May 19, 2014 8:45 AM
Politico tallies the rising costs for "four failed Obamacare exchanges," reporting:
Nearly half a billion dollars in federal money has been spent developing four state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.
Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.
The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to HealthCare.gov. . .The $474 million spent by these four states includes the cost that officials have publicly detailed to date. It climbs further if states like Minnesota and Hawaii, which have suffered similarly dysfunctional exchanges, are added.
CNS News and KMOV TV describe how Obamacare is hiring hundreds (or perhaps thousands) of employees to do nothing for weeks on end in largely-useless application-processing centers (such as processing virtually non-existent types of paper applications).
May 16, 2014 11:00 AM
There are "rate hikes for all" coming due to Obamacare, predicts The Daily Caller, citing state insurance filings:
Virginians will see upped health insurance premiums in 2015 . . . according to the filings from the first state to release any information about what Obamacare could bring next year. The premium proposals were submitted to the state insurance office for official approval and were made public Monday. Each health plan expects to increase its prices in 201 past nominal increases for inflation, the Wall Street Journal reports. Anthem HealthKeepers, run by WellPoint, expects to up its premiums on and off Virginia’s Obamacare exchange by an average of 8.5 percent. . . others will see increases up to 16.6 percent. The fees are due to a multitude of Obamacare worries, including sicker new customers, an influx of demand for health care services from the newly insured and a plethora of new Obamacare taxes.
Big increases in premiums and deductibles are coming after the November election, notes The Fiscal Times. As we noted earlier, Washington, D.C., recently imposed a one-percent health-insurance tax in the city to pay for the ballooning costs of its Obamacare health insurance exchange, increasing costs for both employers and individuals. Obamacare has increased the cost of employer-provided health insurance in the District of Columbia, as predicted by experts, who warned that small employers especially “may see their rates increase” in the city. Hot Air proclaims, “get ready for the next round of Obamacare price spikes."
Many people will be plunged into the individual health insurance market as they lose their employer-provided coverage due to Obamacare. An NPR report "profiled AmeriMark, a catalog retailer with 700 employees that has long provided coverage for employees. However, the premiums for their 2013 plans escalated 30 percent for 2014, so they switched carriers and forced employees to pay a higher share of premiums with higher deductibles and co-pays."
May 13, 2014 2:06 PM
Yesterday evening, the Senate Environment and Public Works (EPW) Committee's "big four" (Democrats Barbara Boxer and Tom Carper, and Republicans David Vitter and John Barrasso) released their draft highway bill reauthorization proposal. It basically calls for six more years of the status quo, with some nice gimmicks thrown in for good measure. You can read the full thing here. There's also this handy summary for people who don't have too much time on their hands.
As was expected, EPW's proposal has been met with crickets. Observers knew it would fail to address the core problem facing the Highway Trust Fund: that Congress spends more money than it takes in. Not only that, but it failed to include President Obama's excellent suggestion of removing the present federal prohibition on states tolling their own Interstate segments. The Senate Finance Committee handles surface transportation reauthorization revenue, so Boxer and Vitter will now wait for their colleagues to produce about $100 billion in needed bailout money out of thin air.
May 8, 2014 2:54 PM
Marc Scribner talks about his new paper, "Self-Driving Regulation."
May 8, 2014 2:23 PM
The Federal Aviation Administration (FAA) is currently considering whether or not it will honor its EU-U.S. open skies treaty in the case of Norwegian Air Shuttle's Norwegian Air International (NAI), a low-cost airline seeking to expand service throughout Europe and the United States.
European regulators have already approved NAI operations, rejecting the protectionist outrage from domestic airlines and their unions who have been alleging bogus labor violations. Regulators in Ireland, where Norwegian is domiciled, are fuming at the Obama White House's apparent anti-consumer protectionism that has led to these delays. The European Cockpit Association, having lost its case in Europe, is now lobbying the FAA to kill NAI's expansion plans.
But the Air Line Pilots Association (ALPA), which represents over 50,000 mostly high-paid pilots in the U.S. (the median annual wage is $129,600, excluding generous benefits) and Canada, has sunk to a new low. ALPA is airing a radio ad that largely relies on xenophobic language to make their "case" against Norwegian. A sample line: "NAI calls itself Norwegian, but it registers its airplanes in Ireland, hires its pilots in Singapore, and bases its flight crews in Thailand." Ireland, Singapore, and Thais, oh my! (Then again, this isn't the first time ALPA has tolerated rank bigotry from its officials.)
May 7, 2014 1:41 PM
The costs of Obamacare keep rising. The Council of the District of Columbia has imposed a one percent tax on all health insurance policies to pay for costs associated with the Affordable Care Act. The Washington Post reports that this “first in the nation tax on all health insurance products is needed to cover the costs of D.C.'s health insurance exchange." (This tax is in addition to the fee of $63 per insured person already imposed nationwide by the Obama administration. Obamacare already contains many other taxes at the federal level, including seven taxes that apply to people that apply to people making less than $250,000 a year.)
The Wall Street Journal notes that D.C.'s new Obamacare tax, which was designed
by the city's DC Health Link insurance exchange, gives the city the power to tax all health-insurance carriers inside the district . . . The council opted for taxing all carriers, not just those selling in the exchange . . .
The proposal had the backing of Washington Mayor Vincent Gray and was approved unanimously by the council. The plan will fund the exchange starting next year, when it has a budget of $28.8 million. Beginning in 2015, the exchanges that 14 states and the District of Columbia set up under the law won't have federal funding and have to become self-sustaining. Exchanges got hundreds of millions of dollars in federal startup funds.The district's exchange had said that around 45,000 residents signed up for private coverage and Medicaid through the exchange in its first enrollment window, which ended April 30. The relatively small number of participants in private plans meant that just charging them for the operating costs of the exchange would increase the costs of their insurance coverage significantly. The assessment would likely be 1% on the amount of money each carrier took in from health-insurance premiums . . .
Insurers have previously indicated that they have met the cost of new fees under the health law by increasing premiums. The exchange says the funding plan has the backing of two insurers selling on the exchange, Kaiser Permanente and Aetna, but has been criticized by other carriers. The national insurance industry trade association, America's Health Insurance Plans, has questioned the legal basis for the proposal and described it as open-ended and inappropriate because it is being applied to carriers not selling on the exchange. Those carriers include ones providing products such as disability income insurance and long-term care coverage, which "derive no direct or indirect benefit from the exchange," said Geralyn Trujillo, regional director for the association.
Several state and local Obamacare health insurance exchanges, such as those in Oregon, Massachusetts, and Maryland, have failed, while costing taxpayers hundreds of millions of dollars.
May 7, 2014 12:02 PM
In our scorecard of the United States Senate’s labor and employment votes, CEI's WorkplaceChoice.org has included voting on the movement of David Weil’s confirmation to be Administrator of the Wage and Hour Division of the Department of Labor.
Strictly Partisan Confirmation
In vote # 110, a strictly partisan vote of 51-42 on April 28, 2014, the U.S. Senate confirmed controversial professor David Weil to administer the Department of Labor’s Wage and Hour Division, which implements such policies as overtime, prevailing wages, family and medical leave, migrant worker programs, and minimum wage. Seven Senators did not vote.
Nuclear Option Controversy
The controversy over Weil’s nomination was inflamed by the “nuclear option,” a new strong-arm tactic implemented by Majority Leader Harry Reid (D-Nev.) for the first time this Congress to prevent filibustering lightning-rod personnel. The nuclear option effectively lowers the vote threshold for approving nominees to a simple Senate majority (51 votes) from the 60 votes previously needed. Thus on vote # 109, the cloture motion to end any filibuster, the same strictly partisan 51-42 vote manifested the deep division on Weil’s propriety.
Views of Senator Lamar Alexander, Top Republican on the Labor Committee
Senator Lamar Alexander, the top-ranking Republican on the jurisdictional U.S. Senate Committee on Health, Education, Labor and Pensions (HELP Committee), explained in a statement that, “To fill this position, we need someone who can be trusted by both employees and employers to enforce the law without bias; and we need a qualified manager. Unfortunately, I think Dr. Weil fails to meet that standard.”
Senator Alexander added, “I cannot support a nominee who has advocated expanding current law beyond what Congress intended. Nor could I support a nominee who is a proponent of targeting industries and employers who use certain business models rather than being responsive to complaints of breaches of the law. Or one that has the underlying goal of increasing unionization, without regard to the desires of employees themselves.”
“Dr. Weil’s writings suggest he may have a bull’s eye on industries that use subcontracting and franchising,” Alexander said.
Confirmations Rare for Wage and Hour Administrators
In an interview, Littler Mendelson attorney Tammy McCutcheon recollected that with her confirmation in 1991 she was the last nominee to be confirmed as Administrator to the Wage and Hour Division. Jackson Lewis attorney Paul DeCamp, who followed Ms. McCutcheon, was recess-appointed in 1996. As another example, Seyfarth Shaw attorney Alex Passantino served as Acting Administrator in 2008 and 2009.
The position has been completely vacant under President Obama. The Washington Times explains, “Mr. Obama’s first selection, Lorelei Boyland, withdrew her name amid Republican opposition over her involvement in a state ‘wage watch’ program in New York, a first-of-its-kind program that deputized unions and advocacy groups to visit private businesses and report wage violations to the government. The administration yanked a second nominee, Leon Rodriguez, in 2011.”
Confirmation Hearing Less Than One Month After Nuclear Option Implemented
Weil was nominated by President Barack Obama in September of 2013, and “The Senate Health, Education, Labor and Pensions Committee held Mr. Weil's confirmation hearing on Dec. 10, less than a month after the rule change,” The Wall Street Journal noted. That rule change is the “nuclear option” strong-arm tactic that took effect in November of 2013.
May 6, 2014 12:42 PM
Over at Vox.com, former WaPo blogger Brad Plumer wrote a post about highway funding, largely relying on the good folks over at the Pew Charitable Trusts, who published this analysis of transportation funding and financing yesterday. The numbers are sound. There are major funding challenges facing the federal transportation programs. We can all agree on that. But Plumer ignores a couple of key facts that might color his narrative a bit differently. He writes:
Ever since the Reagan administration, roughly four-fifths of federal transportation spending has gone toward highways, while one-fifth has been specifically set aside for mass transit projects.
In recent years, some Republicans have pushed to eliminate the fixed share of federal money for transit, arguing that local bus and subway projects should be financed by user fees rather than federal gasoline taxes. These challenges have been unsuccessful so far, though, and mass transit has maintained its dedicated funding stream.
For decades, federal highway spending was largely financed by the Highway Trust Fund, paid for by federal gas taxes. The idea was that roads and highways would be paid for by the people actually using them. But this is no longer the case.
As the first column shows, the federal gas tax only covered about 72 percent of all federal highway spending in 2011. Congress had to scrounge up the rest from the general fund. Indeed, every single state now receives more in federal highway money than it pays in federal gas taxes — with some states receiving significantly more.
Warren Buffett: "During the next decade, you will read a lot of news – bad news – about public pension plans."May 6, 2014 12:02 PM
Thus warns Warren Buffett in his latest message to investors, part of Berkshire Hathaway's annual report. And when the Oracle of Omaha speaks, most of the world listens. So here's hoping his warning of the dangers that underfunded public pensions liabilities pose to state and local governments brings some needed public attention to this problem.
Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford. Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them. Unfortunately, pension mathematics today remain a mystery to most Americans.
The math being "a mystery to most Americans" is a major factor that has enabled state and local politicians to underfund pensions for years, by calculating contributions using discount rates based on overly optimistic investment return projections.
Despite reforms in more than 40 states, many pension funds are still in bad shape. As Benefits Pro's Lisa Barron reports, ""Moody's Investor Services estimates that the liability increased 24 percent, from $998 billion in 2011 to $1.2 trillion in 2012, the latest available data with audited results."
May 1, 2014 3:11 PM
Michigan becoming the nation's 24th right to work state in 2012 appeared to pose a challenge to major industrial private sector unions like United Auto Workers. But it's also posed a major challenge to public sector unions in the Wolverine State -- or rather, a scheme to reclassify as "public employees" a group of people who aren't even directly employed by the state.
The group in question is home health care workers who receive state assistance. How were they reclassified as state "employees"? The Washington Examiner's Sean Higgins explains:
In 2005, then-Gov. Jennifer Granholm, a Democrat, created the Michigan Quality Community Care Council -- commonly referred to as "MQC3" -- ostensibly for the purpose of keeping tracking track of program's 45,000 participants. However the entity also made it legally possible for the state to claim the participants were actually employees and therefore eligible for collective bargaining.
The following year, Granholm signed a collective bargaining contract with SEIU Healthcare Michigan, after a mail-in ballot in which only 20 percent of the program participants voted. It is not clear how many in the program even knew an election was going on or what the ballot represented.
In short, a union-friendly administration created a state body to pose as the "employer" of home care workers receiving state assistance, and then conducted a stealth organizing campaign by mail. (A similar effort in Connecticut led CEI to partner with the Connecticut-based Yankee Institute to conduct our own mail campaign informing Connecticut home care workers that if they wanted to avoid unionization, they had to return the cards stating so.)
Unsurprisingly, many home care workers in Michigan were unhappy about having their assistance payments suddenly reduced because of dues payments to which they never consented. So when they could finally exit, they did. As a result, SEIU Healthcare Michigan's membership dropped from 55,000 in 2012 to under 11,000 the next year.