Today, Consumers Union President Jim Guest wrote President Bush, members of Congress, Homeland Security Secretary Michael Chertoff and newly appointed FEMA Director R. David Paulison, calling on government and the private sector to promptly consider several principles to improve the health, welfare and economic condition of those affected by Hurricane Katrina and to help speed the recovery of the Gulf Coast region. The letter addressed to President Bush follows:
Sept. 15, 2005
The Honorable George W. Bush
The White House
Washington, DC 20500
Dear President Bush:
Consumers Union, the nonprofit publisher of Consumer Reports, wants to take this opportunity to raise several important issues related to ongoing efforts to help the thousands of individuals displaced or harmed by Hurricane Katrina.
To improve the health, welfare and economic conditions of those harmed by this national disaster, we have created the following framework for the government and private sector to consider as it undertakes this enormous effort. We urge you to consider these common-sense measures as a means to directly improve the day-to-day lives of the hurricane victims, as well as ensure a bright and productive future for individuals and the Gulf Coast region.
• Rebuilding should promote improved economic opportunity and neighborhood stability for low income consumers. Rebuilding should be structured in such a way that it will promote local economic opportunity, strong and stable communities, and community infrastructure including affordable housing, access to employment opportunities and accessible health services.
• No negative credit consequences for disaster victims. Consumers from the affected areas of Hurricane Katrina must be protected from the need to make payments during the period of disruption, and from negative credit consequences such as penalty rates or penalty fees, negative reports to credit reporting agencies, sale of debt to collection agencies, repossessions and related judgments, and foreclosures, for a sufficient time period. Consumers should not be held responsible for the costs of telecommunications services and other utilities that stopped functioning during and after the disaster. Requirements for service deposits should be waived for evacuees seeking to establish new services.
• No pay, no delay, to access disaster benefits and payments. Consumers should be protected from fees and practices that will interfere with prompt access to the full amount of benefit payments, including fees to use FEMA debit cards, fees to cash FEMA or other benefit checks, and long check holds that delay access to benefit or insurance funds.
• Ensure insurance claims are paid promptly. FEMA should urge insurers to pay claims promptly, leaving disputes about allocating claims between flood insurance and a victim’s property insurance to be worked out between insurers and FEMA later. Also, the GAO should begin a review of how claims are allocated to make sure taxpayers do not end up paying claims that should be legitimately paid under property insurance policies.
• Protect victims from increased risk of identity theft. The damage caused to personal financial records and computer data in the affected areas makes victims ripe for identity theft. Consumers need strong anti-identity theft protections, because the time and delay to remove negative credit information generated by a thief could interfere with prompt access to credit, insurance, and employment that victims need to rebuild financial lives.
• Ensure health access in region. The guiding principle should be temporary Medicaid enrollment of Katrina victims who do not have health insurance or have lost employment in the impacted region, with the federal government covering that share of increased costs. This assistance should last as long as necessary to correct the health insurance disruptions caused by Katrina. Grants and other assistance should be made available for the reconstruction of needed health facilities (e.g., non-profit dialysis centers, hospitals and ER rooms, and skilled nursing facilities).
• Strengthen our public health infrastructure. The conditions left by Katrina were ripe for the spread of infectious disease – corpses in standing water, heat, mosquitoes, and many sharing squalid living spaces. Paired with the erosion of our public health infrastructure in recent years, we have the potential for another kind of disaster. The resources needed to combat the spread of infections and disease over the long term must be in place and accessible to Katrina victims scattered throughout the region.
• Help workers easily transition back to the employer-provided healthcare system. Extend the time limit displaced workers have to find similar employer-provided health coverage. Currently, a private insurer must cover a consumer’s pre-existing medical conditions if a person obtains coverage from another insurer within 63 days. That time limit should be extended substantially for those consumers who lost jobs – and health insurance – due to Katrina.
• Provide special help with the cost of prescription drugs and the start-up of the new Medicare drug benefit. Consumers in the impacted counties will have a harder time paying for high-cost drugs and accessing information about the new Medicare drug benefit. Relief for high-priced drugs can be provided by making prescriptions temporarily available at the Veterans Administration negotiated price (which is up to 50 percent lower than market price) and by urging drug companies to expand their existing low-income assistance programs to also serve those in the impacted areas. To reduce consumer confusion and time pressure to sign up for the Medicare drug benefit, extend the period in which those who are dually eligible for Medicare and Medicaid can receive drugs from Medicaid, and allow enrollment in a drug plan anytime in 2006 without penalty. Also, offer a government-administered drug benefit to save area residents from having to research and shop for the best privately-administered plan.
• Ensure manufactured homes used as emergency housing are installed properly and only used temporarily. Installation inspection by qualified personnel is essential to the safety and habitability of any manufactured home. It is important to understand that emergency housing is temporary. Implement an aggressive plan for transitioning residents to more appropriate permanent housing. In Florida, evacuees from last season’s hurricanes still live in emergency manufactured housing more than a year later. An aggressive transition plan will prevent the creation of overcrowded communities of manufactured homes lacking economic, public safety and other essential infrastructure.
• Public airwaves for public safety. Public airwaves should be used to aid communications among emergency officials, consumers and others in the wake of a disaster. Wherever possible, relief efforts should include establishing ad hoc communications systems based on the most appropriate technology to restore basic communications – such as wireless broadband services for voice communications when wire lines or cellular services are not functioning.
• Replacement of cellular equipment. For many victims of Katrina, cellular phones are the only way they will be able to communicate with friends and family. For such critical “life-line” communications services, relief measures should provide consumers with emergency replacement equipment at reduced or no cost. Consumers affected by the hurricane should not lose cell phone service for non-payment during the evacuation and recovery period, nor be penalized for late payments or charged for out of state use or cancellation.
Thank you for considering these issues. We look forward to working with you, state and local policymakers, and the private sector to develop prompt and effective hurricane-relief measures.
Sincerely,
James Guest
President
Distribution
The Honorable George W. Bush, President
Members of the United States Congress
The Honorable Michael Chertoff
The Honorable R. David Paulison