Obamacare fallout begins in earnest.

Obamacare. Higher costs, less care.

From Pacific Business News

May 16, 2014, 6:30am HST
Kaiser Permanente Hawaii posts $5.8M Q1 loss after paying $8M in ACA fees

Pacific Business News
Kaiser Permanente Hawaii said costs related to the federal Affordable Care Act added $8 million to its expenses in the first quarter and contributed to a $5.8 million loss for the quarter.
The Honolulu Star-Advertiser reports Kaiser said it collected $296.1 million in premiums during the first three months of the year, and paid $302.8 million in benefit expenses, which resulted in a $6.7 million operating loss that was offset by investment gains of $900,000, for a net loss of $5.8 million.

The newspaper reports Hawaii’s largest health-maintenance organization, which did not have an estimate of how much in ACA fees it would have to pay this year, said that the ACA fees account for about 2 percent to 3 percent of insurance premium costs.

The newspaper reports a Kaiser spokeswoman said the Affordable Care Act fees pay for subsidies for low-income families and individuals to purchase health insurance on the Hawaii Health Connector, which helps achieve a major goal of the federal legislation, which was to increase access to health care.
Meanwhile, the Hawaii Medical Service Association attributed much of its $30.1 million loss for the first quarter to the $46.1 million in Affordable Care Act fees that the state’s largest health insurer paid during the quarter.


Broken pension promises

A worker toils for twenty, thirty or more years and is promised a pension upon retirement. He or she must make the assumption that the promise will be kept. In recent years the promises have been broken and people that have been retired for years have found their financial situation much different than what they had planned for.

Old Guy in helmet   2008 09 02

To get a clear view of the reasons for this betrayal we need to take a simplified look at two of the basic types of retirement plans.

Defined benefit plans

The oldest plans are the defined benefit plans.These were developed in the golden age of American industry and provide a fixed “guaranteed” payment. Money is put into the plans by the employer during the employee’s working years. An interest assumption is used to determine if the plan is funded adequately to provide the guaranteed benefit. The interest assumption is just that, an assumption. If the percentage does not reflect the actual performance of the investments, then the plan is underfunded. If it is underfunded the employer must come up with more cash to fund the plan.

The financial crises of 2008 clearly demonstrated what happens when interest assumptions are glaringly incorrect. Real interest and market performance plummeted leaving many corporations with these plans unable to fund them. Some companies declared bankruptcy. What happens in bankruptcy to defined benefit plans?
They are protected by the Pension Benefit Guarantee (there’s that word again) Corporation. There are multiple requirements to collect the pension and reductions in payout are common. The PBGC is funded by premiums paid by companies that have defined benefit plans. It is possible that with enough bankruptcies the payouts will exceed the premium contributions.

If a giant corporation like General Motors put its plans into the PBGC the PBGC would have to go to congress for help and all those receiving their pension from that organization would be in jeopardy.

Defined benefit plans are becoming a dinosaur. Most companies have terminated these plans and switched to a defined contribution plan to be discussed next. The exceptions are government employees. Government agencies continue to fund these programs for one simple reason; their unions want them. They provide guaranteed benefits superior to those in the private sector. The employer (government) does not have to make a profit and does not have to worry about funding them. They simply raise taxes and fees to do so. This works well until the tax and fee base simply cannot support them.

The Detroit bankruptcy is a prime example. Many public employees are now forced to change their lifestyle even though they may have been retired for many years.

Defined contribution plans

As the name implies, these plans take put an amount every period into a 401K or IRA. When a person retires the amount they receive is variable depending on the contribution amount and the investment performance. Companies love these plans because they no longer have to fund a guaranteed payout.

Upon retirement the pensioner has several options including a monthly withdrawal from the IRA/401K or they may purchase an annuity from an insurance company which can guarantee (there’s that word again) an amount payed each period.

Both basic options have risk. For example the insurance company can itself become insolvent. They will have insurance for the annuity holders but the amounts are determined by the state. It is possible that the insurance is insufficient to cover the guaranteed payout. The pensioner is subject to the audit or lack of audit as to the remaining balance in their account.

Where to turn

There are government agencies that are supposed to help those who have been harmed by events beyond there control. How do they work? Not very well.

In the case of the defined benefit plan the PBGC will determine your pension and it may be far less that you had originally planned for.

In the case of the Employee Retirement Income Security Act (ERISA) and the Employee Benefits Security Administration (EBSA), I personally have found them to be essentially unresponsive to individual requests. They are supposed to set plan standards for companies but if you as an individual have been harmed by legal or illegal manipulation of a retirement plan it is unlikely you will get help from this agency.

The recent scandal regarding the VA medical center’s total disregard for some of the people they are supposed to serve exists in other agencies as well. Know your retirement plan. Get as much information as possible and above all do not believe The Promise or The Guarantee. Oh yes, don’t rely on your government to help.

Reducing the amount of choking government regulation

Most of us eventually come to the realization that we have too much stuff. We have too much stuff in our homes, we have too much stuff on our computers, we had too much stuff on our smart phones.

So, eventually we must come up with a means to get rid of the worthless useless stuff on our computers in our homes and our smartphones. Now, this does take some time and it takes an effort to sort through the stuff to figure out which is good stuff and which is stuff to throw away.

The problem with legislation, rules, regulations and laws is that there doesn’t seem to be a method to sort through them and get rid of the ones that we no longer need. Regulations that are ill-conceived, discriminatory, unenforceable, too costly, or simply no longer needed must be repealed.

This might lead to a new type of political promise. Right now, we seem to rate legislators on the number of bills they sponsor and get passed. What about a new criteria? How about grading performance on the number of regulations repealed or otherwise killed?

Or, we might modify procedure to allow that for a new law to pass, there must be three repealed in the same section or area.

Here is a comment by a former member of the New Zealand parliament:

— E. Donald Elliott is a Professor (Adjunct) of law at Yale Law School and a partner in the Washington, D.C. office of the international law firm Willkie Farr & Gallagher LLP

For a number of years I was a Member of the New Zealand Parliament, during which time New Zealand, facing the same problem of obsolete and contradictory law, set out to clean up its statutes. The process we used was to systematically re-write the corresponding statutes of each sector of the economy we reformed – such as the tax code and health care – so that the laws were clear and unambiguous, and reflective of the needs of contemporary society. These re-written statutes were then passed by Parliament and all the related old ones were repealed. In my view this was a very effective process. New Zealand’s environmental laws, for instance, went from being 25 inches thick to just 348 pages. The action of repealing all the old laws also automatically repealed all the regulations built on those laws so the regulatory code was cleaned up at the same time.

And here is the full article from The Atlantic.


Farming and Ranching. Changing demographics. From NPR.

For Many, Farming Is A Labor Of Love, Not A Living


Bill Miller, a part-time farmer in Aurora, Mo., says farming “gets in your blood.”

Dan Charles/NPR
Every five years, the U.S. Department of Agriculture carries out a census of farmers: who they are, and what they are doing on their farms.

The agency just released the latest one, and it’s a feast for all ag geeks. And here’s the very first, most basic piece of new information: There are 2,109,303 farmers in this country.

But look a little closer at that number, and you can see that it’s not quite what it seems. Most of those farmers are not actually making a living by farming.

Bill Miller is a typical example. He grew up on a big cattle ranch in southwestern Missouri, near the town of Aurora, and he felt like the place was his. But he was the son of a ranch hand, not the owner. So when the ranch was sold to new owners, his father lost his job and the family had to move out of their house on the ranch.

Today, Miller works at a chemical plant near Aurora. But he and a co-worker rent some land where they graze cattle.

“It’s just something you love to do, you know?” Miller says. “Born and raised with cows. Just enjoy being around them, messing with them.”

The land where his cows graze is beautiful. It’s a hillside with a pond at the bottom and a view across the valley to a mountainside covered with trees. Some evenings, Miller comes over here after work, sits on the hill and just watches the cows and their calves.

“Basically, it just gets in your blood. It’s what you love doing. There’s nothing like seeing a brand new calf, the first time trying to get up and walk, you know?” Miller says quietly.

But there are a couple of things he doesn’t get from farming: health insurance; a 401(k); or very much income, for that matter. “I work a job so that I have health insurance, some sort of retirement,” Miller says.

Miller is surprisingly typical. According to the newly released census of agriculture, more than half of all farmers say it’s not their primary occupation. Also, two-thirds of all farms sell less than $25,000 worth of crops or livestock each year. That’s not profit — that’s total sales.

Part-time farmers come in many flavors. Some are stepping away from agriculture. They may be semi-retired, or they inherited farmland and want to keep it in the family, but they don’t want to farm full time. Some are raising vegetables for farmers markets. Others have orchards.

But the biggest single group is made up of people like Miller, who raise cattle. It’s often the easiest way to farm part time. Cattle don’t take a lot of expensive equipment or a huge amount of labor. As a result, the average cattle herd in the country is just 40 animals.

Some of these part-time farmers would love to do it full time. “My whole entire life, all I wanted to do was farm. But things change as you grow up,” says Josh Kennedy.

Kennedy got married. He and his wife now have a young son. “It kind of became — how do I support my family? Of course, benefits and insurance are a big thing,” he says.

So he went to work at the Aurora Fire Department. When he gets off work there, he trades his fireman’s uniform for a pair of rancher’s boots, gets in his truck, and goes home to the work that he considers his real occupation.

“It’s hard to explain sometimes. People are like, ‘Why do you do that? It doesn’t look like it makes a whole lot of money!’ ” Kennedy says.

Kennedy would like to expand his farming operation by buying or renting more land, and grazing more cattle. “Ultimately, that’s my goal, to buy a bigger farm.”

But land is really expensive. He’s competing with other farmers, including bigger farmers, with much bigger lines of credit.

Devin Fisher, another part-time farmer near Aurora, also played with the idea of doing it full time and decided there was no way she could ever acquire enough land to make it work financially. “It’s virtually impossible to do it for a living unless it’s been handed down to you,” she says. “You almost have to walk into it, to do it as a full-time job.”

Being a hobby farmer, she says, is the next best thing.

The census numbers reveal the continuing transformation of American agriculture. The huge number of part-time farmers represents a kind of historical legacy. To a large extent, they are what’s left of the days, a century ago, when farmers made up almost a third of the labor force.

Meanwhile, though, big farms are getting bigger.

According to the latest census, there are just 80,000 farms with sales of over $1 million a year. They represent just 4 percent of the total farm population. But those few big farms account for two-thirds of all agricultural production in the country.

Cost per enrollee in Obamacare

From the Hawaii Free Press:

Cost-per-enrollee in each state’s Exchange

by Jay Angoff, FindJustice.com, May 7, 2014 (excerpts)

…There was a very large variation in cost-per-enrollee among the Exchanges. Of the 15 state-run Exchanges, the state with the lowest cost-per-enrollee was California, at $758, while the state with the highest cost-per-enrollee was Hawaii, at $23,899. Excluding Hawaii and the District of Columbia, which were outliers, the state Exchange with the highest cost-per-enrollee was Massachusetts, at $5,681. Hawaii’s cost-per-enrollee was 32 times California’s, while Massachusetts’s was 7 times California’s. …

The five states with the lowest cost-per-enrollee are all states whose governors and/or legislatures have resisted the ACA, and whose Attorneys-General challenged the constitutionality of the ACA. They are as follows:

State Cost-per-enrollee

Florida $ 76
Texas $ 102
Georgia $ 240
Virginia $ 376
Michigan $ 427
The five jurisdictions with the highest cost-per-enrollee include three whose elected leaders support the ACA and two that oppose it. Those five are as follows:

State Cost-per-enrollee

Hawaii $23,899
District of Columbia $12,467
North Dakota $ 7,089
Delaware $ 6,825
Wyoming $ 6,323
The common denominator among these five jurisdictions is that they are very small–all with populations of less than 1.4 million–and thus must spread the fixed costs of the Exchange over a very small base. Nevertheless, Hawaii and DC, which run their own Exchanges, had costs-per-enrollee that were far higher than those in any of the federally-run small states–almost twice as high in DC, and more than three times as high in Hawaii….

read … Kaiser Health News

Background: Final Deadline: Hawaii Spends the Most and Gets the Least from Obamacare

Department of Transportation | Hawaii’s Legal Presence Law

Do any of these requirements have anything to do with the ability of an individual to operate a motor vehicle?


Effective March 5, 2012, anyone applying for an original or renewal of their Hawaii driver’s license or permit must show proof of legal presence in the U.S.

Legal presence means that a person is either a U.S. citizen or is legally authorized to be in the United States.

Act 38, Session Laws of Hawaii 2010, prohibits the issuance of a Hawaii driver’s license to any person that is not legally in the United States and limits the term of the issued licenses only for the period that the applicant is temporarily authorized to be in the United States.

Legal Presence Affects Everyone

Legal presence requirements affect anyone applying for a Hawaii driver’s license, including U.S. citizens and foreign-born applicants, those applying for a learner’s permit, and permit holders passing their road test to obtain a driver’s license. Legal presence also applies to anyone who has just moved to Hawaii from another state or country, and anyone renewing their Hawaii driver’s license or permit.

Proof of legal presence will be required from:

Applicants applying for an original Hawaii driver’s license.
Anyone who has never held or is re-applying for a Hawaii driver’s license must provide proof of legal presence in the U.S.
Applicants renewing their Hawaii driver’s license.
Anyone who renews their Hawaii driver’s license must provide proof of legal presence in the U.S. Applicants who are U.S. citizens and aliens admitted for permanent residence status in the U.S. will need to provide proof of legal presence documents every second renewal.
Drivers reinstating their driving privilege because of a license revocation or cancellation.
Customers whose license or permit to drive has been revoked or cancelled must provide proof of legal presence in the U.S.
Drivers who have allowed their license to expire.
Anyone who lets his driver’s license expire, even by just one day, must provide proof of legal presence in the U.S.
Permit holders when they pass their road test and obtain a Hawaii driver’s license.
All permit holders must provide proof of legal presence in the U.S.
Drivers converting their Hawaii provisional driver’s license to a full driver’s license.
All license holders who convert from a provisional to a full license must provide proof of legal presence in the U.S.
Proof of legal presence will NOT be required from:

Applicants applying for a duplicate Hawaii driver’s license or permit.
Temporary Legal Length of Stay – Limited Duration Driver’s Licenses or Permits

Persons who are authorized by the federal government to be present temporarily in the U.S. will be issued limited duration driver’s licenses or permits.
Applicants who are temporarily authorized to be in the U.S. are required to present proof of legal presence when applying for an initial or renewal of a Hawaii driver’s license or permit.

Now, check this link and see if any of these requirements have to do with the operation of a motor vehicle.