78th Legislative Session in Focus (Jan. 2003).

Legislature must address 'family budget crisis'

The capitol is again buzzing with legislators and lobbyists, their agendas vying for attention and votes. Yet for Texas families, "Did the Legislature work to fix the family budget crisis?" -- will be the measuring stick by which the success or failure of session will be judged amidst the state's fiscal crisis and temptation by lawmakers to seek quick fixes that threaten family finances.

"The family budget crisis is just as real and urgent to Texans as the state's financial crisis," said Reggie James, director of the Southwest Regional Office of Consumers Union, at a Jan. 17 media briefing. "Let's make sure not to fix the state budget crisis by busting the family budget even further."

"Consumers won't be better off if we nickel-and-dime them with fees galore, if we fail to close the loopholes that allow insurance companies to raise rates at will, or if we limit their access to the courts when they are wronged by medical practitioners," James said.

Consumers Union will focus early in the session on seeking real solutions to the two emergency items: insurance reform and changes in the medical malpractice system.

"The insurance industry and its powerful lobby have been busy lately clouding the issue of insurance reform," James said. "We will measure any proposed bill against our five-point plan for real insurance reform. Our bottom line is simple: we must work to bring rates down dramatically."

Rob Schneider, a Consumers Union senior staff attorney, told a capacity room of TV and print reporters: "Real insurance reform means addressing outrageous rates. Since the elections, the insurance industry has been busy hiring lobbyists. The legislature should be cautious about listening to the insurance companies because they're the ones that got us into this mess in the first place."

Schneider proposed a plan for lowering rates that's in the consumers' best interest. "We don't think file and use, path of least resistance, is the right answer. We're proposing a smart benchmark system," he said.

The benchmark system would allow the insurance commissioner to set a rate with which insurance companies would comply. By reinstating an insurance rate regulatory system, homeowners insurance companies would provide lower rates and avoid transferring policyholders into unregulated Lloyd's companies.

Equally vital to Texans, James said, is the issue of medical malpractice.

Real reform, he said, must take into account all elements that affect the cost of malpractice insurance -- primarily, quality of care and insurance regulation and secondarily, legal reforms.

"Our goal is to get the legislature to improve quality of care, reform the insurance market, and make changes in our legal system to make the healthcare system work better for consumers," said Lisa McGiffert, a CU senior policy analyst. "Too many current proposals focus on providing additional insurance options for healthy consumers who can afford to pay for them, rather than providing priority coverage for the uninsured."

Kevin Jewell, policy associate for Consumer's Union on manufactured homes, called for several reforms related to sales and ownership practices.

"We want to make sure the market is well regulated and that all homes are inspected for safety and durability prior to consumers moving in," he said.

Of 1.2 million manufactured homes in Texas, less than 25 percent will be professionally inspected.

"When consumers with no equity find themselves in over their heads, they have less incentive to find a way to make the payments and default on the loan instead," Jewel said.

These and other issues, James said, will affect Texas families directly. The legislative session will ultimately be weighed by millions of Texans who need more affordable insurance, increased health care availability, effective oversight and policies that promote Texas families.

A cross-cutting area will be ensuring the excesses of deregulated or inadequately regulated industries -- such as insurance, telecommunications, and electric -- are kept in check and even reversed, James added.

Among key consumer issues for the session, detailed in Consumers Union's issue papers available at http://www.consumersunion.org/finance/swro_pp_intro.htm, are:

• Strengthening consumer protections related to the telephone and electric markets.

• Expanding access to Texas' health care independent review system.

• Lowering the cost of prescription drugs for families and state government.

• Reforming sales and ownership practices related to manufactured homes.

• Closing usury loopholes used by out-of-state banks to market pay day loans.

• Curbing the high cost of vehicle finance add-ons.

• Reforming Texas' funeral regulatory agency and adopting a "bill of rights."