Gravity November 15, 2013November 15, 2013 Have you seen the movie? I liked it — if not quite as much as some seem to — but this one is a lot more realistic: 25 minutes broadcast from the International Space Station. What a kick. What a time to be alive. Have a great weekend. I’m headed off grid for a week — if not quite into outer space — so if something momentous should happen while I’m gone, next week’s posts, written in advance, could seem bizarrely clueless or insensitive. (If they show up at all: remember, I have the world’s worst web hosting service.) My apologies in advance.
No, No, No, No November 14, 2013November 14, 2013 DOONESBURY This strip, from October 6, seems to be going viral. Click the link to see it (and pass it on), but basically you’ve got a middle aged white guy on the radio . . . Hey, folks who look like me! Negative Ned here for the state of North Carolina! Here in Raleigh, we’re on the move — backwards! 338 regressive bills and counting! We’ve said No to young people by banning pre-registration! They’re just not mature enough to vote the right way. And No to teachers . . . No, also — if you read on, from panel to panel — to the unemployed . . . to women . . . to minorities . . . to college students . . . to law enforcement . . . to scientists (“If you use climate change data in your projections you will be punished! It’s the law!”) THE G. “NO” P. This is a party committed to blocking the uninsured from getting affordable health care, especially if they have preexisting conditions. Committed to cutting back on food stamps for the poor in tough economic times. Committed to keeping them poor by preventing a rise in the minimum wage. (Watch Rachel debunk the myth that raising the minimum wage raises unemployment. Watch her show how popular minimum wage hikes are . . . even among Republicans . . . except those in Congress. Read Nick Hanauer’s case for a $15 minimum wage. And, if you are my last reader on earth not to have seen it, watch his 5:50 minute Ted Talk. Lifting people into the middle class by paying them decently — not tax cuts for the best off — is what creates jobs.) It’s a party committed to neutering financial reform. To opposing the Consumer Financial Protection Bureau. To making abortion unavailable to the poor. To blocking the American Jobs Act that would have put the unemployed to work rebuilding America’s infrastructure. To making it harder to vote. To blocking Senate-passed immigration reform that would pass the House if it were brought up for a vote — and the Senate-passed Employment Nondiscrimination Act that would pass the House if it were brought up for a vote. To blocking marriage equality. To decrying compromise. To breaking the unions. To denying climate change. To killing ACORN. Abe Lincoln, Teddy Roosevelt, Dwight Eisenhower, Gerald Ford — even Richard Nixon and Ronald Reagan, I suspect — are rolling over in their graves. HEALTH CARE Peter Kronenberg: “Here’s a site that calculates the subsidy a family would be eligible for.” THE POPE According to the New York Times yesterday, bishops are getting his Holy drift. . . . They voted a day after hearing an address by Archbishop Carlo Maria Viganò, the Vatican’s ambassador, or nuncio, to the United States, who spoke of Francis’ vision for the church. Archbishop Blase J. Cupich of Spokane, Wash., said in an interview after the vote on Tuesday: “The nuncio said the Holy Father wants bishops to have a keen pastoral sensitivity, shepherds who know the smell of the sheep. That’s a nice metaphor to use. “Pope Francis doesn’t want cultural warriors, he doesn’t want ideologues,” he said. “That’s the new paradigm for us, and it’s making many of us think.” Loving this Pope.
Love the Pope; Less Crazy About Palin November 13, 2013December 27, 2016 ‘TIS THE SEASON Love the Pope (see last Friday’s post). Less crazy about John McCain’s choice to lead the world in the event of his demise. Click any of the 19 ornaments on this Christmas tree to hear snippets from her new audio book, Good Tidings and Great Joy: Protecting the Heart of Christmas. HEALTH CARE PROGRESS I’ve gotten a lot of pretty angry emails from folks upset at losing their current coverage. See Jim L., below. My hope is that, for most when the dust settles, Obamacare is going to prove not such a bad thing after all — maybe even, for some of them (and for their loved ones and coworkers and country — and for their housekeeper who comes once a week, whom they love, who never previously had coverage for her family) quite a good thing. And a thing we can all work together over the months and years to come to improve. Jim L.: “We discussed last week how I was offered crappy plans solely covering in-network, none of which offered my doctor (or any other decent doctor). And how my previous, private insurer was about to skyrocket my rates. Here’s an update. I just returned to the NY site, and find that they’ve added new plans, including one recognizable (though fairly lousy) insurer (Empire Blue Cross) whom my doctor does accept….plus others which do cover (with enormous deductibles) out-of-network care. I preferred my previous plan, which I’m not going to be able to afford (it’s already at the upper limit of my budget), so this is still not optimal for me, and so I reassert my conclusion that Obamacare favors the lowest end and squeezes middle class freelancers. But it’s no longer untenable for me, which is good news.” Hardly a rave; but six weeks into the launch, discernible progress. Artie: “You asked us to correct you if you’re wrong about the Bronze plan effectively providing more than 60% coverage. I’m no expert, but I do think that your comments on the bronze plan are correct. And there is one more plus to consider: the out-of-pocket maximum is lower than you stated for people of lower income, at least in New York. According to the New York healthcare site, if your annual income falls somewhere between 100 and 400 percent of the federal poverty line, you get a break. For example, if your income is between 100% and 200% of the poverty level, the out-of-pocket annual limit is just a third of the full $6,350/$12,700 cap you referenced.” FORMULA FUNDS Ross Morgan: “My brother received an email in his TD Ameritrade and here is my understanding of it: The International Funds will be completely liquidated if approved at the next board meeting. Domestic Funds will be reorganized and wrapped up into the GOTHAM TOTAL RETURN FUND, which as I understand it was a product that Joel Greenblatt developed as a hedge fund proxy (long/short equity). This leaves me with a bunch of questions: Has Joel Greenblatt lost patience with his own product? How do we as individual investors reconcile these new changes? Go back to Vanguard or in my case, Fairholme and Gabelli Asset Fund? Who wins the bet between you and Less Antman? (Just joking.) My employees are invested in these products, along with my parents, grandparents, and brother’s. What’s one to do?” ☞ We’ve done nicely with the domestic funds; crappy (about break even) with the international. I think Joel thinks he can produce better results long/short than just long – and I love that, so will be rolling over the domestic funds into his Total Return Fund, and maybe adding the proceeds of the international funds as well. I think he’s closing down the international funds because they just don’t seem to have borne out the validity of his strategy. The bet was constructed to run until the next edition of The Only Investment Guide You’ll Ever Need (which it has only at this exceptionally late date occurred to me to rename The Only Investment Guide You’ll Ever Need So Long As You Buy Each New Edition) goes to press, which will not be for some time. Just eyeballing it, it looks to me as though we may be running about neck and neck. But I’ll ask Less to do a little digging and give us a status report.
HealthSherpa.Com — And Why 60% Is More Than It Seems November 11, 2013November 10, 2013 With all the attention rightly paid to “the 5%” who are encountering difficulty and uncertainty with Obamacare — many of whom will ultimately wind up with better coverage for less — let’s not forget the 95%. (Or the 100% who will benefit from living in a healthier country with a healthier economy.) Manish Bhatia: “I’m tired of hearing rants about Obamacare. What is the Republican counter-proposal? Condemn tens of millions to life without medical insurance?” Bob F.: “I purchase insurance from an ex-employer whose retirement health plan I’m eligible for. I’m still working, for another company, and exceed the income levels for any subsidies. However, I wanted to compare the prices available on the exchange to see if I could get a better deal. I was looking for a way to get to a price list without having to go through the entire registration process. When I called the 800 number for healthcare.gov support on Friday, I was told how: On the healthcare.gov home page, there are two green rectangular buttons, APPLY ONLINE and APPLY BY PHONE. Directly below is a grey rectangular SEE PLANS NOW button. It takes you to a page that links to “plans and sample prices” — which takes you here, asks questions, and then gives you a list of plans and prices. These prices do not include the tax credit but for my purposes that didn’t matter. As it turns out, the Marketplace plans and the plan I currently have are close enough that I’m not going to bother switching. Like President Obama said, ‘If you like your current health plan you can keep it.’ I’ll be doing just that.” Bob could simply have used healthsherpa.com — which does include the subsidy calculations. This is so cool. Three twenty-year-olds did it in their spare time over a few nights and weekends. As a public service. Just enter your info and out come your available plans and prices. If you see one you like, click the “How To Buy” button and they tell you how to call the insurance company and buy it. That simple. THE BRONZE PLAN COVERS MORE THAN 60% And listen: we all have a lot to learn about Obamacare. For example, a lot of us know that the “bronze” plan will usually be the cheapest option, covering just 60% or so of the medical expenses you incur. Pretty crappy, no? But as I read this (correct me if I’m wrong), it understates two really important benefits: > First, that your 40% co-pay is based on the dramatically lower fees your insurer negotiates than the full rate you’d be charged if you were uninsured. I go in for an MRI on my own, I might be billed $1,200. I get it via my insurance, maybe it’s billed at $400 . . . of which my 40% comes to $160. So in this example, the bronze plan covers not just 60% of that $1,200 I might have been billed for when I had no insurance (which for many years I did not), but more like 87%. > Second, there is an out-of-pocket annual cap of $6,350 for individuals and $12,700 for families. A huge sum for most families, to be sure. But say you get really sick or injured (God forbid! feh! feh!) and have $670,000 in hospital and medical bills. The bronze plan pays only 60% — until you reach your out-of-pocket cap, but then pays 100% of the rest. So in this example it would be covering not 60% but more like 98% or 99% of your 2014 medical expense. And there are no longer any lifetime caps, thanks to Obamacare, which makes you all the more secure. Which is the whole point of having insurance. To be more secure still, set up an HSA — a Health Savings Account — much like the IRA you’ve been building. Once you’ve amassed a nice sum, even the $6,350 or $12,700 in co-pays you might have to shell out with a bronze plan in an illness- or injury-plagued year would pose no threat to your solvency. VETERAN’S DAY Where would one even begin to express one’s admiration and gratitude? Honoring a hero via the Bob Woodruff Foundation is one idea. Resolving the V.A.’s horrendous disability-claim backlog would be an even better idea.
Pope To Ideologues: “You’re Ill” November 8, 2013November 11, 2013 I’ve always been an atheist but have also always loved the teachings of Christ. A little left-wing for me (you can’t always turn the other cheek; and I think a rich man who’s lived a righteous life would get into heaven, if there were one, way easier than a camel could negotiate a needle’s eye) — I’m more of a centrist — but who could not be moved by the compassion and purity of his teachings? It is an upside down world, it has always seemed to me, that thinks Jesus would have favored invading Iraq or cutting food stamps or eliminating the estate tax or voting 46 times to defund Obamacare. We can’t know for sure, of course. Only the Pope has a direct line to God (and apparently, not even that; just limited infallibility). But according to Addicting Info, “Pope Francis has shifted the focus of the Catholic Church to issues facing the poor and the sick. He has railed against economic inequality and has criticized the anti-gay and anti-abortion strains that have come to dominate the Christian Right here in America. Such ideological extremism is dangerous, not only to Christianity, but to the world. And Pope Francis said as much last Thursday.” Here is one minute of it — calling Christian ideologues “ill,” no less. Amen.
Hiltzik on Health Care Disinformation November 7, 2013 Michael Hiltzik takes a closer at the Wall Street Journal‘s Obamacare horror story — here. The most prominent example of Obamacare victimization being offered at the moment comes from Edie Littlefield Sundby of San Diego, a businesswoman who related in a Wall Street Journal op-ed earlier this week how Obamacare is threatening her life by depriving her of access to her cancer doctors. . . . Well: not exactly. Read on. And here is Hiltzik on Deborah Cavallaro, the hard-working Los Angeles real estate agent . . . . . . who has been featured prominently on a round of news shows lately, talking about how badly Obamacare is going to cost her when her existing plan gets canceled and she has to find a replacement. Well: not exactly that, either. Did the President err in stating so flatly that no one would have to change plans or doctors? He did. Is the situation remotely as bad as Fox News et al would have you think? It is not. Obamacare is good for the country as a whole, and good for the overwhelming majority of us individually. Maybe even good for Edie Littlefield Sundby and Deborah Cavallaro.
Health Care: A Viewers’ Guide November 6, 2013 Peter Jackson: “I am among the 5% or so who, so far as I can tell, will have to give up my plan because I am self-employed. I was paying $770 for a family of four. My new coverage will cost $839 and have maternity coverage, drug counseling, and all that other stuff repubs don’t want to pay for. Know what? I don’t care. Chances are my old policy would have increased in price to more than $839 this year. Comparing last year’s prices to this year’s prices has always been an exercise in blood pressure regulation. This is the smallest hike I’ve seen. My only complaint is that I still can’t sign up for the exchange. But I’m happy to wait: because I’m too busy building my business to argue over $69 a month and worry about the Obamacare website. If all else fails, I’ll do it by phone in December.” Paul J.: “I was just speaking to my mother who is 61 years old. She’s very distressed regarding her healthcare. Her COBRA plan runs out on 12/31. As of right now she hasn’t been able to sign up for a new plan to kick in January 1st. She says it has to do with the website issues. My mother has pre-existing conditions that require her to take several monthly medications and see doctors frequently. She’s very worried about becoming uninsured January 1st and not being able to afford to buy her prescriptions and see her doctors. What should she do? Or whom should she call?” ☞ It’s not just the website; there are four ways to get coverage. One is to call 800-318-2596, 24 hours a day, 7 days a week. CHRIS HAYES’ VIEWERS’ GUIDE TO WATCHING OBAMACARE COVERAGE Take three and a half minutes to watch. You will likely feel better about all this — as you will if you watch Massachusetts Governor Deval Patrick’s two minutes on this past Sunday’s Meet the Press.
Health Care November 5, 2013 [Those who get this page by email each day (sign up at right) should now be getting it via Mail Chimp, which we hope will prove more reliable than the previous method. Right now, it’s set to go out at 5am each morning, East Coast time.] Did you see Deval Patrick on Meet the Press Sunday? He followed Mitt Romney — as Governor of Massachusetts and then again on Sunday’s broadcast — and he made (I thought) a lot more sense. Mitt stressed what he called “fundamental dishonesty,” going on to say, “I think the key thing that the president is trying to get away from is that he told people they could keep their insurance, and that was not the truth. And whether you like the model of Obamacare or not, the fact that the president sold it on a basis that was not true has undermined the foundation of his second term. I think it’s rotting it away.” Watch Governor Patrick respond to that, and to David Gregory’s other questions. in under three minutes. You will feel better about this. There’s no question that the website needs to be fixed. (The Republicans are not entirely blameless, as argued below.) And there’s no question that, in hindsight, it would have been better for the President to say something like . . . “If you like your current plan, then in almost every case, you’ll be able to keep it. And if you ARE among the 5% or so who will be forced into a plan with better benefits than they have now, the good news is that you may well pay less for it. Even though it provides better coverage. Not such an awful thing. Some among that 5% will have to pay more for better coverage. And they may not be happy about it. I get that, and I don’t take it lightly; but as a nation, we have so much to gain here for the health of our citizenry and the health of our economy, we have to ask them to do it anyway.” He might have continued . . . “The same goes for the currently uninsured, who are free riders when they show up at the emergency room after a car crash or about to give birth. They may prefer not to contribute to the health care system, but we need them to do it anyway, either by buying coverage or paying a fine.” Needless to say, the Republicans are no more focused on the 95% or 98% who will be better off under Obamacare, now that they are out of power, than they were focused — when for six years they controlled the White House, House and Senate — on the tens of millions with no coverage at all. Or the tens of millions more with coverage that left them exposed to financial ruin in the event of a serious illness. THE DEBACLE HAD A LITTLE HELP Indeed, Obamacare — in its earlier incarnation as Romneycare — is working fine in Massachusetts. And there’s reason to be optimistic about the roll-out in the states that designed their own exchanges. Gerald M.: “You asked to be informed about my wife’s experience with enrolling in a new insurance plan under the ACA. Last week she obtained a gold level plan through the New York exchange. Enrollment was fast and easy. The new plan (with no subsidies) will have comparable out-of-pocket expenses to her prior plan and will now cost $6,276/year compared to $18,439 under the old plan, a savings of $12,163/year. Needless to say we are thrilled.” But most of the Republican-controlled states chose not to design their own exchanges, leaving the job to the Feds and hoping they would fail. As the Washington Post noted this past Sunday (and as highlighted by Jonathan Capehart): Although the [Affordable Care Act] provided plenty of money to help states build their own insurance exchanges, it included no money for the development of a federal exchange — and Republicans would block any funding attempts. According to one former administration official, [Health and Human Services Secretary Kathleen] Sebelius simply could not scrounge together enough money to keep a group of people developing the exchanges working directly under her. “So,” writes Capehart, “the federal exchange that Republicans said wouldn’t work ended up not working because it was starved of the money needed to help make it work.” This doesn’t excuse the rocky start to the roll out. But one might be forgiven for thinking it spreads the blame. Where in Massachusetts people from both parties worked to make their new system work, with Obamacare one party has been doing everything it can, from the start — even to the point of shutting down the federal government — to gum up the works. Even the Massachusetts roll-out took a while to get right, but it did succeed. So will Obamacare; though it would succeed faster if people on the other side stopped trying so hard to make it fail. Watch Deval Patrick. He said it better than I have.
Bill Gross On The Gini Coefficient November 4, 2013November 3, 2013 Great news for investors: According to Bill Gross’ latest must-read Pimco letter, the share of GDP we’ve had to pay in wages has dropped from 47% to 43% during the past decade, allowing pre-tax profits to jump from 10% to 14% of GDP. This is terrific. (Unless you work for a living, but why is that my problem? All a worker has to do if she wants to share in the wealth is start a successful business!) We’ve broken ACORN and the unions; slashed taxes on investment income (though we still haven’t eliminated the estate tax on billionheirs, as Republicans have long sought to do); and we should strive to pay people even less. Listen, if the economy’s bad enough, they’ll have no choice but to take the work. The only catch I see in this otherwise bright scenario is that we’ll need to find someone to consume the goods and services we now so profitably produce, whence our dividends and capital gains flow. Which I guess is that old Nick Hanauer problem I keep raising: that it’s not the wealthy who create jobs and grow the economy, it’s consumers. Watch his video here. “In a capitalist economy,” he explains — and Nick is nothing if not a successful capitalist — “the true job creators are middle class consumers. Taxing the rich to make investments that make the middle class grow and thrive is the single shrewdest thing we can do: for the middle class, for the poor, and for the rich.“ You know the problem with me? (There are several, but the relevant one today.) It’s that I can’t discuss this stuff without getting upset and sarcastic — and that’s exactly not the way to present one’s case to good people who just happen not yet to see things my way. You know the great thing about Bill Gross? (There are several, but the relevant one today.) It’s that he can. So I give you now Bill Gross. Read his letter. You will even learn about Gini coefficents. (“Developed economies work best when inequality of incomes are at a minimum. Right now, the U.S. ranks 16th on a Gini coefficient for developed countries, barely ahead of Spain and Greece. . . .”) It seems he’s another wildly successful capitalist who agrees we should raise taxes on wealthy investors and put that revenue toward rebuilding our national infrastructure.
Obamacare Perspective November 1, 2013 Here are the top lines (as I see them): 1. After 80 years of trying — and against enormous and continuing opposition from the Republican Party — we have finally got health care reform moving . . . and on a model conceived by a Republican think tank and launched with success by a Republican governor who heralded it as a model for the nation (before he started running for his party’s Presidential nomination in 2012, at which point he denounced it). 2. The long-term effect will be to make our citizenry — and our economy — healthier and more secure than they would otherwise have been. 3. There being no free lunch, the above is possible for two main reasons: > First, tens of billions of dollars in extra taxes are being shifted from the most fortunate among us to the less fortunate. (For each extra $1 million in dividends or capital gains you earn next year above your first $250,000 or so in taxable income, you will be hit with an extra $38,000 in tax. That’s a lower tax rate than when Ronald Reagan left office; but repugnant to any millionaire or billionaire who feels he has it too rough or the working poor have it too easy.) > Second, all manner of pilot programs, best practices, and incentives are built into the program that over time should make health care delivery less costly than it otherwise would have been. (Example: insurers may now retain no more than 15% or 20% of premiums to cover their operating expenses and profit. Example: the right kinds of free preventive care can lower costs. Example: hospitals will soon have a financial incentive to see as few surgical readmissions as possible.) 4. Lots of states are enrolling folks just fine — Washington State has already enrolled 49,000 with another 92,000 in process. Watch. Kentucky has already signed up more than 26,000. California reported 95,000 applications in process after just the first two weeks. New York, 174,000 after the first three weeks. Massachusetts, of course, has long since shown this model can work fine. The irony is that most of the states that have left this job to the Feds are controlled by Republicans who claim to want the smallest possible Federal government. But do you know what? Sooner or later, this immensely frustrating start-up will be behind us. Making sensible adjustments as needed along the way, we’ll get there. It would be much easier if one party were not so invested in the system’s failure and all worked together — as they did under Mitt Romney in Massachusetts — to make it a success. It would be easier if wealthy Republicans were not spending a fortune to discourage young people from buying insurance. But we’ll get there. 5. Many of the people who’ve been expecting the worst will come to see Obamacare as a pretty good deal, after all. What fewer will appreciate — but that makes them no less important — are the societal benefits that will affect us all indirectly, as members of a healthier, fairer, more productive, prosperous society. My friend Jonathan is not one who’ll be getting any subsidies. Five weeks ago he wrote, with some agitation: “I’m paying $891 now for a family of six. With an additional $500 monthly Health Savings Account contribution, I can cover 100% of our costs for a total of $1391 per month. Although Access Health Connecticut hasn’t published the rates that will go into effect next week (shame on them), I have dug through the bureaucratic details and figured out my health insurance exchange premium rate would be roughly $1400 for only 60-70% actuarial coverage. I am dubious that my current plan will continue to exist. Nobody’s sent me a letter about my renewal rate on 11/1/2013. The huge flaw in the roll-out is the vacuum of information. If you want to scare people and provide room for fear-mongering, just keep them in the dark. Whenever it’s hard to find the price of something, that’s a tip off.” And yet last night he emailed: “I finally accessed AccessHealthCT.com. The State of Connecticut did a great job. Once I got in, it took about 15 minutes to complete an application for a family of six. Choosing a plan took some time. Once I decided that we should have deductibles similar to our old plan, a PPO, not an HMO, and a broad provider network, I was able to choose the right one. It took a couple hours of research to figure it out. That’s not so bad for a major purchase, and at least the Obamacare plans had consistent disclosures so I could compare them to one another. Our new plan has a bit higher coinsurance than our old one. Since it covers all the preventative stuff that we use every year and we rarely hit the deductible, looking back at the last 10 years as a guide, I think it will save out of pocket costs. The Obamacare insurance costs 11% less than our prior plan. All together I expect to save $2000 – $3000 per year, without any subsidy.“ So quite upset at the imposition of Obamacare only five weeks ago, he now expects to save $25,000 over the next decade, while living in a country whose citizenry and economy will be healthier than they otherwise would have been. 6. Most of the criticisms are misleading. There is the charge that millions of people are losing their policies. But it turns out that carriers routinely canceled policies long before Obamacare, so this is not entirely new. And that many of the policies being dropped are those that failed to meet Obamacare’s minimum benefit standards. And that about half the people who replace these sub-par policies with better ones will be paying less than they were before (though about half will be paying more). So a lot of dust needs to settle; but it’s not quite the nightmare that is being portrayed. And you may have seen the “monkey court” clip, where a Republican congressman charges the law strips us of our medical-records privacy — and a Democratic congressman sets him straight. And we can be sure there will be endless individual horror stories — most of which will prove wildly misleading as well. See examples here. Consumer Reports has posted healthlawhelper.org to try to dispel some of the confusion and to help you find out what you need to do. Have a great weekend.