Proposed CMS Legislation Cannot be Resuscitated Following the Wall Street Bailout
The efforts of the insurance industry to revive the previously fatally ill Centers for Medicare and Medicaid Services [CMS] reform legislation can be declared over and the life support disconnected following the Congressional actions to bail out Wall Street. The insurance industry and some misinformed stakeholders gave the bill a bounce, like a dead cat thrown against the ground. Still, economics and public opinion will not support the effort any longer.
NO MORE INSURANCE COMPANY BREAKS
The combination of the nationalization of AIG and the need for the US government to raise $700 Billion makes it extremely doubtful that the Federal government will give the insurance industry another break other than to reinforce the country's need to ensure banks and their spreadsheets.
The congressional bailout of aid in the 2008 economic recession, also known as the Troubled Asset Relief Program (TARP), was a controversial measure taken by the U.S. government in response to the global financial crisis that began in 2007. The crisis, caused by a combination of factors, including the subprime mortgage crisis, was characterized by a sharp decline in the stock market, a tightening of credit, and a significant increase in unemployment.
In response to the crisis, Congress passed the Emergency Economic Stabilization Act (EESA) in October 2008, which authorized the U.S. Treasury to purchase up to $700 billion in troubled assets from financial institutions. The purpose of the TARP program was to stabilize the financial system and prevent a further economic downturn by providing a source of capital for struggling banks and other financial institutions.
The TARP program was controversial from the outset, with many lawmakers and members of the public expressing skepticism about the government's ability to use taxpayer funds to bail out failing institutions effectively. Some argued that the bailout would only serve to reward reckless behavior and would not address the underlying causes of the crisis. Others argued that the bailout was necessary to prevent a full-blown economic collapse and that the alternative – allowing financial institutions to fail – would have had even more dire consequences.
Despite the controversy, the TARP program ultimately stabilizes the financial system and prevents a deeper economic recession. According to the Congressional Budget Office, the program cost significantly less than the original $700 billion appropriation, with a net cost to taxpayers of about $475 billion. The TARP program also helped to stabilize the housing market, which had been hit hard by the subprime mortgage crisis and provided a much-needed source of capital for struggling banks and other financial institutions.
Overall, the congressional bailout of aid in the 2008 economic recession was a controversial but necessary measure taken by the U.S. government to stabilize the financial system and prevent a further economic downturn. While the TARP program was not without its criticisms, it ultimately played a crucial role in helping the U.S. economy recover from the crisis and avoid a more severe recession.
RESPONSIBLE REPORTING ENTITIES
CMS made it clear on a national teleconference on October 1st that it was holding workers’ compensation insurance carriers as sole Responsible Reporting Entities (RRE), and it wasn’t going to let them walk away and re-delegate responsibility to others. CMS declared that workers’ compensation conditional medical payments remained a “pay and chase” proposition and that CMS was not allowing the responsibility of reporting to be shifted by the insurance industry.
The tightening of governmental scrutiny is now a predominant theme as the socialization of the insurance industry becomes more apparent, and the existence of workers' compensation as a State based program becomes ever more threatened. Both sides of the political aisle are encouraged to look at insurance programs in a new light and make major adjustments as the country's economic viability remains threatened. Giving the insurance industry another break by allowing them to shift responsibility back to CMS isn't on the horizon, and the idea can be finally buried.
The author, Jon L. Gelman, practices law in Wayne, NJ. He is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (Thomson-Reuters). For over five decades, the Law Offices of Jon L Gelman 1.973.696.7900 firstname.lastname@example.org have represented injured workers and their families who have suffered occupational accidents and illnesses.
© 2008-2023 Jon L Gelman. All rights reserved.
Recommended Citation: Gelman, Jon L., Proposed CMS Legislation Cannot be Resuscitated Following the Wall Street Bailout, www.gelmans.com (2008),