US Health Reform Irks Some Seniors

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The US Government is working hard on  health reform to ensure Americans get the high-quality, affordable care they need and deserve. At this time, too many Americans can’t get the affordable care they need when they fall ill.

However President Obama’s health-care initiative may be a costly misstep in some eyes.

It was a long shot to think that a neophyte U.S. president, before celebrating the first anniversary of his inauguration, could radically transform the notoriously dysfunctional U.S. health-care system in a way Theodore Roosevelt first vowed to do in his losing bid for the presidency in 1912.

Obama will sign a reform bill later this year, which will require all Americans to purchase health-care coverage, including the close to 46 million Americans who have no coverage.  This will be subsidized by Uncle Sam to pay their premiums. Certain restrictions will be placed on private insurers, among them a prohibition against denying insurance to Americans with pre-existing medical conditions.

Powerful opposition to the health reform has become very vocal and many are up in arms.  The AARP (American Association of Retired Persons) has come out in favor of the reform but that has caused some members to resign in protest.

As many as 60,000 AARP members have left the group in protest over its stance on healthcare reform. The reforms did not sit well with the many AARP members who are upset over proposed cuts to Medicare that will total $313 billion over ten years.  They are in many cases defecting to the American Seniors Association, which bills itself as more conservative than AARP and solidly opposes President Obama’s healthcare reform proposals. 

Given this vociferous opposition, Obama has been promoting Health Reform on conservative radio.

The White House transformed its Diplomatic Reception Room into a radio studio Thursday, as President Obama took to the airwaves to promote his health care plan. He spoke directly with listeners of a nationally-syndicated radio program hosted by Michael Smerconish. Talk radio is a powerful vehicle for promoting political and social agendas in the United States. Conservatives have used the airwaves lately to aggressively attack Mr. Obama’s policies.

The fierce debate will certainly continue since in essence the Health Reform has some hidden victims.  These are some of them if anything like the existing Senate or House health plans become law:

  • Young people will have to buy policies that don’t reflect the low risk they have of getting sick.
  • Small Businesses will have to pay a tax up to 8% of their payroll, if they do not provide coverage
  • Health Savings Account (HSA) holders covered by plans with low-cost premiums and high deductibles that are designed for large, unexpected medical costs will have to buy policies
  • Medicare Advantage users will undoubtedly see changes

Although the objectives of the Health Reform are most laudable, President Obama will have to use all his diplomatic and persuasion skills if the Health Reform package is to be adopted without too many cuts and modifications.

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Behind With Credit Card Payments

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If you are behind with credit card payments, then you are certainly not alone.  Equifax Canada reports that More Canadians are in arrears on credit payments.

More than half a million Canadians are more than three months behind on their credit payments.  That represents a 19 per cent rise in the average delinquency rate in the year ending May 31.

In May, a report from the Certified General Accountants Association of Canada showed Canadians are increasingly relying on credit cards and credit lines to finance day-to-day expenditures.

  • Household debt is at an all-time high reaching $1.3 trillion in 2008
  • Canadian households are financing consumption activity with unearned money as families increasingly reach for credit to finance day-to-day living expenses.
  • The majority (58%) of survey respondents with rising debt said that day-to-day living expenses are the main cause for the increasing debt. This was higher than the 52% reported in 2007.

Undoubtedly the same situation exists in the US.  The situation is likely to get even worse since Credit Card Issuers Are Raising Rates Ahead of New Law.

Credit card companies are raising interest rates and fees seven months before new rules go into effect that will limit their ability to do so, much to the irritation of Congress and consumer advocates.  The flurry of activity, which the banks say is necessary to shore up their revenue losses, has irked members of Congress, who passed a new credit card law, which was signed by President Obama in May.

The law, among other things, would prevent card companies from raising rates on existing balances unless the borrower was at least 60 days late and would require the original rate to be restored if payments are received on time for six months. The law would also require banks to get customers’ permission before allowing them to go over their limits, for which they would have to pay a fee.

Bank executives had warned that the new law would force them to increase rates and fees because it would keep them from properly managing borrowers’ risk. The argument is that if banks can’t raise rates on riskier customers, they will have to raise rates on all.

Chase is one bank that is increasing Credit Card Payments Ahead Of The Reform.

Chase told the Huffington Post that the changes would apply to less than 1 percent of its approximately 100 million active accounts.  “Chase has recently increased the monthly minimum payment on select accounts that have carried balances. Effective August 2009, impacted cardmembers will have their minimum payment increased from 2% to 5% of the statement balance,” said Chase spokeswoman Stephanie Jacobson in a statement. “Tens of millions of Chase customers have taken advantage of our promotional low rate financing over the last five years. Most of these loans have been paid back in less than 24 months. However, there have been a small percentage of customers that have not made as much progress in paying down these loans.”

Chase is not the only lender to take action that will raise costs for consumers since Obama signed the reforms into law in May. USAToday reported Monday that Chase and Bank of America are both raising balance transfer fees, and that Capital One and Citibank have raised interest rates. The Financial Times reported Wednesday that Citi is raising rates on millions of its customers in exactly the way the new legislation is supposed to prohibit.

This in all likelihood means that even more credit card debtors will be behind with their payments.  Hopefully the recession will begin to abate in the not too distant future and that will present a light at the end of the tunnel for at least some of these debt-stressed individuals.

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Drug makers admit taking too much money

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Drug makers admit they’ve taken too much money

By agreeing to cut prices by $80 billion over the next 10 years to close the Medicare Part D prescription drug doughnut hole and help pay for health care reform, the major pharmaceutical companies have admitted that they’ve been raking in way too much money.

The drug manufacturers, organized as the Pharmaceutical Research and Manufacturers of America (PHARMA), have agreed to a minimum 50 percent discount for most Medicare beneficiaries for brand-name medicines purchased in the doughnut hole gap in Part D coverage, roughly between $2,700 and $6,100 a year.

The doughnut hole came into existence when former President George W. Bush and his fellow Republicans designed Part D to benefit pharmaceutical and insurance companies more than the elderly Americans who need the coverage. At the same time, the federal government was barred from negotiating drug prices in bulk with the pharmaceutical companies.

The $80 billion commitment, part of $2 trillion in health care cost cuts sought by President Barack Obama over the next 10 years as part of the health care reform effort, shows how excessively profitable the pharmaceutical industry has become.  Even so this represents only 4% of the targeted reduction.  In Canada, where the government negotiates drug prices as part of a Single Payer arrangement, American made medicines are considerably cheaper.

The 30 percent overhead for private health insurance is  the other big area for cost cutting. Eliminating these middle men through a Single Payer arrangement or Obama’s public health insurance option is the best way to achieve universal coverage at the least cost. Every other industrialized country has already shown the way.

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Combating Identity Theft

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Identity theft is a particular concern for seniors. The invasion of privacy can be devastating and the steps needed to eliminate the problems caused by the identity theft can be long and onerous.

It is not just a problem for seniors. That is why the Wall Street Journal reports that Security Experts React to Obama’s Cybersecurity Report with enthusiasm. These cybersecurity concerns apply both at the national level and also for all individuals.

Several executives were encouraged by Mr. Obama’s personal remarks on what is often seen as an obscure issue. “I know how it feels to have privacy violated because it has happened to me,” he said, noting that his campaign’s emails and files were hacked last year.

“Identity theft is something that lives off in virtual land, and I think has people appropriately nervous, so I thought the president did an excellent job touching on issues people identify with,” said Ed Amoroso, AT&T’s chief security officer.

The appointment by President Obama of a cybersecurity czar will bring heightened emphasis on these issues. Nevertheless whatever improvements are made at the national and corporate level against such activities as phishing to steal personal data, the ultimate responsibility is always with the individual. Precautions must always be taken to guard against any security breaches.

If the unfortunate happens and an individual is the victim of identity theft, then it is worth ensuring that you already have in place an Identity Theft Recovery Kit. This should set out a detailed plan of what needs to be done including important phone numbers, websites, and addresses. You should also keep a good recovery log of what is done on every account in case problems arise. Such precautions when dealing with identity theft are never a waste of effort.

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Unjustified Bonuses Paid By Taxpayers

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AIG bonuses are ‘an outrage’ says President Obama, and he speaks for us all.  How can the senior executives in AIG be so out of touch with reality that they rely on legal niceties to do what is so morally wrong?  Perhaps that lack of judgment and apparent unawareness of how the real world functions explains their appalling track record.  Well they seem to have shot themselves in both feet this time:

Barack Obama is vowing to pursue “every legal avenue” to stop a clutch of top executives at American International Group Inc. from pocketing multimillion-dollar bonuses, including some to employees who designed the risky credit instruments that helped topple the insurance giant.

The U.S. President joined congressional leaders and state regulators on Monday in demanding that the failed insurance giant, which has so far received more than $170-billion (U.S.) in government bailout cash, roll back $165-million in bonuses paid to employees over the weekend.  Outrage was the word of the day as news spread of the payouts, some reportedly as high as $6.5-million.

Not surprisingly, the Bonuses overshadow foreign bank payments, which could have drawn equally violent reactions.

When it emerged on Sunday that foreign banks had received more than $50bn of US federal funds as part of the AIG bail-out, big beneficiaries such as Deutsche Bank and Société Générale must have braced themselves for an outcry in Washington.

Any senior executive of any financial institution should have a keen awareness of what is going on around the world and consider carefully the most appropriate reactions. In the UK, the Financial Services Authority (FSA) will set out a banking clampdown.

Britain’s financial regulator, the FSA,  plans to clamp down on risky mortgage lending and City bonuses in a shake-up of banking rules due this week according to the British Sunday newspapers.

The FSA is planning a crackdown on management bonuses that reward short-term risk taking and will propose new rules on how banks should be run, including forcing them to hold more capital against risky trading, according to the Financial Sunday Express.  The regulator will also table new vetting procedures to ensure bank bosses are qualified to run financial institutions.

This follows up on assertion by the UK Prime Minister, Gordon Brown, that We won’t pay for bankers’ one-way bets.  He laid out a four-point plan to end the excesses of the bonus culture

Everywhere I go in Britain, I sense and share the anger and dismay of millions of hard-working people who have watched in disbelief during a year in which irresponsible practices in global banks have brought the world’s financial system close to collapse.  Only bold action to protect those endangered through no fault of their own will do.

Responsible senior bank executives should not need to have the politicians clamp down on them in this way.  It goes beyond the issue of legality, it is a simple question of morality.  President Obama has a massive popular movement supporting him as he tries to do whatever it takes to re-establish this in the financial world.

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Save Or Spend In This Recession

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Can Canadians buy their way out of the recession? is the question posed by Parminder Parmar of CTV.ca News.  North Americans and Europeans appear to be getting mixed messages about whether they should save or spend to move the economy forward.

In the U.S., prominent members of President Barack Obama’s administration have said Americans should once again become a nation of savers — and end the era of carefree overspending. Meanwhile, in Finland, a national campaign featuring an angry looking piggy bank warns people not to feed the recession by saving.

If you want to explore further, here is a web page on President Obama’s administration ‘nation of savers’ thought.

The “Making Work Pay” tax credit, a focus of Obama’s economic stimulus bill, would become permanent. The credit is $800 for those filing jointly and $400 for individuals. It phases out for single taxpayers with $75,000 of adjusted gross income, $150,000 for joint filers.

Other increases in the budget include expansions of the earned income tax credit and child tax credit for low-income Americans, an expanded saver’s tax credit and a plan to automatically enroll people in IRAs and 401(k) plans.

As for the Finnish national campaign featuring an angry looking piggy bank, you’ll find more on that here.

University of Victoria economist Linda Welling says it’s natural for people to be concerned about the negative direction the economy appears to be heading in leading to a tightening of wallets.  So Ottawa should focus on trying to get more money into the hands of consumers to kick start the economy. A few options like offering tax rebates, extending employment insurance benefits or relaxing EI qualification requirements could boost consumer spending.  Anyone making purchases will find ready supply and really low prices.

Mehmet Dalkir, economics professor at the University of New Brunswick, feels that is only part of the answer.  The real key to getting out of the recession is to boost business spending — and the best way for the government to encourage that is by initiating public capital projects.  Without that, continuing job losses will depress overall consumer spending.

As far as consumers go, a good rule of thumb is to have six months to a year of funds to cover net expenses. If you have that, then perhaps by spending you will do yourself and the economy a real good turn.

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Grey Power At The Top

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If you  needed any confirmation that gray or grey power is in the ascendant, the headline item is discussing The Distinguished-Looking President’s Other Gray Matter.

After just 44 days on the job, the 47-year-old president is showing a bit of gray in his hair.  “The gray, it’s not a whole lot, but he has a few strands,” explained Zariff, the president’s Chicago barber for 17 years, who goes by a single name. “It’s quite normal for his age group.”

“Seniors, listen up. I’m getting gray hair myself,” Obama quipped at a campaign stop in Indiana last spring.  “The gray is coming quick,” he told supporters a few months later in Colorado. “By the time I’m sworn in, I will look the part.”

It is a welcome reminder that grey power does not just refer to a cosmetic feature, but can point to all that grey matter that is available within our senior citizens’ crania.  It is not therefore just their disposable income that seniors can use to assist the economy, but perhaps their intellectual capacities can also come into play.

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Fair Pay For All

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It is good to see that President Obama’s first law concerned The fight for fair pay.

President Barack Obama’s first bill, the Lilly Ledbetter Fair Pay Act he signed into law, loosens the statute of limitations under which workers can sue employers for pay discrimination based on characteristics such as gender, race, age or disability.  To ward off discrimination suits, companies will need to meticulously document pay decisions and retain detailed employment records, legal experts say.

It is rather ironic that should have been the first bill, since at the same time he is acting on salaries and compensation at the other end of the scale.

The President proposes to limit the total compensation for senior executives of those companies receiving support under the bailout arrangement.  The top brass would no longer have golden parachutes and the severance packages to those in the second tire would be limited to one year’s salary.  Although it may sound perfectly reasonable to you and me, it immediately raises criticisms from others.

For example, Carly Fiorina, former chief executive of HP, believes that Government shouldn’t decide executive pay.

Americans are outraged over excessive CEO pay and perks. That outrage is justified, particularly when American taxpayers are footing the bill.  Our capitalist system works best when there is transparency and accountability. There has been too little of both on Wall Street.

She is concerned that the proposed cap for top executive pay at $500,000 for institutions that have received bailout money is arbitrary and applies only to them.  She calls for an across-the-board approach.

  • To strengthen transparency, all aspects of CEO pay and perks should be fully disclosed on a regular basis. This should include airplanes, cars, golf-club memberships, bonuses, stock options, retirement plans and salaries — in short everything that a common-sense person would consider part of a CEO reward package.
  • To strengthen accountability, all aspects of CEO compensation should be voted on by shareholders on an annual basis.

These are very reasonable suggestions and legislation to bring them in would receive wide support.  However the President’s proposed limits send a strong message and prepare the ground for such legislation down the road.  Open government requires transparency and equity.  Fair pay for all should apply at all levels.

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Gordon Brown, UK Prime Minister, Old World. Barack Obama, New World.

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What a glorious day occurred yesterday for the whole world with the inauguration of Barak Obama as the new US president.  Now we must all pick up the message, Yes We Can.  That means facing up to reality.

After a whirlwind of galas surrounding his inauguration, Barack Obama begins his first full day as U.S. president Wednesday with a full plate of reality staring him in the face.

Gordon Brown, the UK prime minister says that he sees this as a new chapter
in both American history and the world’s history.  However others have commented before that Prime Minister Gordon Brown is out of touch.

If you will permit a short rant, I note that today’s word in my Forgotten English calendar is mumbudget.  That is an expression denoting secrecy as well as silence.  It seems to be a word beloved by Gordon Brown.

The Times headline today is Gordon Brown backs moved to block full publication of MPs expenses.

Gordon Brown has imposed a three-line whip to force a move to block full publication of MPs’ expenses through the Commons.  Labour MPs could face sanctions if they rebel in tomorrow’s vote on an amendment to the Freedom of Information Act that would exempt MPs from disclosing exactly how they have been spending their annual £22,000 second-home allowance.

The Guardian had already pointed out that the move to make MPs exempt from publishing expenses will antagonize a large number of people.

The move next week will allow parliament to nullify all the long-fought victories by campaigners and journalists to force MPs to publish details of all their individual receipts for their second homes, including details of what they spent on furnishings, maintenance, rent, mortgage payments, staffing, travel, office staffing and equipment.

Public opposition is growing against the move.  At the time of writing this, almost 7,500 people have signed a Facebook campaign led by mySociety.  mySociety runs the “theyworkfor-you” website, that urges MPs not to push through the change.

What a stark comparison.  Gordon Brown in the Old World.  Barak Obama in the New World.  Thankfully the Internet forces openness and makes ever truer those words of Abraham Lincoln at Gettysburg: a government of the people, by the people, for the people.  Please smell the coffee, Mr. Brown.

STOP PRESS: Gordon Brown withdraws plan to keep details of MPs’ expenses secret:
Surprise announcement follows the collapse overnight of a bipartisan agreement between the prime minister and David Cameron

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Should the mother-in-law move in?

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obama first grandma

If your mother-in-law moving in is a current concern, then you will find lots of good advice in a current news item. Michelle Obama’s mother is moving into the White House with the first family.  She will thus become The First Grandma.

Marian Robinson, the mother-in-law of President-Elect Barack Obama is moving into the White House – at least temporarily – to support her daughter Michelle and granddaughters Sasha and Malia as they adjust to their new life in Washington.  Mrs. Robinson, a Chicago native who retired from her job as a bank executive secretary last summer, has never lived outside of The Windy City, so the move will be as big an adjustment for her as it will be for the other four members of The First Family. Barack Obama has called her one of the unsung heroes of his campaign.

Advice for the Obamas on mother-in-law’s move runs the gamut from discipline styles with the children to privacy issues. 

Like some 4 million other multigenerational U.S. households Barack Obama’s mother-in-law, Marian Robinson, will join the Obamas at the family’s private quarters at 1600 Pennsylvania Avenue.  In about 1.3 million American homes where the parents are head of the household, at least one grandparent lives with the family.  Having a grandparent living with a family can be a wonderful and beneficial addition to the family, says psychologist Elaine Ducharme, but only if everyone can navigate the boundaries.

Clearly in such a move there are positive aspects and there are negative aspects.  Each case is different.  Hopefully by considering all factors in such a move, disasters can be avoided and all family members can have enriched lives.

Footnote: If you are interested in books on Good Living, then why not visit the Good Living section of the Money Bookstore.

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