Category Archives: markets

YGTBSM

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Here’s another installment in this series, this time (again) with ObamaMart.

Finally get enrolled in an Obamacare health welfare package via ObamaMart?  Don’t die this year.  Don’t take that raise.  Put that baby back where it came from.  You can’t update your package to account for these life changes—that functionality deliberately was put on the back burner in favor of fixing other…glitches…in the Web site.

The list of life changes that you can’t tell ObamaMart about include, in addition to the above,

  • marriage and divorce
  • death in the family
  • new job
  • moving to a different community

Remember, moving to a different community also changes the premiums you have to pay—that community rating thing.

Remember, also, you still have to repay the subsidy payments you received after the raise made you ineligible.  And you still owe the taxes on the raise.

Just be sure, after you’ve separately told your Plan provider about your life change, you go back and tell ObamaMart.  After they get around to fixing this.

General Insurance Dysfunction

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I’ve written about the failure and the dishonesty of Obamacare on a number of occasions.  However, the failures of insurance coverage aren’t limited to Obamacare.  Here’s an example from my wife’s insurance coverage, an old-style policy that hasn’t (yet) been canceled by Obamacare.

At my wife’s annual physical, last month, she spent over an hour talking with our doctor about mutual concerns, where they agree, where they disagree. (How many doctors will do that, in the first place?  This is one of the reasons I like her for my doctor, too.)

We got the billing statement a couple days ago:

Billed to Insurance = $20.00
Network Discount = $17.00
Applied to Deductible = $0.00
Paid by Plan = $2.70
Paid at Visit = $0.00
Amount you may Owe = $0.30

First, the insurance networks to which she belongs beat her up to a $20/hr rate that she’s allowed to charge (actually, it’s a per visit rate, but this is what this doctor’s integrity works that out to), then forced an 85% discount on top of that onto her.

Where’s insurance industry competition?  Obamacare ain’t it, and yet it’s worse than the insurance régime before.

Health Law’s Uneasy Launch

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In a Wall Street Journal article from which I copied the title, Christopher Weaver opened with some misapprehensions that are interesting for a WSJ article [emphasis added].

Can [the Health Law’s] mix of government subsidies and market-based competition extend health insurance to millions of people…?

Umm, what market-based competition, exactly?  The Health Law begins with a mandate that creates artificial demand.  The underpinning and beginning of this particular market is decidedly anti-competitive.  The Health Law continues and ends with mandated coverages—innovation not allowed except by government permission—and with government-permitted premiums.  There’s no competition present in the product mix, either.

Oh, and those premiums are not at all based on the risk being assumed; indeed, health histories of the enrollees are explicitly excluded from the premiums charged them.

There’s nothing at all competition-based in this privately funded, government mandated welfare entitlement program.

A Risk for Future Food Prices?

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Or of land…acquisitions…or both?

About one tenth of China’s farmland is polluted by lead, zinc, and other heavy metals to “striking” levels exceeding official limits[.]

And

About…8 million acres…of China’s farmland is too polluted to grow crops, a government official said on Monday, highlighting the risk facing agriculture after three decades of rapid industrial growth.

The area of China’s contaminated land is about the same size as Belgium.

The Wall Street Journal reports that

Figures released by the Ministry of Land and Resources on Monday in Beijing indicated as much as 2.5% of China’s soil could be too contaminated by heavy metals and other pollutants to farm.  Meanwhile, the share of China’s land that is arable fell by a fifth of a percent during the three years ended in 2009 due to pollution, urbanization, and other reasons….

And

The pollution figure equals about 2.5% of China’s 2.027 billion mu [roughly 340 million acres] in total arable land in 2012, according to a calculation by The Wall Street Journal.  The total arable land figure, down about 0.2% from 2.031 billion mu [338 million acres] in 2009, was also…newly released by the [Land Bureau] on Monday.

Further, much of the PRC’s farmland starts out as not good farmland:

Almost a quarter of China’s arable land is located in areas considered poor for farming, such as hillsides, the bureau said.

One result is this:

In recent years, China’s land shortage has helped drive facets of its foreign policy, from state-supported purchases of farmland and agro-business groups around the world to its appetite for foreign agricultural commodities like US corn.

The PRC also is concluding a deal to lease 3 million hectares (7.4 million acres) of Ukrainian farmland for the next 50 years, for instance.

This comes on the heels of another pessimistic report on the viability of Chinese farmland.

Chinese demand—need—for food won’t explode overnight, or even necessarily over the next few years.  If Chinese demographics don’t improve, the demand might not get much larger than it is today.

Still, for a world that has trouble feeding itself, at least in part through the affordability of food, this is a matter on which it’s useful to keep an eye.  Among other things, as the competition for farm-grown food heats up, so will prices and the competition for fisheries, including those in the South and East China Seas.

Health Insurance Risk…Corridors

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These are insurance company premium income/payout cost bands written into Obamacare that are intended to smooth out the transition from a quasi-free market in health insurance to the government run health welfare program that is Obamacare.  Under this program, insurance companies that are too successful are punished for that success by being forced to disgorge some of their income in the form of a tax on the premiums they collect, which the Feds then transfer to insurance companies that couldn’t hack the new program, so they get government support.

Only some companies that are having trouble need not apply for the bailout support—they just get to pay the vig without the payoff.

The IRS collects an annual flat amount specified by the Affordable Care Act to be allocated among the insurers according to market share.

But….  IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.”  Since about four of five employers with more than 500 workers and most union-negotiated health plans are self-insured, they are spared from the tax.  So is insurance on behalf of “government entities,” such as original Medicare (but not privately run Medicare Advantage).

[Thus]…the tax burden falls on the saps who work for small businesses, the self-employed and individuals—i.e., the people who can least afford it.

Worse,

this [tax] is not deductible for corporate income tax purposes.  In other words, health plans pay the tax and then federal and state taxes on the taxed amount.  [Ex-CBO director Doug] Holtz-Eakin estimates this unusual taxes-on-taxes rule means that the effect on premiums is 54% larger than the dollar amount of the tax itself.

Hmm….