Parts of the health care law that kick in

Now that it’s 2011, parts of the Health Care Reform Bill kick in.  The linked article summarizes changes in Medicare, giving seniors cheaper prescription drugs and giving them some free preventative tests.  Also a $2.5 billion tax on the pharmaceutical industry, which can only mean higher prices and less money to invest in new miracle drugs. Here are some of the changes that will affect everyone:

For those insured outside Medicare, 2011 starts a new requirement that insurers must spend 80% of revenue for small-group plans and 85% of revenue for large-group plans on medical care. The requirement is designed to rein in industry profit and administrative costs. Carriers that don’t meet the requirement will have to issue rebates to consumers, though those won’t go out until 2012.

Consumers will no longer be able to use their flexible spending accounts—tax-free funds set aside for medical costs—to pay for most over-the-counter items unless they are purchased with a prescription.

For many consumers, Jan. 1 will mark the first opportunity to tap into a slate of benefits that began taking effect Sept. 23. That’s when the law called for insurers to allow parents to keep a child on their policy until their 26th birthday, among other things. Employers didn’t need to make that batch of changes until they started a new plan year.

Nurse midwives also will see change in the new year. Until now, certified nurse midwives were paid 65% the rate of physicians for performing the same services by Medicare. Now they will be paid at the same rate.

via Big Health-Care Changes Arrive in New Year – WSJ.com.

I don’t understand.  First of all, 80% of revenue for one thing plus 85% percent of revenue for something else adds up to 165%.  That must be a misprint.  But it seems wrong for the government to “rein in profits and administrative costs.”  How does the government know how much administrative costs will be, much less how much profit a business should be allowed to make?

And why limit flexible spending plans?  How will that help consumers?  And how will paying midwives as much as doctors hold down health care costs?

How is any of this a good thing?

China will bail out Europe

Towards the Chinese Century and world domination:

China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.

In a fresh humiliation for Europe, Foreign Ministry spokesman Jiang Yu said it was one of the most important areas for China’s foreign exchange investments.

The country has already approached struggling European countries with financial aid, including offering to buy Greece’s debt in October and promising to buy $4billion of Portuguese government debt.

‘To have any discernible effect China will have to buy a lot more than 5billion euros if they expect to have any impact on the negative sentiment surrounding Europe,’ said Michael Hewson, currency analyst at CMC Markets.

China’s astonishing economic growth has put it on track to overtake America as the world’s economic powerhouse within two years, a recent report claimed.

But experts believed still be some years before America’s leadership role is really challenged – largely because Beijing has given no indication it is ready to take on the responsibility of shepherding the world’ economy.

This foray into the future of the euro could be a signal from Beijing that it is ready to change that perception.

via Fresh humiliation for euro zone as China says it will bail out debt-ridden nations | Mail Online.

Medieval England was better off than many countries today

More stereotype-busting about the Middle Ages.  From Science Daily:

New research led by economists at the University of Warwick reveals that medieval England was not only far more prosperous than previously believed, it also actually boasted an average income that would be more than double the average per capita income of the world’s poorest nations today.

In a paper entitled British Economic Growth 1270-1870 published by the University of Warwick’s Centre on Competitive Advantage in the Global Economy (CAGE) the researchers find that living standards in medieval England were far above the “bare bones subsistence” experience of people in many of today’s poor countries.

The figure of $400 annually (as expressed in 1990 international dollars) is commonly is used as a measure of “bare bones subsistence” and was previously believed to be the average income in England in the middle ages.

However the University of Warwick led researchers found that English per capita incomes in the late Middle Ages were actually of the order of $1,000 (again as expressed in 1990 dollars). Even on the eve of the Black Death, which first struck in 1348/49, the researchers found per capita incomes in England of more than $800 using the same 1990 dollar measure. Their estimates for other European countries also suggest late medieval living standards well above $400.

This new figure of $1,000 is not only significantly higher than previous estimates for that period in England — it also indicates that on average medieval England was better off than some of the world’s poorest nations today including the following (again average annual income as expressed in 1990 dollars).

Zaire $249

Burundi $479

Niger $514

Central African Republic $536

Comoro Islands $549

Togo $606

Guinea Bissau $617

Guinea $628

Sierra Leone $686

Haiti at $686

Chad $706

Zimbabwe $779

Afghanistan $869

via Medieval England twice as well off as today’s poorest nations.

HT:Joe Carter

Laws that expire

Philip K. Howard argues that many of our national problems are the result of too many laws, which go back for generations and that gum up our ability to respond to current conditions.  He argues that we need a “sunset provision” that makes all laws expire eventually, requiring that the legislature periodically revisit them:

Once a law is in place in the United States, it’s almost impossible to dislodge. Our political class assumes that, after a law is forged in the crucible of democracy, it should be honored as if it’s one of the Ten Commandments – except it’s more like one of 10 million.

We even have a hard time modifying laws that were explicitly designed to be temporary. Just look at the current battle over the Bush-era tax cuts.

Having that debate at all is unusual. Once enacted, most laws are ignored for generations, allowed to take on a life of their own without meaningful review. Decade after decade, they pile up like sediment in a harbor, bogging the country down – in dense regulation, unaffordable health care, and higher taxes and public debt.

A healthy democracy must make fresh choices. This requires not mindless deregulation but continual adjustment of laws. Congress could take on this responsibility if it followed a simple proposal: Every law should automatically expire after 10 or 15 years. Such a universal sunset provision would force Congress and the president to justify the status quo and give political reformers an opening to reexamine trade-offs and public priorities.

via To cut the deficit, get rid of our surplus of laws.

He goes on to show how outdated laws contribute to the deficit, complicate health care, and hurt business.

The idea seems to have merit, and yet what legislature would have time to reconsider the whole record of national legislation every ten years or so?

Revolt of the children

A 16-year-old boy in the Netherlands was arrested for bringing down the MasterCard and Visa websites in retaliation for their refusing to process payments for Wikileaks. More young hackers are promising more attacks.

In the meantime, British university students have been rioting in protest of that country’s new austerity program, which includes raising tuition rates to a fraction of what American students pay. The British students, notorious for their political apathy previously, are breaking windows, smashing shops, burning cars, and assaulting police officers. They even attacked Prince Charles and his wife as they were driving by, smashing a window in their car. See TUITION FEES VOTE PROTEST: Charles and Camilla’s car attacked as thousands of students descend on Parliament | Mail Online.

So will young people–unused to any kind of austerity, indignant at established authority,and able to use the internet really well–rise up and overthrow the adult world?

Obama accepts Bush tax cuts

President Obama has agreed with Congressional Republicans to extend all of the  Bush-era tax cuts in exchange for extending unemployment benefits.  The package includes some other interesting details:

President Obama and congressional Republicans have reached a tentative accord on a far-reaching economic package that would preserve George W. Bush administration tax breaks for families at all income levels for two years, extend emergency jobless benefits through 2011 and cut payroll taxes by 2 percent for every American worker through the end of next year.

The scope of the agreement, announced by the White House late Monday, was far broader than lawmakers in either party had been expecting. The deal would extend a college tuition tax credit and other breaks for middle-class families that were due to expire New Year’s Eve. And it would revive the inheritance tax after a year-long lapse, imposing a 35 percent rate on estates worth more than $5 million for individuals and $10 million for couples.

The package would add more than $700 billion to the rising national debt, said congressional sources who were briefed on the deal. But with the unemployment rate at 9.8 percent, the White House was focused on winning a compromise that could boost the fragile recovery while preventing the economic damage that could result from letting the expiring tax breaks affect paychecks next month.

The payroll tax holiday, in particular, is striking for its universal application. Unlike most tax breaks, it would be available to taxpayers at every income level, letting consumers keep an extra $120 billion in their pockets next year. For a couple making $70,000 a year, the holiday would provide a tax savings of $1,400.

via Obama and GOP strike tax accord.

This description of the payroll tax, which goes for Social Security, is unclear.  It doesn’t cut them by a measly 2%, which would hardly mean anything.  Rather, it cuts the tax rate from 6% of the paycheck to 4%, so that all workers will get to keep a third of what they used to pay.  That’s a pretty significant raise.

Now all the President has to do is persuade the Democrats, many of whom are reportedly livid at the deal, which keeps the tax cuts even for those who make $250,000 and up.


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