Latest news with #Oakland-based
San Francisco Chronicle
17 hours ago
- Business
- San Francisco Chronicle
California finally passed CEQA reform. Will it stop housing roadblocks?
The titanic shift in California housing policy orchestrated by Gov. Gavin Newsom on Monday night, resulting in the rewriting of large parts of the California Environmental Quality Act, will allow him to spend the final 18 months in office trying to correct one of his biggest policy failures unencumbered by what he views as a key roadblock. Newsom and housing advocates have long blamed the CEQA environmental review process for the state's inability to keep up with growing housing demand. But with the legislation passed Monday those reviews have been severely curtailed. As pro-housing advocates celebrated one of their biggest victories in years and environmentalists decried the potential damage from the new laws, one question went largely unasked: Will they work? While CEQA lawsuits from environmental groups and neighbors across California — often a single neighbor — have protected open space, thwarted polluters and spared pristine coastlines from luxury resorts, Newsom and housing advocates believe they have also been weaponized to bog down and kill badly needed housing, and in doing so, have helped make housing more expensive and less accessible. But plenty of obstacles to home-building remain — including construction costs and interest rates — meaning it's unclear just how big of an impact the CEQA reforms will have and how quickly Californians will feel them. Proponents of the legislation saw some quick victories. After a five-year period in which the slow pandemic recovery and high costs clogged the pipeline of new projects, a much improved regulatory landscape awaits builders as soon as conditions improve. 'It will absolutely speed up project approvals in infill locations with no or low litigation risk under CEQA,' said land use attorney Jennifer Hernandez. 'And it will make the application cheaper for sure.' Labor unions will no longer be able to use CEQA lawsuits to extract better wages and other concessions from developers on individual projects, sometimes without any clear benefit to the environment, according to Oakland-based real estate attorney Robert Selna. 'The unions have gone astray in this regard — they use environmental law as leverage to extort contracts for their members, which has been a significant impediment to building housing,' Selna said. He pointed to a former client's project in San Lorenzo, which faced heavy opposition from organized labor after its developer declined to commit to exclusively using union labor. The project was never built. 'This is the first time I have seen a CEQA reform really have a chance to make a difference,' Selna said. Union representatives contacted by the Chronicle were reluctant to speak on the record. But the general sentiment was that not all were neutral about the provisions of the reform. In San Francisco the laws won't make a huge impact because the majority of infill housing developments already take advantage of state programs that exempt them from CEQA review. The problem in the city remains challenging market conditions. Nonetheless, Mark MacDonald of DM Development, one of the city's most prolific buildings over the last 12 years, said that the streamlining bills have been a game-changer, cutting at least a year off the approval process — and sometimes more. 'In San Francisco, best case you are looking at 18 months and worst case you are looking at years, or never,' he said. 'It's certain and it's fast and that is why S.F. has tens of thousands of units entitled. If market conditions were different we would be building a lot of housing now. That time will come.' The new laws were spearheaded by two Bay Area housing reform advocates, Assembly Member Buffy Wicks, D-Oakland, and Sen. Scott Wiener, D-San Francisco. But by making the state budget contingent on the reforms' passage, Newsom employed all his political clout in what was for him an unusual foray into the legislative process. In a statement after he signed the measures, Newsom called them 'transformative' and 'the most consequential housing and infrastructure reform in recent state history.' Sam Oliker-Friedland, executive director of Institute of Responsive Government, agreed, calling the new laws 'one of the most important housing reforms in a generation.' But environmentalists, who said CEQA is not to blame for California's housing crisis, predicted that relaxing the law will provide a gaping loophole for developers willing to damage the environment in pursuit of a profit. Bradley Angel, of Greenaction for Health and Environmental Justice, said its reform comes 'under the false guise of promoting affordable housing' and weakens an 'incredibly important' tool for advocates to 'challenge bad decisions that pose a threat to public health.' 'Any weakening of CEQA will make it easier for dirty industries to pollute communities,' he said. Longtime environmental law and land use attorney Stu Flashman agreed. 'They are telling untruths and they are telling them on purpose. The fraud is: if we get rid of CEQA, we get much more affordable housing,' Flashman said. 'It's a minor factor in the cost of housing in California.' Flashman credits the law with preventing a Chiron biotech manufacturing plant from encroaching on a residential neighborhood in Emeryville in the 1980s. 'The city of Emeryville was going to approve it under a negative declaration,' said Flashman, referring to a determination under CEQA that a proposed project will not have a significant negative impact on the environment. Flahsman, who lived two blocks away from the planned project, was part of a lawsuit against the city to thwart the massive development. A settlement between the parties required the city to conduct a full blown environmental impact analysis for the project. The plan ultimately unraveled. Flashman is as certain today as he was then that Emeryville was 'the winner of that fight.' 'There is still biotech going on in the city, but it's not manufacturing. It's much more contained. Part of the area (where the plant was planned) later on became Pixar Studios,' he said. 'Development still happened, jobs still came, but the risks of building a huge biotech plant weren't there, and other (growth) happened instead.' Flashman referred to the present attempt at reforming the law as 'horrifying,' The fact that CEQA legal process is 'complaint based' has long meant that the more urban the location, the more vulnerable a developer is to being challenged in court. That means that the 100-acre subdivision in an exurb often flies through the approval process while the 100-unit apartment building next to a rail station gets bogged down, and often killed, in appeals. 'If you don't have any neighbors, if you are building in a green field, a place that is by definition the least sustainable, then you are going to have an easier time with CEQA than if you build in a place where people already live,' said Sonya Trauss, who founded the YIMBY movement in 2015 and is the executive director of the group YIMBY Law. As the housing crisis has tightened its grip on the state, pressure to make building housing easier has ratcheted up. Still, instead of major reforms, lawmakers over the last few years took a piecemeal approach — carving out so many projects for exemptions that critics have called it 'Swiss cheese CEQA.' But the bills Newsom signed Monday grant broad exemptions to CEQA for homes and other buildings in already developed areas. The list of projects that are now exempt includes mostly categories that would hardly be seen as environmental scofflaws: childcare centers, food banks, farmworker housing, health clinics, advanced manufacturing sites, and infill housing complexes less than 85 feet. And the list of exemptions is not exactly random. From a food bank in Alameda to a plan to add 34 bike lanes in San Francisco to farmworker housing in downtown Half Moon Bay, the list includes types of projects that have been targeted by opponents using CEQA. As he was failing to meet his goals for building new housing, Newsom tried, among other things, forcing cities to rezone for bigger buildings and denser neighborhoods and punishing towns that blocked development. But those steps didn't work, leading to Monday's drastic actions. Trauss attributed CEQA reform passing with such a lopsided vote to the fact that so little housing is being built at the moment. She compared it to the years after the Great Recession when San Francisco lowered affordability requirements with the support of groups normally on the opposite sides of the political spectrum. 'This is a similar moment,' she said. 'People are surprised that politics lined up to facilitate homebuilding without doing all these exactions for labor or affordability. It makes sense. We are not seeing applications, stuff is not being built. When things dry up that much everybody starts to realize what an emergency it is and they are more open to solving the problem.' Trauss said the CEQA reforms 'really zero in on where the action is.' 'It's definitely the new environmentalism,' she said. Melissa Romero, policy advocacy director for California Environmental voters, disagrees, predicting that public health and community safety will suffer under the new laws. 'The quiet but dangerous rollback of California's core health and safety protections paves the way for industrial projects to move forward without proper review and creates a long list of exemptions from endangered species habitat protection,' Romero said.
Miami Herald
2 days ago
- Business
- Miami Herald
Insurer Blue Shield of California's new parent company alarms consumer advocates
Last year, regulators approved a request by Blue Shield of California, the state's third-largest health insurer, to restructure and establish a new parent corporation in Delaware. The Oakland-based nonprofit got the go-ahead from the Department of Managed Health Care, or DMHC, to create an entity called Ascendiun Inc., which is now the out-of-state corporate parent of Blue Shield. The insurer said that the restructuring would allow it to better serve its members "with less bureaucracy and faster results, while making health care more affordable." But the transaction has raised alarm among a former high-level Blue Shield executive and consumer advocates, who complain that it was carried out with no public oversight and could allow the insurer to transfer money to a Delaware parent company with few strings attached. The activists claim that some of that money could be used to boost its spending on charitable endeavors. The company has accrued a surplus of more than $4 billion over the decades as it benefited from its former tax-exempt status, according to a regulatory filing. "The move guts the ability of the DHMC to enforce Blue Shield's nonprofit obligations to the California public and gives Blue Shield's directors ... a virtually free hand to make use of Blue Shield's billions of dollars in charitable assets as they please," wrote Michael Johnson, the insurer's former director of public policy, in a recent letter to Mary Watanabe, director of the department, which was reviewed by The Times. Johnson is calling for the department to rescind its approval and unwind the restructuring. The department maintains that the insurer is not subject to charitable trust rules as a nonprofit mutual benefit corporation. In a statement, the department said it "maintains full regulatory authority and enforcement of all Blue Shield of California health plan operations," and reviewed the transaction to ensure that it will not harm the plan's financial viability. Blue Shield's restructuring is reviving a longstanding debate about whether one of the state's largest insurers is reinvesting enough of its profit to lower its rates, better serve low-income residents and provide coverage for underserved areas of the state. Controversy over the company's role as a nonprofit previously aired in 2015 as it sought approval from the department for its $1.2-billion purchase of Care1st, a Medicaid health plan. Blue Shield has disputed Johnson's claims, noting that the state has determined it is not subject to the rules governing charitable nonprofits. In the Jan. 8 announcement of its restructuring, Blue Shield also disclosed that it was forming a for-profit subsidiary called Stellarus that would provide services to other health plans, such as delivering drugs to patients more inexpensively than pharmacy benefit managers. Ascendiun is structured as a nonprofit and Blue Shield and the company's Medi-Cal insurer, Blue Shield of California Promise Health Plan - the former Care1st - also would continue as nonprofits, the insurer said at the time. "This structure is not uncommon among health plans, as many across the country - including other nonprofit Blue Cross and Blue Shield companies - have made similar corporate reorganizations to better serve their membership," the insurer said in its statement to The Times. A scathing audit Blue Shield was established in 1939 by the California Medical Assn. as the nation's first prepaid health plan to cover physician bills. It followed the creation of the first Blue Cross plan, in Texas, to pay for hospital bills. The California insurer did not pay federal taxes until a change in the law in 1986. And it was exempt from state taxes until the Franchise Tax Board revoked that status in August 2014 after a scathing audit that The Times first reported. The audit found that Blue Shield was operating similarly to a for-profit company, with executives instructed to "maximize profitability." The tax board also found that the insurer had stockpiled "extraordinarily high surpluses" even as it failed to offer enough public benefits, such as more affordable coverage. Blue Shield denied the accusations but ultimately relinquished its tax-exempt status, even as it has continued to pursue an appeal of an order requiring it to pay more than $100 million in back taxes. Johnson contends that the new corporate structure will allow Blue Shield to move its assets around in pursuit of its business goals with little oversight beyond maintaining required reserves - especially given its parent company's incorporation in Delaware, a business-friendly state where most Fortune 500 companies are registered. The DMHC strengthened reserve requirements in approving the deal and it now totals about $2.1 billion, according to a regulatory filing, which Johnson says would allow Blue Shield to transfer about $2.4 billion to Ascendiun. Charles Bell, a healthcare advocate who was involved in last decade's debate over Blue Shield's charitable obligations, is troubled by the decision to establish an out-of-state parent. "I think that the changes in corporate structure that were made are highly concerning, and it should have received a much higher level of public scrutiny and a lot more skepticism by the Department of Managed Health Care," said Bell, advocacy programs director for Consumers Union, the publisher of Consumer Reports. The department said in its response to The Times that it "may hold public meetings if a transaction meets certain requirements to qualify as a major transaction. Upon due consideration, the Department determined that the specific facts of this restructuring did not meet the criteria set out in law to hold a public meeting." A long history of restructuring Blue Cross and Blue Shield plans have a long history of restructuring, including Blue Cross of California. That insurer broke ground when in 1993 it spun off a recently established for-profit subsidiary, Wellpoint Health Networks. Blue Cross was later required to distribute $3.2 billion to a pair of new nonprofits, the California Endowment and the California Health Care Foundation, which are still operating. Less than a decade later, Blue Cross and Blue Shield plans in more than dozen other states had converted to for-profits, typically highly controversial proposals, given questions about what was to become of their billions of dollars of assets. More recently, the nonprofits have converted into mutual insurance holding companies. That allows them to maintain their nonprofit status while funding for-profit ventures, such as in technology, said Brendan Bridgeland, an attorney with the Center for Insurance Research in Cambridge, Mass. What is unusual about Blue Shield of California's restructuring, he said, is that the DMHC allowed it to establish an out-of-state parent company. "Once you reach the point where the subsidiary starts transferring money up to the parent and it gets reallocated, then it's going to be out of their control," Bridgeland said. Johnson's concerns are rooted in efforts last decade by healthcare advocates to have Blue Shield declared a charitable organization and to dig into its assets to improve patient care as a condition of its approval to acquire Care1st. Johnson worked at Blue Shield from 2003 until 2015, when he resigned to mount a public campaign to pressure the insurer over its nonprofit mission. Johnson has been involved in litigation with his former employer, which sued him in 2015 alleging he disclosed confidential information, including Blue Shield's communications with the Franchise Tax Board. In a settlement, he agreed to no longer retain or disseminate such documents. In seeking to retain its state tax-exemption during its audit by the board, which began in 2013, Blue Shield argued that should it dissolve, its assets could be distributed only to another nonprofit. Yet, the insurer told the DMHC, when the agency reviewed the proposed acquisition in 2015, that as a nonprofit mutual-benefit corporation it served only its enrollees and had no such obligations. Ultimately, the department decided that Blue Shield did not have the charitable obligations though it required the insurer, in approving the acquisition that year, to refrain from making "misleading or inconsistent" statements regarding the distribution of its assets if it ever were dissolved. "Through this process there have been inconsistencies in what Blue Shield has said. It was frustrating because we had to spend a lot of time and energy to make sure what was true," the department's then director, Shelley Rouillard, said at the time. A pledge to spend more on patient care The insurer pledged as part of the Care1st acquisition to spend $200 million over the next decade on several initiatives aimed at providing better patient care. Nevertheless, patient advocates criticized the DMHC's finding that Blue Shield did not have charitable obligations, saying the state lost the opportunity to regulate how the insurer spent its billions in assets - and then failed to impose tougher conditions on the insurer, such as limiting its ability to impose rate increases deemed unreasonable. In his March letter, Johnson called on the DMHC to require Blue Shield to spend annually at least 5% of its total assets on community benefits, which might go, for example, to grants to community clinics in underserved areas of the state. Blue Shield defended its charitable spending, noting that it caps its annual profit at 2% and allocates additional revenue to such services as delivering COVID vaccines at no cost to the state, and funding nonprofits that advance mental health. "Blue Shield … has consistently supported its members and California communities throughout the state," the company said. Johnson also contends newly public documents show Blue Shield has continued to argue before state tax authorities that it is a charitable trust. In the opening brief of its back taxes case in 2020, the insurer cites a state Supreme Court case that it said confirms "Blue Shield operates exclusively for the promotion of social welfare," his letter notes. Blue Shield told The Times that it has provided "consistent information to DMHC about its corporate restructuring" and that Johnson's letter provided "no new evidence" regarding Blue Shield's status as a "tax-paying not-for-profit mutual benefit corporation." Johnson and the DMHC traded additional letters last week, with Johnson questioning why the department had not reviewed the new tax appeal documents or why they had not reviewed Ascendiun's articles of incorporation or bylaws prior to approving the restructuring. Janet Rickershauser, a nonprofits lawyer at Hurwit & Associates, said that the bylaws are important to understanding the parent company's operations, including the relationship of the subsidiaries to each other and the holding parent company. In a letter sent June 23 to Johnson, Jonathon Williams, an assistant chief counsel at the DMHC, said the department concluded it was "not necessary or appropriate" to review the tax-appeal documents in its review of Blue Shield's application to restructure nor conduct a "full evaluation of Delaware's corporation statutory scheme." The department told The Times that it conducted a "comprehensive review" of the articles of incorporation of Blue Shield and its Medicaid Promise Health Plan as required by state law. Although it did not review Ascendiun's bylaws or articles of incorporation, the department said it retained its regulatory authority over Blue Shield. Blue Shield said it would not release it bylaws because they are "confidential company documents." However, Rickershauser said that "hiding the ball on the bylaws is preventing transparency into important aspects of how they're operating." Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Gulf Today
2 days ago
- Politics
- Gulf Today
Aid at risk for California students receiving Pell Grants
Molly Gibbs, Tribune News Service Thousands of Bay Area students could soon face a new hurdle when it comes to paying for college: deep cuts to federal financial aid. Republican lawmakers in Washington, D.C., are considering proposals to cap some federal loans and dramatically limit Pell Grants, which have for years served as a lifeline for low-income students. More than 700,000 California students rely on the Pell Grant, which does not need to be repaid. 'What is being proposed goes against pretty much all of the evidence about college affordability and college access,' said Christopher Nellum, executive director of the Oakland-based education research and advocacy group EdTrust-West. 'We're bracing for fewer students enrolling in college in the state. In particular the Bay Area, given what the data tells us, we'll see fewer students of colour. We're going to see fewer low-income students, perhaps fewer parenting students.' While the exact local impact of the proposals is unclear, leaders from the California State University, University of California, California Community Colleges and Association of Independent California Colleges and Universities wrote to Congress this week imploring lawmakers to reject cuts to the program and prioritise funding for students. A bill passed by the Republican-led US. House would cap graduate student loans, cut income-driven loan repayment options and eliminate schools' aid if students' earnings fall below a certain threshold. The bill also includes deep cuts to the Pell Grant program and makes part-time students ineligible for the funds. The Senate was expected to vote on its own version of the bill, which did not include changes to Pell Grant eligibility. After that, the House and Senate would need to negotiate a compromise to send to President Donald Trump's desk. Trump has called for widespread cuts to education spending. 'Individually, these policies are severely damaging,' the letter said. 'Collectively, they represent an existential threat to this vital federal program that serves half of all undergraduate students in California or 14.3% of all Pell Grant recipients nationwide.' Nellum said the proposed cuts are part of the Trump administration's larger attack on public education. 'I can't make sense of it, given everything I've seen over almost two decades of doing this work,' he said. 'I can't imagine a more legitimate investment than in education. I don't know who this benefits.' The potential changes come as California universities are still reeling from several other Trump administration policies, including the cancellation of millions of dollars in research grants and a crackdown on diversity, equity and inclusion programmes. Currently, students who take at least 24 credits are considered full-time students, but under the House's proposal, they would need to take 30 credits a year to be considered full-time and receive the maximum Pell Grant, which is $7,395 a year. Students who take fewer than 15 credits a year would no longer be eligible for the funds. Trump's proposed budget for the 2026 fiscal year would also decrease the maximum Pell Grant award to $5,710. For many California students, the existing funding of Pell Grants is already insufficient to cover the costs of college. Proposed cuts, which would take effect this coming school year, have sent them scrambling for scholarships or packing their schedules with additional classes to avoid dropping out or needing to take out student loans. Saidy Reyes, a rising senior urban studies major at UC Berkeley, transferred to Cal after completing two years at a community college. A first-generation college student from Marin County, Reyes said the maximum Pell Grant award was just enough to cover her education at community college but she still needed a part-time job to afford her basic needs. 'Now that I'm at Berkeley, the whole story is different,' Reyes said. 'I live on my own now, and I feel like it's not enough. And Berkeley is a really expensive place to live to begin with.' For a new student starting in the 2025-26 school year, Cal estimates the total cost of attendance, including tuition, living and personal expenses, is $51,904. Nellum, of EdTrust-West, said four in 10 Bay Area students don't have enough savings to cover three months of their basic expenses. 'We know the Pell Grant over the last three or four decades has already struggled to keep pace with the true cost of college,' Nellum said. 'So any cut to that program for students who have financial limitations or are unable to pay for the true cost of college, it's only going to make their situation worse.' Benjamin Diaz, a rising political science junior at UC Santa Cruz, said that despite receiving the full Pell Grant amount in his freshman year, he still had to pay around $3,000 out-of-pocket each quarter. As a full-time student, Diaz said he wouldn't be affected by the House-proposed eligibility cuts, but he worries about the potential decrease to the maximum award. 'I probably won't be able to afford to pay for college and attend,' Diaz said. The issue is particularly pressing in the UC system, which said it enrolled a higher percentage of Pell Grant recipients among all its undergraduate students — 33% — than any other top research university in the country for the 2022-23 school year, the most recent data available. UC Berkeley said that under the proposed changes to Pell Grant eligibility, about 50% of the university's recipients would be reclassified as part-time and see their awards reduced. The school said it will explore increased fundraising efforts for student aid to help offset any potential federal reductions.
Los Angeles Times
3 days ago
- Business
- Los Angeles Times
Insurer Blue Shield of California's new parent company alarms consumer advocates
Last year, regulators approved a request by Blue Shield of California, the state's third-largest health insurer, to restructure and establish a new parent corporation in Delaware. The Oakland-based nonprofit got the go-ahead from the Department of Managed Health Care, or DMHC, to create an entity called Ascendiun Inc., which is now the out-of-state corporate parent of Blue Shield. The insurer said that the restructuring would allow it to better serve its members 'with less bureaucracy and faster results, while making health care more affordable.' But the transaction has raised alarm among a former high-level Blue Shield executive and consumer advocates, who complain that it was carried out with no public oversight and could allow the insurer to transfer money to a Delaware parent company with few strings attached. The activists claim that some of that money could be used to boost its spending on charitable endeavors. The company has accrued a surplus of more than $4 billion over the decades as it benefited from its former tax-exempt status, according to a regulatory filing. 'The move guts the ability of the DHMC to enforce Blue Shield's nonprofit obligations to the California public and gives Blue Shield's directors ... a virtually free hand to make use of Blue Shield's billions of dollars in charitable assets as they please,' wrote Michael Johnson, the insurer's former vice president of public policy, in a recent letter to Mary Watanabe, director of the department, which was reviewed by The Times. Johnson is calling for the department to rescind its approval and unwind the restructuring. The department maintains that the insurer is not subject to charitable trust rules as a nonprofit mutual benefit corporation. In a statement, the department said it 'maintains full regulatory authority and enforcement of all Blue Shield of California health plan operations,' and reviewed the transaction to ensure that it will not harm the plan's financial viability. Blue Shield's restructuring is reviving a longstanding debate about whether one of the state's largest insurers is reinvesting enough of its profit to lower its rates, better serve low-income residents and provide coverage for underserved areas of the state. Controversy over the company's role as a nonprofit previously aired in 2015 as it sought approval from the department for its $1.2-billion purchase of Care1st, a Medicaid health plan. Blue Shield has disputed Johnson's claims, noting that the state has determined it is not subject to the rules governing charitable nonprofits. In the Jan. 8 announcement of its restructuring, Blue Shield also disclosed that it was forming a for-profit subsidiary called Stellarus that would provide services to other health plans, such as delivering drugs to patients more inexpensively than pharmacy benefit managers. Ascendiun is structured as a nonprofit and Blue Shield and the company's Medi-Cal insurer, Blue Shield of California Promise Health Plan — the former Care1st — also would continue as nonprofits, the insurer said at the time. 'This structure is not uncommon among health plans, as many across the country — including other nonprofit Blue Cross and Blue Shield companies — have made similar corporate reorganizations to better serve their membership,' the insurer said in its statement to The Times. Blue Shield was established in 1939 by the California Medical Assn. as the nation's first prepaid health plan to cover physician bills. It followed the creation of the first Blue Cross plan, in Texas, to pay for hospital bills. The California insurer did not pay federal taxes until a change in the law in 1986. And it was exempt from state taxes until the Franchise Tax Board revoked that status in August 2014 after a scathing audit that The Times first reported. The audit found that Blue Shield was operating similarly to a for-profit company, with executives instructed to 'maximize profitability.' The tax board also found that the insurer had stockpiled 'extraordinarily high surpluses' even as it failed to offer enough public benefits, such as more affordable coverage. Blue Shield denied the accusations but ultimately relinquished its tax-exempt status, even as it has continued to pursue an appeal of an order requiring it to pay more than $100 million in back taxes. Johnson contends that the new corporate structure will allow Blue Shield to move its assets around in pursuit of its business goals with little oversight beyond maintaining required reserves — especially given its parent company's incorporation in Delaware, a business-friendly state where most Fortune 500 companies are registered. The DMHC strengthened reserve requirements in approving the deal and it now totals about $2.1 billion, according to a regulatory filing, which Johnson says would allow Blue Shield to transfer about $2.4 billion to Ascendiun. Charles Bell, a healthcare advocate who was involved in last decade's debate over Blue Shield's charitable obligations, is troubled by the decision to establish an out-of-state parent. 'I think that the changes in corporate structure that were made are highly concerning, and it should have received a much higher level of public scrutiny and a lot more skepticism by the Department of Managed Health Care,' said Bell, advocacy programs director for Consumers Union, the publisher of Consumer Reports. The department said in its response to The Times that it 'may hold public meetings if a transaction meets certain requirements to qualify as a major transaction. Upon due consideration, the Department determined that the specific facts of this restructuring did not meet the criteria set out in law to hold a public meeting.' Blue Cross and Blue Shield plans have a long history of restructuring, including Blue Cross of California. That insurer broke ground when in 1993 it spun off a recently established for-profit subsidiary, Wellpoint Health Networks. Blue Cross was later required to distribute $3.2 billion to a pair of new nonprofits, the California Endowment and the California Health Care Foundation, which are still operating. Less than a decade later, Blue Cross and Blue Shield plans in more than dozen other states had converted to for-profits, typically highly controversial proposals, given questions about what was to become of their billions of dollars of assets. More recently, the nonprofits have converted into mutual insurance holding companies. That allows them to maintain their nonprofit status while funding for-profit ventures, such as in technology, said Brendan Bridgeland, an attorney with the Center for Insurance Research in Cambridge, Mass. What is unusual about Blue Shield of California's restructuring, he said, is that the DMHC allowed it to establish an out-of-state parent company. 'Once you reach the point where the subsidiary starts transferring money up to the parent and it gets reallocated, then it's going to be out of their control,' Bridgeland said. Johnson's concerns are rooted in efforts last decade by healthcare advocates to have Blue Shield declared a charitable organization and to dig into its assets to improve patient care as a condition of its approval to acquire Care1st. Johnson worked at Blue Shield from 2003 until 2015, when he resigned to mount a public campaign to pressure the insurer over its nonprofit mission. Johnson has been involved in litigation with his former employer, which sued him in 2015 alleging he disclosed confidential information, including Blue Shield's communications with the Franchise Tax Board. In a settlement, he agreed to no longer retain or disseminate such documents. In seeking to retain its state tax-exemption during its audit by the board, which began in 2013, Blue Shield argued that should it dissolve, its assets could be distributed only to another nonprofit. Yet, the insurer told the DMHC, when the agency reviewed the proposed acquisition in 2015, that as a nonprofit mutual-benefit corporation it served only its enrollees and had no such obligations. Ultimately, the department decided that Blue Shield did not have the charitable obligations though it required the insurer, in approving the acquisition that year, to refrain from making 'misleading or inconsistent' statements regarding the distribution of its assets if it ever were dissolved. 'Through this process there have been inconsistencies in what Blue Shield has said. It was frustrating because we had to spend a lot of time and energy to make sure what was true,' the department's then director, Shelley Rouillard, said at the time. The insurer pledged as part of the Care1st acquisition to spend $200 million over the next decade on several initiatives aimed at providing better patient care. Nevertheless, patient advocates criticized the DMHC's finding that Blue Shield did not have charitable obligations, saying the state lost the opportunity to regulate how the insurer spent its billions in assets — and then failed to impose tougher conditions on the insurer, such as limiting its ability to impose rate increases deemed unreasonable. In his March letter, Johnson called on the DMHC to require Blue Shield to spend annually at least 5% of its total assets on community benefits, which might go, for example, to grants to community clinics in underserved areas of the state. Blue Shield defended its charitable spending, noting that it caps its annual profit at 2% and allocates additional revenue to such services as delivering COVID vaccines at no cost to the state, and funding nonprofits that advance mental health. 'Blue Shield … has consistently supported its members and California communities throughout the state,' the company said. Johnson also contends newly public documents show Blue Shield has continued to argue before state tax authorities that it is a charitable trust. In the opening brief of its back taxes case in 2020, the insurer cites a state Supreme Court case that it said confirms 'Blue Shield operates exclusively for the promotion of social welfare,' his letter notes. Blue Shield told The Times that it has provided 'consistent information to DMHC about its corporate restructuring' and that Johnson's letter provided 'no new evidence' regarding Blue Shield's status as a 'tax-paying not-for-profit mutual benefit corporation.' Johnson and the DMHC traded additional letters last week, with Johnson questioning why the department had not reviewed the new tax appeal documents or why they had not reviewed Ascendiun's articles of incorporation or bylaws prior to approving the restructuring. Janet Rickershauser, a nonprofits lawyer at Hurwit & Associates, said that the bylaws are important to understanding the parent company's operations, including the relationship of the subsidiaries to each other and the holding parent company. In a letter sent June 23 to Johnson, Jonathon Williams, an assistant chief counsel at the DMHC, said the department concluded it was 'not necessary or appropriate' to review the tax-appeal documents in its review of Blue Shield's application to restructure nor conduct a 'full evaluation of Delaware's corporation statutory scheme.' The department told The Times that it conducted a 'comprehensive review' of the articles of incorporation of Blue Shield and its Medicaid Promise Health Plan as required by state law. Although it did not review Ascendiun's bylaws or articles of incorporation, the department said it retained its regulatory authority over Blue Shield. Blue Shield said it would not release it bylaws because they are 'confidential company documents.' However, Rickershauser said that 'hiding the ball on the bylaws is preventing transparency into important aspects of how they're operating.'
Yahoo
6 days ago
- Entertainment
- Yahoo
Kehlani Reflects on ‘You Should Be Here' Mixtape 10 Years Later: ‘I'm Grateful That It Changed My Life'
Kehlani endured innumerable struggles and beat the odds 'all before the age of even being able to buy a f—king drink at a bar,' as she said with her raspy, hushed voice in the 'Intro' of her 2015 sophomore mixtape You Should Be Here. She was raised by her aunt, who eventually adopted Kehlani, after her father died when she was a toddler and her mother served time in jail while struggling with drug addiction. She left PopLyfe, the Oakland-based teen pop band that finished in fourth place on America's Got Talent in 2011, due to managerial and contractual issues. She stole iPhones straight out of people's hands at train stations and sold them — and got banned from Walmart for stealing clothes and food — just to skate by, according to her 2015 Fader cover story. And she poured that grit and resilience that's carried her throughout her entire life into her music. More from Billboard Queer Jams of the Week: New Music From Kehlani, Kevin Abstract, Blondshell & More AC/DC Plug In Extra Stadium Dates for Australia's Power-Hungry Fans Brandy and Monica Reveal 'The Boy Is Mine' Was Inspired by 'Jerry Springer' In 2014, they independently released their critically acclaimed debut mixtape Cloud 19, which led to a label deal with Atlantic Records. By the time they were working on their follow-up project, they got to indulge in the one grown-up activity they hadn't been able to before. Then-19-year-old Kehlani still wasn't 'able to buy a f—king drink at a bar' in the U.S., but she could in Vancouver in British Columbia, Canada, where she went with her righthand producer Jahaan Sweet and photographer David Camarena. 'I thought I was big shit because I was of legal age,' she tells Billboard, recalling her 'first experience of being out of the country and working in an Airbnb and leaving the Airbnb to go get a drink at a bar and listen to the music walking down the street. [It was] this freeing feeling of this is what I can do as an artist. This is the kind of life I can have where I can get up and go, get inspiration and create in another place, and make art in this freeing way.' On You Should Be Here, Kehlani navigates their romantic and familial relationships through the lens of a charming and vulnerable young woman taking her life by the reins – and a lifelong student of '90s R&B and neo-soul. The tape reassures her fans, known as the Tsunami Mob — as well as Kehlani herself — to never lose sight of the light at the end of the tunnel, even when it seems incredibly dim. And her inextinguishable pursuit was rewarding as the spotlight shined even brighter on the burgeoning star. You Should Be Here earned Kehlani their first top five project on Top R&B/Hip-Hop Albums as well as their first Grammy nomination for best urban contemporary album. 'I was told there hadn't been a mixtape nominated for a Grammy, and if there was, then I was the first girl. It was a pivotal moment, any moment that lets you know that the level of how you believe in yourself is valid,' they says. As part of Black Music Month, Billboard is celebrating the 10-year anniversary of You Should Be Here with Kehlani, discussing what the mixtape meant to them at the time of recording it, continuing to show love to Musiq Soulchild, feeling 'haunted' by their videotaped reaction to their first Grammy nomination, and if they'll ever bring back that one song that's been removed. What do you remember most about recording ? How natural it was. Me and Jahaan were living together at the time in all these Airbnbs. We were in any living room we could find. That was such a crazy project because it was right after my first mixtape ever, which changed my life. It was me making music the first year out of my teenagehood and the first year of me cracking off as an artist. There was so much context in there of how that shaped my relationships, my view of the world, my young womanhood. That was in response to my life at the time. Sweet produced six songs on the mixtape What was your working relationship with him like at the time? Considering he later worked on your 2017 debut album why was he such a crucial member of your inner creative circle? We did a lot of Cloud 19 together. We did what I felt like was my first breakthrough song, 'Get Away.' We both had this underdog feeling because when I met Jahaan, he was an assistant at a studio and I was there working with someone else. After the session ended, Jahaan came in the room and was like, 'Hi, you don't know me. I'm like the little guy here. I have a beat to play you if you'd be down to listen.' And I'm like, 'Well, I'm a little guy. [Laughs.] Absolutely play me the beat.' And it ended up being my first breakout song. We've just had that kindred relationship where we were really hungry and we felt like we had something to prove, but we also had chemistry where we'd finish each other's musical sentences. He'd know what I'd want to do next and where I'd want to take it, and before I would even get a chance to do it, he would already be tweaking the beat to how I'd probably like it. Around the time you released this mixtape, different publications were labeling you a . Did that term resonate with you? I kind of still, to this day, feel like a mindie artist. That's nothing to do with the label, more to do with the era that I came up in. I was a part of the pre-streaming service [era]. You have to go hard for yourself. You can't wait for a marketing strategy or rollout. It's all about the relationship that you have with your fans personally, with no middleman. I've always operated in that way. My fanbase [grew] up with me, they feel like they know me, which is a double-edged sword in this day and age. We have a really deep connection where they feel proud to be here this long and every time a milestone happens, and they're excited about things that are beyond where's the next hit? Are the numbers moving in this kind of way? That comes from that mindie movement. Light shines through as a key lyrical theme in . You sing 'So be great, be kind/ Don't let them dim your light/ A woman like the sun should always stay bright' on 'Bright.' And you sing, 'Too damn strong/ To let you get the best of me/ Took way too long/ To find the light inside of me' on 'N—as.' Why was that an important message for you to share with your fans on this mixtape? I've dealt with chemical imbalance and mental illness my entire life, so it's been up and down. Anybody with mental health issues knows how imperative that moment that your light returns is and how much of a big deal it is. It's not, 'I felt sad yesterday and I'm coming around today.' It's these time periods where you do not feel like there's any sort of light at the end of anything. And when you finally get that back, the measures you take to ensure that it stays, whether your boundaries change or your routine changes or you have to let certain things or people go, it's a big feat. That was the beginning of my life shifting in that way where I had to make those changes to prioritize the light that I found. Those were the first years of my life with stability and with control over my own life. Everything was shifting, and I finally had a grip on it. I just needed to protect it. Speaking of 'N—as,' you removed the track from all streaming services in 2023. Would you ever put it back on streaming for the fans who miss it? At this point, I'm not really interested in bringing it back for myself. I've always said if there's another artist who would like to put it out because people want the song in the world, I'd be more than happy to let another artist record it and let them have it. Other than that, at the time I took it down, I was being communally called in by people who felt offended by it, and I was abiding by what I feel like community care is, which is when you're called in, you listen and you make a change. I try to keep my peace as much as possible, and I feel like re-putting it out on any platforms at this point would be another ignited thing beyond what my focus is at the moment. You contributed background vocals to Chance the Rapper and The Social Experiment's the same year you featured him on 'The Way.' How did you two establish that relationship? Me and Chance go back to that golden era of earlier music from our late teenagehood and early young adulthood where it was me, Chance, Bryson [Tiller], Jhené [Aiko], Tinashe. It was this early group of us that were still dropping things on SoundCloud. We were all tapped in with each other. We're in that space of innovation is starting to happen, which I don't know if we realized that at the time, but now I can look back and be like, 'Oh, that was the beginning of certain ways that music moves now.' Me and Chance have always had a great friendship and continue to do so. 'Down For You,' featuring BJ The Chicago Kid, interpolates Musiq Soulchild's 'Just Friends (Sunny).' Four years later, you featured Musiq Soulchild on 'Footsteps,' the opening track of How did you finesse that? Did you two ever talk about 'Down For You'? Oh, he knows I'm a fan. I not only interpolated him on that, but on the mixtape before, I quoted him. It went from quoting to interpolating to the feature. He's always known from even the first moment. I don't care about coming off like a fan to anybody in anything that I'm a fan of. [Laughs] I always was loudly like, 'You're my favorite. Growing up, you were my favorite. You'll always be my favorite.' He knows very well. I will get down on the floor and bow to that man. What was your favorite song from in 2015, and is it still your favorite off the project a decade later? 'Jealous.' I just remember the excitement of discovering Lexii and how it was to hear Lexii for the first time on her SoundCloud. I remember being in a sprinter van with my manager and being like, 'Yo, there's this girl from Minnesota and she's so hard. We need her on the album.' And she just knocked out that verse so quickly, and I just became a super Lexii Alijai stan because of it. To this day, it's one of my favorites that I've done because of the energy that she brought to it. That is my favorite now because of sentimental reasons. Rest in peace, Lexii. At the time, my favorite song was probably 'You Should Be Here' because it felt like a declaration. I had just got out of my first adult relationship, and that person broke up with me because of the trajectory I was in and there were some issues around that. It felt like this big catalyst into, 'Oh, this is shit is real.' And it awoken all the feelings of I really need to anaylze how my life is shifting. You just turned 30 in April. If you could talk to the 19-going-on-20-year-old version of Kehlani who was making , what would you tell them? I would say your life's about to change. The art that you're making is going to have big cultural significance that gets a lot of people to relate to you because of your story, your upbringing, your background, your emotional journey. It's going to bring a lot of those people who need it to the forefront, but also don't take that on as your own. Lock in, focus on your relationship with God and perfect your craft. Take your time and have fun. Once You Should Be Here came around, I was in go mode — and it was such a detrimental thing to my mental health, because life really took off after that. We got the Grammy nom, it started getting really psycho insane, and I spent a lot of years working myself to burn out — and taking on the fact that all these people were like, 'You changed my life, You saved me.' It was a heavy weight to carry at 19, 20. I was also growing up in front of the world. So I would want to hear from myself now that I owed it to myself to really prioritize my mental well-being while I'm giving these things to the world. You embarked on your first-ever solo headlining tour, the You Should Be Here Tour, after the tape dropped. But earlier that year, you went with G-Eazy on the second leg of his From the Bay to the Universe Tour. What lessons had you learned from that joint stint that helped you during your first solo run?I will always thank G-Eazy for being the first person to take me on the road and open the lane for me like that. He's so incredible, because he's done that for almost every single Bay Area artist. Like, every Bay Area artist who has come out of the Bay that has been after his time, he's brought on tour. He's opened the door for all of us in that way. It was a very different tour than what an R&B tour would look like. It was very rock star. I'm like, 'This what a tour bus is? This what backstage looks like? This some rock star s–t.' It allowed me to see the epicness before I had to go and take on all those responsibilities myself. It's different when you're an opener. You just get to go on stage and then watch someone every night. I got to see what a show with production looked like, and a show that had a set and real lights. And then I went on my first tour, and I didn't have any of those things — but it gave me something to look forward to and something to be excited about, like, 'Oh, I can do this. This is possible.' You earned your first-ever Grammy nomination with this mixtape. Do you remember how you felt when you found out? What's funny is I am so haunted by the video where I found out. There's literally a video where I'm running around screaming outside of the tour bus. I think we were in Sweden. I had some acne [laughs] on my cheek, and I put tea tree oil on it, and I burnt the shit out of my face. So I'm sitting there holding my face while I just chemically burned it, and David [Ali] tells me the information, and I start losing my mind with the switch from 'Holy s–t, I'm crying because I just burnt my face' to 'Holy s–t, I'm crying because I'm nominated for a Grammy off of a f—king mixtape.' It was f—king hilarious. I was told it hadn't been done before that. I was told there hadn't been a mixtape nominated for a Grammy, and if there was, then I was the first girl. It was a pivotal moment — any moment that lets you know that the level of how you believe in yourself is valid. I'm not big [on letting] any award validate how great your art is. But it's nice when the system in place or the hierarchy of what you're doing in art recognizes that what you're doing is great. It feels good, even if you don't believe in it. What did mean to you at the time of recording it, and looking back at your discography, what does mean to you now? At the time I recorded it, I was just a hungry 19-year-old trying to follow up the splash that my first project made, trying to get my emotions down, trying to explain myself, trying to get people to feel me. Looking back at it now, I'm grateful that I was down to bare myself in that way and I was down to be emotional and vulnerable. I'm grateful that it changed my life. It really did. It was the project that was the first change of my life as far as musical pivots, and there would be no project after that without what You Should Be Here opened up for me. Best of Billboard Chart Rewind: In 1989, New Kids on the Block Were 'Hangin' Tough' at No. 1 Janet Jackson's Biggest Billboard Hot 100 Hits H.E.R. & Chris Brown 'Come Through' to No. 1 on Adult R&B Airplay Chart
