New Health Care Plan is Already Sick

 

An article in yesterday’s Washington Post is already predicting possible cost overruns due to higher-than-expected costs associated with the government’s new Pre-Existing Condition Insurance Plan.  The plan is designed to cover people who have trouble getting insurance due to a pre-existing condition (i.e. you’re already sick).

The article poses the question of whether the $5 billion (‘b’ as in ‘broke’) allotted by Congress to start up the pools will be enough.  That as enrollments which were predicted to be around 375,000 are only hitting 8,000.

The plan’s home page even states that the plan “doesn’t charge you a higher premium just because of your medical condition.”

To be eligible for the plan, you must meet some very clear requirements:

• You must be a citizen or national of the United States or residing in the U.S. legally.
• You must have been uninsured for at least the last six months. Please note that if you currently have insurance coverage that doesn’t cover your medical condition or are enrolled in a state high risk pool, you are not eligible for the Pre-Existing Condition Insurance Plan.
• You must have a pre-existing condition or have been denied coverage because of your health condition.

The article cites two cases in which the plan has helped someone who was otherwise uninsurable or would have paid a much higher rate.

• First is a 50 year-old woman who was recently diagnoses with an aneurysm.  The woman had no health insurance after dropping it in July of 2009 due to costs.  She will now “pay” $358 a month for her insurance that will cover her surgery in January – surgery that could cost tax payers well over $100,000 to perform.
• Next is a 57 year-old male who was diagnosed with AIDS in 2002.  He was forced into bankruptcy after his insurance would only cover a small portion of his $3000/month prescription bill.  Now, thanks to this new health care plan, he can pay $600 a month in return for the government paying his $3000/month medicine bill.  (The article notes the man was “floored” when he found out how costly the plan was.  I guess paying $600 a month to save $3000 a month and your life wasn’t generous enough in his eyes.)

China's Wen confident on inflation after rate rise

More information on China's efforts to control inflation. From Reuters. 

Sun Dec 26, 2010 6:09PM EST

By Langi Chiang and Chen Aizhu

BEIJING (Reuters) - China's government will be able to keep inflation in check, Premier Wen Jiabao said on Sunday, a day after the central bank raised interest rates, and he pledged to speed up efforts to rein in house price surges.

Steps taken in the past month, including administrative controls to curb speculation and monetary tightening, had started to produce results, Wen said.

The People's Bank of China raised interest rates on Christmas Day for a second time in just over two months as Beijing strengthened its battle against stubbornly high inflation.

Analysts said the latest rise showed that measures such as increasing banks' required reserve requirements to rein in liquidity were not enough on their own, and that the Chinese authorities were determined to keep inflation under control.

"We have raised reserve requirement ratio for six consecutive times and increased interest rates twice to absorb excess liquidity in the market to keep it at a reasonable level to support economic development," Wen said in a state radio broadcast a day after the rate rise.

"I believe we can keep prices at a reasonable level through our efforts. As a major leader of the government, I have the responsibility and I have the confidence, too," he said in remarks published on www.cnr.cn.

The rate rise came after Beijing said earlier in December it was switching to a "prudent" monetary policy, from its earlier "moderately loose" stance.

"The rate rise shows China is quickening its pace to normalize monetary policies," said Ba Shusong, a senior economist with the Development Research Center, under the State Council, the country's cabinet.

"The front-loaded tightening, before the peak of consumer inflation in the first half of 2011, is helpful to curb inflationary expectations," Ba was quoted as saying on the financial website www.caing.com.

AHEAD OF THE CURVE

Chinese authorities have repeatedly stressed the importance of staying ahead of the curve in the battle against inflation.

"Inflationary expectation is worse than inflation itself," Wen said in the radio broadcast.

"When there is inflation, we must establish confidence, know our vantage points and take forceful and decisive measures in a timely manner to curb price rises."

The central bank said on Friday it would deploy a range of measures to head off inflationary pressures and asset bubbles.

China also intensified its property tightening measures in April and September in an attempt to brake soaring property prices.

"Until now, the measures are not implemented well enough, and we will reinforce our efforts in two ways," Wen said.

The government plans to build 10 million units of affordable housing in 2011, up from this year's target of 5.8 million.

China will also increase efforts to curb speculation in the real estate market, mainly through monetary policies and stricter use of land, Wen said, without giving details.

Property transactions as well as land costs, a major contributor to high housing prices, have shown signs of a rebound in recent weeks, triggering concerns of more tightening.

Despite all the challenges, Wen said: "I believe property prices will return to reasonable levels through our efforts. I have the confidence."

Chinese stock markets have shed nearly 10 percent since mid-November on concerns the government would ratchet up its monetary policy tightening in the face of rising inflation.

However, analysts suggested China's share market could push higher on Monday on optimism about the overall outlook for shares in 2011.

(Editing by Robert Birsel)

Sent by iPhone 

City’s Revenue Shows Mixed Message

While some counties are showing positive gains in recent months for sales tax collections, the City of Neosho hasn’t seen the same trend.  Although December’s receipts were up over last year by more than 5%, November was down more than 8.5%.  For the first three months of the current fiscal year, Neosho’s revenues over last year are down 0.86%

For the past 12 months, revenues are down 0.68% over the previous 12-month period.

China's Economic Concerns Still Growing

This article was on the New York Times website this evening. It gives a very good summary of the issues facing China's overheated economy. The comments mirror what I saw and read during my Asia trip in November.

http://www.nytimes.com/2010/12/13/business/global/13yuan.html?hp=&pagewanted=all

This One Made Me Think

Money To Burn – And You’re Paying For It

If you didn’t catch the Yahoo article, here’s a good one.

The US Treasury has printed more than 1 billion (with a ‘b’) new $100 bills with additional security features.  Unfortunately, the bill was so hi-tech, the treasury had trouble printing them.  The result?   Poor quality printing that makes some of the bills unusable.  What’s worse?  The bad bills are mixed with good bills in such a way that  sorting them will take a 20-30 years if done by hand or 1 year if done by machine.

The solution – burn the bills (wasting the $120 million it cost to run them) and go back to the previous style.

My guess is no six sigma black belts were overseeing the QC aspect of the treasury’s printing operation.

GOP Needs to Be Reasonable on Tax Cuts Now, but Fundamental Changes in Gov’t Need to Happen Too!

With the GOP’s recent wins in the US House of Representatives, those who promised change in 2008 are definitely going to see it come 2011.  But between now and January, many American’s are also going to see a change in their tax rates if Congress doesn’t act and act soon.

Why?  Many of the Bush-era tax cuts are set to expire for the 2011 tax year.  That means many Americans (not just the “rich”) will be paying more, including those making below $34,550 a year.

(I won’t post here my complaints about why democrats have made this a priority only after losing badly in November.  Heck, they’ve had two years and everyone knew it was coming.  But that’s for another day)

So it would seem reasonable, especially during an economic recession, that extending such cuts would be a no-brainer.  After all, leaving money in the hands of the people to spend is a better option than collecting the money in taxes and letting the government spend it (Reaganomics vs. Keynesians).  Right?  Well, yes and no I guess.

Republicans as expected are fully behind the supply-side theory – cut taxes to drive economic expansion.  No cut is too much, no income is too high. 

Democrats are on board too - at least for those making $250k or less (they almost have to be after President Obama “promised” no tax increases for that segment of the population).  But they don’t believe a multi-millionaire will miss a few percent of that vast fortune.  In other words, – they can “afford” it.  Now the battle begins.

How much income is from small business?  Don’t small businesses create most of the jobs?  Won’t a tax increase on the “rich” hurt job growth?  What about the deficit?

I offer this – GOP beware, but DC wake up!  Don’t get me wrong.  I’m all for extending the cuts.  Ideally, I agree that those cuts will help more than they hurt and it’s an overall good strategy that has worked before and will work again.  But I also think the republicans need to concede that at some point (maybe it’s a $1 million, maybe it’s more), imposing a “small” tax increase on some in the short-run may be necessary to get this compromise done.  I don’t think there is much to be gained by republicans drawing a line in the sand that such cuts are an all-or-nothing deal.  That could very easily backfire and hurt them in 2012.

But I also think that all of DC, all parties included, need to understand that the country can no longer afford to spend more than we make (common sense to me, but not politically rewarding to those career politicians we send there.)  We’re already facing unprecedented debt.  (If it wasn’t for low interest rates, our debt would be even worse.)  Without changes in programs at all levels – even those once considered off limits – our country will dig a debt hole so deep that no level of taxation will ever fill it.

Changes in defense, social security, education, medicare, medicaid, and others MUST happen.  Unfortunately, we’re all going to have to suffer to fix it.  But if we don’t act now, I’m afraid the fallout will be even worse.

So get the darn tax cuts extended, get past the bickering, and know that the tax-cut battle is only a small skirmish in a much bigger battle that we have no option but to win.