Here’s a simple rule of thumb to know when government is about to make your life more difficult or expensive: When someone tries to change the word ‘shall” in a rule or law to “may,” hold on to your wallet.

Such is the case as the Missouri Public Service Commission considers changing its year-old ethics policy to make it easier for monopoly utility companies like Ameren Missouri to charge higher rates for electricity.

The PSC is one of state government’s most complicated public bodies, but it is vastly important. Its commissioners, who make $105,070 annually and receive six-year appointments, sit in a quasi-judicial capacity when investor-owned utility companies seek rate hikes. Because they act as judges, their ethics policies should be as stringent as those that guide judges. It helps consumers know that rate increases aren’t being granted in back-room deals.

Several times in the past few years, various commissioners, Democrats and Republicans alike, have been accused of holding private meetings with utilities seeking higher rates. That’s why last year the commission enacted a tougher ethics rule. The rule bans so-called ex-parte communications with parties to a case, and, just as important, requires both the regulated utilities and commissioners to disclose such meetings if they take place, accidentally or otherwise.

PSC chairman Kevin Gunn, a Webster Groves Democrat, wants to “tweak” that rule. He says the tweak would make the rule more workable. He says he doesn’t intend to weaken the rule.

Yes, and the Rams intend to win the Super Bowl.

One section of the rule, for instance, requires utilities to give 60 days notice of a pending rate case. This is the process that starts the clock on commissioners being blocked from meeting with utility executives so that they aren’t improperly influenced.

Right now, any case filed without the proper notice ‘shall not” be considered by the commission. The proposed rule change muddies the waters, replacing ‘shall not” with “may.” That’s quite a tweak.

The proposed change also gets rid of the key sentence in the ethics policy, the one that bans utilities and other parties from lobbying commissioners regarding issues likely to be decided in future rate cases and requires notification of such communication if it takes place.

In testimony about the rule change, commissioner Terry Jarrett, a Republican, lamented that he has had to avoid certain meetings that might find him in violation of the rule.

Isn’t that the point?

Mr. Jarrett, keep in mind, ran afoul of other ethics rules last year when — while still sitting as a PSC commissioner — ran for circuit court judge in Cole County. He accepted campaign contributions from lobbyists representing utilities that had business before the commission. He later returned the donations.

The example perfectly illustrates this ethics kerfuffle: Powerful corporations, both utilities and the industrial companies fighting rate increases, will use whatever means is at their disposal to influence commissioners to vote their way.

Trying to limit undue influence in government is important to public trust. Ethics policies should be tough.

That’s why last year, responding to public outrage, the PSC adopted the tougher ethics rules.

Trying to undo those rules when they haven’t even had a chance to work isn’t a tweak, it’s a mugging.

Testimony before the

Senate Interim Committee on Health Insurance Exchanges

November 10, 2011

            Mr. Chairman and members of the committee, thank you for being here today and accepting public testimony on this important matter.

           My name is Joan Bray.  I represent the Consumers Council of Missouri, which advocates for the interests of individual consumers with utilities, personal finance and health insurance.  We urge you to accept the $21 million in federal money for the state to plan for a Missouri specific competitive health insurance marketplace.   Changes in the way Missourians choose and pay for their health care cannot come soon enough. 

            Health care consumers have suffered far too long – not necessarily from physical maladies but certainly from ailing means of access to affordable health care.  From 2000 to 2007, health insurance premiums for Missouri working families skyrocketed 76 percent while the median earnings of Missouri workers increased 17 percent, to $26,037 from $22,201.  Health insurance premiums rose 4.4 times higher than workers’ earnings.

            The consumers my organization represents are your constituents; they are the people you represent.  As you consider this issue I hope you will think about them and maybe even in terms of the constituent surveys you send out.  What do you think the answers would be to the following survey questions?

*           Would you like health insurance companies to compete for your business based on the value of the plans they offer? 

*           Would you like health insurance companies to use easy-to-understand language to describe their products, what is covered and costs?

*           Would you like health insurance companies to be limited on copayments, deductibles, out-of-pocket costs and premium increases?

*           Would you like health insurance companies to be prevented from dropping your coverage if you get sick 

*           Would you like health insurance companies to be prevented from charging women higher premiums than men?

*           Would you like health insurance companies to be prevented from denying you coverage because you have a disability or pre-existing condition?

            You and I both know that most respondents to those questions on a constituent survey would answer yes to all of them. 

            Many of your constituents have a health insurance horror story involving a close family member or friend.  You will be hearing some of those heartbreaking accounts today.  I can tell you my own story about my young adult son who had an accident, surgery and rehab that has left him teetering on the brink of bankruptcy – despite his having had two major medical insurance policies at the time.  

            A health insurance exchange tailored for Missouri would begin preventing the reasons for those horror stories – dropped coverage, denied coverage, inadequate coverage, and, worst of all, no coverage.

            A health insurance exchange would ensure that your constituents’ needs expressed through their answers to the theoretical questions of a constituent survey would be met in reality.

            You can start righting the wrongs of the current health insurance marketplace by providing your constituents a health insurance exchange designed by Missourians for Missourians.  Your constituents expect you to represent their best interests.  Take the federal grant and get going.

Consumers Council of Missouri

Joan Bray, Chair

Testimony before the

Senate Interim Committee on Health Insurance Exchanges

November 10, 2011

            Mr. Chairman and members of the committee, thank you for being here today and accepting public testimony on this important matter.

            My name is Joan Bray.  I represent the Consumers Council of Missouri, which advocates for the interests of individual consumers with utilities, personal finance and health insurance.  We urge you to accept the $21 million in federal money for the state to plan for a Missouri specific competitive health insurance marketplace.   Changes in the way Missourians choose and pay for their health care cannot come soon enough. 

            Health care consumers have suffered far too long – not necessarily from physical maladies but certainly from ailing means of access to affordable health care.  From 2000 to 2007, health insurance premiums for Missouri working families skyrocketed 76 percent while the median earnings of Missouri workers increased 17 percent, to $26,037 from $22,201.  Health insurance premiums rose 4.4 times higher than workers’ earnings.

            The consumers my organization represents are your constituents; they are the people you represent.  As you consider this issue I hope you will think about them and maybe even in terms of the constituent surveys you send out.  What do you think the answers would be to the following survey questions?

*           Would you like health insurance companies to compete for your business based on the value of the plans they offer? 

*           Would you like health insurance companies to use easy-to-understand language to describe their products, what is covered and costs?

*           Would you like health insurance companies to be limited on copayments, deductibles, out-of-pocket costs and premium increases?

*           Would you like health insurance companies to be prevented from dropping your coverage if you get sick?

*           Would you like health insurance companies to be prevented from charging women higher premiums than men?

*           Would you like health insurance companies to be prevented from denying you coverage because you have a disability or pre-existing condition?

            You and I both know that most respondents to those questions on a constituent survey would answer yes to all of them. 

            Many of your constituents have a health insurance horror story involving a close family member or friend.  You will be hearing some of those heartbreaking accounts today.  I can tell you my own story about my young adult son who had an accident, surgery and rehab that has left him teetering on the brink of bankruptcy – despite his having had two major medical insurance policies at the time. 

            A health insurance exchange tailored for Missouri would begin preventing the reasons for those horror stories – dropped coverage, denied coverage, inadequate coverage, and, worst of all, no coverage.

            A health insurance exchange would ensure that your constituents’ needs expressed through their answers to the theoretical questions of a constituent survey would be met in reality.

            You can start righting the wrongs of the current health insurance marketplace by providing your constituents a health insurance exchange designed by Missourians for Missourians.  Your constituents expect you to represent their best interests.  Take the federal grant and get going.

 August 26, 2011

Re: Adjustment to Medical Loss Ratios in Missouri 

            Good morning.  My name is Joan Bray.  I am the chair of the board of the Consumers Council of Missouri.  Thank you for the opportunity to present testimony this morning. 

            The Consumers Council of Missouri (CCM) was organized to educate andempower consumers statewide and to advocate for their interests.  Health insurance is one of the areas in which we work.  Health insurance is one of the most stressful items in a household budget.  Many individuals and families have no health insurance because it is too expensive.  Many who pay health insurance premiums are under-insured and when they need to use the insurance it may not cover their needs.  And people who are covered by health insurance often find it difficult to know what their premiums are buying or to know the value of the money they are spending. 

            The Consumers Council believes purchasers of health insurance should know what their options are, what they are buying and the comparative value of the health insurance products.  For too long the industry has been veiled in mysterious and dense language and complex numbers and calculations.   This veil must be removed.  Terms of the agreement between insurer and insured must be presented in clear and transparent layperson language.

          The new Medical Loss Ratio requirements (MLR) are a step toward accomplishing such a goal.  They give consumers a straightforward calculation of how their premium dollars are spent by setting a minimum level of spending on medical benefits and quality improvement at 80 percent in the individual and small group markets.  Congress, with the support of the Congressional Budget Office, concluded that efficient insurers could achieve an 80 percent minimum MLR in the individual market.  However, HHS may grant an adjustment to the 80 percent MLR over the next few years if a state demonstrates that there is a “reasonable likelihood” that application of the requirement “may destabilize the individual market in the state” and that “harm to consumers, will occur.”

          The department has asked for public comment on whether Missouri should request an adjustment to the MLR for the individual market in the state.  The Missouri Consumer Council says no.  We are unaware of enough evidence that would support a request for an adjustment of the 80 percent MLR at this time. 

            In April of this year, the department prepared and has now posted on its website MLR estimates for each insurer in the individual, small group and large group market.  Consumers Council commends the department for making this information available.  I do believe, however, that more progress needs to be made in presenting the data in clear and transparent layperson language.

    The department’s report shows that 7 of the 17 insurers in the individual market subject to the 80 percent MLR requirement met or came close to that mark.  These insurers’ adjusted MLRs, as reported by the department, ranged from 77.2 percent to 97.4 percent.  However, the department’s data do not show historical trends, nor does the department provide any explanation of why other insurers did not meet the 80 percent goal or how difficult it would be for other insurers to comply or pay rebates to consumers.

            The department needs more information before it – or anyone — can assess the impact of the 80 percent MLR on Missouri’s individual market.  The information that the department needs to monitor the impact of the MLR is information that consumers need to make more informed choices about their health insurance.  It is also information that HHS indicates should be included in a state’s analysis.

            HHS has specified that states seeking an adjustment of the 80 percent MLR in the individual market are to submit information about the MLRs for each insurer.  In addition, HHS also asks states to provide:

• For each issuer who offers coverage in the individual market in the state the number of individual enrollees by insurance product and individual premium data by product;
• Total agents’ and brokers’ commission expenses on individual health insurance products;
• Estimated rebates for those insurers who do not meet the 80 percent MLR;
• Net underwriting profit for the individual market business and consolidated business in the state for each insurer and their after-tax profit and profit margin for the individual market business and consolidated business in the state; and their risk-based capital level.

            Information about profits and capital reserves provides a clearer picture of where our premium dollars are going.  It may be that the companies that fall below the 80 percent MLR are making exorbitant profits rather than using our premium dollars to pay for medical care.  The data the department has published comparing MLR across carriers, tells part of the story.  We need the rest.

            The Consumers Council supports transparency and accountability.   We support the department’s effort to learn more about how carriers in the individual market are spending premium dollars and to make that information public.

            We urge you issue another public report that compares the profits and capital levels of all health insurers in Missouri, but particularly those in the individual market as part of the department’s due diligence in determining the likely impact of the 80 percent MLR on Missouri’s individual market.  Until the data are made available and the public has an opportunity to comment, we believe it is premature for Missouri to request an adjustment of the 80 percent MLR rule.

This Wednesday, August 24th, is your final opportunity to talk with the MSD rate commission about their proposed rate plan to finance improvements which will place MSD in compliance with EPA standards.  The MSD plan would cost the average household $583.44 more over five-years. 

While we all know the improvements are needed, we do not believe that MSD should lock in the rates for 5 years without knowing exactly what will be required by the EPA and without seeing detailed cost information.  We need that information BEFORE the rates are raised.

Please make your voice heard.  Attend the public hearing on August 24th at the Herbert Hoover Boys’ and Girls’ Club, 2901 North Grand in St. Louis from 6 p.m. to 9 p.m.

• Since 2007, the individual whom Ameren Missouri calls its “typical residential electric customer” has seen his monthly electric bill go up 31 percent, to $96 a month.

Four years ago, “Trec” was paying $66 a month for 1,000 kilowatt hours of electricity. Four rate increases in a little more than four years — the latest a 7 percent, $172 million bump approved last week by the Missouri Public Service Commission — have whacked Trec pretty hard.

Trec isn’t helping himself much — he’s doing a lousy job of conserving energy. Ameren reckons Trec now is using 1,100 kwh of power each month, up 10 percent from 2007.

Trec should think about cutting back because his other utility bills are going up, too. Metropolitan Sewer District says its average customer’s sewer bill will go up by $20 a month by 2015. If Trec lives in the city of St. Louis, his water bill is up 12 percent this year and 50 percent since 2004. Trec-in-the-city also is paying a new $11-a-month trash pickup fee.

If Trec is a St. Louis County customer of Missouri American Water Co., his water bill is up $44 over last year. The company has asked the PSC for another increase of 20 percent to 23 percent. Trec’s natural gas bill went up a couple of bucks a month last year, too — plus the wholesale gas price increases that Laclede Gas Co. automatically passes along.

Let’s assume Trec is typical in other ways. Let’s assume his family’s income is right in the middle for a Missouri household — $45,149. Between 1998 and 2008, Missouri’s median household income dropped 14.6 percent, the steepest drop of any state in the nation.

Back before the Reagan Revolution began tilting the economic table toward corporations and the wealthy, working-class consumers like Trec had a fighting chance to stay even with utility rate increases — and increases in the prices of other necessities of life. Maybe he’d get a raise, or move up to a better job. He may even have voted for Ronald Reagan.

Now, even if Trec is employed and his house isn’t being foreclosed upon, he’s struggling to keep his head above water. Republicans tell us that more tax cuts will fix things. They haven’t since 2000, though corporate profits are at an all-time high. As a regulated utility, Ameren is guaranteed, under the latest rate approval, the right to earn up to 10.2 percent return on equity.

Ameren doesn’t earn that much; it was 7.8 percent last year. The company expects that to grow this year to between 8 percent and 9 percent.

If Trec got an 8 percent raise this year, he just about could keep up with rising costs of utilities, gasoline, groceries, health care and other basics.

Ameren is only doing what companies do in this era of limited corporate obligations: looking out for its investors and employees.

About half of the latest rate increase is attributed to pollution controls installed at its Sioux generating station in St. Charles County. Clean air is a social good, the costs of which are socialized.

But it’s curious that the PSC gave Ameren a $31 million break because of uncertain economic conditions that caused Ameren to slow down work at the Sioux plant. The commission was unwilling to extend the same break to consumers, ruling:

“Many witnesses who testify at local public hearings offer heartfelt and frequently heartbreaking accounts of how they are suffering from the economy in general and high utility rates in particular. As the commission heard frequently at those hearings, many customers want the commission to ‘just say no’ to any proposed rate increase.”

However, the commissioners said, “the utility is entitled to charge rates sufficient to cover its costs.”

Down at the bottom of the economic food chain, Trec can’t pass on his increasing costs, nor can he count on keeping with them. One of these days, Trec will decide to fight back.
Read more: http://www.stltoday.com/news/opinion/columns/the-platform/article_848345ef-d191-5526-be73-5ed5f525a435.html#ixzz1SUQrsUBi

Ameren Missouri is seeking to charge its customers $89 million to cover part of the costs of rebuilding the Taum Sauk power plant after making repeated statements the consumers would NOT bear the cost of their reservoir disaster.

In 2005, the Taum Sauk reservoir breached, releasing a billion gallons of water in 12 minutes and sending a 20-foot-wall of water down the Black River destroying Johnson’s Shut-Ins and Taum Sauk state park.  Ameren acknowledged “errors in judgment” had created the disaster.  They accepted full responsibility and vowed to protect consumers from bearing the cost of the disaster.

Now, however, they want customers to pay for “enhancements”.  However, it turns out the enhancement is replacing the 40-year-old reservoir with a new, safer reservoir.  We think that if their “errors in judgment” hadn’t caused the old reservoir to fail, we wouldn’t have to build a new one.  It sounds like more than an enhancement.

Let the Public Service Commission know what you think.  Contact the PSC at psc.lmo.gov/mpsc/comments and enter case number ER-2011-0028.

On Saturday, June 18th at 10:00 a.m., a public meeting will be held to begin planning strategy to move payday loan legislation forward in the next session of the Missouri Legislature.  The meeting  – Fair Lending for Missouri Families – will be held at St. Peter’s Catholic Church in the Selinger Center at 216 Broadway in Jefferson City, MO. For more information, contact Molly Fleming-Pierre at 816-444-5585 extension 2.

Senators: Next session for payday loans

Current legislation failed to advance.