March 30, 2010 § 3 Comments
After health care legislation was passed, my inbox was flooded with emails from people who wanted to know how the new law will affect them. As with any major legislation, there are winners and losers. Here is my breakdown of the winners and losers of the new law.
1) Low-income people: Approximately 32 million people will be added to Medicaid. These people won’t have to pay a dime for health care, in addition to not having to pay any income tax (since they are probably at or around the poverty level). In short, it’s a win-win for them.
2) People with preexisting conditions: The law prohibits insurance companies from rejecting or dropping coverage for people with preexisting conditions.
3) Insurance companies and pharmaceuticals.
1) Young and healthy individuals: These people will have to buy health insurance or face a hefty fine. As insurance companies are likely to shift the costs of covering people with preexisting or serious conditions onto these individuals, they should expect their premiums to soar. In effect, healthy people will be forced to subsidize insurance coverage of unhealthy people.
2) The unemployed: The legislation mandates that most businesses must provide health care for their employees or face hefty fines. As a consequence, businesses are likely to either layoff workers or suspend new hirings indefinitely (while having existing workers work longer hours and overtime) in an attempt to reduce costs. Expect higher unemployment once mandates come into effect in 2014.
3) The retired: The new law slashes 500 billion dollars from Medicare. The cuts will make Medicare less attractive to physicians and health clinics. Senior citizens will have less choices and benefits.
4) The States: To accommodate the increased enrollment in Medicaid, states will have to enact painful cuts and increase taxes. Mass layoffs and reduction in public services are expected.
5) Doctors and other health care professionals.
March 24, 2010 § 1 Comment
If the Olympics failed to satisfy your appetite for figure skating, you can enjoy more of it when the 2010 world figure skating championships commence later today. I know it’s odd that they decided to schedule a major competition right after the Olympics. But figure skating, like most competitive sports, is foremost a business. They want to capture whatever buzz is left from the Olympics. Personally, I think their strategy will backfire. Anyway, I am only interested in the ladies’ event and probably won’t watch the other events. Best of luck to all skaters.
March 20, 2010 § 2 Comments
In recent weeks, I have been asked repeatedly to explain various statistics on unemployment. I’ll attempt to explain them in the simplest way possible. Reliable economic research has shown that the United States will have to produce a net gain of 150,000-200,000 jobs just to keep up with population growth. Anything less than the aforementioned points to a weak job market.
For example, the economy is found to have created a net gain of 30,000 jobs in March. Politicians may cite the net gain as proof that the job market is starting to produce jobs. Yet, it is a deceptive claim. In REAL terms, the number of able people without a job actually increases by 120,000 (150K minus 30K). The job market is not getting better; it is continuing to get worse. However, I would agree that the pace is slowing and that’s a good thing.