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Reminder on Medicare Part D Donut Hole September 1, 2010

Posted by Ken in Health Care, Politics.
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A hand-drawn chart showing Total Out-of-Pocket expenses under Medicare Part D

Recently Health and Human Services Secretary Kathleen Sebelius has said that there is “a lot of reeducation to do” heading into the midterm elections – to help her in her efforts, I wanted to take a moment and explain the one immediate benefit many Americans are enjoying as a result of the Health Care Reform Bill referred to as “Obamacare” – the $250 rebate check for the so-called donut hole in their prescription drug coverage.

As you may recall President Bush (43), with bi-partisan support, implemented the Medicare Prescription Drug, Improvement and Modernization Act commonly referred to as “Part D” that provided real, significant savings to nearly all seniors who need prescription drugs. In a nutshell, seniors would choose the Part D plan that best suited their needs, and they would realize savings once their drug costs exceeded $295/year. The plan provides for 75% savings on every dollar spent above $295, until your medication costs exceeded $2,700 for the year, with a second round of discounts kicking in once your total expenses hits $6,154, after which you get 95% savings on every dollar spent above that threshold. But what does that mean?

If you spend less than $295/yr on prescription drugs, this plan offers you no savings, but at just under $25/month, your expenses should be fairly manageable.

If you spend between $296 and $2,700/year on prescription drugs, your maximum out of pocket expense will be $896.25 – a maximum possible savings of over $1,800. Every dollar between $295 and $2,700 spent only costs you 25 cents.

If you spend between $2,701 and $6,154 you will have no savings on any dollars spent in excess of $2,700 – this is the “Donut Hole” and the folks that complain about the donut hole tend to forget that Part D has already saved them over $1,800, and if you were to calculate the savings after Part D was enacted, they are only spending $4,350.25 for what cost them $6,154 before Part D was enacted – a 30% savings on all drugs right up to the Donut Hole upper limit.

Now, if your needs are such that you require more than $6,154 a year in prescription drug expenses, you will realize a 95% discount on every dollar spent beyong $6,154. In my sample chart, I only go to $9,000/yr, which is $750/month, and at that level the realized benefits are that for the $9,000 in total annual benefits your total-out-of-pocket expense is $4,492.55 – just a smidge more than a 50% discount, and and expenses increase, the savings really add up – the next $5,000 in benefits only increase the out-of-pocket expenses for the patient by $250!

But, having exploited the seemingly horrific “donut hole,” certain politicians felt a change was needed to address the Donut Hole, so, as part of the Health Care Reform Bill passed into law earlier this year, they included a provision that instituted “rebate checks” to help ease the financial strain of those that find themselves in the dreaded “donut hole” – they will get a $250 check from the government. The Health Care reform bill proposed to eliminate the “donut hole” by the year 2020.

This very real benefit from the Healthcare Reform Bill kicks in once you spend more than $$2,700/yr on prescrition drugs and alters your out-of-pocket expense. For my worst-case patient that requires $750/month in prescription drugs, their out-of-pocket cost is decreased from $4,492.55 (50% discount) all the way down to $4,242.55 (a 52.8% savings).

Secretary Sebelius reports that over one million $250 rebate checks have been sent out so far (meaning that over one million medicare recipients have spent more than $896.25 for more than $2,700 worth of prescription drugs, and she further expects a total of four million rebate checks may be sent out before they year is over (the checks are sent as the $2,700 expense threshold is crossed) – the total cost of the rebate checks will therefore approach one billion dollars this year.

Also, just a reminder, that medicare recipients can select Part D plans that include additional coverage to help with the so-called “donut hole” expenses by paying slightly higher premiums for their coverage.

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MTA Traffic Spike for 8/28 Rally in D.C. September 1, 2010

Posted by Ken in Restoring Honor.
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Crowd at Glenn Beck Restoring Honor rally August 28th, 2010

According to a Metro spokesman, Washington Metro ridership spiked to 510,000 on August 28th, the day of Glenn Beck’s Restoring Honor rally at the Lincoln Memorial. That spike indicates an increase of about 180,000 additional rides (one-way trips) over any other Saturday in D.C. this August, adding credence to estimates that the crowd approached 100,000 visitors, but seemingly refuting claims of far greater numbers (some up to 500,000) – but what’s the real number?

We’ll never know, but we can say a few things for certain: Attendence was huge, easily too big to be dismissed as a a minor rally or a fringe effort. Attendence was from all across the country – I personally saw five buses from Wyoming parked near the bus I rode in on from New Jersey, and I heard reports of attendees from as far away as Washington State that came in on buses, Alaska and Hawaii were represented as well, as well as members of the armed services from overseas bases.

Was it a half million attendees – I don’t know, I ran out of fingers and toes way too early to count them all, but I can say this about the Metro ridership – like many others, I walked from RFK Statium to the rally, but me and my fellow walkers were a minority of bus riders, not the majority, but after the rally the lines to get back to RFK Stadium were enormous – it took almost an hour to get on to the Smithsonian Station platform after the rally – many were put off by the lines and choose to walk back to the buses.

No matter how you slice it, there were a lot of attendees (just look at the aerial shot above), and the event was an unqualified success, and the crowd couldn’t have been nicer. Some are even suggesting that the rally go’ers left the Mall cleaner than they found it

Lies, Damn Lies, and Nielsen Ratings August 18, 2010

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While the linked-to article is about the performance of late-night TV show Red Eye, the included charts show the ratings (overall and in the 25-54 demograph) for the various news channels. Sorry Neil Cavuto, Fox Business news isn’t included – maybe we should demand it! Link to Mediaite article.

Reagan vs… August 18, 2010

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Here’s a great little video of some powerful statements by President Ronald Reagan, inter-cut with some more recent statements by our elected leaders:

Unemployment by county, 2007 – 2010 August 18, 2010

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Fascinating, disturbing video of the month-by-month increases in unemployment by county over the last three plus years, as depicted by U.S. Department of Labor’s Bureau of Labor statistics.

Thoughts on the iPad August 11, 2010

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A couple weeks ago I bought an iPad, despite my opinion that it was a fairly limited device. My opinion of the iPad hasn’t changed much, but I can easily say I don’t regret deciding to buy it. Let me explain…

My thoughts when the iPad first came out revolved around the fact that it looked like a massive, almost cartoonish, version on the Apple Touch, and that it is geared more towards content enjoyment, not creation. That isn’t a bad thing, but it is a “thing”to be aware of. And, of course, there is the ‘no flash’ kerfuffle – much WWW content is flash-based, to the point that it really does impact your ability to enjoy a fairly large chunk of web sites. Sure, Apple/Steve Jobs has decreed that flash is no good, but that doesn’t change the reality of the web as it is today and for the next little while.

So what is good about the iPad? Well, the battery life is great – mine gets used sporadically, but I’ve never been surprised by the battery suddenly going dead on me. The battery life of this device suits my usage patterns, but I don’t really push the limits of this device, either. The display is glorious, the resolution and brightness never fail to impress others, and while I mainly use the iPad in dimly lit rooms or in an office environment, I can say that it serves my needs well. I honestly have no idea how well it would work outdoors, I assume it would be similar to an iPhone. The actual size of the iPad isn’t as big an issue as I would have imagined, but I must confess I tend not to take my iPad out on the town – it is used mainly at home or in an office. I wouldn’t want the iPad to be any bigger (then it would be like a clipboard), and any smaller and it starts to resemble my iPhone (which goes everywhere with me BECAUSE it is so small).

So then, what’s wrong with the iPad – not a lot, once you understand what it is (and is not). The iPad is NOT a laptop or a netbook – it is a tablet, with no dedicated keyboard (and the on-screen keyboard is only good for hunt-and-peck typists). To fully exploit the abilities of the iPad, you also need to buy in to the Apple iTunes/Store model of buying content from Apple to load up your iPad – there are other methods, but you can’t for example, save a PDF file from a website on the iPad by simply selecting and holding on it on a web page (like you can with, say, a picture). Again, not necessarily a bad thing, but a ‘thing’ to be aware of.

Then there are the Apps. Now understand, the iPad, like the iPod/iPhone has an app to do almost anything, and many are free. I like free. I like free so much that I refuse to pay for them – not for any reason other than I just don’t like buying apps when there are so many free ones available, and I really hate buyer’s remorse – that sinking feeling you just wasted $2.99 on a bad app with no real recourse. I’m not saying my feelings about paid apps make any rational sense, but they are my feelings…

It can be used as an iPod, but the form-factor precludes it’s use as such in nearly all contexts imaginable, save two – on a plane and to provide background music while using your ipad to enjoy non-audio content (ebooks, webpages, etc.).

In the final analysis, I don’t view the iPad as a ‘game changer’ or a ‘paradigm shifter’, but it is an answer to that desire for a bigger screen on your iPhone, with all the strengths and weaknesses of the iPhone remaining.

The iPad I bought was the 64 Gig non-3G model (no cellular hardware built-in), because I envision loading this up with content for family trips, and the storage will come in handy (I imagine). I chose not to buy the 3G model because I don’t like the idea of buying hardware I might never use, since I also don’t like subscription fees for service. For ‘on-the-go’ Internet browsing my iPhone with it’s data plan usually suffices – when it doesn’t I can usually get on a real computer (net book, laptop, desktop) without too much effort. I decided to invest the money I would have spent on the 3G hardware ($120 -/+) on greater on-board storage.

As for traveling with the iPad, I feel pretty confident this would meet nearly all my computing ‘needs’ for several days, but I would have carry a so-called travel router, a device that plugs into an Ethernet Jack and transmits the Internet connection over WiFi. I’m not sure how I would get through a Terms of Service click-through screen, maybe it will just workout (the ToS screen might just make it through to the iPad browser).

All things considered, I’m happy with my decision to buy an iPad, but as I said earlier, that’s because I knew what I was buying, I understood it’s limitations, and I had a need I thought this device could satisfy. It is my hope that this brief write-up will help you, the iPad-curious, to come to your own conclusion.

Thoughts on HR1586 August 11, 2010

Posted by Ken in Education, Health Care, Politics, Taxation.
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Congress took money from defense, food stamps, and will tax Americans working overseas (for 10 years!) to pay for “teacher jobs” and propping up Medicare… First off, why did it take TEN YEARS of cuts and sacrifices by Americans before this bill is deficit neutral? Second, I thought we had a few wars going on, why cut BILLIONS from defense? Third, I thought Medicate was the wonderful example of Gov’t healthcare, why must it be bailed out (for six months of benefits, paid for with 10 years of taxes)? And finally, who thinks that cutting food stamp payments in 2014 (rolling them back to ‘pre-stimulus’ levels, AKA 2008 levels) is the best way to restore a couple of teacher jobs?

Once this bill is understood (BTW, love the name “___________ of __________”), many on the left will join the right in opposing it.

What gets lost in the discussion is that this bill took the place of the ” TARP Bailout Bonus” clawback taxes AND the investment in Air Safety initiatives that were the previous bills under this number (H.R. 1586) – both bills were scrapped to get this pandering POS bill on Obama’s desk ASAP, before elections…

How many teacher’s jobs will this restore? I bet almost none, since the money won’t come until after school starts, expect to see a lot of federally-funded programs that don’t involve re-hiring teachers… And what happens to any teachers hired this year under this bill? Will states suddenly find the hundreds of millions they need to retain them next year?

This is like taking out a ten year loan on this seasons NFL Season Pass on satellite TV – it seems like a good idea, but wait until the season is over and you still have 9 1/2 years of payment stubs before you’ve paid it off!

The Appearance of Fairness August 8, 2010

Posted by Ken in Politics, Taxation.
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A little reminder from the 2008 Presidential Election – (then) Senator Obama clearly said that he was willing to raise tax rates despite a history that shows it is counter-productive, for the sake of the appearance of fairness… Does he still think that is a useful strategy? (I choose this clip despite it’s few snarky comments from the poster since it includes the complete question and (then) Senator Obama’s complete answer – no Sherrod-treatment here!)

The Three Main Issues in Healthcare Reform August 2, 2010

Posted by Ken in Health Care, Politics.
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The healthcare problems we find ourselves facing in America today are rooted in three fundamentally very simple issues:

  1. Healthcare for many Americans is tied to their employment.
  2. Few Americans actually know what the care they receive costs – they know what their insurance co-pay and premiums are, but nothing more.
  3. Americans insist on the latest, newest procedures, drugs, and devices.

The answer to the first issue is that healthcare coverage is tied to employment is the result of the Revenue Act of 1942 which made healthcare benefits tax deducatbale while placing salary caps on many industries. Nowadays, employees demand defined healthcare benefits, maintinag the previous year’s level of services irrespective of cost, and employers are thus at the mercy of the insurance companies who are not motivated to lower healthcare costs.

The second issue is that there is almost no concern to conserve or do any cost benefit analysis done by the patient, causing costs to escalate – once the patient makes their $10-25 copay, they have no interest in considering lower-cost procedures – to them, all cost the same.

The third issue is that America is the home of many of the latest breakthroughs in healthcare and as a people we demand availability to the latest treatments, that raises costs as well.

Further insulating consumers from the cost of their healthcare will not drive down costs.

Squeezing incentives from providers will drive out providers (doctors, etc.) and only make healthcare more scarce, again driving up costs.

The only portion of the current healthcare reform bill that will lower costs (actually, more likely simply contain costs) are the various review boards that will determine the appropriate level of care for a given ailment, and may ration more expensive treatments.

Thinking about the National Debt July 27, 2010

Posted by Ken in Politics, Taxation.
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After my post yesterday based on a chart provided by a friend last year, I’ve been thinking about the numbers, and they simply don’t add up. My initial question has to do with the oft-cited surplus President Clinton left behind at the end of his second term, $236 Billion. First off, let me say I will stipulate that this amount of money was “left over” after all revenues were collected and all expenses met that year, FY2000. Looking a bit deeper we see that the national debt stayed at $5.6 Trillion from FY1999 through FY2000 – but that’s my problem, why didn’t National Debt get reduced by $236 Billion, to $5.364 Trillion? Let me explain… (more…)