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Wednesday, 15 July 2015

Health Insurance Prices Take Off: Worker Pay Stagnant

Lambert here: Shocker, huh? I remember thinking, when Obama said buying health insurance on the wonderful website would be like buying an airline ticket, “Oh! Price collusion!” So far, that hasn’t panned out (that I know of). But now it turns out that ObamaCare has encouraged another great feature of the airline industry: consolidation. Also too, adverse selection death spiral.

By PEU Report. Originally posted on their blog, Private Equity Report.


PPACA is not bending the health care cost curve downward as promised.  It is sending premiums into the orbit.  NYT reported:

Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. 

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota.

The government projected a less than one percent increase for national health expenditures under PPACA.

We estimate that overall national health expenditures under the health reform act would increase by a total of $311 billion (0.9 percent) during calendar years 2010-2019, principally reflecting the net impact of (i) greater utilization of health care services by individuals becoming newly covered (or having more complete coverage), (ii) lower prices paid to health providers for the subset of those individuals who become covered by Medicaid, (but with net Medicaid costs from provisions other than the coverage expansion), and (iii) lower payments and payment updates for Medicare services. Although several provisions would help to reduce health care cost growth, their impact would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.

Now that coverage is soaring once again, the government remains on the hook:

The PPACA establishes the Exchange premium subsidies during 2014-2018 in such a way that the reduced premiums payable by those with incomes below 400 percent of FPL would maintain the same share of total premiums over time. As a result, the Federal premium subsidies for a qualifying individual would grow at the same pace as per capita health care costs during this period. 

Annual premium growth of 20 to 50% will blow a monster hole in PPACA’s financial footing.  PPACA was apredictable debacle.  People are paying more to be underinsured and face hurdle after hurdle accessing health care services.

What are health insurers doing with their extra cash?  Buying one another.  Forbes stated:

The big are getting bigger: Aetna and Humana, the nation’s number three and number four health insurers by revenue, are merging.  Aetna will pay about $230 per share for Humana, in a $37 billion cash and stock deal, the largest-ever deal in the health insurance industry.

It’s also the latest major merger in an increasingly frantic health care marketplace. On Thursday, Centene  announced that it was buying HealthNet for nearly $7 billion, and CVS last week bought the Target pharmacy business for $2 billion.  (And the other two big health insurers, Anthem and Cigna have also talked about merging.) PPACA “appears to have only helped major insurers, by driving millions of new customers into the market. Aetna and Humana have seen their stock valuations triple in the past five years, since PPACA was signed into law, and the other three major insurers also have seen huge gains.”

If you like America’s consolidated airline industry service which in my experience has consistently provided less for more money, you’ll love PPACA.  Just as the private plane set no longer flies commercial, the people reforming the system, executives, board members, lawmakers and lobbyists/consultants, will have no trouble accessing concierge level healthcare. Most of us will pay an unconscionable amount to be underinsured and still face financial obliteration from one major health care episode.

Pay raises for five years, zero to miniscule.  One year increase in health insurance premiums, 25 to 50%.  That’s bending the cost curve in a way to make PPACA an instant failure. 

When Capitalism Turns to Cannibalism

With authentic growth scarce, there's no other way to reap huge profits but cannibalism.

When people say "capitalism has failed" or "capitalism has succeeded," we have to ask: what type of capitalism do you mean? Authentic capitalism, in which capital is placed at risk to earn a return in a competitive, transparent marketplace, or do you mean cartel-state capitalism, or crony-capitalism, or monopoly capitalism or finance capitalism, i.e. the types that dominate the global economy?

As long as most startups crash and burn, and anyone with a few bucks and plenty of inner drive can start an enterprise, authentic capitalism still lives. But let's face it, authentic capitalism occupies a diminishing corner of the U.S. and global economies.

With a work force of 150 million and around 120 fulltime workers, the U.S. economy has about 6 million small businesses with employees and a few million self-employed (sole proprietors) who earn a middle-class livelihood: 

Endangered Species: The Self-Employed Middle Class


The political and financial influence of small business and the self-employed barely registers on K Street, Wall Street and in Washington D.C. Politicos praise small business in the same way they speak of small family farms as the backbone of American agriculture--as a form of pandering for PR purposes while they pocket the big campaign contributions from Monsanto and Big Ag.

Meanwhile, in the real world, small business is in decline while corporate money floods the financial sector and Washington D.C.

The 22.4 million with some self-employment income looks like a big number, but most earn a pittance: only a relative few earn what qualifies as a middle-class income, and 3 million of these are professional-sector corporations or partnerships:

The real action in modern-day capitalism is finance capital: that's where the really big money is made. You don't make money making inexpensive autos, you make the big money selling subprime auto loans.

Corporations aren't selling more products to boost their share prices--they're buying back their shares as a way to push their stock price higher. It has been estimated that the majority of corporate profits (presumably actual profits, as opposed to the tricked-up accounting games companies play to boost their announced earnings) have been spent buying back shares.

Correspondent Arshad Ali recently described the underlying dynamic of finance capital in a Facebook post: a lack of authentic growth is driving financial cannibalism:

"The modern banking system of the last few centuries has been based on lending to borrowers who do something productive with the capital -- open a mine, start a factory, start a ranch, drill an oil well. But this whole equation becomes unstuck when -- because of a finite resource-constrained planet -- there's nowhere productive to invest it anymore. That's when finance capital becomes cannibalistic, as it has over the last few decades. That's why the Greeks, for example, cannot grow themselves out of the debt pit -- there's no growth to be had."

This is why corporations are "investing" in their own shares--there's no place left to invest for growth. They are cannibalizing the entire financial system, buying regulatory and tax favors from thoroughly corrupt political systems to secure their profits, which are then used to remove shares from the market, boosting the price-earnings ratio and the share price.

Insiders grant themselves immense chunks of newly stocks via options which they promptly cash in, reaping tens of millions in personal gains from the cannibalism.

Yes, authentic capitalism still exists, but it's been relegated to the sideshow. The Big Tent with the Big Bucks is all finance/cartel/state/crony capitalism, and financialization is devouring all the other players.

With authentic growth scarce, there's no other way to reap huge profits but cannibalism.


Venezuela Is Suddenly Intent on Annexing Two-Thirds of Neighboring Guyana

Venezuela has fallen on hard times, as its economy collapses amid a crippling shortage of goods and the world's highest inflation rate. In what may seem a sign of increasing desperation, Venezuelan President Nicolas Maduro has revived a territorial dispute with neighboring Guyana over a stretch of territory that makes up approximately two-thirds of the tiny South American country.

A long-simmering disagreement over the Essequibo region, as the territory is known, has lain dormant for more than 15 years, Maduro appears to have been prompted to extend his country's claim after the discovery of a potentially rich oil deposit in the area.

In 1899, Guyana won possession of the 95,000 thousand miles of territory in an arbitration court ruling while it was still a British colony known as British Guiana. Venezuela contested this decision in 1962, and four years later a treaty was signed by Great Britain, Venezuela, and British Guiana on the understanding that the parties work toward a peaceful resolution to the disagreement. Guyana won independence just months later.

Venezuela's government recently sent a letter revisiting this issue to ExxonMobil, which Guyana has contracted to undertake offshore drilling in the area — and which reported making a significant oil discovery in May. Maduro's critics have decried the revival of the territorial claim as a farce that is meant to distract Venezuelans from their country's economic crisis while shoring up flagging support for the embattled president.

Venezuelan President Nicolas Maduro points to the area of Guyana's territory that his government would like to claim as his country's own. (Photo via EPA/Miraflores Press)

Henrique Capriles, governor of Miranda state and former opposition presidential candidate,


 whether Maduro actually has a real interest in recovering the Essequibo, suggesting that it was merely a stunt for improving Maduro's popularity rating, which recently fell to a near-record low of 25 in May.

8th Grade Test From 1912 Shows How Far American Education Has Been Dumbed Down; Can You Take It?


Kristan T. Harris

A Kentucky 

8th grade exam from 1912

 was donated to the Bullitt County history museum. The questions feature the fundamental foundation of education that we seem to have lost due to the dumbing down of the American education system.

Now with the 

common core

 epidemic we can see our youth transformed by a cookie cut education system and a near total loss of critical and independent thinking. 

If you can not read the fine print or zoom in, then here are some examples of 8th grade level testing in 1912.

Define the following terms of government: Democracy, Limited Monarchy, Absolute Monarchy, Republic. Give Examples of Each. 
To what four governments are students in school subjected? 
Name 5 county officers and the principal duties of each. 
Give 3 duties of the president. What is meant by VETO power? 
Give at least 5 rules to be observed in maintaining good health? 
Define Cerebrum; Cerebellum 
Name the organs of circulation. 
How many parts of speech are there? Define each.



Here are some probable answers