Wednesday, June 24, 2015

Oregon Health Insurer Giant Moda Having Problems; Oregon Insurance Division Bailing Them Out with Rate Payer Money?

MaxRedline has an interesting post on the Oregon Insurance Division refusing to allow Oregon health insurance providers to reduce their rates. In fact its preliminary determinations are forcing two providers to charge almost $60/month more than they want to charge.

Health Net wanted to charge a $240 monthly premium for its silver plan for a 40 year old. Zoom, a new provider, wanted to charge $233 per month for its silver plan. But the Oregon Insurance Division has given a preliminary determination that Health New will have to charge $297/month and Zoom will have to charge $291/month for the silver plan.

Why is the Oregon Insurance Division asking health insurance providers to charge more than they think is necessary? The Oregonian reports that state regulators are doing it to keep the health insurance industry "stable".
"State Insurance Commissioner Laura Cali said that while her job is to make sure consumers are not overcharged, she also has to ensure rates cover insurers' costs. Otherwise, predatory pricing could over the long term drive some companies out of the market. She said that Oregon is likely to still enjoy better rates than other states thanks to one of the most competitive markets in the country.

"Pat Allen, director of the state Department of Consumer and Business Services, said 'We need to ensure a market that long term is stable, competitive and ensures pricing that is much closer to the cost of delivering health care.'"
Zoom is new to Oregon, and Health Net covers only about 1,000 individual policy buyers out of an Oregon market of over 220,000. But, do state regulators know more about running stable long term health insurance plans than Kaiser Foundation Health Plan or Providence Health Plan who insure about 1/5th of Oregon's individual plan market? Kind of doubtful.

So, why would Oregon health insurance regulators ask Kaiser and Providence to raise their proposed rates $26/month ($271 instead of $245/month) and $27/month ($284 instead of $257/month)respectively?

Maybe to help other insurers stay in business who have not made wise decisions?

Moda, Oregon's biggest insurer with 46% of the Oregon individual market is asking for a 25.6% monthly premium raise from $245/month to $307/month. It took a big loss in 2014. It expected claims and administrative costs to equal 99% of premium income. But, instead they equaled 165% of income. Ouch!

Then there is LifeWise Health Plan which serves a tenth of Oregon's individual health care insurance market asking for $318/month (a 38.5% premium increase) in 2016.

Where were the wise state regulators on higher premiums bringing stability when they approved Moda for second lowest premium $221/month in 2014 and LifeWise for lowest premium $222/month for 2015? If $222/month is fine this year, why shouldn't $233 or $245/month be fine in 2016?

Could it be that the state regulators like Laura Cali and Pat Allen are really trying to shield big players like Moda and LifeWise from their bad business decisions? Two years into ACA coverage they aren't doing well. They insure 56% of the Oregon individual market. Too big to fail so all the individual plan premium payers of the other providers have to cough up increases too?

Tuesday, June 23, 2015

Effects of Unstable Currency: Brazilian Credit Cards Now Charge 360% Interest a Year

Brazilian credit card interest has now risen to 360% a year.

In the 1980's and early 1990's Brazil faced runaway inflation. One of the main tools to reign it in was high interest rates. This, of course, impacted both consumer spending and business expansion (fewer products bought = fewer products manufactured).

Out of control spending and money printing leads to disastrous side effects in any economy including the eighth largest economy in the world: Brazil.


Juros = interest
Cartão de crédito (Rotativo) = credit card (revolving)
Cheque Especial = bank credit line
Variação porcentual ao ano = yearly percentage variation
Fonte: Banco Central = Source: Central Bank

Tuesday, June 02, 2015

Newspaper Woes Continue: 3% Slide in Circulation

The Pew Research Center reports that newspaper circulation fell 3% in 2014 as compared to 2013. (Though 2013 was the only positive year in a decade long -47% slide in circulation.)
"After a year of slight gains, newspaper circulation fell again in 2014 (though tracking these data is becoming more complicated each year due to measurement changes)[*]. Revenue from circulation rose, but ad revenue continued to fall, with gains in digital ad revenue failing to make up for falls in print ad revenue. Despite widespread talk of a shift to digital, most newspaper readership continues to be in print."
Total revenue has fallen from $46.1 billion in 2003 to $20.7 billion in 2013**--about a 55% drop. Interestingly, newsroom employment has not dropped as fast as revenue. It went from 54,200 employees in 2003 to 36,700 in 2013--only a 32% drop. So, newsroom employees have felt only about half the impact of the drop in newspaper revenue.

The sad story is perhaps told best by the drop in daily readership by age. There has been a significant drop in newspaper readership among all age groups since 2000, but especially among those under the age of 45.Currently those under 45 are half as likely to read a newspaper as their under 45 counterparts in 2003.

2003 daily newspaper readership:
18-24 year olds - 40%
25-34 year olds - 41%
35-44 year olds - 50%
45-54 year olds - 59%
55-64 year olds - 64%
age 65+ - 71%

2014 daily newspaper readership:
18-24 year olds - 17%
25-34 year olds - 20%
35-44 year olds - 23%
45-54 year olds - 32%
55-64 year olds - 40%
age 65+ -  52%

The only bright spot for Oregon newspapers is that the Oregonian is in the "Top 25 Newspapers by Digital Traffic" coming in at number 21 with 6,339,000 unique visitors in January, 2015. Unhappily, that doesn't translate into actual circulation since the Oregonian doesn't make the top 25 in digital circulation.

The Alliance for Audited Media remains useless for daily circulation numbers, but Pew Research gamely puts together a top 25 list for Sunday newspapers. Here are the top 25 in Sunday circulation and Sunday digital circulation:

Total circulation, Sunday edition, September 2014:
The New York Times - 2,502,367
Los Angeles Times - 965,598
Houston Chronicle - 925,065
The Detroit News and Free Press - 835,661
The Washington Post - 776,806
Chicago Tribune - 769,215
The Dallas Morning News - 707,792
The Atlanta Journal-Constitution - 665,056
San Jose Mercury News - 634,001
(MN) Star Tribune - 589,725
The Denver Post - 573,542
(NY) Daily News - 558,057
(NY) Newsday - 510,683
The Philadelphia Inquirer - 497,142
(CA) Daily News - 491,480
The Arizona Republic - 462,477
New York Post - 454,007
St. Louis Post-Dispatch - 438,058
(OH) The Plain Dealer - 397,891
Chicago Sun-Times - 387,604
The Boston Globe - 377,405
(NJ) The Star-Ledger - 359,820
The Seattle Times - 352,131
Tampa Bay Times - 350,216
U-T San Diego - 334,723

Digital circulation, Sunday edition, September 2014:
The New York Times - 1,321,207
Los Angeles Times - 280,125
New York Post - 238,655
(NY) Newsday - 217,816
The Denver Post - 153,682
Chicago Tribune - 146,448
(NY) Daily News - 145,497
The Philadelphia Inquirer - 138,800
The Dallas Morning News - 121,917
(NJ) The Star-Ledger - 119,494
The Salt Lake Tribune - 109,568
(UT) Deseret News - 101,094
The Boston Globe - 94,965
(OH) The Plain Dealer - 80,799
Chicago Sun-Times - 76,716
Honolulu Star-Advertiser -72,491
San Jose Mercury News - 71,440
Houston Chronicle - 71,087
(MN) Star Tribune - 67,573
The Seattle Times - 66,347
Saint Paul Pioneer Press - 59,915
The Atlanta Journal-Constitution - 50,645
San Francisco Chronicle - 43,636
(MD) The Sun - 42,982
(WI) Milwaukee Journal Sentinel - 42,612

One presumes that subtracting the Sunday digital circulation from the Sunday total circulation for newspapers on both lists will give the print circulation. But, that is iffy given the Alliance for Audited Media's bizarre circulation metrics.
*Due to Alliance for Audited Media's measuring changes.
**Total Revenue in 2014 was $19.9 billion--a -$0.8 billion drop from 2013.

Sunday, May 31, 2015

May Garden

We picked and ate the first green beans of the season. The first green tomato is showing, and the apples are growing on our little dwarf apple tree. Wow! Bits of joy God has sprinkled in our life not only to see but to eat.

Thursday, May 28, 2015

Supreme Court Case Could Revolutionize Voting Districts

The Supreme Court will soon be deciding (in Evenwel v. Abbott) if representation should reflect eligible voters or total population. Does one person/one vote mean voters are all equal, or that a voter in an area with lots of non-voters should have more sway than a voter in an area with fewer non-voters. An interesting question. It could change political power from cities where there are more non-voters (including areas that have been courting illegal immigrants) to suburbs or rural areas where the eligible voter to non-voter population is more even.

From Seth Lipsky of the New York Sun:
The case — known as Evenwel v. Abbott — is arising from Texas. It’s about whether voting power has to be apportioned equally by general population or by eligible voters. The impact could extend way beyond the Lone Star State, shifting political power away from cities.
Particularly cities with relatively high, non-voting immigrant populations like — oh, say — New York. The case has the potential to require authorities to strip away during the redistricting process population that isn’t eligible to vote — undocumented aliens, felons, children.
Edward Blum is the conservative constitutional sage who heads the Project on Fair Representation, which provided counsel in this case. He tells me the Nine could force redistricting. The court could, he said, “help upstate New York districts dramatically.”
Not just upstate. Mr. Blum reckons the case could lead to changes in city councils, too. He speculates that council districts in such big cities as New York, Houston and Chicago are among the “most mal-apportioned” in the country.
Here's a link to an amicus brief that gives some of the argumentation.

Monday, May 04, 2015

Seniors View Smartphones as Instruments of Freedom More than Young People

The Pew Research Center reports that older people see smartphones much more positively than younger people.

Almost 4/5ths of those 50 and over see smartphones as giving them freedom and allowing them to connect.

While almost 1/3rd of those under 50 see smartphones as a "leash" and "distracting".

Pew notes that far fewer older people use smartphones than younger people. While 85% of those under 30 have smartphones, only 27% of those 65 and older have smartphones.

Pew says that the difference in views may come from the fact that older people use smartphones for a much narrower range of activities than younger people.
. . . Younger adults tend to use their phones for a far wider range of purposes (especially social networking and multimedia content) and are much more likely to turn to their phone as a way to relieve boredom and to avoid others around them.
Older adults, by contrast, tend to use their phones for a narrower range of purposes – especially basic communication functions such as voice calling, texting and email. For young adults, smartphones are often the device through which they filter both the successes and annoyances of daily life – which could help explain why these users are more likely to report feeling emotions about their phone ranging from happy and grateful to frustrated or angry during a weeklong survey.
It also may have to do with seniors remembering what it was like when both communication and information sources were not readily at hand.

I remember when someone with a cell phone called for roadside assistance when our vehicle broke down. My dad had started to walk up the highway in what looked to be a miles long walk to try to find the nearest phone to call for assistance. A kind man with a cell phone pulled over, talked to my dad, and called AAA for him.

As an older person I see the internet as a marvel. I remember the days of going to the library and poring over encyclopedias, reference books, and the Readers' Guide to Periodical Literature to find answers to questions that are now a snap. And "how to" information is especially accessible via youtube.

The only downside of cell phones and smart phones is that you are always on call. Unless, of course, you turn them off when you don't want to be disturbed, or only turn them on when you have a need for them. Heh.

Wednesday, April 29, 2015

Mixed Signals on Obamacare Penalties

H&R Block reports:
Almost two-thirds of tax filers who received insurance via the state or federal insurance Marketplaces had to pay back an average of $729 of the Advance Premium Tax Credit (APTC), cutting their potential refund by almost one-third, according to analysis of filing data by H&R Block (NYSE: HRB), the world’s largest consumer tax preparation company. Conversely, one in four was due additional premium tax credit and therefore had an increase of an average of $425 in their refund.
Amazingly, most of those who owed refunds were not advised to get their withholding down so they would have little or no refund coming. The average refund for these folks was $2,195. Apparently they are not so poor that $180 missing from their monthly pay check is of concern. Either that or no one has ever talked to them about how easy it is to change their withholding status.

Another big surprise was that penalties owed averaged $178--almost twice the touted $95 flat fee penalty. It will be even worse for the 2015 tax filing: $325 per adult.
While the average penalty of $178 at year’s end was almost double what many assumed was a flat $95 fee, [Mark] Ciaramitaro[*] said tax filers can expect the flat fee to increase to $325 per adult, or it could be 2 percent of household income minus the filing threshold, whichever is greater. For example, the penalty this year for a family of four earning $60,000 was around $400, but next year that increases to $975. The Year 2 penalty could drive increased interest in exemptions as well as marketplace enrollments, Ciaramitaro said.
However, TurboTax found opposite results. Insurancenewsnet reports:
The majority of taxpayers (81%) with marketplace health insurance plans received subsidies. Despite concerns that marketplace users would have to pay back large amounts of their subsidies because of not reporting changes in their income, the average range of premium tax credit payback was lower than industry estimates prior to tax filing season.
. . .
33% took an advanced tax credit and got an additional subsidy when they filed their taxes, at an average range of $207 - $257.
44% took an advanced tax credit and were required to pay some money back, at an average range of $315 - $365, because they underestimated their projected income for 2014. This is a lower amount than some previous industry estimates.
5% took an advanced tax credit and saw no adjustments when they filed their taxes.
. . .
The average health insurance penalty for taxpayer households was at an average range of $88 – $138. 
For uninsured single filers, 43% paid the minimum $95 penalty, and 57% paid 1% of their annual income.
So, for TurboTax only 44% had to pay something back. For H&R Block 66% had to pay something back. That's a 50% difference.

For TurboTax 33% got an additional subsidy, and for H&R Block only 25% got an additional subsidy. That's a 25% difference.

For TurboTax 5% saw no tax adjustment, and for H&R Block 13% saw no tax adjustment. That's a 250% difference.

It sounds like somebody is spinning data. Maybe it's a difference in clientele for the two firms. But, TurboTax data sounds mushy. Having an average range ($88-$138) instead of a clear average ($178) as H&R Block reports indicates a lack of clarity in reporting data. Also, TurboTax gives no information on if the money paid back came from tax refunds or will be collected via normal IRS legal/criminal pressure.

In any case, both firms say 2015 will be more difficult for tax filers.

H&R Block:
“This season saw general ACA-related confusion, incorrect or delayed 1095-A information documents, and overall anxiety regarding refund impacts,” Ciaramitaro said. “With many taxpayers now receiving coverage documentation, more taxpayers who will experience APTC reconciliation and the doubling of penalties, unfortunately we should expect taxpayer anxiety and confusion to continue next year.”
The penalty for going without health insurance in 2015 increases to $325 per adult (up to $975 for a family) or 2% of income, whichever is greater.
*vice president of H&R Block health care and tax services

H/T Byron York