My Free Speech Political Quotations and Commentaries Directory and Log
---
http://www.cs.trinity.edu/~rjensen/temp/Political/PoliticalQuotationsCommentaries.htm
If everyone is thinking alike, then somebody isn't
thinking.
George S. Patton
Madiba's Wisdom: 20 Timeless Quotes From Nelson Mandela
Includes a timeline of his inspirational life---
http://www.businessinsider.com/timeless-quotes-from-nelson-mandela-2013-12
The good news, if you want to call it that, is that
roughly 1.6 million Americans have enrolled in ObamaCare so far. The not-so-good
news is that 1.46 million of them actually signed up for Medicaid . . . New York
spent more than $15 billion on Medicaid last year, roughly 30% of all state
expenditures. The Kaiser Foundation projects that over the next 10 years, New
York taxpayers will shell out some $433 billion for the program. But none of
these projections foresaw that so many of ObamaCare’s enrollees would be
Medicaid eligible. To be sure, the health-care law’s designers saw the expansion
of Medicaid as an important feature of their plan to expand coverage for the
uninsured. Still, they expected most of those enrolling in ObamaCare to qualify
for private (albeit subsidized) insurance.
Michael D. Tanner, NY Post, December 7, 2013 ---
http://nypost.com/2013/12/07/the-medicaid-time-bomb/
Medicaid ---
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html
Covered California has signed up nearly 80,000
people in private health plans and an additional 140,000 people qualified for
Medi-Cal the state's Medicaid program.
Houston Chronicle | December 7, 2013
Jensen Comment
It's hard to find Medicaid's share of state budgets because the amounts are
usually buried in other line items. As best I can tell thus far the Medicaid
share of state budgets is approximately a third before the new Obamacare
enrollees in Medicaid are factored into the budgets. Medicaid is a great idea,
but would be a better idea if more was spent to enforce the rules regarding who
qualifies. For example, Russian diplomats received over $5 million in Medicaid
benefits by lying about their incomes. A recent audit in Illinois reveals that
half the people on Medicaid are not eligible to be on Medicaid. What proportion
of the millions of new Medicaid recipients do you think will really qualify for
free medical care if the Medicaid rules were enforced?
President Obama hopes to add another 5 million people who are
above the poverty line to Medicaid in 2014.
Barack Obama beat Mitt Romney in the 2012 elections 65,909,451 Obama
to 60,932,176 Romney votes.
Among the 48 million people of food stamps, how many voted for Mitt Romney?
The GOP will never win without gaining half the food stamp votes.
Here Are The States With The Most To Lose From Republican Food Stamp Cuts ---
http://www.businessinsider.com/here-are-the-states-with-the-most-to-lose-from-republican-food-stamp-cuts-2013-9
It would do wonders for farmers if we gave food stamps to the 99%. The GOP would
do better with that platform.
American university professors now have an opportunity to protest the
occupation of Palestine by Israel and register a vote to support an academic
boycott of Israel ---
http://www.theasa.net/caucus_activism/
"Leaders of American Studies Association Endorse Academic Boycott of Israel,"
by Beth McMurtrie, Chronicle of Higher Education, December 4, 2013 ---
http://chronicle.com/article/Leaders-of-American-Studies/143377/?cid=at&utm_source=at&utm_medium=en
Members of ASA Endorse the Boycott ---
http://chronicle.com/article/Membership-of-American-Studies/143645/
66% of less than 30% of the total ASA members who actually voted in the poll.
Jensen Comment
I adamantly do not support this academic boycott of Israel, and consider
it totally one sided in terms of the various anti-Semitic universities in
nations of the world that go unmentioned by the ASA and are not also
proposed to be similarly boycotted by leaders of the ASA. However, before
throwing slings and arrows at these ASA leaders it is important to study what
led them to this one-sided proposal.
One piece of evidence in favor of this boycott is the following book:
Peaceful Resistance: Building a Palestinian University under Occupation
By Gabi Baramki (with a foreword by Jimmy Carter)
Pluto Press
232pp, £60.00 and £17.99
ISBN 9780745329321 and 29314
Published 1 February 2010
http://www.timeshighereducation.co.uk/books/peaceful-resistance-building-a-palestinian-university-under-occupation/
"Against Academic Boycotts," by Henry Reichman, Inside Higher Ed,
December 12, 2013 ---
http://www.insidehighered.com/views/2013/12/12/essay-criticizing-concept-academic-boycotts
"Shame of the Academy The American Studies Association votes to boycott
Israel," The Wall Street Journal, December 16, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579262804145084652?mod=djemEditorialPage_h
Iran's Supreme Leader Grand Ayatollah Ali Khamenei urged the Muslim World to
boycott anything and everything that originates with the Jewish people ---
http://www.freerepublic.com/focus/f-news/3099771/posts
A short time ago, Iran's Supreme Leader Grand
Ayatollah Ali Khamenei urged the Muslim World to boycott anything and
everything that originates with the Jewish people.
In response, Meyer M. Treinkman, a pharmacist, out
of the kindness of his heart, offered to assist them in their boycott as
follows:
"Any Muslim who has Syphilis must not be cured by
Salvarsan discovered by a Jew, Dr. Ehrlich. He should not even try to find
out whether he has Syphilis, because the Wasserman Test is the discovery of
a Jew. If a Muslim suspects that he has Gonorrhea, he must not seek
diagnosis, because he will be using the method of a Jew named Neissner.
"A Muslim who has heart disease must not use
Digitalis, a discovery by a Jew, Ludwig Traube.
Should he suffer with a toothache, he must not use
Novocaine, a discovery of the Jews, Widal and Weil.
If a Muslim has Diabetes, he must not use Insulin,
the result of research by Minkowsky, a Jew. If one has a headache, he must
shun Pyramidon and Antypyrin, due to the Jews, Spiro and Ellege.
Muslims with convulsions must put up with them
because it was a Jew, Oscar Leibreich, who proposed the use of Chloral
Hydrate.
Arabs must do likewise with their psychic ailments
because Freud, father of psychoanalysis, was a Jew.
Should a Muslim child get Diphtheria, he must
refrain from the “Schick" reaction which was invented by the Jew, Bella
Schick.
"Muslims should be ready to die in great numbers
and must not permit treatment of ear and brain damage, work of Jewish Nobel
Prize winner, Robert Baram.
They should continue to die or remain crippled by
Infantile Paralysis because the discoverer of the anti-polio vaccine is a
Jew, Jonas Salk.
"Muslims must refuse to use Streptomycin and
continue to die of Tuberculosis because a Jew, Zalman Waxman, invented the
wonder drug against this killing disease.
Muslim doctors must discard all discoveries and
improvements by dermatologist Judas Sehn Benedict, or the lung specialist,
Frawnkel, and of many other world renowned Jewish scientists and medical
experts.
"In short, good and loyal Muslims properly and
fittingly should remain afflicted with Syphilis, Gonorrhea, Heart Disease,
Headaches, Typhus, Diabetes, Mental Disorders, Polio Convulsions and
Tuberculosis and be proud to obey the Islamic boycott."
Oh, and by the way, don't call for a doctor on your
cell phone because the cell phone was invented in Israel by a Jewish
engineer.
Continued in article
Jensen Comment
And to say nothing about an atomic bomb whose invention is heavily
attributed to Jews.
Question
What States and Provinces in North America Have the Most Economic Freedom ---
http://finance.townhall.com/columnists/danieljmitchell/2013/12/14/the-most-procapitalism-place-to-live-in-north-america-is-n1762720?utm_source=thdaily&utm_medium=email&utm_campaign=nl
Jensen Comment
Canada also wins out in terms of long-term prosperity. The reasons are
complicated. Obviously a low population controlling a vast amount of economic
resources such as oil, minerals, and timber contributes to long-term prosperity.
A pay-as-you go government that does not destroy itself with unfunded
entitlements helps. There are other benefits such as living almost free under
the USA defense umbrella and the USA research umbrella (particularly medical
research) reduces Canadian budgets.
There are climate advantages that discourage illegal immigration from warm
climates. The geographic USA geographic cushion also is a barrier to illegal
immigration.
Canada also has a national health care plan that is far from perfect but is
paid for partly by all taxpayers. In the USA the health care plan is becoming
more and more a free service as people increasingly lie about incomes for free
Medicaid or government subsidies to lower premium costs. The threat of USA
Medicaid and premium subsidy enforcement of rules at this point is a sham in the
USA but not in Canada.
The main advantage in my opinion is a low Canadian population controlling a
vast amount of natural resources with a huge market for those resources south of
the Canadian border and in parts of Asia. Scandinavian countries also benefit
from low populations and minimal immigration.
Half of Ryan-Murray Budget Cuts Don't Happen Until 2022 While Increasing
Spending by $65 Billion Over the Next Two Years ---
http://www.breitbart.com/Big-Government/2013/12/11/Real-Savings-In-Budget-Deal-Dont-Happen-Until-2022
Jensen Comment
A lot can happen over five future national elections. Don't count on those
promised fairy tale budget cuts.
'The Hidden Danger in Public Pension Funds: Their investments expose
government budgets and taxpayers to 10 times more risk than in 1975," Andrew
G. Biggs, The Wall Street Journal, December 15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303789604579196100329273892?mod=djemEditorialPage_h
The threat that public-employee pensions pose to
state and local government finances is well known—witness the federal ruling
earlier this month that Detroit's pension obligations are not sacrosanct in
a municipal bankruptcy. Less well known is that pensions are larger and
their investments riskier than at any point since public employees began
unionizing in earnest nearly half a century ago.
Public pensions have long been advertised as
offering generous, guaranteed benefits for public employees while collecting
low and stable contributions from taxpayers. But with Detroit's bankruptcy
filing, citing $3.5 billion in unfunded pension liabilities, and with four
of the five largest municipal bankruptcies in U.S. history occurring in the
past two years, reality tells us otherwise.
How much riskier are public pensions now? According
to my research, public pensions pose roughly 10 times more risk to taxpayers
and government budgets than in 1975. And while elected officials—a few
Democratic mayors included—are now pushing for reforms, even they may not
realize the danger.
In 1975, state and local pension assets were equal
to 49% of annual government expenditures, according to my analysis of
Federal Reserve data. Pension assets have nearly tripled to 143% of
government outlays today. That's not because plans are better funded—today's
plans are no better funded than in 1980—but mostly because pension plans
have grown as public workforces have aged.
The ratio of active public employees to retirees
has fallen drastically, according to the State Budget Crisis Task Force.
Today it is 1.75 to 1; in 1950, it was 7 to 1. This means that a loss in
pension investments has three times the impact on state and local budgets
than 40 years ago. Enlarge Image
In a photo from Monday, Dec. 2, 2013, an empty
field in Brush Park, north of Detroit's downtown is shown with an abandoned
home. Associated Press
And pensions can expect to take losses more often
because of increased investment risk. Public plans have historically assumed
roughly an 8% rate of return. But thanks to falling yields on safe assets,
pensions must invest in riskier assets to have any hope of getting 8%
returns. A one-year Treasury bond in 1975 yielded a 5.9% return. In 1980, it
offered 14.8%, and in 1985 an investor could expect 6.5%. Today, the
Treasury yield hovers at 0.1%.
Meager yields leave America's enterprising
public-pension plan managers with a choice: Accept a lower return—forcing
higher taxpayer contributions—or take on more risk to keep 8% returns
flowing. My estimate, based on Treasury yields and analysis from economists
at the Office of the Comptroller of the Currency, is that a pension today
must build a portfolio with a standard deviation—how much returns vary from
year-to-year—of 14%. Such high volatility means that a fund would suffer
losses roughly one out of every four years.
By contrast, in 1975 a plan could achieve 8%
expected returns with a standard deviation of just 3.7%. Those portfolios
would lose money once every 65 years. This level of risk varied little
through the 1980s and 1990s: An 8% return portfolio in 1985 would require a
standard deviation of 2.7%, and 4.3% in 1995. Risk began inching upward
after 2000 and has increased rapidly since the recession as low-risk assets
continue to fall.
These figures aren't theoretical. They represent
public pensions' decades-long shift from safe bonds to risky stocks, along
with the recent growth of "alternative investments" such as hedge funds and
private equity. These alternatives are, according to Wilshire Consulting,
60% riskier than U.S. stocks and more than five times riskier than bonds.
Larger pensions and riskier investments combine to
increase risk to state and local budgets. The standard deviation of public
pension investments equaled 1.8% of state and local budgets in 1975. That
figure crept upward to 2.2% in 1985, and reached 5.8% in 1995. Today it
stands at 19.8%. Pension investment risk to budgets has risen roughly
tenfold over the past four decades.
As pension plan managers in Detroit, California and
elsewhere can attest, there aren't easy solutions. Mature pensions should
move their investments away from risky assets, but many plan managers are
doing the opposite in a double-or-nothing attempt to dig out of
multitrillion-dollar funding shortfalls. In most instances, significant
benefit cuts for current retirees who made the contributions asked of them
is difficult to justify and legally problematic.
The only real option, then, is to make structural
changes, including more modest benefits and increased risk-sharing between
plan sponsors and public employees. But that will only happen if elected
officials accept that they can't continue with business as usual without
accumulating tremendous risk.
Bob Jensen's threads on pension accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#Pensions
Having paid off bond holders for one penny on the dollar, what fool would
loan it another dollar to pay its bloated unfunded pensions?
"California City’s Return to Solvency, With Pension Problem Unsolved,"
by Rick Lyman and Mary Williams Walsh, The New York Times, December 3,
2013 ---
http://www.nytimes.com/2013/12/06/us/stockton-set-to-return-to-solvency-with-pension-problem-unsolved.html
Before Detroit filed for bankruptcy, there was
Stockton.
Battered by a collapse in real estate prices, a
spike in pension and retiree health care costs, and unmanageable debt, this
struggling city in the Central Valley has labored for months to find a way
out of Chapter 9. Now having renegotiated its debt with most creditors,
cobbled together layoffs and service cuts and raised the sales tax to 9
percent from 8.25 percent, Stockton is nearly ready to leave court
protection.
But what Stockton, along with pretty much every
other city in California that has gone into bankruptcy in recent years,
has not done is address the skyrocketing public pensions that are at the
heart of many of these cases.
“No city wants to take on the state pension system
by itself,” said Stockton’s new mayor, Anthony Silva, referring to the
California Public Employees’ Retirement System, or Calpers. “Every city
thinks some other city will take care of it.”
While a federal bankruptcy judge ruled this week
that Detroit could reduce public pensions to help shed its debts, Stockton
has become an experiment of whether a municipality can successfully come out
of bankruptcy and stabilize its finances without touching pensions. It is an
effort that has come at great cost to city services and one that some
critics say will simply not work once the city starts trying to restore
services and hire 120 police officers it promised to get the sales-tax
increase passed.
“They wanted to get out of bankruptcy in the worst
possible way, and that’s just what they did,” said Dean Andal of the San
Joaquin County Taxpayers Association, which fought the sales-tax increase.
“If they go ahead and hire those new police officers, the city will be back
in insolvency in four years.”
Stockton declared fiscal emergencies in 2010 and
2011, giving it the power to renege on annual pay increases for city
workers. City services were slashed. Hundreds of municipal workers were laid
off. And many retirees who had been promised health coverage for life
learned that they would have to begin paying for it.
“That was the hardest part,” Councilman Elbert
Holman said, “looking people in the eye and telling them sorry, you are
losing your health care, but it’s absolutely necessary.”
By the time the judge found Stockton eligible for
Chapter 9 bankruptcy on April 1, the city had about $147 million in unfunded
pension obligations and about $250 million in debt from various bond issues.
The years of fiscal emergency and bankruptcy have
left their mark, including a skyrocketing crime rate, which city officials
and many residents attribute to staffing and service cuts in the Police
Department.
“I suddenly realized a few years ago that, just in
my tiny, two-block neighborhood, there had been 11 residential burglaries in
the previous nine months,” said Marci Walker, an emergency room nurse.
Cities go bankrupt for many reasons: a collapse in
real estate prices, a spike in pension and retiree health care costs, a
burden of debt from expensive city projects. Stockton has experienced all
three.
When real estate prices shot up in Silicon Valley
in the last decade, many commuters decided that Stockton’s cheaper housing
was worth the long commute to the Bay Area. That drove up local housing
prices, so when the bubble burst it had a bigger impact, giving Stockton one
of the nation’s highest foreclosure rates.
City leaders had also gone on a construction spree
during the flush years, building a new sports arena, a minor-league baseball
stadium and a marina. Citizens still bitterly mention the 2006 concert that
opened the arena, where Neil Diamond was paid $1 million to perform.
And through it all, the pension costs for city
workers — particularly for police officers and firefighters, who can retire
early and draw on those pensions for decades — kept going up.
No part of the city has been left unscathed. Ms.
Walker’s comfortable neighborhood near the University of the Pacific campus
was hit with rising crime almost immediately after the police layoffs. “When
the economy got bad and we lost police officers, it all started,” she said.
So she started the Regent Street Neighborhood
Watch, the first of more than 100 such organizations to sprout up in the
city in the last few years.
“We don’t confront anybody, we just let them know
that we know they’re there,” Ms. Walker said. She added, “Criminals do not
like eyeballs on them.”
Continued in article
Jensen Comment
Off the cuff Governor Brown complained that California has to deal with a
trillion dollars in unfunded pensions (he may have exaggerated). The sad ttruth
is that many of these were fraudulent pensions with criminal amounts (e.g., the
pensions of Bell, California) and absurd early retirement provisions at age 50
or earlier.
City of Bell Scandal ---
http://en.wikipedia.org/wiki/City_of_Bell_scandal
Before the Stockton declaration of bankruptcy there was the 2008 bankruptcy
of Vallejo where the bankruptcy judge screwed bondholders but not pensioners..
Detroit's pensioners may not go unscathed, but the pattern of favoritism of
pensioners over bond holders will eventually hurt cities that rob Peter
Bondholder to pay Paul Pensioner.
"Why Investors Are Fleeing Muni Bonds At Record Rates," by Wolf
Richter, Business Insider, December 16, 2013 ---
http://www.businessinsider.com/fear-and-trembling-in-muni-land-2013-12
Municipal bond investors, a conservative bunch who
want to avoid rollercoaster rides and cliffhangers, are getting frazzled.
And they’re bailing out of muni bond funds at record rate, while they still
can without losing their shirts. So far this year, they have yanked out
$52.8 billion. In the third quarter alone, as yields were soaring on the
Fed’s taper cacophony and as bond values were swooning, net outflows from
muni funds reached $32 billion, which according to Thomson
Reuters, was more than during any whole year.
Muni investors have a lot to be frazzled about.
Municipal bonds used to be considered a safe investment – though that may
have been propaganda more than anything else. Munis are exempt from federal
income taxes, hence their attractiveness to conservative investors in high
tax brackets. Munis packaged into bond funds appealed to those looking for a
convenient way to spread the risk over numerous municipalities and states.
While the Fed was repressing rates, muni bond funds were great deals.
Then came the bankruptcies.
The precursor was Vallejo, CA, a Bay Area city of
115,000 that filed for Chapter 9 bankruptcy protection in 2008 and emerged
two years ago. But it’s already struggling again with soaring pension costs
that had been left untouched. Jefferson County, which includes Alabama’s
largest city, Birmingham, filed in 2011 when it defaulted on $3.1 billion in
sewer bonds, the largest municipal bankruptcy at the time [but it’s already issuing
new bonds; read..... Municipal
Bankruptcy? Why Not! And so The Floodgates Open].
Stockton, CA, filed in June 2012. Mammoth Lakes,
CA, filed in July 2012. San Bernardino, CA, filed in August 2012. They were
dropping like flies in the “Golden State.” Detroit filed in July this year,
crushing all prior records with its debt of up to $20 billion. That’s
$28,000 per person for its population of 700,000.
But Detroit is just a fraction of what is
skittering toward muni investors: the Commonwealth of Puerto Rico. The poverty
rate is 45.6%. Unemployment is
14.7%. The economy has been in recession since 2006. The labor force has
shrunk 16% from 1.42 million in 2007 to 1.19 million in October. The number
of working people, over the same period, has plunged from 1.8 million to 1.1
million, a breathtaking 39%.
Puerto Rico had a good run for decades as federal
tax breaks lured Corporate America to set up shop there. But when these tax
breaks were phased out by 2005, the companies went in search for the greener
grass elsewhere. To keep splurging, the government embarked on a borrowing
binge that left the now lovingly named “Greece of the Caribbean” with
nearly $70
billion in debt.
That’s 70% of GDP, and for its population of 3.67
million, about $19,000 per capita, or about $64,000 per working person. And
then there is the underfunded pension system. But unlike Detroit, Puerto
Rico is struggling to address its problems with unpopular measures, raising
all manner of taxes and cutting outlays. Not even the bloated government
payrolls have been spared. Too little, too late? Given the enormous poverty
rate and long-term shrinking employment, what are the chances that this debt
will blow up?
Pretty good, according to Moody’s
Investors Service. Last week, it put $52 billion of Puerto Rico’s debt under
review for a downgrade – to
junk. Moody’s litany of factors: “Failure
to access the public debt market with a long-term borrowing, declines in
liquidity, financial underperformance in coming months, economic indicators
in coming months that point to a further downturn in the economy, inability
of government to achieve needed reform of the Teachers’ Retirement System.”
This followed a similar move by Fitch Ratings in November.
Alas, Puerto Rico has swaps and debt covenants with
collateral and acceleration provisions that kick in when one of the three
major credit ratings agencies issues the threatened downgrade. Which “could
result in liquidity demands of up to $1 billion,” explained Moody’s analyst
Lisa Heller. It would “significantly narrow remaining net liquid assets.”
Now Puerto Rico is under pressure to show that over
the next three months or so it can still access the bond markets at a reasonable rate.
If not....
Puerto Rico’s debt was a muni bond fund favorite
because it’s exempt from state and federal taxes. Now fears of a default on
$52 billion or more in debt are cascading through the $3.7 trillion muni
market. But Puerto Rico isn’t alone. Numerous municipalities and some states
have ventured out on thinner and thinner ice.
Default risks are dark clouds on the distant
horizon or remain unimaginable beyond the horizon. And hopes that disaster
can be averted by a miracle still rule the day. However, the Fed’s taper
cacophony is here and now, and though the Fed is still printing money and
buying paper at full speed, the possibility that it might not always do so
hangs like a malodorous emanation in the air.
Continued in article
Bob Jensen's threads on pension accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#Pensions
"Illinois's Fake Pension Fix: The most dysfunctional state
government lives down to its reputation," The Wall Street Journal,
December 2, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303670804579233901035185122?mod=djemEditorialPage_h
Democrats in Illinois have dug a $100 billion
pension hole, and now they want Republicans to rescue them by voting for a
plan that would merely delay the fiscal reckoning while helping to re-elect
Governor Pat Quinn. The cuckolded GOP seems happy to oblige on this
quarter-baked reform.
Legislative leaders plan to vote Tuesday on a bill
that Mr. Quinn hails as a great achievement. But the plan merely tinkers
around the edges to save a fanciful $155 billion over 30 years, shaves the
state's unfunded liability by at most 20%, and does nothing for Chicago's
$20 billion pension hole.
Most of the putative savings would come from
trimming benefits for younger workers. The retirement age for current
workers would increase on a graduated scale by four months for 45-year-olds
to five years for those 30 and under. Teachers now in their 20s would have
to wait until the ripe, old age of 60 to retire, but they'd still draw
pensions worth 75% of their final salary.
Salaries for calculating pensions would also be
capped at $109,971, which would increase over time with inflation. Yet
Democrats cracked this ceiling by grandfathering in pensions for workers
whose salaries currently top or will exceed the cap due to raises in
collective-bargaining agreements.
Democrats are also offering defined-contribution
plans as a sop to Republicans who are desperate to dress up this turkey of a
deal. These plans would only be available to 5% of workers hired before
2011. Why only 5%? Because if too many workers opt out of the traditional
pension, there might not be enough new workers to fund the overpromises
Democrats have made to current pensioners.
At private companies, such 401(k)-style plans are
private property that workers keep if they move to a new job. But the
Illinois version gives the state control over the new defined-contribution
plans and lets the legislature raid the individual accounts at anytime.
That's a scam, not a reform.
Even under the most optimistic forecasts, these
nips and tucks would only slim the state's pension liability down to $80
billion—which is where it was after Governor Quinn signed de minimis fixes
in spring 2010 to get him past that year's election.
Safely elected in January 2011, Democrats then
raised the state's 3% flat income tax rate to 5% and its corporate rate from
7.3% to 9.5%, the fourth highest in the country. All $7 billion a year in
new revenues have gone to pension payments, which will leave a huge new hole
in the budget when the supposedly temporary tax hikes are phased out in
2015.
The truth is that Democrats will never let the tax
increases expire, and state Senate President John Cullerton all but admitted
as much in October. Mr. Quinn won't rule out another tax hike, which means
round two is a certainty in 2015 if he wins re-election next year. The
difference is that this time Democrats will kill the flat income tax and
impose a progressive rate scheme that will make future tax hikes politically
easier.
It's a sign of their desperation that the state's
business lobbies are supporting the reform as the best they can hope for.
Others want special tax breaks to offset the 2011 tax hike. Archer Daniels
Midland ADM +1.49% (Decatur) and Office Max (Naperville) have threatened to
move their corporate headquarters if the state doesn't guarantee $75 million
in tax breaks. But Mr. Quinn has refused to approve more gifts for the
legislature's corporate cronies until lawmakers pass something on pensions.
Democrats hold comfortable majorities in the
legislature and don't need GOP votes. Yet they are demanding Republican
support so they won't be the only targets of union wrath. Mr. Quinn watered
down the reforms to reduce opposition from the teachers and other government
unions, but the unions are still promising to go to court to block the
changes if they pass.
GOP leaders who are rounding up votes must be
feeling especially charitable this holiday season because they're making an
in-kind contribution to Mr. Quinn, who will claim a bipartisan victory as he
runs for re-election. While GOP gubernatorial candidate Bruce Rauner has
denounced the pension legislation as window-dressing, his Republican primary
challengers aren't as savvy. State Senator Bill Brady, who lost to Mr. Quinn
in 2010, is supporting the bill while treasurer Dan Rutherford says it is
too hard on unions. Such me-too thinking is why the Illinois GOP has become
a useless minority.
Continued in article
"Audit reveals half of people enrolled in Illinois Medicaid program not
eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer
The early findings of an ongoing review of the
Illinois Medicaid program revealed that half the people enrolled weren’t
even eligible.
The state insisted it’s not that bad but Medicaid
is on the federal government’s own list of programs at high risk of waste
and abuse.
Now, a review of the Illinois Medicaid program
confirms massive waste and fraud.
A review was ordered more than a year ago-- because
of concerns about waste and abuse. So far, the state says reviewers have
examined roughly 712-thousand people enrolled in Medicaid, and found that
357-thousand, or about half of them shouldn't have received benefits. After
further review, the state decided that the percentage of people who didn't
qualify was actually about one out of four.
"It says that we've had a system that is
dysfunctional. Once people got on the rolls, there wasn't the will or the
means to get them off,” said Senator Bill Haines of Alton.
A state spokesman insists that the percentage of
unqualified recipients will continue to drop dramatically as the review
continues because the beginning of the process focused on the people that
were most likely to be unqualified for those benefits. But regardless of how
it ends, critics say it's proof that Illinois has done a poor job of
protecting tax payers money.
“Illinois one of the most miss-managed states in
country-- lists of reasons-- findings shouldn't surprise anyone,” said Ted
Dabrowski.
Dabrowski, a Vice-President of The Illinois Policy
Institute think tank, spoke with News 4 via SKYPE. He said the Medicaid
review found two out of three people recipients either got the wrong
benefits, or didn't deserve any at all.
We added so many people to medicaid rolls so
quickly, we've lost control of who belongs there,” said Dabrowski.
Continued in article
The Financially Literate
America's Wealth Is Staggeringly Concentrated In The Northeast Corridor ---
http://www.businessinsider.com/americas-wealth-is-staggeringly-concentrated-in-the-northeast-corridor-maps-2013-12
The Financial Illiterate
20 Lottery Winners Who Blew It All ---
http://www.businessinsider.com/lottery-winners-who-lost-everything-2013-12
Bob Jensen's threads on financial literacy ---
http://www.trinity.edu/rjensen/Bookbob1.htm#InvestmentHelpers
"We're Not Easing Sanctions on Iran: Tehran will be deeper in the
hole six months from now. Here's why." by David Cohen, The Wall Street
Jouirnal, December 10, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303497804579240710793962446?mod=djemEditorialPage_h
The intense pressure of international sanctions,
led by the United States, brought the Iranian government to the negotiating
table in Geneva, where, on Nov. 24, the six major powers and Iran agreed to
a Joint Plan of Action on Iran's nuclear program. As the principal U.S.
official charged with crafting and enforcing our sanctions program, I am
confident that the sanctions pressure on Iran will continue to mount. Iran
will be even deeper in the hole six months from now, when the deal expires,
than it is today.
Here's why.
To begin with, the relief package in this interim
deal is economically insignificant to Iran. The lion's share of the relief
comes from granting Iran access, in installments, to $4.2 billion of its own
revenues currently trapped outside Iran. In addition, U.S. sanctions on
Iran's petrochemical exports and its auto industry will be temporarily
suspended.
We estimate that this additional trade could
generate about $1.5 billion in revenue over the next six months—but only if
Iran is able to find customers to buy its cars and petrochemical products.
This will be difficult: There are long-standing problems with Iran's auto
sector, and petrochemical importers prefer long-term contracts, which aren't
possible given the six-month duration of the deal.
The Joint Plan also suspends sanctions on Iran's
ability to buy and sell gold. But because remaining prohibitions preclude
Iran from using either its foreign reserves or its own currency to buy gold,
this provision is of limited value. Any gold Iran purchases would be offset
by the hard currency it would spend to buy it.
Under strict guidelines, the deal also allows Iran
to transfer $400 million of restricted Iranian funds to defray tuition costs
for Iranian students studying abroad.
If the Iranians comply with their obligations under
the Joint Plan, over the next six months they will stand to receive $6
billion to $7 billion in relief, mostly by gaining access to their own
money. Not $1 comes from U.S. taxpayers.
Viewed in light of Iran's struggling economy, this
sum is inconsequential. Iran is in a deep recession—its economy contracted
last year by more than 5%, and it is on pace to contract again this year.
Its annual inflation rate now stands at about 40%. Iran's currency, the rial,
has lost around 60% of its value against the dollar since 2011.
The total relief is a small fraction of the roughly
$80 billion Iran has lost since early 2012 because of U.S. and
European Union
oil sanctions, and of the nearly $100 billion in Iran's foreign-exchange
holdings that are mostly restricted or inaccessible due to U.S. financial
and banking sanctions.
Iran's economy will also continue to suffer because
the core architecture of U.S. sanctions—especially our potent oil, financial
and banking sanctions—remains firmly in place. The oil sanctions alone cost
Iran about $5 billion a month in lost sales, meaning that over the six-month
duration of the Joint Plan, Iran will lose about $30 billion in oil revenue.
Iran's access to whatever oil revenue it earns, moreover, won't be available
for transfer or repatriation.
All of our sanctions against major Iranian
financial institutions also remain in place, which means that Iran will
remain largely cut off from the international banking system, curbing its
ability to move or spend its cash. The sanctions that forbid investment in
Iran's energy sector, including helping to develop Iran's oil and natural
gas resources, remain in place, as does the long-standing comprehensive ban
on U.S. business with Iran.
As President Obama said when he announced the Joint
Plan, we are fully committed to vigorous enforcement of these sanctions. We
know that sanctions do not implement themselves. To disrupt and disable
those facilitating Iran's nuclear and missile programs, we will identify
front companies, evaders and malefactors and sanction them. Along with our
partners across the U.S. government, my team at Treasury has done so more
than 600 times in the last several years. This will continue unabated.
To maintain pressure on Iran's economy, we will
continue to present foreign banks with a stark choice: They can either do
business with designated Iranian banks and businesses, or they can do
business with the U.S.—not both. To keep Iran's oil revenues depressed, we
will ensure that Iran will not be able to export one additional barrel
beyond the current low levels. And to hold back latent interest in trade
with Iran, we will communicate a blunt message to every foreign official,
businessperson and banker who thinks now might be a good time to test the
waters: We are watching, and we are poised to act against anyone, anywhere,
who violates our sanctions.
Sanctions gave Iran a powerful incentive to accept
this first-step deal, and they will be key to negotiating the comprehensive
resolution that ensures Iran cannot obtain a nuclear weapon. Now is no time
to let up—and we won't.
Mr. Cohen is the undersecretary for terrorism and financial
intelligence at the Treasury Department.
"CBO: The Distribution of Household Income and Federal Taxes, 2010 ---
http://taxprof.typepad.com/taxprof_blog/2013/12/cbo-the.html
Jensen Comment
Per usual I remind you that there's a $2 trillion underground cash-only economy
where income does not get reported and income taxes do not get paid.
The Pope does not seem to understand how non-capitalist nations (e.g., Cuba,
India, China, Viet Nam) that are shifting to capitalism are raising standards of
living whereas the non-capitalist nations clinging to socialism are mired in the
deepest poverty (e.g., North Korea and Venezuela) ---
http://en.wikipedia.org/wiki/Poverty#Measuring_poverty
Like many non-economists he views wealth differentials as sinful per se
without considering when the wealth curve shifts upward even for the poorest
people on the bottom.
Why don't the poorest people of the world want to emigrate to oil-rich Venezuela
rather than the USA and Canada?
The Pope's Bad Grasp of Basic Economics ---
http://reason.com/archives/2013/12/05/the-pope-and-basic-economics
What the Pope Gets Wrong About Capitalism ---
http://reason.com/archives/2013/12/06/what-the-pope-gets-wrong-about-capitalis
Capitalism for Dummies ---
The History of Economics & Economic Theory Explained with Comics,
Starting with Adam Smith ---
http://www.openculture.com/2013/12/the-history-of-economics-economic-theory-explained-with-comics.html
The 18 Most Corrupt Countries In The World (2013) ---
http://www.businessinsider.com/the-most-corrupt-countries-in-the-world-2013-12
Transparency International has published its 2013
Corruption Perceptions Index (CPI), which ranks
countries and territories based on how corrupt their administrative and
political institutions are perceived to be on a scale from 0 (highly
corrupt) and a 100 (very clean).
Compiled from a
combination of surveys and assessments of "the
abuse of entrusted power for private gain," the CPI is the most widely used
indicator of corruption worldwide.
Syria, in the midst of a brutal civil war, dropped
eight points in the last year as government officials
profit from the food crisis.
Libya, in the midst of
post-revolutionary turmoil, dropped six points to
surpass Iraq in official corruption.
:
Rank |
Country |
Score |
1 |
Denmark |
91 |
1 |
New Zealand |
91 |
|
|
|
9 |
Canada |
81 |
|
|
|
19 |
United States |
73 |
19 |
Uruguay |
73 |
|
|
|
|
|
|
175 |
Somalia |
8 |
175 |
North Korea |
8 |
175 |
Afghanistan |
8 |
174 |
Sudan |
11 |
173 |
South Sudan |
14 |
172 |
Libya |
15 |
171 |
Iraq |
16 |
168 |
Turkmenistan |
17 |
168 |
Syria |
17 |
168 |
Uzbekistan |
17 |
167 |
Yemen |
18 |
163 |
Equatorial Guinea |
19 |
163 |
Chad |
19 |
163 |
Haiti |
19 |
163 |
Guinea Bissau |
19 |
160 |
Cambodia |
20 |
160 |
Eritrea |
20 |
160 |
Venezuela |
20 |
From the CFO Journal's Morning Ledger on December 9, 2013
The U.S. is losing ground in the battle for foreign investment
Of all the new foreign direct investment that flowed across borders last
year, only 12% went to the U.S.,
the WSJ’s Brenda Cronin reports.
Meanwhile developing economies attracted 52% of global
FDI, for the first time eclipsing developed countries. By comparison, as
recently as 2000, the U.S. attracted 22% of new global FDI. America’s
smaller slice “is a worrying indicator that our policy environment
is…unattractive,” said Matthew Slaughter, a
professor at Dartmouth’s Tuck School of Business.
It also reflects that companies have “multiple opportunities around the
world.”
Developing economies have “gotten their acts together with rule of law,
better-educated workforces, newer infrastructure,” said Dan Ikenson of the
Cato Institute, a libertarian Washington think tank. With the rest of the
world “competing pretty ferociously” for investment, the U.S. can’t be
complacent, Mr. Ikenson said.
The
U.S. could try to reverse the trend by focusing on what multinationals want,
Cronin notes. In 2011, PricewaterhouseCoopers polled CFOs of U.S.
subsidiaries of foreign companies and found that when deciding where to
invest, companies’ key considerations included workforce skills, the
corporate-tax system and trade policy. “We’re really not making any progress
on all three of those,” Mr. Slaughter said. Instead, there has been
“stagnation.”
Government is still adding the most new jobs, but the fastest rates of growth
are in manufacturing and professional services
"Who’s Hiring (and Who Isn’t) in Five Charts," by Justin Fox, Business
Review Blog, December 8, 2013 ---
http://blogs.hbr.org/2013/12/whos-hiring-and-who-isnt-in-five-charts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29&cm_ite=DailyAlert-120913+%281%29&cm_lm=sp%3Arjensen%40trinity.edu&cm_ven=Spop-Email
Jensen Comment
What this article does not tell us is how many of those new jobs are part-time
jobs without benefits.
"Ice Everywhere, But No Hockey Sticks," by Mark Steyn,
National Review, December 2, 2013 ---
http://www.nationalreview.com/corner/365220/ice-everywhere-no-hockey-sticks-mark-steyn
News from
Santa’s Grotto:
Global warming
hysterics at the BBC warned us in 2007 that by summer 2013,
the Arctic would be ice-free. As with so many other doomsday
predictions by
warmists, the results
turn out to be
quite the opposite.
Meanwhile, down the
other end at
Santa’s summer vacation condo:
Antarctic sea ice has
grown to a record large extent for a second straight year,
baffling scientists seeking to understand why this ice is
expanding rather than shrinking in a warming world.
Antarctic ice is now at
a 35-year high. But scientists are “baffled” by the planet’s
stubborn refusal to submit to their climate models. Maybe the
problem with
Nobel fantasist Michael Mann’s
increasingly discredited hockey stick
is that he’s holding it upside down.
Nonetheless, the
famously settled science seems to be
re-settling:
Scientists
Increasingly Moving To Global Cooling Consensus
Global warming will kill us.
Global cooling will kill us. And if it’s 54 and partly cloudy,
you should probably flee for your life right now. Maybe
scientists might usefully consider moving to being less hung up
on “consensus” – a most unscientific and, in this context,
profoundly corrupting concept.
Continued in article
"Illinois's Fake Pension Fix: The most dysfunctional state
government lives down to its reputation," The Wall Street Journal,
December 2, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303670804579233901035185122?mod=djemEditorialPage_h
Democrats in Illinois have dug a $100 billion
pension hole, and now they want Republicans to rescue them by voting for a
plan that would merely delay the fiscal reckoning while helping to re-elect
Governor Pat Quinn. The cuckolded GOP seems happy to oblige on this
quarter-baked reform.
Legislative leaders plan to vote Tuesday on a bill
that Mr. Quinn hails as a great achievement. But the plan merely tinkers
around the edges to save a fanciful $155 billion over 30 years, shaves the
state's unfunded liability by at most 20%, and does nothing for Chicago's
$20 billion pension hole.
Most of the putative savings would come from
trimming benefits for younger workers. The retirement age for current
workers would increase on a graduated scale by four months for 45-year-olds
to five years for those 30 and under. Teachers now in their 20s would have
to wait until the ripe, old age of 60 to retire, but they'd still draw
pensions worth 75% of their final salary.
Salaries for calculating pensions would also be
capped at $109,971, which would increase over time with inflation. Yet
Democrats cracked this ceiling by grandfathering in pensions for workers
whose salaries currently top or will exceed the cap due to raises in
collective-bargaining agreements.
Democrats are also offering defined-contribution
plans as a sop to Republicans who are desperate to dress up this turkey of a
deal. These plans would only be available to 5% of workers hired before
2011. Why only 5%? Because if too many workers opt out of the traditional
pension, there might not be enough new workers to fund the overpromises
Democrats have made to current pensioners.
At private companies, such 401(k)-style plans are
private property that workers keep if they move to a new job. But the
Illinois version gives the state control over the new defined-contribution
plans and lets the legislature raid the individual accounts at anytime.
That's a scam, not a reform.
Even under the most optimistic forecasts, these
nips and tucks would only slim the state's pension liability down to $80
billion—which is where it was after Governor Quinn signed de minimis fixes
in spring 2010 to get him past that year's election.
Safely elected in January 2011, Democrats then
raised the state's 3% flat income tax rate to 5% and its corporate rate from
7.3% to 9.5%, the fourth highest in the country. All $7 billion a year in
new revenues have gone to pension payments, which will leave a huge new hole
in the budget when the supposedly temporary tax hikes are phased out in
2015.
The truth is that Democrats will never let the tax
increases expire, and state Senate President John Cullerton all but admitted
as much in October. Mr. Quinn won't rule out another tax hike, which means
round two is a certainty in 2015 if he wins re-election next year. The
difference is that this time Democrats will kill the flat income tax and
impose a progressive rate scheme that will make future tax hikes politically
easier.
It's a sign of their desperation that the state's
business lobbies are supporting the reform as the best they can hope for.
Others want special tax breaks to offset the 2011 tax hike. Archer Daniels
Midland ADM +1.49% (Decatur) and Office Max (Naperville) have threatened to
move their corporate headquarters if the state doesn't guarantee $75 million
in tax breaks. But Mr. Quinn has refused to approve more gifts for the
legislature's corporate cronies until lawmakers pass something on pensions.
Democrats hold comfortable majorities in the
legislature and don't need GOP votes. Yet they are demanding Republican
support so they won't be the only targets of union wrath. Mr. Quinn watered
down the reforms to reduce opposition from the teachers and other government
unions, but the unions are still promising to go to court to block the
changes if they pass.
GOP leaders who are rounding up votes must be
feeling especially charitable this holiday season because they're making an
in-kind contribution to Mr. Quinn, who will claim a bipartisan victory as he
runs for re-election. While GOP gubernatorial candidate Bruce Rauner has
denounced the pension legislation as window-dressing, his Republican primary
challengers aren't as savvy. State Senator Bill Brady, who lost to Mr. Quinn
in 2010, is supporting the bill while treasurer Dan Rutherford says it is
too hard on unions. Such me-too thinking is why the Illinois GOP has become
a useless minority.
Continued in article
"Audit reveals half of people enrolled in Illinois Medicaid program not
eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer
The early findings of an ongoing review of the
Illinois Medicaid program revealed that half the people enrolled weren’t
even eligible.
The state insisted it’s not that bad but Medicaid
is on the federal government’s own list of programs at high risk of waste
and abuse.
Now, a review of the Illinois Medicaid program
confirms massive waste and fraud.
A review was ordered more than a year ago-- because
of concerns about waste and abuse. So far, the state says reviewers have
examined roughly 712-thousand people enrolled in Medicaid, and found that
357-thousand, or about half of them shouldn't have received benefits. After
further review, the state decided that the percentage of people who didn't
qualify was actually about one out of four.
"It says that we've had a system that is
dysfunctional. Once people got on the rolls, there wasn't the will or the
means to get them off,” said Senator Bill Haines of Alton.
A state spokesman insists that the percentage of
unqualified recipients will continue to drop dramatically as the review
continues because the beginning of the process focused on the people that
were most likely to be unqualified for those benefits. But regardless of how
it ends, critics say it's proof that Illinois has done a poor job of
protecting tax payers money.
“Illinois one of the most miss-managed states in
country-- lists of reasons-- findings shouldn't surprise anyone,” said Ted
Dabrowski.
Dabrowski, a Vice-President of The Illinois Policy
Institute think tank, spoke with News 4 via SKYPE. He said the Medicaid
review found two out of three people recipients either got the wrong
benefits, or didn't deserve any at all.
We added so many people to medicaid rolls so
quickly, we've lost control of who belongs there,” said Dabrowski.
Continued in article
Citizens of Iceland Overthrow Government Over Bank Fraud ---
http://lastresistance.com/3983/citizens-iceland-overthrow-government-bank-fraud/
Also see the video at
http://www.youtube.com/watch?v=BMcihtYecQs
Bob Jensen's Fraud Updates ---
http://www.trinity.edu/rjensen/FraudUpdates.htm
"IRS Targeting: Round Two The first time around, targeting conservatives
was a secret. Now, not so much," by Kimberley A. Strassel, The Wall
Street Journal, December 12, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303932504579254521095034070?mod=djemEditorialPage_h
President Obama keeps claiming that he had no
knowledge of the Internal Revenue Service's abusive muzzling of conservative
groups. That line is hard to swallow given that his Treasury and IRS are
back at it—this time in broad daylight.
In the media blackout of Thanksgiving week, the
Treasury Department dumped a new proposal to govern the political activity
of 501(c)(4) groups. The administration claims this rule is needed to
clarify confusing tax laws. Hardly. The rule is the IRS's new targeting
program—only this time systematic, more effective, and with the force of
law.
That this rule was meant to crack down on the White
House's political opponents was never in doubt. What is new is the growing
concern by House Ways and Means Committee investigators that the regulation
was reverse-engineered—designed to isolate and shut down the same tea party
groups victimized in the first targeting round. Treasury appears to have
combed through those tea party applications, compiled all the groups' main
activities, and then restricted those activities in the new rule.
"The committee has reviewed thousands of tax exempt
applications," says House Ways & Means Chairman Dave Camp. "The new
regulation so closely mirrors the abused tea-party group applications, it
leads me to question if this new proposed regulation is simply another form
of targeting."
Here's how it works. To get or keep tax-exempt
status, 501(c)(4) organizations must devote a majority of their work to
their "primary" social-welfare purpose. Most tea party groups were set up
with a primary purpose of educating Americans on pressing problems—the size
of government, the erosion of the Constitution—and did so mainly via
nonpartisan voter guides, speakers forums, pamphlets or voter-registration
drives.
What the proposed Treasury/IRS regulation would do
is to re-categorize all these efforts as "political activity"—thereby making
it all but impossible for tea party groups to qualify for 501(c)(4) status.
Say an outfit's primary purpose is educating voters on our unsustainable
debt, which it does mainly with a guide explaining the problem and
politicians' voting records. Under the new rule, that guide is now
"political activity" (rather than "social welfare"), which likely loses the
group tax-exempt status.
The rule, in other words, is not designed to
provide helpful "guidance" on allowable activities. It was designed, rather,
as Mr. Camp explains, "to put tea party groups out of business."
What makes this targeting more obvious is that the
Obama Treasury rule only applies to 501(c)(4) groups. The ultra-liberal
League of Women Voters Education Fund is registered as a 501(c)(3)—one of
those "charities" supposedly held to the strictest IRS standards on
politicking. Yet it brags on its website that it holds "candidate debates
and forums," and that its "educational activities" include "understanding
candidate views and ballot initiatives."
The League will continue to be able to do its voter
guides and registrations and candidate forums. Yet under this new rule, any
conservative social-welfare organization that attempts to do the same will
likely lose its tax-exempt status. Nor does the new rule apply the biggest
spenders of all in politics—unions, which are registered as 501(c)(5)s. The
only category muzzled is the one recently flooded by conservative groups
that Democrats fear in the 2014 election.
Consider the timing. This "proposed guidance"—while
technically pending public comment—puts conservative groups on immediate
notice that it could be enforced at any moment. It is clearly designed to
have a chilling effect on any group gearing up for next year's midterms,
just as the first round of targeting was designed to dampen conservative
participation in the 2010 and 2012 elections.
Democrats are daily directing government against
their political opponents—via Congress, the SEC, the FEC. Yet IRS Acting
Commissioner Danny Werfel wants Americans to think this latest IRS rule is
just about providing "clarity." And the White House continues to insist that
it was unaware of the previous targeting.
The political insult is that President Obama is
using his new targeting rule to wiggle out of liability for the last round.
The same president who in May was "outraged" by the IRS's actions now says
it was all just some confusion over tax law (which his new rule fixes). He
told Chris Matthews last week that the media had hyped what was a few poor
IRS souls in Cincinnati who were "trying to streamline what is a difficult
law to interpret . . . And they've got a list, and suddenly everybody's
outraged."
Everybody was outraged to discover the IRS was
secretly targeting the president's political opponents. They might be more
outraged that the White House is now using the IRS to do the same thing in
the brazen light of day.
"The IRS Scandal, Day 219," by Paul Caron, TaxProf Blog,
December 14, 2013 ---
http://taxprof.typepad.com/taxprof_blog/2013/12/the-irs-scandal-12.html
ssociations Now: At
Hearing, IRS Nominee Faces Questions on Tax-Exempt Political Groups
Breitbart:
Obama Tries to Legalize the IRS Scandal
News Max:
Rep. Garrett: Lew Still Silent on IRS Targeting of Conservatives
Nonprofit Law Prof Blog:
Is the IRS Using Nonprofits to Regulate Political Activity?, by David A.
Brennen (Dean. Kentucky)
Patriot Post:
IRS: The
Left's Weapon of Choice
Reuters:
Proposed IRS Campaign Rules May Create Strange Tax-Exempt Allies
Town Hall:
Proposed IRS Regs: A War on the Tea Party with Force of Law
Wannabe Anglican: IRS
Targeting – There Must be a Special Prosecutor
White House Dossier:
Obama to Make IRS Tea Party Targeting Legit
Continued in article
Bob Jensen's Fraud Updates ---
http://www.trinity.edu/rjensen/FraudUpdates.htm
Lousy Records of Two Famous Charitable Foundations
"PGA Tour's Tax-Exempt Business Model Yields Only 16% to Charity," by
Paul Caron, TaxProf Blog, December 13, 2013 ---
http://taxprof.typepad.com/taxprof_blog/2013/12/espn-pga-tours.html
"Jane Fonda's charitable foundation hasn't made a charitable contribution
in five years. Jane Fonda's charitable foundation hasn't made a charitable
contribution in five years," The Wall Street Journal, December 13,
2013 ---
http://online.wsj.com/news/articles/SB10001424052702303293604579256631848683614?mod=djemEditorialPage_h
From the Scout Report on December 6, 2013
On international science and mathematics test, U.S. students continue
to lag
U.S. students lag around average on international science, math and reading
test
http://m.washingtonpost.com/local/education/us-students-lag-around-average-on-international-science-math-and-reading-test/2013/12/02/2e510f26-5b92-11e3-a49b-90a0e156254b_story.html
BBC News: Pisa tests: UK stagnates as Shanghai tops league table
http://m.bbc.co.uk/news/education-25187997
PISA: Results from the 2012 data collection
http://www.oecd.org/pisa/
Why Asian teens do better on tests than US teens
http://www.csmonitor.com/USA/Latest-News-Wires/2013/1203/Why-Asian-teens-do-better-on-tests-than-US-teens
NEA: The 10 Best STEM Resources
http://www.nea.org/tools/lessons/stem-resources.html
PBS Teachers: STEM Education Resource Center
http://www.pbs.org/teachers/stem/
"U.S. 15 and 16-year olds rank 36th of 65 countries in PISA Educational
Achievement Tests : Education Efforts in the U.S. are a Resounding
Failure," by Steven Mintz, Ethics Sage, December 4, 2013 ---
http://www.ethicssage.com/2013/12/us-15-and-16-year-olds-rank-36th-of-65-countries-in-pisa-educational-achievement-tests-.html
I’m not surprised. I have consistently blogged
about the failed education system in the U.S. Just last week I blogged about
the failure of our educational system as one of the reasons the U.S. concept
of
American Exceptionalism no longer is valid. We’ve
tried it all to improve our kids’ educational achievement in the U.S. to no
avail. We’ve tried “No Child Left Behind,” charter schools, “Race to the
Top,’ and now common core standards, but nothing has worked.
The fact is nothing will work because our leaders
are looking for answers to the disappointing results in all the wrong
places. Some blame poverty in America and the failure to educate low
income/socioeconomic disadvantaged students with the same quality that
exists in high-income groups. Some say using tests to measure education
achievement is wrong because test-taking results do not indicate whether
American kids will be as or more successful than non-Americans once they
enter the working arena. Those folks have a retrospective point of view and
not a prospective one, which is needed to assess whether today’s education
will give our kids the foundation to be future leaders in the global
economic system of the 21st century.
U.S. students ranked 35th out of 65
countries in rankings in mathematics, reading, and science according to the
Program for International Student Assessment (PISA) that is administered by
the Organization for Economic Cooperation and Development (OECD). This
places the U.S. below average on math and near the average on reading and
science. The numbers are even more sobering when compared among only the 34
OECD countries. The United States ranked 26th in math — trailing nations
such as the Slovakia, Portugal and Russia. What’s more, American high school
students dropped to 21st in science (from 17th in 2009) and slipped to 17th
in reading (from 14th in 2009), according to the results.
When it comes to mathematics, reading and science,
young people in Shanghai are the best in the world, according to the survey.
What does that say for our ability to compete with China for global economic
dominance?
In all three subjects, Shanghai students
demonstrated knowledge and skills equivalent to at least one additional year
of schooling than their peers in countries like the United States, Germany
and the United Kingdom.
Not surprisingly, East Asian kids scored better
than the U.S. in all three subjects. Shanghai was first; Singapore second;
Hong Kong third; Taiwan fourth; and South Korea was fifth.
Several European countries saw big gains in the
test results: Poland, Germany and Ireland moved up in the rankings, and
Vietnam, which administered the test for the first time, topped the U.S. in
math and science.
I was interested to read the reactions of
influential educators. American Federation of Teacher’s head Randi
Weingarten used the scores to rally against test-based schooling initiatives
that have been pushed by both the Bush and Obama administrations for years.
“While the intentions may have been good, a decade
of top-down, test-based schooling created by No Child Left Behind and Race
to the Top—focused on hyper-testing students, sanctioning teachers and
closing schools—has failed to improve the quality of American public
education,” she said in a statement. “Sadly, our nation has ignored the
lessons from the high-performing nations.”
Sadly, Ms. Weingarten knows nothing about education
in the Asian world. I can tell you from teaching Asian kids in college for
over 30 years, testing is the be all and end all for these kids. They
hyper-ventilate to get high test scores and feel like a failure if they
don’t. They may internalize bad results and feel like they have brought
dishonor on their family. These feelings can be seen more acutely in first
generation college-educated Asian kids.
U.S. Secretary of Education Arne Duncan recently
said: “While we are seeing some encouraging progress on many important
measures, the United States’ performance on the 2012 PISA is a picture of
educational stagnation. This is a reality at odds with our aspiration to
have the best-educated, most competitive workforce in the world.”
The question is, Secretary Duncan, what are the
best fixes for these disappointing results? A new mantra for educational
achievement means nothing – i.e., race to the top; no child left behind.
Throwing money at the problem won’t fix it. Having students evaluate their
teachers is not the answer. Selecting some teachers for merit pay won’t
work. We’re looking in the wrong places for the answer and that is why
nothing will change; in fact, I predict the results will get worse for the
U.S. over time.
The reason the results will get worse is virtually
all of the countries at the top of the class have something to prove through
hard work and applying themselves to the task at hand. Asian countries want
to show they have the best educated students; it validates their system; it
demonstrates the ability to lead the world economically. Former eastern bloc
nations like Poland want to show they have successfully broken away from the
old Soviet Union in educational achievement and should be seen as an up and
coming economic power.
The ‘elephant in the room’ is the breakdown of
ethics in the U.S. Ethics entails working diligently and the pursuit of
excellence. I have met maybe 5% of college kids in the last ten or so years
that tell me this is their motivation from an educational achievement
perspective. A lesser percentage says their goal is learning for the sake of
learning. Most American kids are motivated by getting a high-paying job;
better yet, one in which they don’t have to work too hard.
The underlying cause for the stagnant educational
achievement of U.S. kids is the lack of a work ethic. Our 15 and 16-year
olds have been raised in an era where parents do not instill the value of
hard work for the sake of hard work – to learn, to mature, to improve
oneself, and to contribute to the betterment of society.
In my classroom I have found that students tune me
out very quickly. They don’t have the skill to focus and pay attention for
more than about ten minutes, unless I do a song and dance routine in class
or a ten-minute monologue.
Then there is the evil of electronic devices. When
I tell students not to use electronic devices in class, unless it is to take
notes, most aren’t complying. It’s obvious by the smiles on their faces that
they are on Facebook or Twitter. My lectures are not that entertaining; I
can’t sing or dance and I’ll leave the monologues to Jay Leno and David
Letterman.
Continued in article
"Finland Used To Have The Best Education System In The World — What
Happened? " by Adam Taylor, Business Insider, December 3, 2013 ---
http://www.businessinsider.com/why-finland-fell-in-the-pisa-rankings-2013-12
Jensen Comment
The article tends to blame complacency. However, I would instead focus on the
bar being raised. Intense competition, especially in Asian nations, has pushed
the competition almost to a point of insanity where the pressures placed upon
students in high-scoring nations beyond what is healthy. I think Finland
still sets the gold standard for healthy education.
"Is Opportunity Declining?" Nobel Laureate Gary Becker,
Becker-Posner Blog, October 20, 2013 ---
http://www.becker-posner-blog.com/2013/10/is-opportunity-declining-becker.html
"Equality of Opportunity," Judge Richard Posner, Becker-Posner Blog,
October 20, 2013 ---
http://www.becker-posner-blog.com/2013/10/equality-of-opportunity-posner.html
High Income Nations, especially EU nations, are troubled with lax tax
enforcement with Exhibit A being Greece.
In the USA it's the $2 trillion "informal economy" otherwise known as the
cash-only underground labor economy. Mostly we think of states having higher
concentrations of undocumented workers (such as house cleaners, child care
givers, roofers, construction workers, and and ranch hands), but I'm suspicious
of Erika's extremely competent dentist who charged us only $8,000 cash for about
half of what the credit card billing would have been for an especially
complicated correction of another dentist's mistake. We did get other estimates
from dentists who never suggested such a whopping cash discount.
"Tax Rates, Governance, and the Informal Economy in High‐Income Countries,"
by Zoe Kuehn (Spain), SSRN, January 14, 2013 ---
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2357227
Bob Jensen's threads on the underground economy in the USA ---
http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm
''Obama Administration About to Give "Kill As Many Eagles as You Want"
Pass to Wind Farms," by Katie Pavlich, Townhall, December 6, 2013 ---
http://townhall.com/tipsheet/katiepavlich/2013/12/06/obama-administration-about-to-give-kill-as-many-eagles-as-you-want-pass-to-wind-farms-n1758668?utm_source=TopBreakingNewsCarousel&utm_medium=story&utm_campaign=BreakingNewsCarousel
Penalty for Individuals Who Kill or Otherwise Harm a Bald Eagle
"Take" includes pursue, shoot, shoot at,
poison, wound, kill, capture, trap, collect, molest or disturb (16 U.S.C.
668c; 50 CFR 22.3). The 1972 amendments increased civil penalties for
violating provisions of the Act to a maximum fine of $5,000 or one year
imprisonment with $10,000 or not more than two years in prison for a
second conviction. Felony convictions carry a maximum fine of $250,000
or two years of imprisonment. The fine doubles for an organization.
Rewards are provided for information leading to arrest and conviction
for violation of the Act.
President Obama's Free 5-30 Year Pass for Wind Farms
The rule by the Interior Department extends the
length of the permits that allow farms to unintentionally kill the
eagles without penalty from five to 30 years, according to department
records.
The rule authorizes the “non-purposeful” killing of eagles, but also
will require farms to implement certain guidelines to help with eagle
conservation. The White House finalized its review of the rule Thursday,
The Hill reports.
An official with the Interior Department tells The Hill the department
has been working for more than a year on the proposal with stakeholders.
The Obama administration, which has been a big supporter of green energy
initiatives, faced backlash in August from environmental groups over the
30-year permit proposal.
Is it "Scoop and Toss" or "Poop and Scoop?"
Jensen Comment
It's a little like spending on new higher-interest credit cards to pay off the
debt on current credit cards that are maxed out. Sounds like a good idea
except for the fact that it does little to encourage fiscal responsibility in
reducing total debt.
But some observers warn that scoop-and-toss
refinancings add to interest costs while allowing civic managers to overlook
structural economic difficulties. Investors purchasing the debt take on the risk
that the securities will lose value, as they did in Detroit's $18 billion
Chapter 9 bankruptcy case.
"Borrowing Maneuver Catches Flak 'Scoop and Toss' Involves Selling New
Debt to Pay Off Existing Bonds," by Mike Cherney, The Wall Street Journal,
December 2, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304579404579234441072889918?mod=djemCFO_h
A budget-stretching tactic employed by strapped
local governments from California to Puerto Rico is coming under market
scrutiny, amid fears that Detroit's record bankruptcy filing could presage
further pain for municipal-bond investors.
The maneuver, called "scoop and toss," involves
selling new long-term debt to raise funds to pay off maturing bonds,
effectively extending the timetable for retiring municipal borrowings.
Refinancings that aim to reduce interest rates typically keep the same
maturity schedule.
The practice, which has been around for decades,
helps cities, states and other local entities to stay current on their
obligations as they try to claw out of one of the deepest economic downturns
since the Great Depression.
The debt sales often offer above-market interest
rates that appeal to many bond buyers at a time of slow economic growth,
easy Federal Reserve policy and low rates on relatively safe investments
such as U.S. Treasury securities and bank accounts.
But some observers warn that scoop-and-toss
refinancings add to interest costs while allowing civic managers to overlook
structural economic difficulties. Investors purchasing the debt take on the
risk that the securities will lose value, as they did in Detroit's $18
billion Chapter 9 bankruptcy case.
"It's never a good sign to see this," said John
Loffredo, portfolio manager of the MainStay Tax Free Bond Fund. Mr. Loffredo
said his firm recently started buying Puerto Rico bonds that carried
third-party insurance guaranteeing repayment, citing the high yields.
Among the chief practitioners of scoop and toss is
Puerto Rico, which since 2006 has relied on new bond sales and loans to help
balance its budget and pay off old bonds coming due. The island commonwealth
has restructured about $4 billion in debt from its main operating budget
since then. About $70 billion of Puerto Rico debt is outstanding.
Yields on Puerto Rico's bonds have risen sharply
this year, making it much more expensive to sell debt to investors,
following rating-company downgrades. Puerto Rico bond prices are down about
16% in 2013.
In 2011, Puerto Rico sold $356 million of bonds
that begin maturing in 2024. Some of the proceeds were used to pay off a
bond from 1989 that was maturing in 2011—in effect turning a 22-year bond
into a 35-year one.
Lyle Fitterer, head of tax-exempt investments at
Wells Capital Management, which oversees about $33 billion in municipal-debt
investments, said he would like to see cheaper bond prices or a sustainable
economic recovery plan before he boosts his firm's small Puerto Rico
holdings.
"The scoop-and-toss strategy might be a good
strategy for a short-term solution, if you have a temporary economic
recession," he said. "But obviously, the longer it goes on, the more
difficult it is to argue that it's a good long-term solution."
Officials in the U.S. territory are seeking to put
the island on stronger fiscal footing through tax increases and entitlement
reform, and seek to end scoop and toss by 2015. "In the past, it had been
restructuring after restructuring," Puerto Rico Treasury Secretary Melba
Acosta said recently in an interview. "We are moving away from that."
Puerto Rico officials have said they can make it
through this fiscal year without borrowing, and have been drawing down a
line of credit from the Government Development Bank, according to Fitch
Ratings.
U.S. companies frequently issue new bonds to pay
off old debt. But investors typically worry less about corporate-debt
issuers because the money can be used to expand the business, which can
benefit bond buyers.
"If a corporation started going into decline, you
aren't going to see the debt rolling over and being refinanced," said Stan
Garstka, accounting professor at the Yale School of Management.
To be sure, there are signs of progress for
municipalities. Over the summer, Moody's Investors Service raised its
outlook for U.S. states to stable from negative, saying "the slowly
improving U.S. economy continues supporting state revenues and reserves."
Other municipal entities have employed
scoop-and-toss strategies recently. Suffolk County, N.Y., which recently
declared a fiscal emergency, last year sold through an authority about $38
million in bonds backed by tobacco revenues to help cover other debt
payments that were due in 2012 and 2013.
In California, the Foothill/Eastern Transportation
Corridor Agency, which operates toll roads in Orange County, is looking into
a scoop and toss that would pay off bonds from 1999 and extend the maturity
of the debt by 13 years to 2053. The bonds are backed primarily by revenues
from tolls, but traffic on the roads has grown slower than expected.
Continued in article
Obamacare ---
http://en.wikipedia.org/wiki/Obamacare#Term_.22Obamacare.22
Although President Obama never proposed using that term, eventually he said is
was an honor for him to assi8ate his name with this legislation that he promoted
to be the crowning achievement of his Presidency. "President
Obama endorsed the nickname, saying, "I have no problem with people saying Obama
cares. I do care."
The good news, if you want to call it that, is that
roughly 1.6 million Americans have enrolled in ObamaCare so far. The not-so-good
news is that 1.46 million of them actually signed up for Medicaid . . . New York
spent more than $15 billion on Medicaid last year, roughly 30% of all state
expenditures. The Kaiser Foundation projects that over the next 10 years, New
York taxpayers will shell out some $433 billion for the program. But none of
these projections foresaw that so many of ObamaCare’s enrollees would be
Medicaid eligible. To be sure, the health-care law’s designers saw the expansion
of Medicaid as an important feature of their plan to expand coverage for the
uninsured. Still, they expected most of those enrolling in ObamaCare to qualify
for private (albeit subsidized) insurance.
Michael D. Tanner, NY Post, December 7, 2013 ---
http://nypost.com/2013/12/07/the-medicaid-time-bomb/
Medicaid ---
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html
The Scam Succeeded
All Russian Diplomats Charged in US Medicaid Fraud Case Have Returned Home
---
http://en.ria.ru/crime/20131225/185920522/All-Russian-Diplomats-Charged-in-US-Fraud-Case-Have-Returned.html
Neither the Russian government nor any of the fraudsters will repay a penny of
the fraud.
Jensen Comment
It's hard to find Medicaid's share of state budgets because the amounts are
usually buried in other line items. As best I can tell thus far the Medicaid
share of state budgets is approximately a third before the new Obamacare
enrollees in Medicaid are factored into the budgets. Medicaid is a great idea,
but would be a better idea if more was spent to enforce the rules regarding who
qualifies. For example, Russian diplomats received over $5 million in Medicaid
benefits by lying about their incomes. A recent audit in Illinois reveals that
half the people on Medicaid are not eligible to be on Medicaid. What proportion
of the millions of new Medicaid recipients do you think will really qualify for
free medical care if the Medicaid rules were enforced?
President Obama hopes to add another 5 million people who are
above the poverty line to Medicaid in 2014.
NYT: Update on December 11, 2013
Health Exchange Enrollment Improves, But Still Short of Target
http://www.nytimes.com/interactive/2013/10/04/us/opening-week-of-health-exchanges.html?_r=0
What the data does not reveal is the percentage of those signing up for private
(non Medicaid and CHIP) plans that are not subsidized. The entire success of the
Obamacare plan rests on the number of people who enroll in private plans without
premium subsidies and the cooperation of hospitals and doctors with the
exchanges that write those policies. To date, 70% of the doctors and many of the
best hospitals are refusing to sign on because it is feared that Obamacare will
be transferring too many losses (bad debts) for unpaid premiums and unpaid
deductibles onto the medical service providers.
While waiting in line at Wal-Mart I overheard two young women trying to
convince the pharmacist that they are on Medicaid. I know one of them is a
full-time student with parents who are not poor. Perhaps it was just too soon
for their student Medicaid to kick in. Will the majority of students who are not
on the plans of their parents be in Medicaid?
Let's just call them lottery winners
"Federal exchange sends unqualified people to Medicaid." Jayne
O'Donnell, USA TODAY, December 9, 2013 ---
http://www.usatoday.com/story/news/nation/2013/12/08/healthcaregov-medicaid-eligibility-questions/3871113/
Jensen Comment
The IRS still refuses to enforce Obamacare fraud when enrollees lie about
income. When incorrect subsidy fraud is taken into account this may become one
of the biggest frauds in history, especially when considering the two trillion
ways income does not get reported even to the IRS.
Obamacare: Limits Placed Upon Choosing Your Own Doctor and Hospital
Jensen Comment
The media along with President Obama led us to believe that medical insurance
plans were going to vary only be the amount of the deductibles and age of the
applicant. We are now learning more about differences in medical networks of
hospitals and doctors. The President kept insisting that we could keep our
present doctors. Technically that was not a lie, but what was left unsaid is
that to literally keep your favored doctors and hospitals you may have to opt
for the more expensive Cadillac plans having "broader network coverage "of
physicians and selective hospitals that opted out of serving the lower-priced
limited network plans.
Dr. Ezekiel Emanuel ---
http://en.wikipedia.org/wiki/Ezekiel_Emanuel
"ObamaCare in Translation Ezekial Emanuel explains what the President really
meant about your doctor," The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304014504579246552456954872?mod=djemEditorialPage_h
. . .
Mr. Wallace: "It's a simple yes or no question.
Didn't he say if you like your doctor, you can keep your doctor?"
Dr. Emanuel: "Yes. But look, if you want to pay
more for an insurance company that covers your doctor, you can do that. This
is a matter of choice. We know in all sorts of places you pay more for
certain—for a wider range of choices or wider range of benefits. The
issue isn't the selective networks. People keep saying, 'Oh, the problem is
you're going to have a selective network.'"
Mr. Wallace: "Well, if you lose your doctor or lose
your hospital—"
Dr. Emanuel: "Let me just say something. People are
going to have a choice as to whether they want to pay a certain amount for a
selective network or pay more for a broader
network."
Mr. Wallace: "Which means your premiums would
probably go up."
Dr. Emanuel: "They get that choice. That's a choice
you've always made."
It's nice to hear a central planner embrace choice,
except this needs translating too. The truth is that you may be able to pay
more to keep your doctor, but only after you choose one of ObamaCare's
preferred plans that already costs you more than your old plan that
ObamaCare forced you to give up.
Jensen Comment
What Dr. Emanuel failed to mention is that the "broader expensive network" plans
are Cadillac plans for which employers lose their tax deductions.
The Cadillac Tax: A Game Changer for U.S. Health Care: Can you
explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act
that will have a monumental 2018 impact on healthcare coverage of employees who
are now covered by employer plans --- plans now costing the government over $250
billion per year? But not for long!
Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before
anybody in the USA had a chance to study all the surprises in this the enormous
bill.
If you're covered presently on your employer's plan you should most certainly
learn about the Cadillac Tax provision that kicks in in 2018.
"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan
Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/
Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are
especially popular will be allowed to keep their plans without penalty since tax
deductions are not of concern to them.
Having preferred networks of doctors and hospitals is not unheard of in
national health care plans. Germany, for example, has both public health
insurance plus premium coverage with private insurance. Cuba notoriously has
bourgeoisie plans for members of the Communist Party and the wealthy versus
proletariat plans for the poor people.
If your Congressional representative brags about
signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that
lets them choose their own doctors and hospitals.
Bob
Jensen's universal health care messaging ---
http://www.trinity.edu/rjensen/Health.htm
Jensen Comment
Until now the media has has avoided mentioning the really big worries about
Obamacare in an effort to present a rosy picture to encourage millions of people
to sign up. What goes unmentioned, until the December 8, 2013 article in the WSJ
quoted below, is that hospital bad debts with greatly increase due to people
patients being unable to pay their deductibles.
December 6, 2013 message from Bob
Jensen
Hi Zafar,
A major portion of the medical cost for the "uninsured"
currently gets passed on to taxpayers since people that have no
insurance are passed on to hospitals that are subsidized by taxpayers to
cover the uninsured such as in San Antonio where most uninsured patients
are passed on to the huge Bexar County Hospital that is heavily funded
by county property taxes. The Bexar County Hospital portion of my
property tax bill exceeded $1,000 per year when I lived in San Antonio.
Of course since that $1,000 gave me about a $400 tax
break on my Federal income tax return, the Federal Government was in
essence paying for 40% of my share of paying for the uninsured served at
the Bexar County Hospital.
The bad debt losses that currently hit hospitals not
subsidized by property taxpayers are for "insured"
patients who do not have sufficient coverage to pay entire billings
beyond what their insurance will pay. The new exchange insurance plans
with enormous deductibles such as the Bronz plans that only pay 60% will
greatly increase the losses to hospitals for "insured"
patients who cannot pay their 40% share of the hospital and physician
billings..
My point is that a huge portion of medical care costs
that are now paid by property taxpayers for "uninsured"
patients will no longer be paid by taxpayers because those patients are
now "insured"
with low premium, high-deductible plans where many of those patients
cannot afford the deductibles for hospital bills. Taxpayers in San
Antonio with high property taxes may cheer the savings that must in the
future be choked on by the hospitals that are not property tax funded.
In other words, somebody pays for hospital patients' bad
debts. The "uninsured" are
now heavily subsidized by county and city property taxpayers. Giving
the uninsured insurance with low premiums and high deductibles is really
a transfer payment from property taxpayers to whomever will pay for
the added bad debts of defaulted deductibles.
I don't think this system is sustainable until there is USA National
Health Program.
Respectfully,
Bob Jensen
The American
Hospital Association, which represents for-profit and nonprofit hospitals and
other health-care providers, concurred that the higher deductibles "will
likely lead to an increase in hospital bad debt,"
said Ashley Thompson, its deputy director for policy.
"High Deductibles Fuel New Worries
of Health-Law Sticker Shock Some Lower-Cost Plans Carry Steep Deductibles,
Posing Financial Challenge," by By Leslie Scism and Timothy W. Martin, The
Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303330204579246211560398876?mod=ITP_pageone_0
. . .
The health law makes tax credits available to help
cover insurance premiums for people with annual income up to four times the
poverty level, or $45,960 for an individual. In addition, "cost-sharing"
subsidies to help pay deductibles are available to people who earn up to 2.5
times the poverty level, or about $28,725 for an individual, in the
exchange's silver policies.
As enrollment picks up on HealthCare.gov, many
people with modest incomes are encountering a troubling element: deductibles
so steep they may not be able to afford the portion of medical expenses that
insurance doesn't cover. Christopher Weaver discusses. Photo: Getty Images.
But those limits will leave hundreds of thousands
or more people with a difficult trade-off: They can pay significantly higher
premiums for the exchange's silver, gold and platinum policies, which have
lower deductibles, or gamble they won't need much health care and choose a
cheaper bronze plan. Moreover, the cost-sharing subsidies for deductibles
don't apply to the bronze policies.
That means some sick or injured people may avoid
treatment so they don't rack up high bills their insurance won't cover,
according to consumer activists, insurance brokers and public-policy
analysts—subverting one of the health law's goals, which is to ensure more
people receive needed health care. Hospitals, meantime, are bracing for a
rise in unpaid bills from bronze-plan policyholders, said industry officials
and public-policy analysts.
Because all health plans now are required to
provide certain minimum benefits, "consumers may be tempted to shop on
premium alone, not realizing that the out-of-pocket costs can have a
dramatic effect upon the annual costs of health care," said Kevin Coleman,
head of research and data at HealthPocket.
Mr. Coleman said he expects the high deductibles
will "produce some reduction in medical-service use" for enrollees who don't
qualify for subsidies.
. . .
The American Hospital Association, which represents
for-profit and nonprofit hospitals and other health-care providers,
concurred that the higher deductibles "will
likely lead to an increase in hospital bad debt,"
said Ashley Thompson, its deputy director for policy.
It isn't known how many bronze policies have been
bought so far because the exchanges aren't releasing that level of detail,
HealthPocket's Mr. Coleman said.
December 6, 2013 message from Bob
Jensen
Hi Eliot,
When there's no Obamacare there will be a USA National
Health Plan that bypasses medical insurance companies. It's possible that we
will still have such companies offering private insurance beyond what the
USA National Plan covers. This "dual coverage" is how the German health
insurance system now works. According to various sources in Germany at the
moment (mostly Erika's relatives), the time and a6ttention and service
varies in ways that that you might find objectionable. The best doctors give
more attention and faster service to German patients with private insurance.
For example, waiting for new knees can take much longer without private
insurance.
Health Insurance in Germany ---
http://www.toytowngermany.com/wiki/Health_insurance
Our present USA Medicare system works on a dual basis.
Erika and I pay nearly $200 per month (each) for supplemental p private
Medicare insurance that eliminates the Medicare deductibles (co-insurance)
and does such things as pay for the added cost of private hospital rooms. Of
course Medicare costs us hundreds more each month such that the supposedly
"free" Medicare costs us each nearly $400 per month. Erika pays all our
bills such that I don't know the exact amounts. She allows me to carry one
check if I promise not to use it.
Thus far I've fortunately paid much more into the Medicare
system since my 2006 retirement than I've withdrawn. Erika sadly has
withdrawn over $1 million from the system.
We've gone beyond the point of no return for Obamacare,
although I think the Obamacare is so complicated and unjust that it will
evolve into a national health care plan perhaps something like that in
Germany. The Canada system is not a very good model, because it varies
between provinces and has long delays for elective procedures such as new
knees and hips. Canada has a dual system where the poor wait and the rich
come to the USA for faster service.
Personally I think the evolution of Obamacare into a USA
National Health Plan will be inevitable.
Obamacare is a disaster in terms of the size of the
deductibles for plans that are affordable. Obamacare is a disaster in terms
of the cheating that will become commonplace for the subsidies. Obamacare
will be a disaster for insurance companies and health providers who will
have to absorb enormous losses such as bad debt losses. Obamacare is a
disaster in that we probably won't even note a significant difference in the
crowds lining up in emergency rooms seeking free diagnostics, treatments,
and drugs.
There will be frustrating years of turmoil in the USA
health system until a USA National Health Plan finally evolves.
Respectfully,
Bob Jensen
I might note that the premium subsidies paid my Uncle Sam
are a new thing and will probably become a larger scam than anything we've
known in healthcare fraud prior to 2014. But let's ignore the new scam in
town and the IRS refusal to enforce the subsidy rules.
Of course the hospitals and physicians will send in the
debt collection agencies. But the millions of plans that were wiped out of
the system in 2013 had much lower deductibles and often higher premiums. The
premiums beginning in 2014 are cheaper in many instances because the
deductible amounts were greatly increased such as the new Bronz plans where
insurance companies only pay 60%.
Nobody seems to be talking about it, but when those big
hospital bills hit the fan the people opting for the lowest premiums (and
high deductibles) are the people least able to pay the deductibles for huge
medical bills.
Yes I do think the problem of bad debts for huge
deductibles will be a bigger, and bigger problem beginning in 2014 because
the options for plans with enormous deductibles have been increased so
greatly beginning in 2014.
What was a huge bad debt problem for hospitals and
physicians in 2013 will become a monster bad debt problem after 2013. The
problem is not so much with the premium amounts as it is the deductible
amounts.
But don't look for the media to even whisper the future
bad debt monster for medical providers.
Respectfully,
Bob Jensen
Jensen Comment
Until now the media has has avoided mentioning the really big worries about
Obamacare in an effort to present a rosy picture to encourage millups upon
millions of people to sign up. What goes unmentioned, until today's article in
the WSJ quoted below, is that hospital bad debts with greatly increase due to
people patients being unable to pay their deductibles.
December 6, 2013 message from Bob
Jensen
Hi Zafar,
A major portion of the medical cost for the "uninsured"
currently gets passed on to taxpayers since people that have no
insurance are passed on to hospitals that are subsidized by taxpayers to
cover the uninsured such as in San Antonio where most uninsured patients
are passed on to the huge Bexar County Hospital that is heavily funded
by county property taxes. The Bexar County Hospital portion of my
property tax bill exceeded $1,000 per year when I lived in San Antonio.
Of course since that $1,000 gave me about a $400 tax
break on my Federal income tax return, the Federal Government was in
essence paying for 40% of my share of paying for the uninsured served at
the Bexar County Hospital.
The bad debt losses that currently hit hospitals not
subsidized by property taxpayers are for "insured"
patients who do not have sufficient coverage to pay entire billings
beyond what their insurance will pay. The new exchange insurance plans
with enormous deductibles such as the Bronz plans that only pay 60% will
greatly increase the losses to hospitals for "insured"
patients who cannot pay their 40% share of the hospital and physician
billings..
My point is that a huge portion of medical care costs
that are now paid by property taxpayers for "uninsured"
patients will no longer be paid by taxpayers because those patients are
now "insured"
with low premium, high-deductible plans where many of those patients
cannot afford the deductibles for hospital bills. Taxpayers in San
Antonio with high property taxes may cheer the savings that must in the
future be choked on by the hospitals that are not property tax funded.
In other words, somebody pays for hospital patients' bad
debts. The "uninsured" are
now heavily subsidized by county and city property taxpayers. Giving
the uninsured insurance with low premiums and high deductibles is really
a transfer payment from property taxpayers to whomever will pay for
the added bad debts of defaulted deductibles.
I don't think this system is sustainable until there is USA National
Health Program.
Respectfully,
Bob Jensen
Bob
Jensen's universal health care messaging ---
http://www.trinity.edu/rjensen/Health.htm
Medicaid eligibility question at
http://www.city-data.com/forum/health-insurance/1969106-can-i-apply-medicaid-independent-college.html
I'm 19 years old and for all intents and purposes
on my own financially. I'm and independent student according to the FAFSA
and get no support from my family. I go to college on scholarships and
loans, I pay my other bills through my financial aid refund and a part-time
job.
I don't really understand all the rules. I was
covered under Medicaid up until age 18. Technically I'm supposed to be
covered under my parent's policy until age 21 (I think?) by filling out some
extra forms, but I've run into the whole "no-support" thing. I actually have
no idea whether or not I'm covered by Medicaid at this moment.
I have to have insurance to continue to be enrolled
in my university (there will be a verification at the beginning of fall
semester next year) and there is no way in hell I can pay for insurance
myself. Can I apply independently? Or would I only be able to be covered as
part of a family policy.
Read more: http://www.city-data.com/forum/health-insurance/1969106-can-i-apply-medicaid-independent-college.html#ixzz2nYZrxCLr
An answer at
http://www.city-data.com/forum/health-insurance/1969106-can-i-apply-medicaid-independent-college.html
If you are in school, you are automatically covered
under your parent's plan (provided your parents have an insurance plan) It
is part of the Obama health care plan, and this part of it went into effect
over 2 years ago. I am not 100% certain of this, but I do not think your
parents have a say in your coverage.
In other words, if they have insurance, and for
whatever reason they are not speaking to you, if you can obtain their
insurance information, you should be able to get a card for yourself and use
it.
If you don't have living parents, or if they are
not legal citizens as an example, you should be eligible for Medicaid
(unless you have a lot of assets).
However, as of 2014, assets will not be looked at.
Only income will be counted. Your legal
aid for college could be counted as income though.
Contined in artucke
Jensen Question
I asked the following question on the Turbo Tax Forum Regarding Obamacare
Questions:
Question
I'm told that only income, not wealth, will be the deciding factor on
eligibility for Medicaid beginning in 2014.
If I'm a full time student having zero income and $10 million trust fund of
stock paying no dividends, will I be eligible for Medicaid?
A Turbo Tax expert says that wealth may still be a criterion in the states
that rejected the Medicaid expansion. Having valuable assets is no longer a
criterion in those states that yielded to Whitehouse pressure and temporary
funding to expand Medicaid roles.
I am honestly confused by the assertion that your wealth after 2014 will
not affect your eligibility for Medicaid. In does not seem right that students
on trust funds should be getting free medical care and medications.
Question
What happens if Obamacare insured individuals or companies go into default on
premiums while the insureds keep piling on the medical bills on the pretense
that they are still insured?
"Obamacare's Perilous Protection Plan for Debtors," by Michelle Malkin,
Townhall, December 6, 2013 ---
Click Here
http://townhall.com/columnists/michellemalkin/2013/12/06/obamacares-perilous-protection-plan-for-debtors-n1758399?utm_source=thdaily&utm_medium=email&utm_campaign=nl
I heard about the latest problem this week from an
eye doctor friend who received a letter from a Colorado-based insurer
informing her that she's essentially on the hook for Obamacare's payment
grace period for debtors. The optometrist is bracing for a flood of similar
letters from other insurers. Like countless other independent providers,
she's extremely concerned about the potential liability, uncertainty and
fraud the rule imposes on her business.
Here's the raw deal: The Affordable Care Act
created a 90-day grace period before insurers can drop patients who fall
behind on premiums. So, delinquents who obtain tax-subsidized health
insurance through an Obamacare health insurance exchange have three months
to settle up their bills prior to their policy being canceled. As written,
the law puts insurers on the hook for the grace period.
But the bureaucrats at the Centers for Medicare and
Medicaid Services decided to issue a rule in March
making insurers responsible only for paying claims
during the first 30 days of the debtors' grace period.
Who's on the hook for the other two months?
Well, customers are entrusted to foot the bills
for additional services. But if they blow off the payments, it's up to
physicians and hospitals to collect.
In real-world practice, this means providers will
be eating untold costs. Several large hospital associations raised red flags
over the issue this summer. In August, the Missouri Hospital Association
noted that the regulatory shift "unduly burdens physicians, hospitals and
other health care providers" by making them directly collect payments from
patients, which "puts them at an unfair and significant risk for providing
uncompensated care to patients."
Emillie J DiChristina of Practicefirst Medical
Management Solutions spelled out the financial risks for clients on the
company's blog: "This leaves providers in a potentially bad place as they
have a high potential for accruing bad debt on services provided between 31
and 90 days of the allowed grace period." Can you spell f-r-a-u-d? People
could "go on and off" insurance plans, Tampa Bay health care lawyer Bruce
Lamb told me, and game the system by bailing on payments and exploiting
Obamacare protections against denial of coverage.
Or as MHA officials put it: "We also are very
concerned that some disreputable individuals will learn they can manipulate
the system and win a full year's insurance coverage on only nine months of
premiums. Knowing they are entitled to three months of grace period
coverage, dishonest persons could stop paying premiums on the ninth month,
enjoy free coverage during the 90-day grace period, have their coverage
terminated, and then re-enter the exchange market where the Affordable Care
Act's guaranteed issue mandate would prohibit another plan from denying them
coverage."
Think such nefarious behavior won't occur? Then you
haven't been paying attention to the data manipulators and con artists in
the Obamacare navigator program. As I reported earlier this year, the seedy
nonprofit Seedco secured multimillion-dollar navigator contracts in Georgia,
Maryland, Tennessee and New York to recruit Obamacare recipients into the
government-run exchanges -- despite settling a civil fraud lawsuit for
faking at least 1,400 of 6,500 job placements under a $22.2 million
federally funded contract with New York City a year ago.
Additionally, investigative journalist James
O'Keefe and his Project Veritas team have caught Obamacare navigators on
tape advising health insurance exchange customers to under-report their
income and lie about their health status in order to cheat the system.
CMS has made no effort to repeal its cost-shifting
rule or to do anything to address the concerns of providers who will be left
holding the bag. As one hospital rep told me: "It's potentially
catastrophic." Private practices are already being hit hard with slashed
reimbursements, the electronic medical records mandate, ICD-10 medical
diagnostic code changes, and increasing federal intrusions on how they
provide care. In yet another entry on the laundry list of Obamacare's
unintended consequences, this regulation will hurt patients by dissuading
doctors from participating in exchange plans.
Continued in article
Bob
Jensen's universal health care messaging ---
http://www.trinity.edu/rjensen/Health.htm
Approximately 7 out of every 10 doctors in California have said they will not
participate in California’s Obamacare health insurance exchange, according to
the
Washington Examiner and several other media sources on Friday.
"70% of California doctors are boycotting California's Obamacare
exchanges," Washington Examiner, December 7, 2013 ---
http://www.examiner.com/article/70-of-california-doctors-are-boycotting-california-s-obamacare-exchanges
An estimated seven out of every 10 physicians in
deep-blue California are rebelling against the state's Obamacare health
insurance exchange and won't participate, the head of the state's largest
medical association said.
“It doesn't surprise me that there's a high rate of
nonparticipation,” said Dr. Richard Thorp, president of the California
Medical Association.
horp has been a primary care doctor for 38 years in
a small town 90 miles north of Sacramento. The CMA represents 38,000 of the
roughly 104,000 doctors in California.
“We need some recognition that we’re doing a
service to the community. But we can’t do it for free. And we can’t do it at
a loss. No other business would do that,” he said.
California offers one of the lowest government
reimbursement rates in the country -- 30 percent lower than federal Medicare
payments. And reimbursement rates for some procedures are even lower.
In other states, Medicare pays doctors $76 for
return-office visits. But in California, Medi-Cal's reimbursement is $24,
according to Dr. Theodore M. Mazer, a San Diego ear, nose and throat doctor.
In other states, doctors receive between $500 to
$700 to perform a tonsillectomy. In California, they get $160, Mazer added.
Only in September did insurance companies disclose
that their rates would be pegged to California’s Medicaid plan, called Medi-Cal.
That's driven many doctors to just say no.
They're also pointing out that Covered California's
website lists many doctors as participants when they aren't.
“Some physicians have been put in the network and
they were included basically without their permission,” Lisa Folberg said.
She is a CMA’s vice president of medical and regulatory Policy.
“They may be listed as actually participating, but
not of their own volition,” said Donald Waters, executive director of the
Alameda-Contra Costa Medical Association.
Waters' group represents 3,100 doctors in the East
Bay area that includes Oakland, with an estimated 200,000 uninsured
individuals.
“This is a dirty little secret that is not really
talked about as they promote Covered California,” Waters said. He called the
exchange's doctors list a “shell game” because “the vast majority” of his
doctors are not participating.
Independent insurance brokers who work with both
insurance companies and doctor networks estimate that about 70 percent of
California's 104,000 licensed doctors are boycotting the exchange.
Continued in article
Jensen Comment
Five guesses as to what will happen to insurance premiums when millions of
people at last are signed up for insurance from the exchanges?
Hint
The answer is not one thing.
- First will be the raising of premiums to cover added payments to
doctors.
- Second will be the raising of premiums to cover the bad debts of
hospitals and doctors for the high deductibles and higher premiums that
millions of newly insured people will be unable to pay when they are
seriously ill.
- Third will be the long delays to make appointments with doctors who are
participating in the exchange programs. Experience with Romneycare in
in Massachusetts found that appointment delays went up an average of six
weeks.
- Fourth will be the toughing out of individuals who will not seek medical
care because of the cost of the deductibles.
- Fifty will be the increased lines in emergency rooms for people to ill
or injured to wait a month or two to see a doctor.
Hi Norma,
Due in heavy part that Obamacare is passing both its deductible
nonpayment bad debts and its premium non-payment bad debts (two of
the three months of a three-month nonpayment grace period), many
hospitals like the Andersen Cancer Center and many doctors (70% in
California) are refusing to serve patients insured by the exchanges.
The TV networks and major newspapers seem to conspire to not report
this.
You may not be able to choose your doctor or hospital unless you pay
cash or go on a high premium Cadillac plan that, in 2015, will cease to
be tax deductible by you or your employer..
After his gun control initiatives failed in Congress, President Obama
unilaterally added very expensive mental health coverage to Obamacare
without mentioning that
most psychiatrists will refuse to serve patients
having any type of insurance.. Psychiatrists are already in short
supply in the USA. Nearly half already only serve cash-paying patients and
currently won't bill any insurance companies, including Medicare or
Medicaid. I think even more will reject the the exchanges.
I have a relative who needs psychiatric medications daily. Even though her
husband is on a good state university medical insurance plan for coverage of
most of her medical needs, she's dependent upon the only (overworked)
psychiatrist in the area. That psychiatrist does not accept insurance.
Why are there so few psychiatrists?
One reason is that psychiatry is the most dangerous medical specialty.
Exhibit A is the recent mass murderer James Holmes in Aurora, Colorado who
was booted off campus for threatening his psychiatrist. Personally I think
another reason is that doctors do not like going into a specialty having
such a low proportion of cure rates and having to be on call 24/7 (usually
to prevent suicides).
Something will have to be done to prevent passing bad bad debts onto
hospitals and doctors.
Now that the GOP has given up on deficit reduction (Sen. Ryan lied by
excluding interest on the debt in his budget), perhaps legislation to
Federal coverage of bad debts on to the Federal government along with
assurances that doctors can bill at their full rates they charge cash paying
patients. The blow to the deficit will be devastating since patients have
little incentive to pay their deductibles if the government will pay those
deductibles.
What we now have is two political parties so desperate to win elections that
both are now promising nearly-free medical coverage that will explode the
deficit and provide false promises about the quality of medical care in
short supply to meet exploding demand.
Medical care will be almost free as long as the government fails to
seriously prevent frauds in Medicaid. Medicare phony disability coverage,
and Obamacare subsidies --- all three
of which are now frauds out of control due to failed government
enforcement
"Obama's Mental Health Solution Falls Flat," by Nicole Bailey,
Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm
. . .
The Obama administration
has expanded mental health care coverage, but the latest research shows
that psychiatrists often do not accept insurance at all. When only 43%
of psychiatrists accept Medicaid, it is difficult to see how expanded
coverage will help mental health patients.
Psychiatrists accept medical insurance less
frequently than other specialists across the board, according to the
study published in JAMA Psychiatry by
researchers from three separate medical schools:
- 55.3% of
psychiatrists accepted medical insurance in general, compared to
88.7% of other physicians
- 54.8% of
psychiatrists accepted Medicare, compared to 86.1% of other
physicians
- 43.1% of
psychiatrists accepted Medicaid, compared to 73.0% of other
physicians
Continued in article
"ObamaCare's Troubles Are Only Beginning: Be prepared for
eligibility, payment and information protection debacles—and longer waits for
care," by Michael J. Boskin, The Journal of Accountancy, December
15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102?mod=djemEditorialPage_h
The White House is claiming that the Healthcare.gov
website is mostly fixed, that the millions of Americans whose health plans
were canceled thanks to government rules may be able to keep them for
another year, and that in any event these people will get better plans
through ObamaCare exchanges. Whatever the truth of these assertions, those
who expect better days ahead for the Affordable Care Act are in for a rude
awakening. The shocks—economic and political—will get much worse next year
and beyond. Here's why:
The "sticker shock" that many buyers of new, ACA-compliant
health plans have experienced—with premiums 30% higher, or more, than their
previous coverage—has only begun. The costs borne by individuals will be
even more obvious next year as more people start having to pay higher
deductibles and copays.
If, as many predict, too few healthy young people
sign up for insurance that is overpriced in order to subsidize older, sicker
people, the insurance market will unravel in a "death spiral" of ever-higher
premiums and fewer signups. The government, through taxpayer-funded "risk
corridors," is on the hook for billions of dollars of potential
insurance-company losses. This will be about as politically popular as bank
bailouts.
The "I can't keep my doctor" shock will also hit
more and more people in coming months. To keep prices to consumers as low as
possible—given cost pressures generated by the government's rules, controls
and coverage mandates—insurance companies in many cases are offering plans
that have very restrictive networks, with lower-cost providers that exclude
some of the best physicians and hospitals.
Next year, millions must choose among unfamiliar
physicians and hospitals, or paying more for preferred providers who are not
part of their insurance network. Some health outcomes will deteriorate from
a less familiar doctor-patient relationship.
More IT failures are likely. People looking for
health plans on ObamaCare exchanges may be able to fill out their
applications with more ease. But the far more complex back-office side of
the website—where the information in their application is checked against
government databases to determine the premium subsidies and prices they will
be charged, and where the applications are forwarded to insurance
companies—is still under construction. Be prepared for eligibility, coverage
gap, billing, claims, insurer payment and patient information-protection
debacles.
The next shock will come when the scores of
millions outside the individual market—people who are covered by employers,
in union plans, or on Medicare and Medicaid—experience the downsides of
ObamaCare. There will be longer waits for hospital visits, doctors'
appointments and specialist treatment, as more people crowd fewer providers.
Those with means can respond to the
government-driven waiting lines by making side payments to providers or
seeking care through doctors who do not participate in insurance plans. But
this will be difficult for most people.
Next, the Congressional Budget Office's estimated
25% expansion of Medicaid under ObamaCare will exert pressure on state
Medicaid spending (although the pressure will be delayed for a few years by
federal subsidies). This pressure on state budgets means less money on
education and transportation, and higher state taxes.
The "Cadillac tax" on health plans to help pay for
ObamaCare starts four years from this Jan. 1. It will fall heavily on unions
whose plans are expensive due to generous health benefits.
In the nearer term, a political iceberg looms next
year. Insurance companies usually submit proposed pricing to regulators in
the summer, and the open enrollment period begins in the fall for plans
starting Jan. 1. Businesses of all sizes that currently provide health care
will have to offer ObamaCare's expensive, mandated benefits, or drop their
plans and—except the smallest firms—pay a fine. Tens of millions of
Americans with employer-provided health plans risk paying more for less, and
losing their policies and doctors to more restrictive networks. The
administration is desperately trying to delay employer-plan problems beyond
the 2014 election to avoid this shock.
Meanwhile, ObamaCare will lead to more part-time
workers in some industries, as hours are cut back to conform to arbitrary
definitions in the law of what constitutes full-time employment. Many small
businesses will be cautious about hiring more than 50 full-time employees,
which would subject them to the law's employer insurance mandate.
On the supply side, medicine will become a far less
attractive career for talented young people. More doctors will restrict
practice or retire early rather than accept lower incomes and work
conditions they did not anticipate. Already, many practices are closed to
Medicaid recipients, some also to Medicare. The pace of innovation in drugs,
medical devices and delivery is expected to slow significantly, as higher
taxes and even rationing set in.
The repeated assertions by the law's supporters
that nobody but the rich would be worse off was based on a
beyond-implausible claim that one could expand by millions the number of
people with health insurance, lower health-care costs without rationing, and
improve quality. The reality is that any squeezing of insurance-company
profits, or reduction in uncompensated emergency-room care amounts to a tiny
fraction of the trillions of dollars extracted from those people overpaying
for insurance, or redistributed from taxpayers.
The Affordable Care Act's disastrous debut sent the
president's approval ratings into a tailspin and congressional Democrats in
competitive districts fleeing for cover. If the law's continuing
unpopularity enables Republicans to regain the Senate in 2014, the president
will be forced to veto repeated attempts to repeal the law or to negotiate
major changes.
Bob
Jensen's universal health care messaging ---
http://www.trinity.edu/rjensen/Health.htm
From the CFO Journal's Morning Ledger on November 25, 2013
Corporate health-care plans may get hit by a wave of new participants
Many companies are betting that the insurance requirement in the Affordable
Care Act will bring people into their plans who have previously opted out,
the WSJ’s Theo Francis reports.
Towers Watson figures that about half of the usual
opt-outs will sign up for next year—meaning an enrollment increase of about
7% or 8%, and a corresponding increase in costs of about 5%. In response,
companies are raising workers’ premium contributions, steering them toward
high-deductible plans and charging them more to cover family members.
Employers have been pushing more of the cost of providing health insurance
on to their workers for years, Francis notes. Some are making employees pick
up a bigger share of the premiums for coverage of family members. Employees
this year are responsible for an average 18% of the cost of individual
coverage, but 29% of the cost of family coverage, according to a survey by
the Kaiser Family Foundation and the Health Research & Educational Trust.
Gannett, for
example, has replaced the two plans for families it used to offer its
workers with a single high-deductible plan that requires employees to pay
the first $3,000 of medical costs each year.
Ryder has taken a
similar path, replacing one of its two insurance options with a
high-deductible plan. And it’s encouraging employees to choose the new
option in part by raising the cost of more-traditional coverage.
Haverty Furniture, which has
stores in 17 Southern and Midwestern states, expects health-care costs to
rise by about $2 million, or 20%, next year. It expects the bulk of that to
come from enrollment increases, so it’s raising premiums, deductibles and
copayments in response, CFO Dennis Fink said. “We do think our per capita
cost is going up, but the bigger piece is just people who’ve chosen not to
have coverage.”
"Companies Prepare to Pass More Health Costs to Workers Firms Brace for
Influx of Participants in Insurance Plans Who Had Earlier Opted Out," by
Theo Francis, The Wall Street Journal, November 24, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304607104579212351200702342?mod=djemCFO_h
Companies are bracing for an influx of participants
in their insurance plans due to the health-care overhaul, adding to pressure
to shift more of the cost of coverage to employees.
Many employers are betting that the Affordable Care
Act's requirement that all Americans have health insurance starting in 2014
will bring more people into their plans who have previously opted out. That,
along with other rising expenses, is prompting companies to raise workers'
premium contributions, steer them toward high-deductible plans and charge
them more to cover family members.
The changes as companies roll out their health
plans for 2014 aren't solely the result of the ACA. Employers have been
pushing more of the cost of providing health insurance on to their workers
for years, and firms that aren't booking much sales growth due to the
sluggish economy are under heavy pressure to keep expenses down.
Some are dealing with rising expenses by making
employees pick up a bigger share of the premiums for coverage of family
members. Employees this year are responsible for an average 18% of the cost
of individual coverage, but 29% of the cost of family coverage, according to
a survey of employee health plans by the Kaiser Family Foundation and the
Health Research & Educational Trust.
"We have seen employers do more cost-shifting, if
you will, for an employee to pay a higher portion of the cost of dependent
and spouse coverage," said Tracy Watts, U.S. health-care reform leader at
Mercer, a benefits consulting unit of Marsh & McLennan MMC -0.27% Cos.
Between 15% and 20% of eligible workers nationwide
tend to skip insurance, benefits consultants say.
Towers Watson TW -1.25% & Co., a benefits
consulting firm, figures that about half of the usual opt-outs will sign up
for next year—meaning an enrollment increase of about 7% or 8%, and a
corresponding increase in costs of about 5%.
Haverty Furniture, HVT -2.76% an Atlanta-based
retail furniture chain with stores in 17 Southern and Midwestern states,
expects health-care costs to rise by about $2 million, or 20%, next year.
The company expects the bulk of that to come from
enrollment increases, and it is raising premiums, deductibles and copayments
in response, Chief Financial Officer Dennis Fink said.
"We do think our per-capita cost is going up, but
the bigger piece is just people who've chosen not to have coverage," he
said.
A quirk of the Affordable Care Act could make it
more appealing for companies to raise rates for family coverage than for
individuals, said Vivian Ho, a Rice University health-care economist.
Starting in 2015, companies employing 50 or more
people must offer affordable health-care coverage to anyone working 30 hours
a week or more.
But affordability is measured using the cost of
individual coverage, capping the cost at 9.5% of income, Ms. Ho said.
Raising family rates could help companies recoup
costs without running afoul of that limit, she said. Starting now, instead
of next year, would allow a more gradual change.
U.S. Department of Health and Human Services
spokeswoman Joanne Peters said that the health-reform law is keeping a lid
on health-care costs overall, and makes it easier for employers to offer
coverage. "Since the Affordable Care Act became law, health-care costs have
been slowing and premiums are increasing by the lowest rates in years," she
said.
Gannett Co. GCI +0.11% , which owns more than 80
newspapers and 23 television stations, expects one factor in its increased
health costs to be the addition of more employees to its insurance plans due
to the ACA rules, according to a person familiar with the company's
projections.
To address an overall increase in costs, Gannett
has replaced the two plans for families it used to offer its workers with a
single high-deductible plan that requires employees to pay the first $3,000
of medical costs each year, according to workers at the Indianapolis Star,
one of the company's papers. For those with individual coverage, who make up
a little over half of Gannett's insurance pool, the figure is $1,500.
The company also scrapped a sliding scale that let
lower-income workers pay lower premiums. For some employees, the result was
a 60% jump in monthly premiums for family coverage, to $575 from about $360.
Gannett said more than half of its employees will
see premiums fall by 12%.
United Parcel Service Inc. UPS -0.16% made
headlines in August when it said that it would bar spouses from its nonunion
health plan if they could get coverage at their own jobs. The company said
it expected to see an increase in its health-care costs in part from adding
employees to its plan who currently opt out.
About 6% of employers ban coverage for spouses who
can get it elsewhere, and another 6% impose an explicit surcharge for
covering a spouse, according to Mercer. American Electric Power Co. AEP
-0.02% , for example, began imposing a $50 monthly surcharge this year to
cover spouses with access to insurance at their own workplace. AEP said 92%
of its employees usually sign up for coverage, so it doesn't expect a surge
of new enrollment.
In another shift this year, companies have become
increasingly aggressive about steering employees toward plans in which they
pay more of the initial costs for their care in exchange for lower premiums.
Trucking and logistics company Ryder System Inc. R
+0.42% has replaced one of its two insurance options with one such
high-deductible plan. Ryder is encouraging employees to choose the new
option in part by raising the cost of more traditional coverage.
These changes are expected to keep Ryder's total
premium cost lower even as it keeps the share of employee premiums that it
pays steady at about 70%, executives said. They accompany earlier decisions
to close Ryder's plan to spouses who can get insurance elsewhere.
Continued in article
Bob
Jensen's universal health care messaging ---
http://www.trinity.edu/rjensen/Health.htm