FTC Nails Pomegranate Juicemaker for False Claims That Don’t Appear False

I found this one interesting. From the beginning of the press release … er … article (could not be a press release, right?):

“Administrative Law Judge D. Michael Chappell ruled on May 17, 2012 that some POM Wonderful ads are deceptive. The company’s ads claim that POM Wonderful 100% Pomegranate Juice and POMx supplements can ‘treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction.’ ”

So the background is POM made a claim that their products can treat, prevent or reduce the risk of heart disease prostate cancer and erectile dysfunction. The FTC sued them for deceptive advertising and the standard they needed to uphold their claims was “competent and reliable scientific evidence”. Sans this, the complaint would be upheld and the FTC would win.

POM has conducted 10 clinical trials on their pomegranate juices and supplements (http://clinicaltrials.gov/ct2/results?term=POM+Wonderful).  Of course, these might be bogus, since they used hack institutions like John Hopkins, UCLA, University of Michigan, etc. And additional studies by the National Cancer Institute, MD Anderson, Sloan Kettring, etc. are also obviously slanted and cannot be used as proof (even though these institutions also study the seems to have a great case here.

If I move to peer-reviewed journals, there are only tens of thousands of hits, with thousands for heart disease and prostate cancer (along with other cancers) and quite a few hundreds on erectile dysfunction. Obviously, there is not enough evidence, cause an effective food or supplement would have millions of studies. After all, Zytiga, a new FDA approved drug has a bit over 700 scholarly articles (roughly the same as pomegranate and erectile dysfunction) and roughly 2500 if the word abiraterone, the chemical name for Zytiga (significantly less than the number of hits for Pomegranate and Prostate cancer, but who’s counting).

Zytiga is the obvious safe choice for discriminating patients, as the only major complications are hypertension (high blood pressure), fluid retention, weight gain, adrenocortical insufficiency (problems with adrenal glands) and hepatotoxicity (kills your liver). The non-safe choice, drinking pomegranate juice, is far worse, as drinking it in higher amounts might cause weight gain, according to various sites. Weight gain is far worse than heart attack in my book.

Here are a few links to journals with research on pomegranate (hack journals , of course):

• Pomegranate juice inhibits LDL oxidation and cardiovascular disease – Drugs Under Experimental and Clinical Research (Journal)
• Pomegranate juice reduces systolic blood pressure – Atherosclerosis Journal
• Pomegranate juice reduces LDL cholesterol and blood pressure – Clinical Nutrition (Journal)
• Pomegranate juice has benefits against ischemic coronary heart disease – American Journal of Cardiology
• Pomegranate juice reduces risk of cancer and cardiovascular disease – National Cancer Institute
• Pomegranate juice as chemoprevention and chemotherapy – National Academy of Sciences
• Pomegranate and green tea as chemoprevention for prostate cancer – Molecular biotherapy journal
• Pomegranate extracts inhibit angiogenesis (NOTE: angiogenesis is the creation of new blood vessels to feed the tumor) – International Journal of Oncology
• Pomegranate extracts induce apoptosis in prostate cancer cells (NOTE: apoptosis is cell death) – Growth Hormone and IGF Research (journal)
• Positive effects of pomegranate, etc., on reducing oxidative stress and erectile dysfunction – Journal of Urology
• Improvement in sperm quality and erectile dysfunction – Food Chemistry
• Pomegranate as a natural Phosphodiestterase Type 5 inhibitor (improves mild to moderate erectile dysfunction) – Reviews in Urology (linked via the NIH (National Institute of Health))

A Google scholar search reveals more than 51,000 hits for pomegranate. If you go to more specific searches on pomegranate reveal more than 4,600 hits for cardiovascular, more than 3,000 for pomegranate and prostate cancer, and more than 700 hits for erectile dysfunction. Of course, since many, if not most, of these are peer reviewed journals and studies by government agencies, so they MUST be biased and unreliable (bad science like all peer-reviewed journals).

Let’s dig a bit deeper into our government, okay? Certainly they have something to say about how bad Pomegranate juice is for you. I mean, they couldn’t be saying something like pomegranate juice helps with medical conditions, right?

From the National Cancer Institute: 

“A study of 13 pomegranate compounds showed some were able to slow the growth and spread of prostate cancer cells and to cause cell death. Higher doses were found to be more effective.”

“Three types of prostate cancer cell lines were treated with either pomegranate extract, pomegranate juice, or two of their bioactive compounds. ALL (emphasis mine) pomegranate treatments were shown to increase cell death and decrease the spread of cancer cells, with higher doses found to be more effective.”

“Other studies in cancer cell lines found that the anticancer activity of pomegranate included effects on certain enzymes and pathways involved in cancer, such as the insulin-like growth factor (IGF) system.”

But this is the National Cancer Institute (NCI) and not the Federal Trade Commission (FTC) and agencies should only trust their own research, even if they don’t research medicines or food. Unless, of course, the research they are trusting is about claims on medications, then they should trust all research, right?

So who is Administrative Law Judge D. Michael Chappell? He MUST be an independent legal authority with no ties to either the FTC or POM, right? If not, he might be biased in one direction or another, which would seem almost unfair to opposing side. Well, a bit of investigation reveals him to be a completely unbiased employee of the FTC, so I am rolling with him all the way … just like the media that published the FTC press release as an authoritative source of information. Hey, if it is press released, it has to be right? And there is no bias against farmers, food, etc. in the government, right?

If it seems like I am a bit underwhelmed by our government, you hit the nail on the head. With the revolving door between various agencies and the industries they watchdog, and the history of going after food while giving “medicine” a relatively free ride (could be due to many federal employees being former {drug, food, ?} company executives/researchers/etc.), I am a bit leery when I see the FTC going after a food for false practices (at least they did not state “water can prevent dehydration” was a false claim, as the European Union did last year), so they have that going for them.

As an aside, here is a particular egregious revolving door case:

In order for the FDA to determine if Monsanto’s growth hormones were safe or not, Monsanto was required to submit a scientific report on that topic. Margaret Miller, one of Monsanto’s researchers put the report together. Shortly before the report submission, Miller left Monsanto and was hired by the FDA. Her first job for the FDA was to determine whether or not to approve the report she wrote for Monsanto. In short, Monsanto approved its own report. Assisting Miller was another former Monsanto researcher, Susan Sechen. Deciding whether or not rBGH-derived milk should be labeled fell under the jurisdiction of another FDA official, Michael Taylor, who previously worked as a lawyer for Monsanto.

Really? She writes a paper to get recombinant growth hormone approved for use in cattle and then gets to approve the research? Obviously no conflict of interest there, right? And I want the fox to guard my henhouse and should have a bridge to sell you later on today. Bleh!

Am I stating you should drink lots of pomegranate juice? Certainly not! Am I stating you should not take drugs if you have heart disease, prostate cancer or erectile dysfunction? Not at all! I am stating that POM’s “false claims” appear to have plenty of evidence behind them. And I would rather drink pomegranate juice than take a load of drugs (one for the cancer, another for the hypertension caused by the cancer drug, and another for the erectile dysfunction caused by the previous 2 drugs, and others to halt the liver damage, etc.).

And, yes, I am being a sarcastic snit at this moment.

Peace and Grace,
Greg

Twitter: @gbworld

The George Zimmerman Case (Trayvon Martin)

I had my feelings the media rushed to judgment in this case from the start. Whether it was NBC doctoring of the non-emergency call from Zimmerman to police, for which a producer was fired. Or all of the media ignoring the first witnesses description of Trayvon Martin on top of Zimmerman beating him (this video was shot the day after the incident, with interview portions shot either that night or the night after):

John witnessed Trayvon on top of ZImmerman

The case was just too tidy and easy to wrap up in a little bow. Life is generally messier.

Just recently, I got a chance to look at the CNN transcripts of the Bail Hearing (1, 2, and 3) to see what evidence was presented in the bail hearing. I am a bit shocked at how little evidence one of the investigators who signed the probable cause affidavit actually had (probable cause to arrest ZImmerman on second degree murder, that is). It makes me wonder if there is really much evidence at all to support the charges. And, if not,

In transcript 2, Zimmerman’s Attorney questions Gilbreath, one of the investigators who determined there was probable cause to arrest Zimmerman for second degree murder. The basics of the story are:

1. George Zimmerman profiled Trayvon Martin.

O’MARA: That he had an ice tea and a bag of Skittles, that he walked back into the gated community, he was on his way back when he was profiled by George Zimmerman. If I say to you the word peanut butter, what do you think?
GILBREATH: Jelly.
O’MARA: OK, Moe, Larry and —
GILBREATH: Curly.
O’MARA: OK, when I say the word profiling, what do you think?
GILBREATH: I believe you’re applying a predetermined thought pattern to a set of circumstances.
O’MARA: No other word comes to mind when I say profiled to you?
GILBREATH: I gave you my answer, sir.
O’MARA: OK, I appreciate the answer. Did you consider it to be some specific type of profiling?
GILBREATH: No.
O’MARA: Why did you use the word profiling rather than noticed, observed, saw, or anything besides the very precise word profiled? And by the way, was that your word?
GILBREATH: I don’t recall. This was a collaborative answer — excuse me, collaborative document.

From the examination, the investigator admits there is no evidence of profiling. George Zimmerman may have profiled Trayvon Martin, but may have just called because he saw someone suspicious, as he contends.

2. George Zimmerman confronted Trayvon Martin.

O’MARA: Zimmerman confronted Martin, those words. Where did you get that from?
GILBREATH: That was from the fact that the two of them obviously ended up together in that dog walk area. According to one of the witnesses that we talked with, there were arguing words going on before this incident occurred. But it was between two people.
O’MARA: Which means they met. I’m just curious with the word confronted and what evidence you have to support an affidavit you want in this judge to rely on that these facts with true and you use the word confronted. And I want to know your evidence to support the word confronted if you have any.
GILBREATH: Well, it’s not that I have one. I probably could have used dirty words.
O’MARA: It is antagonistic word, would you agree?
GILBREATH: It could be considered that, yes.
O’MARA: Come up with words that are not antagonistic, met, came up to, spoke with.
GILBREATH: Got in physical confrontation with.
O’MARA: But you have nothing to support the confrontation suggestion, do you?
GILBREATH: I believe I answered it. I don’t know how much more explanation you wish.
O’MARA: Anything you have, but you don’t have any, do you?
GILBREATH: I think I’ve answered the question.

From the transcript, the investigator admits he does not know if George Zimmerman confronted Trayvon Martin or the other way around. We know George Zimmerman followed Trayvon Martin. From the tape, we know he followed him at least until the investigator told him not to. Some suggest he stopped running after that, evidenced by the change in his breathing. After that point, either Zimmerman confronted Trayvon Martin or Trayvon Martin confronted George Zimmerman.

3. Analysis reveals that the voice crying for help is Trayvon Martin:

O’MARA: Witnesses heard people arguing, sounded like a struggle. During this time, witnesses heard numerous calls for help. Some of this was recorded. Trayvon’s mom reviewed the 911 calls and identified the cry for help and Trayvon Martin’s voice. Did you do any forensic analysis on that voice tape?
GILBREATH: Did I?
O’MARA: Did you or are you aware of anything?
GILBREATH: The "Orlando Sentinel" had someone do it and the FBI has had someone do it.
O’MARA: Is that part of your investigation?
GILBREATH: Yes.
O’MARA: Has that given any insight as to the voice?
GILBREATH: No.

There is no evidence that the voice crying for help was Trayvon Martin. It may have been, but it could have been George Zimmerman, as his family contends.

3. George Zimmerman started a fight with Trayvon Martin

UNIDENTIFIED MALE: So do you know who started the fight?
GILBREATH: Do I know?
O’MARA: Right.
GILBREATH: No.
O’MARA: Do you have any evidence that supports who may have started the fight?
GILBREATH: No.

No evidence on who started the fight. It may have been George Zimmerman. It may have been Trayvon Martin.

Here is another interesting bit from the transcript:

O’MARA: That statement that he had given you — sorry, law enforcement that day, that we just talked about, turning around and that he was assaulted, do you have any evidence in your investigation to date that specifically contradicts either of those two pieces of evidence that were in his statement given several hours after the event?
GILBREATH: Which two?
O’MARA: That he turned back to his car. We’ll start with that one.
GILBREATH: I have nothing to indicate he did not or did not to that.
O’MARA: My question was do you have any evidence to contradict or that conflicts with his contention given before he knew any of the evidence that would conflict with the fact that he stated I walked back to my car?
GILBREATH: No.
O’MARA: No evidence. Correct?
GILBREATH: Understanding — are you talking about at that point in time?
O’MARA: Since. Today. Do you have any evidence that conflicts with his suggestion that he had turned around and went back to his car?
GILBREATH: Other than his statement, no.
O’MARA: Any evidence that conflicts with that.
UNIDENTIFIED MALE: He answered it. He said no.
O’MARA: Any evidence that conflicts any eyewitnesses, anything that conflicts with the contention that Mr. Martin assaulted first?
GILBREATH: That contention that was given to us by him, other than filling in the figures being one following or chasing the other one, as to who threw the first blow, no.
O’MARA: Ok. Now, you know as one of the chief investigators that is the primary focus in this case, is it not?
GILBREATH: There are many focuses in this case.
O’MARA: That would be considered the primary, would it not, in your opinion, 35 years experience?
GILBREATH: I don’t know that it’s primary. It’s one of the concerns, yes.

And this

O’MARA: The injuries seem to be consistent with his story, though, don’t they?
Dale; The injuries are consistent with a harder object striking the back of his head than his head was.
O’MARA: Could that be cement?
GILBREATH: Could be.
O’MARA: Did you just say it was consistent or did you say it wasn’t consistent?
GILBREATH: I said it was.
O’MARA: Ok. Have you ever had your nose broken?
GILBREATH: No.
O’MARA: Have you ever had your nose fractured or broken.
GILBREATH: No.
O’MARA: You know that that was an injury that Mr. Zimmerman sustained, correct?
GILBREATH: I know that that is an injury that is reported to have sustained. I haven’t seen any medical records to indicate that.
O’MARA: Have you asked him for them?
GILBREATH: Have I asked him for them? No.
O’MARA: Do you want a copy of them?
GILBREATH: Sure.
O’MARA: I’ll give them to the state. It’s a more appropriate way to do it. If you haven’t had them yet, I don’t want to cross you on them.

This last part seems to fit the exclusive photo ABC news obtained:

And is seen in the video that ABC (and many other outlets) originally claimed did not show any injuries:

 

The state of Florida must prove the following three elements beyond a reasonable doubt to convict George Zimmerman of second degree murder.

1. The victim is dead
2. The death was caused by the criminal act of the defendant;
3. There was an unlawful killing of the victim by an act imminently dangerous to another and demonstrating a depraved mind without regard for human life.

Point 1 is easy to prove, as it is fairly evident Trayvon Martin is dead. Point 2 and 3 seem to hover around George Zimmerman starting the fight, for which the investigator has stated there is no evidence. Perhaps there is some evidence the investigator does not know about, but since he signed the probable cause document, it seems strange he is not able to definitively state there is evidence that George Zimmerman started the fight.

But, I am not certain even Zimmerman starting the confrontation is iron clad. In 1993, Eugene Baylis walked into a Colorado Springs bar on the corner of N Nevada Ave and E Filmore St to find a biker that he claimed shot him in the face with a pellet gun earlier that day. He carried with him an AK-47 and a 9mm pistol. After shooting the AK-47, he was knocked to the ground and the AK-47 was aimed at his face. The two holding him down stated they were going to kill him. So he pulled out a 9mm and shot the two guys on top of him. Jury decision: Self-defense.

Admittedly, that is a stretch and I was in Colorado Springs both when the shootings occurred and when the trial commenced. I was dumbfounded, but  the jury members questioned stated they agreed to the innocent finding because he was, at the moment he shot the two, fighting for his life. Now there seems to be even less evidence against Zimmerman than there was against Eugene Baylis.

I doubt the Zimmerman trial will go this way. But I believe it is going to be a long, hard ride unless there is more evidence than the investigator who signed the probable cause affidavit indicates. If this is all they have, I see no other way for this to turn out than Zimmerman being set free, unless the Prosecutors are really that good and the Defense attorney is not (he seems pretty sharp at this time).

Now, they could have chosen manslaughter, which has the following definitions:

Voluntary Manslaughter occurs when a person kills another in the heat of passion, without planning beforehand. The classical example is when a person finds their spouse having sex with another person and reacts immediately by killing.

Involuntary Manslaughter, also known as criminally negligent homicide, occurs when a death is an indirect result of recklessness or negligence. This occurs when a person runs a red light and hits another vehicle and a person is killed.

I think the state would have a better chance with manslaughter, but they either have to prove this is a heat of passion crime, which the evidence points against (unless there is more) or involuntary, in which they would have to prove negligence, which gets right back to proof that Zimmerman confronted Martin and not the other way around.

It will be interesting to see how this plays out and I would love to have all of the evidence the state has. I certainly hope it is more than the investigator is aware of, or this could be a travesty of justice like the Duke Lacrosse Team Case.

My main reason for this post was the media rush to judgment. I am not sure how it will turn out, but even a guilty finding does not acquit the media of such one-sided reporting. Just because you picked the right horse does not mean you accurately called the race.

Peace and Grace,
Greg

Twitter: @gbworld

TSA Scanners

There has been a lot of controversy over the new scanning procedures lately. And, like good stewards of the realm, the media has jumped into to protect the government “underdog” from the onslaught of the “ignorant Neanderthals” ignoring “good science”. The question, however, is whether or not we have properly labeled the sides.

There are two basic areas of concern for the masses who are against the new procedures. The first is health concerns over being scanned, primarily from backscatter X-ray radiation. The second is the privacy concerns.

Health Concerns

Are we getting too much radiation when we submit to scans? The government states no. The amount  of radiation from a single scan is estimated at .05 to .1 mrem (micro rems), which is 1000 times less than a standard X-Ray. CBS News then states a variety of things that will give you more radiation.

• Living in a city
• Sleeping next to a partner
• Flying
• Drinking water

There are two problems with the comparisons. First, we have no choice over many of the activities that give us radiation. We can’t stop living on this earth or drinking liquids. But, we do not have to submit to scans unless the government forces us to do it to fly. Second, the amount of radiation is under debate.

The figure quoted is a whole body radiation estimate from the device. If backscatter used the same energy as a standard X-Ray, your full body would get the dose mentioned. But backscatter radiation is not equivalent, as it uses lower energy and does not penetrate the body. A group of scientists in California have estimated the amount of radiation on the skin is likely to be 20 times higher, if not more. Considering the limited depth of the X-Ray, I would not be surprised to find this concentrated area receiving much higher doses. Until there is a peer reviewed study, all figures should be considered suspect.

The government estimates 1 additional cancer death per 200 million scans, so there is an awareness of a risk, albeit a very minor risk (except to that one person?). One additional death means many additional individuals coming down with cancer. The question is how many additional cancer deaths if the radiation figure is off by a factor of 20 … or more?

There are also scanners that use millimeter wave technology, or radio waves. The assumption is these scanners are safer, as they do not use radiation. Probably correct, but there are detractors from this idea. Scientists in California have shown that while radio waves cannot knock DNA base pairs or sequences out of whack, like radiation, they can do other types of DNA damage, like ripping the DNA strands apart. The setup of the millimeter wave scanners are different enough they could not cause this type of damage, but are there other unhidden types of damage?

There is also a topic I have not seen covered by the media and that is the fact that the scanners are set a low resolution. This leaves an option of increasing resolution; perhaps not with the current machines (not sure), but what if we decide we need more? Increasing resolution means increasing the beam, which means increasing the risk.

The risk appears to be very low. In fact, I would agree with the apologists that it probably is low, but I question whether or not it is necessary. More about this in the section on Effectiveness and Reasoning.

Privacy Concerns

One image that is being bandied about the Internet is this one:

Click photo to read article on this photo

This is stated to be a TSA image reversed in Photoshop. The gun in the back gives it enough validity for the average person to buy into what I see as a ruse. The problem is neither of the technologies present would capture the hair. NOTE: The photo shoot these pix were faked from is available here (NSFW).

But, even with the scans not able to capture this good of a picture, the scans are good enough to capture some detail which could embarrass someone. TSA has stated the images cannot be saved and later disseminated, but there are scans from the same type of scanners, albeit NOT in an airport, that have been released on the Internet. These scans are low resolution, but the resolution can be turned up.

I personally don’t have a lot of concern on the privacy front. I already have people scanning all of my possessions and occasionally rifling through my possessions. If privacy was a major concern, I feel the people should have revolted a long time ago. I will once again ask, however, whether or not it is necessary.

Effectiveness and Reasoning

If you have not seen the video of Adam Savage speaking in Seattle, you should take a look. On a recent flight, he states he accidentally carried on two extremely long razor blades which were not caught by the scanners. Others are envisioning terrorists molding explosives to their bodies, which would be missed by the scanners.

This leads one to wonder if the device is effective. And, if not, why burden the public with any risk?

This is not really about safety, but the appearance of safety. Certainly, the scans do catch some things. But the scans are only as good as the scanner, and they miss a lot. I have made it through security with full bottles of water, although they did catch my slightly oversized tube of toothpaste once (God forbid someone walking on with really clean teeth).

What we are observing is security theater. Make it look good and hopefully you will deter enough people that mean the public harm. At the same time, you will keep the average member of the public feeling safe enough to fly and ensure we have an airline industry to get us to our destinations.

When the security theater is merely an inconvenience, then it is probably fine. The deterrent is probably worth an extra half hour, right? But when you add inconvenience to a 1 in X chance of cancer and potential invasion of privacy, is it still worth it? If it catches people who bring very large razor blades on planes, then we might say yes … but they missed that one. Maybe next time?

The sheeple of the United States have acquiesced to the scans overall. I talked to a gentleman in the Austin airport the day before Thanksgiving who was ridiculing anyone who would not walk through the scans. I presented him with some contrary evidence that was backed by scientists, so he probably thinks I am one of the idiots now. Then again, perhaps I gave him a bit of food for thought.

My Thoughts

I am not going to go through the scanners. I don’t feel there is a huge risk, but I don’t feel there is a need to burden myself with any additional risk, no matter how small. If I go through the scanner, the government won’t make my plane arrive 4 minutes faster to offset the additional radiation. And they can’t shield me from radiation in my home town, or wherever I visit. There are simply no ways to offset this additional risk through some type of radiation “trade”.

Until there is a peer reviewed scientific study of the scanners, it is unlikely I will ever submit. And, even then, I don’t need to risk being one of the 1 in 200 million, no matter how small that risk is.

If the scans stop terrorists from blowing up planes, perhaps they can be a good thing. To date, I have heard of no incidents where the scanners have caught anyone. And, if they do, I would like some evidence the person would not have been caught by other means already in place, however, before giving any stamp of approval to a scanner.

I have serious issues with the idea that a handful of people dying of cancer each year is worth the security theater and appearance of safety. Until we show a case where it works, and previous technology would not work, I don’t see my mind changing on this one. Even then, I have to question how many such attempts thwarted by the scanners equal the number of projected deaths.

Peace and Grace,
Greg

Twitter: @gbworld

A brief lesson on government

The left/right explanation is a bit weak and misleading, but the main idea that most forms of government cannot be sustained is telling. As you watch, you should also think about the expansion of government and how the rich get richer, no matter who is in power, and see if you don’t see something in common with what is going on how in this country.

Note that this is not a knock on a particular person or party, but rather a statement on how both parties are leading us down a destructive path (perhaps one faster, but both are creating populist type laws that go against the Constitution to “help” the “people”). And the people then knee jerk and do something like http://www.thedailyshow.com/watch/mon-june-14-2010/alvin-greene-wins-south-carolina-primary.

Actually, I think it is a bit funny that someone who did not campaign wins the primary. To me, it shows how sick we are of Washington. Whether the people of South Carolina purposefully sent this as a message, or simply did not care enough to research candidates, it is very telling of the state of Washington power at this time. It is also kind of funny watching Rawl, the expected winner, who is now challenging the primary results … not that the people voted (he got his clock cleaned with Greene taking almost 60% of the vote) but that there are anomalies in the vote (which have been present for ages and elected him last time). The Democratic party is asking him to withdraw and Clyburne is asking for a probe of the election. The lesson: Don’t upset the apple cart by voting for commoners?

Peace and Grace,
Greg

Twitter: @gbworld

The Bellevue Flood: Maps and Pictures

For those who have not seen Nashville, or do not really understand the extent of the flooding, the following 2 maps should give you an idea. This is a map of what the Bellevue area of Tennessee is like on a normal day:

 

The blue line is the Harpeth river snaking around the area. There is also a small creek almost mid way down the map going off to the east (right) and another creek that crosses near Temple Road and highway 100 (the one that heads south about mid way side to side). Notice the width of the river. Not very wide. Now compare it to the following map, which is where the river was at crest.

In this second map, there is no way to get out of the are for a large number of residents. Large sections on both sides of the river are flooded, including hundreds of houses. And that is just this section of the map. In the upper left corner are the entrances to a couple of neighborhoods that also had massive flooding.

Here is one of my favorite pictures from the flood as I feel it conveys a story:

And here is another of a man watching his jeep being towed out of a flooded area:

What is interesting is the water rose another 10+ feet above this point by later this night. Finally a scene of a picture that was all too prevalent.

This is a picture of a duplex in River Plantation that was flooded. The furniture is now worthless and needs to be thrown out. Inside, the residents are gutting out their walls to dry them out. This means all drywall below the flood line gets ripped up and thrown out.

It is unfortunate a picture cannot truly convey what goes on in a flood. You can imagine the scene, but until you live through it, you just don’t know. Many of the residents in many of the neighborhoods did not have flood insurance, as they DID NOT live in a flood plain. Some were told they could not get insurance if they wanted it (turns out this is false, but it is harder to get flood insurance on the top of a mountain, as it is government run).

Peace and Grace,
Greg

Twitter: @gbworld

HR 3590 – A Brief Analysis

Before getting started, I want to state that I think it is despicable to have a vote at 8 PM on a Saturday. I am not sure why this would be done, but the reasons I come up with do not make me happy. Possible reasons:

1. To avoid calls from people in their district as the office is closed
2. Hoping some opposed will be unable to show up for the vote
3. The Republicans have a dinner at 8 PM

I personally think we should debate this bill, so I am not against voting on starting debate. It just seems a bit underhanded to have votes on a non-work day at a late hour. Will they vote on the final bill Sunday during church, hoping any Senators allied with the Religious Right don’t show up? This is not such an emergency it needs to be voted on during off hours and I hope the American public, in general, see the underhanded manipulation going on. Rant off.

I have read the bill. All 2,064 pages of it. The majority of the bill is not overly disconcerting, like the House bill was, although many points are a bit vague. In this blog entry, I am going to focus on a few things I see that are problematic.

Taxes and Fees

There are numerous new taxes in the bill. Most of these are contained near the end of the bill, in the 9000s. As I go through these, I want to focus on the potential impact to the average American. I am not including all taxes in the bill. As you look through this, remember that States have until 2014 to have an Exchange in place.

Section 9001 (pages 1979 – 1996): Excise tax on “Cadillac” plans. Any plan worth more than $8,500 (individual) or $23,000 (family) will be taxed at 40% for any benefits above the limit starting in 2013. The limit will be raised by the Cost of Living for each year after 2013. The problem I have with this tax is two-fold:

1. The tax is based on amount, not benefits. I have an average health plan currently. The group I am in, however, is very small (6 employees and 3 on COBRA) and has numerous claims. Thus the policy is currently worth more than $18,500. This is still below the threshold for family, but it is about half way there. With more claims, the policy could be negotiated over the limit within the next few years. This will unlikely affect me, as I am working on moving on to another health plan, but it opens up the reality that employees in very small businesses could get socked.
2. The adjustment is on Cost of Living and not rise in the average medical costs. over the past few years, if not longer, medical has been rising at a higher percentage than the Cost of Living.

This tax starts in the year 2013.

Section 9005 (page 1999): Health Flex Savings Account (HFSA or FSA) contributions capped at $2,500. Many companies have FSAs where individuals can sock away a portion of their wages to pay for health costs (co-pays, prescriptions, etc). Under the act, you will only be able to have $2,500 put aside for all of your out-of-pocket costs. This might work for healthy families.

This change takes place in 2011.

Section 9008 (pages 2010 – 2020): $2.3 billion fee imposed on manufacturers of brand name pharmaceuticals. There is a part of me that welcomes this one, as the profit ratios of drug companies is rather high, but I fear the fee will only raise the price of brand name drugs. This will push more people towards generics, which is probably good overall, but it could end up stifling doctors from prescribing newer drug therapies for diseases. Fortunately, the amount is low enough that it should not be overwhelming to R&D of new drugs.

This fee applies to all drugs sold after December 31, 2008. Yes, that means it is retroactive.

Section 9009 (pages 2020 – 2026): $2 billion fee imposed on manufacturers or importers of medical devices. This one makes less sense to me. Raise the price of medical devices? if you raise the price, the providers have to raise prices.

This fee applies to all medical devices sold after December 31, 2008. Also retroactive.

Section 9010 (pages 2026 – 2034): $6.7 billion fee imposed on Health Insurance Providers. This one will impact the average Joe. Total medical spending in the United States is estimated somewhere around $2.5 trillion dollars. Insurance companies control about $1.6 trillion of this market, based on the average insurance for the average American. They have a profit of about 3.3% average, which means somewhere around $53 billion in profits amongst all insurance providers. A $6.7 billion fee is about 12.5% of the profits that insurance companies make. This expense WILL be passed on to the consumer.

This fee applies to all insurance plans sold after December 31, 2008. Yes, also retroactive.

Section 9012 (page 2034): Any expenses allocable to Medicare Part D will no longer be eligible for deduction on a tax return. Medicare Part D is prescription drugs for senior citizens. This goes into effect in 2011.

Section 9013 (pages 2034 – 2025): Starting in tax year 2013, deductions for medical expenses will be based on 10% of income instead of 7.5% of your income. This rounds out, for the average worker, to about $1000 in medical expenses that can be claimed now that will not be deductible in 2013. In the 25% tax bracket, this represents a $250 loss.

Section 9015 (pages 2041 – 2044): High wage earners ($200,000 individual and $250,000 family) will have a new Medicare Hospital Insurance tax added of .5% to every dollar above this amount. No, this one does not affect me or the average person reading this email. The tax, however, is aimed at a group of society that will likely never use Medicare. In addition, the fact the bill is raping Medicare makes it a very interesting tax. But I guess government has to throw things wherever they can tack them on.

Section 9017 (pages 2045 – 2046): Tax of 5% on all elective cosmetic surgery. A tax on boob jobs?

Section 1501 (pages 320 – 341): People not carrying government approved health care will be fined $750 per person not covered per year (or $62.50 per month) beginning after 2016. This fine will rise yearly based on Cost of Living increases. The fine is only $95 per person in 2014 and $350 per person in 2015. The fine will be effective on anyone not covered for one month (three months in the case of Native Americans) and will not apply to prisoners, those will religious reasons for not being insured, individuals not lawfully present in the United States and hardship cases (determined by the Secretary on a case by case basis).

Cost of Plans

The House bill was a bit easier to calculate on costs, as it gave very specific premium estimates. The Senate bill bases everything on a reference plan, which is the second lowest cost silver plan. As these plans have not yet been created, there is not much that can be established on costs to individuals.

At max, you will pay 9.8% of your income for premiums if you file an income less than 400% of the poverty level. As a married couple, you MUST file jointly to be eligible for premium assistance to keep it at this 9.8% level. In addition, if you are less than 150% of the poverty level, you will only pay up to 2.8% of your income in premiums. This is in section 1401 (pages 238 – 260).

As for cost sharing, the estimated cost sharing I have seen are around $11,500 for a family. The government will subsidize 2/3rds if you make between 100% and 200% of the poverty level, 1/2 if between 200% and 300% and 1/3rd if you are between 300% and 400%. This is in section 1402 (pages 260 – 268).

Average family in the US today makes about $58,000 with a Modified Adjusted Gross Income of approximately $45,000. This is how things break down:

                       Today                     Senate Plans
Premiums         $4300                     $4500
Cost Sharing     $5000                     $5750

This supposes you end up on government insurance, which may or may not happen. The $4300 figure today is based on an employer paying the largest share of the load. The cost sharing here is based on the 1/2 subsidy for family.

My Thoughts

The legislation is better than the House version, but there are still major problems.

• Inclusion of National Health Care Plans – I am not opposed to this on some arbitrary philosophical ground, like so many, but a realization that when the government offers something, companies bow out. I watched as seniors I know lost their drug plans when the government added Medicare Part D (and watched their savings dwindle as Medicare covered less than the plan they were paying for). Time and time again, the insurance companies find ways to bow out of the more expensive markets when Uncle takes care of it. It is likely a national health plan for everybody will mean most of us have to move to the plan.
• Heavy fees on insurance companies, pharma and medical devices – I see these as costs that will be thrown back on the consumer.
• Vague cost saving measures – The sections of the bill that talk about how to drive down costs are way too vague to be of any value, at least by themselves. With fees and measures that will raise costs, I would like to see a more definitive plan on reducing costs.

I really wish the government would focus on the real pain points rather than try to change a system most people are overall happy with. Yes, I want reform. But reform is one thing, sweeping change is another. Let’s fix what is broken rather than throw out the baby with the bathwater.

Peace and Grace,
Greg

Twitter: @gbworld
Miranda’s Believe site: http://tinyurl.com/mirandabelieve

Senate Health Care Bill now released

If you need some help sleeping, the Senate bill was released today. It only weighs in at 615 pages, so it is much lighter than the House tome. Taking a cursory glance, it appears a bit more vague, but I will know more after I read it.

http://www.democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf CORRECTED (had older link before)

Peace and Grace,
Greg

Jim Cooper plays the scarecrow – If he only had a brain

My wife wrote Representative Jim Cooper dissatisfied with his vote yes on HR 3962. Here is the response she got from Rep. Cooper (selected passages). First:

I voted yes to advance the cause of health care reform by forcing the Senate to act. Without passage of this House bill, the Senate could delay reform indefinitely. That would be the worst possible outcome because our current health-care system is not sustainable. Congress needs to pass good health legislation for the good of the country.

My vote is not an endorsement of all the provisions of the bill because I find much of the bill to be deeply flawed.

If I can make an analogy, this is much like a group of fathers watching their children while their wives are away. The children want something to play with so the men give them a loaded 9mm. Imagine you find the children with the gun and get this response.

I agreed to the idea, as I wanted to advance the idea of proper decision making and responsibility by forcing the children to act. Without giving them something dangerous, the children could have delayed the idea of finding something to play with indefinitely. This would be the worst possible outcome, because their current play decision was unsustainable. Children need to make good decisions for the good of the family.

Our handing them a loaded gun was not an endorsement of the idea because I find it to be deeply flawed.

Sounds a bit dumber in analogy, doesn’t it? Think about what Rep. Cooper is saying. I sent forth legislation that I disagreed with because it was better to risk flawed legislation making it way to the Presidents desk than to spend more time ensuring it was far less flawed. That is just plain stupid Congressman.

Passing legislation is a little like writing a term paper in school. The first draft is usually not very good. The second draft is better – H.R. 3962 is the second draft. The bill that the Senate will vote on will be the third draft, which I expect to show major improvement. The final draft will be written afterward, if we get to that point, when the House and the Senate will vote on the same bill. 

Okay I get this. The drafts are like term papers. But if you want to follow the analogy through, you keep rewriting until you get it right. You don’t turn it in until you are done. Unfortunately, Congressman, you turned it in.

In this case, unlike a term paper, you will have a second chance. If it is still flawed, however, why should I believe you will not turn it to the professor for a grade. Once again, this is just plain stupid.

I am hoping the Wizard of Oz grants your wish prior to your second chance so you get a brain to ensure you do not vote through flawed legislation again. As I don’t have much faith in the fairy tale, I am not sure you will find your brain in time to do the right thing. If you want to do the right thing, make sure it is right before sending it on with your stamp of approval. That is smart. What you have done is just plain dumb.

Peace and Grace,
Greg

Twitter: @gbworld
http://tinyurl.com/mirandabelieve

An objective look at the Healthcare bill (HR 3200)

I have been reading a lot of misinformation about the health care bill lately, and I decided to post a few things I have found from reading the bill myself. Here are my findings, organized by topic. I am using the version posted at http://energycommerce.house.gov/Press_111/20090714/aahca.pdf, which is up to date, as far as I can tell. I am not going to get into the Palin they are going to create a death commission for old people or Hulabaloo’s Republicans believe it is more immoral to raise taxes than have people dying in the streets with no health coverage, as both are worthless reactionary. I want to hit a couple of topics that are useful to real Americans and approach the bill in a non-passionate way. If you feel I have made a mistake, let’s talk about it, but please be willing to show me real numbers rather just rhetoric.

I have quoted the bill directly, and stated page numbers so you can read entire sections in context. I am not going to post the whole bill or do a line by line, as that is a worthless exercise for me.

What Will Government Healthcare Cost Me?

I cannot definitively answer, as there is no set formula for calculating costs in the bill, unless you fit between 133% and 400% of the poverty level. At these levels, you get what are called "affordability credits" to bring down the costs of national health insurance. Assuming that the actual costs will be somewhere near the max, we can start looking at the metrics mentioned and calculate the costs for an average family. First, let’s look at what the average person pays for health insurance now:

According to the National Coalition on Healthcare, the average cost for health insurance is $12,700, with $3,400 paid by the employee ($9,300 paid by the employer). A Mercer study shows the average deductible was $1,000 for a family in 2008. And the out of pocket max, according to a Market Watch article, were $5,000. Here is a summary table

Total Costs	$12,700
Employer Share	$9,400
Employee Share	$3,400
Deductible	$1,000
Out of Pocket max	$5,000
Employee theoretical max	$8,400

NOTE: I say "Employee theoretical max" from experience, as I have seen how co-pays can still add up after hitting out of pocket max. There may be a way to recoup them, but it is a fight I am not willing to participate in. Over the past few years, our out of pocket costs, premiums, co-pays and other bills, have been around $13,000, but we have dealt with childhood cancer and some expenses that simply were not covered.

To calculate the costs of the healthcare plan (HR 3200), we need to know the cost of premiums and the cost of deductible and out of pocket max. The government combines everything in a category called cost sharing. The cost sharing for families and individuals are spelled out on page 29 (lines 9-16):

9 (B) APPLICABLE LEVEL.—The applicable
10 level specified in this subparagraph for Y1 is
11 $5,000 for an individual and $10,000 for a
12 family. Such levels shall be increased (rounded
13 to the nearest $100) for each subsequent year
14 by the annual percentage increase in the Con15
sumer Price Index (United States city average)
16 applicable to such year.

So, we can see that a family will have a cost share of $10,000. Now we need the premiums. They are only published for familes making 133% to 400% of the National Poverty Level (NPL) and outlined on page 137. According to page 137, lines 1-3, the percentages are:

Percent of Poverty Level	Initial Max %	Final Max %	Actuarial Value %
133% through 150%	1.50%	3%	97%
150% through 200%	3%	5%	93%
200% through 250%	5%	7%	85%
250% through 300%	7%	9%	78%
300% through 350%	9%	10%	72%
350% through 400%	10%	11%	70%

The government definition of the poverty level is also published. The following charts show what the poverty level is. The first two columns were copied directly from the site, I aadded the others to show you how much money each of the other percentages represent. This is so you can easily calculate your own percentage. I am in one of the upper categories.

49 Continguous States and the District of Columbia

Persons in family	Poverty guideline	133%	200%	250%	300%	350%	400%
1	$10,830	$14,404	$21,660	$27,075	$32,490	$37,905	$43,320
2	$14,570	$19,378	$29,140	$36,425	$43,710	$50,995	$58,280
3	$18,310	$24,352	$36,620	$45,775	$54,930	$64,085	$73,240
4	$22,050	$29,327	$44,100	$55,125	$66,150	$77,175	$88,200
5	$25,790	$34,301	$51,580	$64,475	$77,370	$90,265	$103,160
6	$29,530	$39,275	$59,060	$73,825	$88,590	$103,355	$118,120
7	$33,270	$44,249	$66,540	$83,175	$99,810	$116,445	$133,080
8	$37,010	$49,223	$74,020	$92,525	$111,030	$129,535	$148,040
Per Addl	$3,740	$4,974	$7,480	$9,350	$11,220	$13,090	$14,960

Alaska

Persons in family	Poverty guideline	133%	200%	250%	300%	350%	400%
1	$13,530	$17,995	$27,060	$33,825	$40,590	$47,355	$54,120
2	$18,210	$24,219	$36,420	$45,525	$54,630	$63,735	$72,840
3	$22,890	$30,444	$45,780	$57,225	$68,670	$80,115	$91,560
4	$27,570	$36,668	$55,140	$68,925	$82,710	$96,495	$110,280
5	$32,250	$42,893	$64,500	$80,625	$96,750	$112,875	$129,000
6	$36,930	$49,117	$73,860	$92,325	$110,790	$129,255	$147,720
7	$41,610	$55,341	$83,220	$104,025	$124,830	$145,635	$166,440
8	$46,290	$61,566	$92,580	$115,725	$138,870	$162,015	$185,160
Per Addl	$4,680	$6,224	$9,360	$11,700	$14,040	$16,380	$18,720

Hawaii

Persons in family	Poverty guideline	133%	200%	250%	300%	350%	400%
1	$12,460	$16,572	$24,920	$31,150	$37,380	$43,610	$49,840
2	$16,760	$22,291	$33,520	$41,900	$50,280	$58,660	$67,040
3	$21,060	$28,010	$42,120	$52,650	$63,180	$73,710	$84,240
4	$25,360	$33,729	$50,720	$63,400	$76,080	$88,760	$101,440
5	$29,660	$39,448	$59,320	$74,150	$88,980	$103,810	$118,640
6	$33,960	$45,167	$67,920	$84,900	$101,880	$118,860	$135,840
7	$38,260	$50,886	$76,520	$95,650	$114,780	$133,910	$153,040
8	$42,560	$56,605	$85,120	$106,400	$127,680	$148,960	$170,240
Per Addl	$4,300	$5,719	$8,600	$10,750	$12,900	$15,050	$17,200

We can now calculate maximum premiums under the health care plan and compare them. First, let’s find an average family of 4, so we know what we are dealing with. This is a tricky figure. According to the Census bureau, the average income for a family was $58,407 in 2006, with average of 3.13 per family. Using the table above, this family sits in the 300% to 350% percent of NPL. Below is a chart of premium costs using the health care tables. Those lines that are highlighted will pay more, on average, than they pay today in premiums.

	133%			200%			250%
Persons in family	Salary	Initial (1.5%)	Final (3%)	Salary	Initial (3%)	Final (5%)	Salary	Initial (5%)	Final (7%)
1	$14,404	$216	$432	$21,660	$650	$1,083	$27,075	$1,354	$1,895
2	$19,378	$291	$581	$29,140	$874	$1,457	$36,425	$1,821	$2,550
3	$24,352	$365	$731	$36,620	$1,099	$1,831	$45,775	$2,289	$3,204
4	$29,327	$440	$880	$44,100	$1,323	$2,205	$55,125	$2,756	$3,859
5	$34,301	$515	$1,029	$51,580	$1,547	$2,579	$64,475	$3,224	$4,513
6	$39,275	$589	$1,178	$59,060	$1,772	$2,953	$73,825	$3,691	$5,168
7	$44,249	$664	$1,327	$66,540	$1,996	$3,327	$83,175	$4,159	$5,822
8	$49,223	$738	$1,477	$74,020	$2,221	$3,701	$92,525	$4,626	$6,477

	300%			350%			400%
Persons in family	Salary	Initial (7%)	Final (9%)	Salary	Initial (9%)	Final (10%)	Salary	Initial (10%)	Final (11%)
1	$32,490	$2,274	$2,924	$37,905	$3,411	$3,791	$43,320	$4,332	$4,765
2	$43,710	$3,060	$3,934	$50,995	$4,590	$5,100	$58,280	$5,828	$6,411
3	$54,930	$3,845	$4,944	$64,085	$5,768	$6,409	$73,240	$7,324	$8,056
4	$66,150	$4,631	$5,954	$77,175	$6,946	$7,718	$88,200	$8,820	$9,702
5	$77,370	$5,416	$6,963	$90,265	$8,124	$9,027	$103,160	$10,316	$11,348
6	$88,590	$6,201	$7,973	$103,355	$9,302	$10,336	$118,120	$11,812	$12,993
7	$99,810	$6,987	$8,983	$116,445	$10,480	$11,645	$133,080	$13,308	$14,639
8	$111,030	$7,772	$9,993	$129,535	$11,658	$12,954	$148,040	$14,804	$16,284

Let’s calculate our average family in the United states. To give the best benefit of the doubt, I am going to calculate two ways: income and adjusted gross income. There is nothing in the bill that suggests adjusted gross income, but it is only fair to look at both sides of the coin. According to the IRS, adjusted gross income in the United States, for all tax filers, was $31,987. This would be low for our average family, but we will use it to hit a rock bottom figure of costs for this family under the new plan. I am also going to add deductible and out of pocket max, although that is not really how insurance works. But it gives a good idea of what a family with some health concerns could face.

		Gross Income		Adjusted Gross Income
	Current	Initial	Final	Initial	Final
Premiums	$3,400	$5,256.63	$    5,840.70	$        479.81	$        959.61
Deductible	$1,000	$0.00	$0.00	$0.00	$0.00
Max Out Of Pocket	$5,000	$0.00	$0.00	$0.00	$0.00
Cost Sharing	$6,000	$10,000.00	$10,000.00	$10,000.00	$10,000.00
TOTAL	$9,400	$15,257	$15,841	$10,480	$10,960
No illness		$1,856.63	$2,440.70	-$2,920.20	-$2,440.39
Medical Issues		$5,857	$6,441	$1,080	$1,560

This means our average family, with very few doctor’s visits, will save as much as $2,920.20 if the premium max is based on adjusted gross income, but will pay as much as $2,440.70 more if it is based on real income. If this family has medical issues, they will pay as low as $1,080 more to $6,441 more in out of pocket medical expenses. In reality, based on how insurance works, this family, at max comes out $1,440.39 ahead ($27 per week), but could come out as much as $7,441 behind.

If you would like to calculate your situation, it is an easy formula. Take your salary and adjusted gross income (from your tax return last year) and figure what category you fit in based on your family size. Take the percentages from the HR 3200 chart and multiply the two figures by initial and final percentages. These are your max premiums. Then add $10,000 to find your max out of pocket for expenses. to compare, take the amount you pay per paycheck and multiply it by 26 (if on a two week schedule). This is your premium amount. Then add your max out of pocket. This should be your true expense. If you want to give the best benefit of the doubt, add your deductible amount. This will help you better understand more catestrophic medical care.

In case you are curious, my current salary and family size would put my initial premium at about $9,500 initial and $10,500 final (round figures). With a $10,000 cost share, assuming that it covers everything that my current medical sometimes does not, I have a net loss, to my family of $6,500 to $7,500 dollars. This is a sizeable extra chunk of change for me personally. Calculate your own costs and see what the bill means to you, however.

Will My Company Dump Their Health Insurance Plan?

I can’t answer this one definitely either. Based on our average family insurance scenario, the company pays out $9,300 on a salary of $58,407. This amounts to 15.9227% of the person’s salary. The Kaiser family foundation has cost out healthcare at an average of $2.59 per hour per employee, or $5,283.60 (9.046% of the average family income) in 2005, with healthcare rising about $.20 per hour per employee. That would put the current costs, if the trend continued, at around $2.98 per hour per employee ($6,079.20 or 10.4% of the average family income). Studies have shown the smaller companies pay even higher percentages than large companies, due to smaller group size. Looking at various sites, I find the average expenditure for health insurance to be around 9% of payroll, but I cannot determine if this is 9%, but remember this is a percentage of the entire payroll and does not factor out the part time employees who do not receive healthcare benefits.

HR 3200 states that the government has a "contribution" amount of 8% of payroll for companies that do not have a company health insurance plan (page 149, lines 14-20+):

14 SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV
15 ERAGE.
16 (a) IN GENERAL.—A contribution is made in accord
17 ance with this section with respect to an employee if such
18 contribution is equal to an amount equal to 8 percent of
19 the average wages paid by the employer during the period
20 of enrollment …

If the total payroll for the preceding calendar year does not exceed $400,000, the percentage is subsidized (page 150, lines 9-13). I added the dollar amounts after the percentage, the rest of the lines are copied verbatim from the bill.

9 (1) IN GENERAL.—In the case of any employer
10 who is a small employer for any calendar year, sub
11 section (a) shall be applied by substituting the appli
12 cable percentage determined in accordance with the
13 following table for ‘‘8 percent’’:

If the annual payroll of such employer for                 The applicable
the preceding calendar year:                                      percentage is:
Does not exceed $250,000 ……………………………….     0 percent  ($0)
Exceeds $250,000, but does not exceed $300,000       2 percent ($5,000 – $6,000 total)
Exceeds $300,000, but does not exceed $350,000       4 percent ($12,000 – $14,000 total)
Exceeds $350,000, but does not exceed $400,000       6 percent ($21,000 – $24,000 total)
$400,000                                                                     8 percent ($32,000 total)

Now to the question of your employer. I see the following dumping healthcare group benefits, if they have it:

1. Employers with low payrolls (those subsidized above)
2. Employers with mostly full time employees that make below, and perhaps at, the average salary
3. Employers who are not competing heavily for employees (using healthcare benefits as a perk to get talent)
4. Employers with lots of part-time employees, if they are forced to cover them with benefits, as well (not spelled out either way in the bill)

On the other hand, the following will not dump policies

1. Employers who have a healthy number of very highly paid employees
2. Employers with a great deal of part-time employees, unless they have to provide them benefits, as well (not spelled out either way in the bill)
3. Employers for whom having company insurance will be a great attraction for the best talent

The 8% figure appears to have come from a government study that shows healthcare costing 7.8% per family, but I cannot find the link right now and I cannot tell if it includes all American families or just those insured. I would imagine, looking at the other sites, 7.8% means all families, not just those covered by employers.

If you want to calculate your risk, figure out what you think the average salary in your company is and calculate the total payroll. If you think the average is much lower, you will have to adjust this percentage up. Multiply this total number by 8%. Now remove part time employees from the mix, as they do not cost the company benefits and multiple by 9% if the average is about $59,000 per year in salary. If you think it is less, you have to add more percentages.

If you have an employer who has 25 employees each making about $59,000, the total payroll is $1,475,000. The health insurance costs are $132,750 and the healthcare plan is $118,000, for a savings of $14,750. Unless this company can get rid of a few HR people by dumping the insurance plan, for greater savings, they probably will not. Even if we take the 10.4% figure, it is only $35,400 saved per year (plus any HR person they can get rid of when benefits are reduced). If you multiply this by 10 (250 employees), with a total of $350,400 in savings (plus probably at least one HR person), it becomes more attractive.

Will the Health Insurance Plan Cover Undocumented Workers

The undocumented worker/illegal alien question has spurred a lot of bad information. The people negative towards the bill point to SECTION 152 (pages 50-51), which states:

21 SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.
22 (a) IN GENERAL.—Except as otherwise explicitly per
23 mitted by this Act and by subsequent regulations con
24 sistent with this Act, all health care and related services
25 (including insurance coverage and public health activities)

1 covered by this Act shall be provided without regard to
2 personal characteristics extraneous to the provision of
3 high quality health care or related services.
4 (b) IMPLEMENTATION.—To implement the require
5 ment set forth in subsection (a), the Secretary of Health
6 and Human Services shall, not later than 18 months after
7 the date of the enactment of this Act, promulgate such
8 regulations as are necessary or appropriate to insure that
9 all health care and related services (including insurance
10 coverage and public health activities) covered by this Act
11 are provided (whether directly or through contractual, li
12 censing, or other arrangements) without regard to per
13 sonal characteristics extraneous to the provision of high
14 quality health care or related services.

What is a high quality health care service? Once you answer that, you can determine whether "high quality" means anyone who needs health care has a card. If so, then undocumented workers/illegal aliens will be able to participate. But, as proponents of the bill have stated, they won’t get affordability credits:

3 SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED
4 ALIENS.
5 Nothing in this subtitle shall allow Federal payments
6 for affordability credits on behalf of individuals who are
7 not lawfully present in the United States.

This is the only thing in the bill that talks about undocumented workers. As I have read it, affordability credits only apply to individuals between 133% and 400% above the National Poverty Level. The question is whether or not someone can include undocumented workers/illegal aliens in the under 133% category. Overall, I would agree with the proponents on this one.

Will Health Care Expenses Go Down?

According to a CNN/Money article, the United States currently has a $2.2 billion medical industry, with around $1.2 billion in waste. It is this waste that is causing the incredible expenses related to health care. The following chart was on the site

Just looking at the bill alone, it is unlikely overtesting will be solved by any of the sections in the bill. The expense of process claims will likely go up, especially if the filing system is designed like Medicare. The bill will do nothing about ignoring doctor’s orders either. There are some provisions that might help some with ineffective use of technology, but the problem is growing and the bill does not address the real problem here. Hospital readmissions will likely go down, but hospitals, which will be "fined" under provisions in the bill for too many readmissions might keep their more risky patients in the hospital, raising waste in admissions while reducing the waste in readmissions. Medical errors are not addressed directly in the bill. Unnecessary ER visits will go down. They might be replaced by some unnecessary doctor’s visits, but doctor’s visits cost less than ER visits. And there is nothing to address hospital acquired infections.

If you ask me, the improvement is largely in a small bucket, while one of the largest buckets will likely grow larger. The most likely outcome is an increase in health care costs and waste, not a decrease. With everyone having insurance cards, I am almost certain ER visits will reduce, however. But even a reduction of 100% will not offset a 10% increase in processing claims expense, which is also very likely.

I am done with the novel for now. I might get back with some more interesting tidbits later.

Peace and Grace,
Greg

Twitter: @gbworld

Sotomayor not fit to be a Supreme Court Justice?

After receiving a few emails expressing outrage over the “liberal” nominee for the Supreme Court, I decided that I needed to read up a bit on the issues that were brought up by various talking heads, emails, etc. Here is my two cents on a couple of issues I have seen raised.

The "Latina Women are better than White Men" comment

Looking at the actual snippet, the comment is far less inflammatory than is being expressed.

I would hope that a wise Latina woman, with the richness of her experiences, would more often than not reach a better conclusion than a white male who hasn’t lived that life

The above comment was part of a speech given at the University of California, Berkeley for  a conference entitled Raising the Bar: Latino and Latina Presence in the Judiciary and the Struggle for Representation. Given the context, I am not overly concerned with the comment, as it was specifically tailored for a particular group and was given in response to the comment “a wise old man and wise old woman will reach the same conclusion in deciding cases”.

Do questions need to be asked about her feelings on racial issues? Certainly, as the answers the questions may, in fact, reveal that the above comment is part of her overall feelings on Latina women versus white men and may cloud her judgment on issues. But, it should be only to establish her thoughts on this issue and then taken as part of the entire line of questioning. Extended focus on this particular comment is ridiculous. I would certainly hope this does not become the major focus of the upcoming dog and pony show, as it distracts.

The New Haven Fire Department Fiasco

I agree with the sentiment being expressed over this one, but it is not Sotomayor’s fault. Title VII states that discrimination is illegal when it comes to hiring practices. It, unfortunately, does not iterate what discrimination is, leaving plenty of room open for interpretation. Specifically, it does not iterate what disparate discrimination is, or when there is unintentional discrimination.

The sad part is the New Haven fire department heads knee jerked when they found 60% of white test takers passing and only 30% of black and hispanic takers passing the Lieutenant’s and Captain’s exams. The knee jerk was further justified by looking at the passing candidates and whether they would actually get one of the slots. No black individual would have been promoted, due to the number of slots. The first legal precedent is Griggs v. Duke Power Company, where the company stopped overt racist practices, but added a high school diploma and IQ test to the requirements for higher positions. The decision was further spelled out in Albemarle Paper Co. v. Moody, which concluded their tests unfairly excluded blacks from higher paying jobs, and Washington v. Davis, which concluded the Washington DC police force’s verbal tests were failed disproportionately by black applicants. The nail in the coffin was Connecticut v. Teal, which found that adverse impact at any stage in a promotion process constitutes discrimination.

The crux of the law is it is illegal to have a process that has disparate impact on hiring and promotion unless one can prove the process is a "reasonable measure of job performance".

The main argument I can see against Sotomayor’s decision is whether or not she correctly decided against the plaintiffs as precedence allows for adjusting scores of minority applications and not throwing out the results of an exam altogether. If this is the worst this woman has done, it seems like thin ice to me.

Summary

The best two arguments against Sotomayor, at this point, are rather trivial, unless one can show evidence that they shows a trend in favoritism against the majority. At present, this is not firmly evident.

Peace and Grace,
Greg

Twitter: @gbworld