Steadfast Liberals said the Government should do more to help the needy.
  • The public is just about evenly split on attitudes about the poor, but there are deep ideological divides among typologies: 86% of Steadfast Conservatives say that the poor have it easy because they get government benefits without doing anything, while 86% of Solid Liberals say the poor have it hard because government benefits don’t go far enough to help them live decently.
  • Two-thirds of Americans continue to hold the belief that people can get ahead if they are willing and work hard, while a bit less than one-third agreed that hard work is no guarantee of success for most. The American myth that anyone can pull him or herself up by the bootstraps clearly continues to carry tremendous weight, obfuscating the power of social systems and structures, such as racism, classism, and sexism, to oppress and perpetuate poverty, and making it more difficult to achieve systemic solutions.

What can we learn from these findings? More importantly, in an age of congressional gridlock, clearly rooted in polarized beliefs in both Congress and the wider public, what can possibly be done to ensure access to opportunity and justice for all? Read Part II of this blog tomorrow to learn how advocates can utilize messaging and reframing to ensure access to justice and opportunity for low-income people in an age of political polarization.

 

Plan administrator gets the benefit of the doubt in another ERISA lawsuit

Claimants often ask why ERISA lawsuits are so difficult. Among other reasons, the biggest obstacle for claimants in ERISA lawsuits is often the standard of review employed by the court reviewing the claim denial.

The core of every ERISA lawsuit involving the recovery of disability benefits essentially comes down to whether the court will give the claims administrator the benefit of the doubt. In most cases, where the plan gives the administrator discretionary decision making authority, the court reviews the claim denial merely for an abuse of discretion. In other words, the administrator gets the benefit of the doubt.

Under an abuse of discretion standard the court would review only the administrative record—or the evidence available to the plan administrator at the time of its decision. New evidence about the disability could not be introduced once the final decision is made by the plan administrator.
The general rule against introducing new evidence, however, is relaxed when evidence is admitted for the limited purpose of determining the standard of review.

In Waldoch v. Medtronic, the claimant, the plaintiff in the ERISA lawsuit, attempted to avoid the deferential standard of review. From the start, plaintiff admitted that his employer, Medtronic, had discretion under the terms of the plan, but contended that Hartford, which did NOT have discretionary authority, effectively made the final claim decision and that Medtronic merely rubber stamped Hartford’s decision. Plaintiff therefore argued that no entity with discretionary authority actually made a decision and so the deferential standard of review should not apply.

In support of his position, Waldoch put forth two arguments. First, he argued that Hartford effectively made the final decision on the claim although Hartford was not granted any authority to make final benefit determinations, therefore its denial decision should not be reviewed for abuse of discretion—in other words, Hartford should not get the benefit of the doubt.

Second, Waldoch argued that Medtronic failed to conduct a meaningful review of his claim by merely “rubber-stamping” Hartford’s decision and thus failing to comply with the “full and fair review” required by ERISA. In other words, Waldoch conceded that the Plan granted Medtronic complete discretionary authority to make final benefit determinations, however, Medtronic never exercised that authority.

The Court disagreed with both arguments.

According to the Court, Medtronic was “permitted to delegate claims processing functions to Hartford and rely on Hartford’s reasoning without compromising its obligation to provide a ‘full and fair review.’”

The Court then proceeded to evaluate the substance of Waldoch’s disability claim under the deferential standard of review. The plan administrator of course got the benefit of the doubt and the Court held that the plan did not abuse its discretion in denying Waldoch’s claim.

This case was not handled by Dell & Schaefer.

Senate Bill 1046 – Penaties for insurers who do not provide adeqate health care benefits

On Monday (8/4/14), the California Legislature approved a bill (SB 1046) that would increase penalties for insurers that do not provide adequate coverage for mental health care, the AP/San Francisco Chronicle reports. The Assembly voted 70 to 0 to approve the bill, which now heads to Gov. Jerry Brown (D). Under current state and federal regulations, insurers must cover treatments for serious mental illnesses and are prohibited from imposing separate limits on mental health benefits and including higher co-payments or out-of-pocket costs for mental health treatments. SB 1046 would give the California Department of Insurance authority to issue per-day, per-patient fines for violating the mental health coverage requirements. The California Department of Managed Health Care, which supervises major group health plans, already has such authority. As State Sen. Jim Beall (D-San Jose), the bill's author, said, SB 1046 puts health insurers on notice that they must live up to the law or face serious penalties.

“Super Voucher” Controversy Distorts the Real Issue

This blog post was coauthored by Adam Ballard, Community Organizer and Housing Advocate at Access Living, and Kate Walz, Director of Housing Justice at the Shriver Center.

You’ve probably seen the flurry of news coverage about low-income families living in $3,000 to $4,000 a month luxury apartments in downtown Chicago via a federal housing program.  Sounds like just another story of people taking advantage of a government program, right?  Really, what could make a better news story? Perhaps one grounded in the real details and the facts behind the program being attacked. 

This controversy began with an amendment proposed by Rep. Aaron Schock (R–Peoria) to the United States Department of Housing and Urban Development’s annual appropriations bill.  That amendment would prohibit public housing agencies from offering fair market rents in excess of 120%, otherwise known as “exception rents,” to landlords who participate in the tenant-based Housing Choice Voucher program. Schock’s stated rationale for the amendment is that the Chicago Housing Authority has paid rents in excess of 300% of the fair market rents, allowing voucher holders to live in tony apartments near the lakefront.

The Housing Choice Voucher program is one of the government’s main federal housing assistance programs, helping more than two million very low-income households, including families, senior citizens, and persons with disabilities, afford their housing by giving them vouchers to cover a portion of their rent in the private market. Vouchers are one of the best means of relocating families to higher opportunity and less violent neighborhoods and reducing homelessness and poverty rates for participants. The Housing Choice Voucher program also enables more than one million persons with disabilities, including veterans relying upon the veteran-specific VASH voucher program, to live independently in a community of their choice. 

Schock’s amendment and the news coverage that followed missed the mark entirely. Less than 2% of the Chicago Housing Authority’s 38,000 vouchers have exception rents, and only a fraction of those vouchers have rents in excess of 200%. For all of 2013, there were only three vouchers with rents at the 300% cap.

None of the news coverage asked the question why such high rents were even needed. Here are a couple of questions that should have been asked: Is there a person in the household who is disabled and requires a hard-to-find accessible unit that can only be found in higher-rent neighborhoods? Is the housing close to a good elementary school for the family's children? Finally, is the housing in proximity to employment that may help the family lift themselves out of poverty?

The much larger issue is that the vast majority of voucher holders in Chicago live in high poverty, racially segregated neighborhoods and struggle to find units that are accessible. Indeed, only $1 out of every $10 spent on rents through the voucher program went to neighborhoods with lower rates of poverty and more opportunity.  

Vouchers are also a lifeline for the disability community. Due to a pervasively high unemployment rate independent of recessionary cycles, the majority of people with disabilities rely on fixed-income benefits like Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). These programs are not adequate to pay rent and still have money left for the other necessities of life. Once a person with a disability receives a voucher, the challenge is to find accessible housing, especially for those with significant mobility impairments. In Chicago and many older cities, antiquated housing stock built without physical access for this population makes the search very difficult. Agencies that provide housing search assistance for people with disabilities in Chicago and elsewhere are overwhelmed by demand that is impossible to fully meet—one such agency receives over 200 unique requests every month. The answer often lies in newer buildings in higher-rent and/or gentrifying communities. In order to make these opportunities possible, exception rents (often around 200%, but in rare cases as high as 300% or more) come into play as a “reasonable accommodation” under federal fair housing and civil rights law.

The Chicago Housing Authority’s effort to improve where voucher holders live by offering them a real and sometimes first chance to live in better neighborhoods and out of institutional settings (which are still more costly to the taxpayer than an exception rent voucher), is also what civil rights laws require. Without the ability to offer higher-than-market rents to landlords, the hard reality is that voucher holders struggle to find landlords willing to rent to them. Though voucher discrimination has been outlawed in Chicago and Cook County and other parts of the country, landlords still openly discriminate against voucher holders, particularly in higher opportunity neighborhoods. This refusal to rent to voucher holders is often pretextual, where the landlord’s actual reason for refusing to rent is discrimination on the basis of race, familial status, or disability. 

When efforts were made to protect voucher holders from discrimination in Illinois, Aaron Schock, then a state legislator, opposed extending that protection. If Rep. Schock actually wants to work to improve the voucher program, let’s begin with the full set of facts, cut out the rhetoric and splashy news pieces, and support every effort to permit voucher holders to live in communities of their choice.

Protecting the Housing of Survivors of Violence Should Be a Top Priority for HUD Secretary Castro

In early July, the Senate voted to confirm San Antonio Mayor Julian Castro as Secretary of Housing and Urban Development (HUD), putting this rising political star at the helm of the nation’s federal housing programs. One can only imagine the fever pitch of requests competing for Secretary Castro’s attention. Many important issues deserve focus, including the lack of affordable housing across the nation in spite of increasing need, the slow and sometimes stymied recovery of the housing market, increasing recognition of the detrimental effects of residential racial segregation, and the failure of or outright resistance by many local governments to affirmatively further fair housing. Secretary Castro should steer his agency to develop laws and policies proactively that can address these issues for long term.

But here’s something Secretary Castro and HUD should act on immediately. In 2005, Congress’ reauthorization of the Violence Against Women Act (VAWA) included for the first time critical housing protections for victims of domestic violence, dating violence, and stalking who lived in or were applicants to certain federal affordable housing programs. The new housing provisions were groundbreaking in that they prevented certain housing providers from evicting or denying admission to individuals for being crime victims. It is a grim reality that, before VAWA 2005 was in place, many housing providers did evict victims. And it took years of education and slow roll out of HUD rules and policy to get to the point where most housing providers covered by VAWA 2005 understood the law. 

In March 2013, President Obama signed the 2013 reauthorization of VAWA. The housing provisions in VAWA 2013 are just as groundbreaking as those in VAWA 2005. Among other things, VAWA 2013 added nine more federal housing programs to the mandate not to harm, evict, or deny admission to victims of violence, which potentially cover an additional 1.4 million households. The new law also now covers sexual assault survivors, LGBT survivors, and immigrant survivors. These  protections are long overdue. Finally, the new law permits survivors to move into other federal affordable housing in order to escape violence—a critical new tool so that survivors do not have to choose between their safety and their affordable housing. But other than a HUD notice issued in August 2013 seeking guidance on the new provisions and a brief guide to public housing authorities from the United States Interagency Council on Homelessness, HUD has failed to issue new policy or instructions, including basic updates to housing providers, tenants, and applicants, such as leases that spell out the new protections for sexual assault survivors. This delay puts survivors and housing providers in confusing and potentially dangerous territory, where the lack of instruction could result in evictions of crime victims at their most vulnerable time. Because more than 85% of victims of domestic violence and sexual assault are women, this delay also presents a serious impediment to fair housing for women.   

Secretary Castro and HUD should act immediately to issue these long overdue policy and instructions on VAWA 2013. Because survivors of violence can’t wait for HUD to do its job.