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The Justice Report Summer 1999 An update from the Foundation for Taxpayer and Consumer Rights The Foundation’s Consumers For Quality P RESIDENT’ S M ESSAGE Care Project Fuels the National HMO Help Wanted: Patients’ Rights Movement Patriots hen United States Senators and group; no ads, just a fax a day to keep By Harvey Rosenfield, President of the Foundation President Clinton held press the HMO’s at bay.” By late 1998, Wconferences across the nation President Clinton declared that a right Our democracy is in July 1999 to promote the Patients’ without a remedy is not a right—noting swarming with Bill of Rights, they turned to the he would not sign patients’ rights legis- mighty special interests. Lobbyists Foundation's Consumers For Quality lation that did not include reform of for the insurance Care (CQC) for patients to stand beside ERISA. companies, HMOs, them and tell personal stories of HMO In 1999, CQC has focused on edu- banks, utilities and abuses. Every day for five months in cating the public about the plight of other financial titans work hard to 1998, CQC sent 1,000 legislators and patients with no remedy and the ability protect their privileges and profits. media contacts a different story and pic- of states to enact HMO liability mea- At their hands, our nation’s tradi- ture of HMO medicine casualties who sures that bypass ERISA. A model tional values of justice, individual did not have a remedy due to the Texas law allows patients to sue HMOs prosperity and respect for the envi- ronment and human dignity are too Employee Retirement Income Security for quality of care violations. CQC has easily undermined. Moreover, many Act of 1974 or ERISA. CNN said of the worked with groups and legislators in elected officials are beholden to Casualty of the Day Campaign, “Far 23 states who have introduced legisla- these interests. So who is looking more effective [than HMO industry ads] tion based on the Texas law. That law out for the public’s interest? is this shoestring California consumer resulted in deterrence of HMO abuses We are. continued on page 4 The Foundation for Taxpayer and Consumer Rights is one of the nation’s largest non-profit, non-par- Auto Insurance Update tisan consumer protection organiza- tions. Based in California, with mod- est offices in New York, San FTCR Spearheads “Lifeline” Insurance For California’s Poor Francisco, and Washington, D.C., our mission is to counter-balance the or most Californians, getting to work means driving to work. Auto insurance lobbyists, the interest groups and F is mandatory and can be very expensive. While a “lifeline” for the poor exists their political allies. We’ve chal- for other necessities such as telephone and electricity service, low-income con- lenged them in the legislature, in court, and at the ballot box. We've sumers do not have a similar option for auto insurance. saved taxpayers and consumers liter- Without an affordable auto insurance policy, millions of Californians are forced ally billions of dollars. to drive uninsured. Yet, at no cost to taxpayers or other insured Californians - and a continued on page 6 likely reduction in car insurance costs across the board - the state can enact a low- continued on page 7 In This Issue: ¢ The Oaks Project Teaches FTCR Study Sparks Major Insurance Industry Accountability Legislation Citizens How to Become Leaders March 1999 report published by FTCR, “The Low-Balling of the California ¢ Foundation Sues Aetna For A Insurance Claim,” has become the centerpiece of an effort by consumer Racketeering, Kaiser for groups to restore civil justice protections to innocent accident victims. Californians Advertising Fraud who are injured by reckless drivers are often further victimized by unscrupulous ¢ Foundation Announces New insurers that deny, delay or undervalue payment on a claim. Project to Protect Integrity and The report found that since 1988, when the California Supreme Court took Impartiality of the Judicial Process away innocent accident victims’ right to sue at-fault drivers’ insurers for bad faith ¢ and more... continued on page 7 Why Don't We Learn This Stuff in High School? The Oaks Project Teaches Citizens How to Become Leaders — Over 11,000 Letters Delivered to State Capitol he Oaks Project began two The Oaks’ grassroots campaign to executives, testified at public hearings years ago with the purpose of pass Prop 9 was unprecedented. As and staged numerous successful press T building an organization com- part of a tightly organized effort, the events. prised of volunteer citizen leaders who, Oaks volunteers, going door-to-door Historic as the Oaks’ Prop 9 enter- as Ralph Nader stated, prise was, the utilities anti-Prop would be “as strong and 9 campaign prevailed by out- sturdy and as well root- spending the grassroots team ed in communities, as by nearly 200 to 1. The utilities the oaks that line hid behind paid spokespeople California.” The Project and fictitious “committee” set out to teach the citi- names as they broadcast over zen “Oaks” all of the eight thousand TV commer- political and organizing cials to defeat Prop 9. The pub- skills that are too often lic never knew that utility com- withheld from the citi- panies were behind the ads. zenry. Right after the November Last year, the Oaks loss, the Oaks went back to Project, still in its infan- work. They began laying the cy, did what most orga- FTCR president Harvey Rosenfield and Oaks at Bonnie Raitt concert bene- groundwork for a campaign to nizations will never do: fit on Prop 9. bring “truth in advertising” to they placed a statewide the initiative process. initiative on the ballot. The Oaks col- and in front of supermarkets, personal- Their work turned into this year’s lected over one hundred thousand sig- ly spoke to nearly 1,000,000 voters! In educational campaign and legislative natures to sponsor Proposition 9, which addition to direct voter contact, Oaks bill, SB 1220 (Schiff). SB 1220 would have stopped the multi-billion placed opinion pieces in newspapers, requires that all ads for or against ini- dollar taxpayer bailout of the giant util- appeared as guests on TV and radio tiatives plainly disclose the real names ity companies. talk shows, debated utility company of the sponsors. If SB 1220 passes, continued on next page The Oaks in Action Why the People Must Be Vigilant Teaching the Pros… aks volunteers—in Sacramento to the senator listened as the Oaks ou could hear snickering under O support Foundation bills—stood painstakingly explained that she had Y the breath of the professionals on open-mouthed as they watched the her facts wrong and that her vote a May day when two dozen Oaks in first Senate roll call vote on SB 1220, endangered the bill. The senator was t-shirts declaring “Stop Insurance the Oaks’ Truth in Initiative stunned to learn that her vote was Low-balling” filled the corridor out- Advertising Act. They were shocked needed. “This is a 2/3 [vote of all leg- side the California State Senate to see one prominent “No” vote, from islators] bill?” she asked. Every Oak chamber, the province of lobbyists in Senator Jackie Speier, in a sea of nodded. “Oh,” was her response. $500 suits and tassled, Gucci loafers. Democratic “Ayes.” When SB 1220 came up for a sec- But the chuckles stopped minutes Forty Oaks volunteers quickly ond vote, the Oaks held their breath as later when Senator Debra Bowen stormed into Senator Speier’s office. Speier’s name was called: “No to walked right past the pros and They did not budge when they were Aye” came the response — allowing straight up to Oak Mytyl Glomboske, told to speak to the senator’s staff. the bill to pass and proving once again assuring Mytyl that the Oaks would They wanted to speak to her. She that citizens in the Capitol can make a have Bowen's vote on all three agreed. They asked her to change her difference. ¢ Foundation bills being heard that day. vote. ¢ Faced with forty informed citizens, 2 OAKS - continued corporate polluters, for example, will delivered to members of the Assembly manent pursuits. And they are having a not be allowed to hide behind names and State Senate. They lobbied scores of great time giving the state's special like, “Californians for the representatives and testified at Capitol interests something to worry about. Environment.” The Oaks have turned hearings. They organized press events Stay tuned.... ¢ their Prop 9 experience into a larger and had over a dozen opinion fight to ensure the integrity of the initia- pieces published in major tive process itself. papers such as the San The Oaks organized a letter writing Francisco Chronicle and the drive that resulted in over 6,300 person- Orange County Register. al, hand-written letters and post cards SB 1220 cleared the Senate with a two-thirds vote. In a true showing of citizen power, one California Senator changed her vote from a NO to a YES after meeting with a group of Oaks Project Volunteers. The bill now moves to the Oaks don life jackets outside an Insurance Assembly. Committee hearing to dramatize the need The Oaks have also generated for “Lifeline” auto insurance for low- income drivers. over 5,600 letters and postcards on other Foundation issues, including HMO and auto insurance reform. Oaks meet with SB 1220 author, Senator The Oaks, strong and sturdy, understand Adam Schiff, after successful committee hearing. that citizenship and democracy are per- Foundation Sues Aetna For Racketeering, Kaiser for Advertising Fraud n the first federal class action lawsuit taining and improving quality while, in care at the company.