Dismantling America - Thomas Sowell

"Just one year ago, would you have believed that an unelected government official, not even a Cabinet member confirmed by the Senate but simply one of the many 'czars' appointed by the President, could arbitrarily cut the pay of executives in private businesses by 50 percent or 90 percent...."

Allan Meltzer: Deficits and the Next Financial Crisis - WSJ.com

"The United States is headed toward a new financial crisis. History gives many examples of countries with high actual and expected money growth, unsustainable budget deficits, and a currency expected to depreciate. Unless these countries made massive policy changes, they ended in crisis. We will escape only if we act forcefully and soon."

The ABC Dilemma of Health Reform - WSJ.com

Vernon L. Smith: The ABC Dilemma of Health Reform - WSJ.com: "The ABC Dilemma of Health Reform"

Senate proposals put premium on healthy living

MSNBC.com

Overweight? Smoker? Health bills hit hard

Bills could put workers under pressure to lose weight, stop smoking

By David S. Hilzenrath

The Washington Post

updated 8:18 p.m. CT, Thurs., Oct . 15, 2009

Get in shape or pay a price.

That's a message more Americans could hear if the health care reform bills passed by the Senate Finance and Health committees become law.

By more than doubling the maximum rewards and penalties that companies can apply to employees who flunk medical evaluations, the bills could put workers under intense financial pressure to lose weight, stop smoking or even lower their cholesterol.

The initiative, largely eclipsed in the health care debate, builds on a trend that is already in play among some corporations and that more workers will see in the packages they bring home during this month's open enrollment. Some employers offer lower premiums to people who complete personal health assessments; others offer only limited benefit packages to smokers.

The current legislative effort takes the trend a step further. It is backed by major employer groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers. It is opposed by labor unions and groups devoted to combating serious illnesses, such as the American Heart Association, the American Cancer Society, and the American Diabetes Association.

A colossal loophole?
President Obama and members of Congress have declared that they are trying to create a system in which no one can be denied coverage or charged higher premiums based on their health status. The health insurance lobby has said it shares that goal. However, so-called wellness incentives could introduce a colossal loophole. In effect, they would permit insurers and employers to make coverage less affordable for people exhibiting risk factors for problems like diabetes, heart disease and stroke.

"Everybody said that we're going to be ending discrimination based on preexisting conditions. But this is in effect discrimination again based on preexisting conditions," said Ann Kempski of the Service Employees International Union.

The legislation would make exceptions for people who have medical reasons for not meeting targets.

Supporters say economic incentives can prompt workers to make healthier choices, thereby reducing medical expenses. The aim is to "focus on wellness and prevention rather than just disease and treatment," said Business Roundtable president John J. Castellani.

BeniComp Group, an Indiana company that manages incentives for employers, says on its Web site that the programs can save employers money in a variety of ways. Medical screenings will catch problems early. Employers will shift costs to others. Some employees will "choose other health care options."

Douglas J. Short, BeniComp's chief executive, said the incentives he uses focus on outcomes, not conditions.

"I can't give you an incentive based on being a diabetic or not being a diabetic, but whether you're managing your blood glucose level — I can give you an incentive based on that," Short said.

National epidemic of obesity
The incentives could attack a national epidemic of obesity. They also cut to a philosophical core of the health care debate. Should health insurance be like auto insurance, in which good drivers earn discounts and reckless ones pay a price, thereby encouraging better habits? Or should it be a safety net in which the young and healthy support the old and sick with the understanding that youth and good health are transitory?

Under current regulation, incentives based on health factors can be no larger than 20 percent of the premium paid by employer and employee combined. The legislation passed by the Health and Finance committees would increase the limit to 30 percent, and it would give government officials the power to raise it to 50 percent.

A single employee whose annual premiums cost him and his employer the national average of $4,824 could have as much as $2,412 on the line. At least under the Health Committee bill, the stakes could be higher for people with family coverage. Families with premiums of $13,375 — the combined average for employer-sponsored coverage, according to a recent survey — could have $6,687.50 at risk.

An amendment passed unanimously by the Health Committee would allow insurers to use the same rewards and penalties in the market for individual insurance, though legislative language subsequently drafted by the committee's Democratic staff does not reflect that vote, Sen. Mike Enzi (Wyo.), for the committee's ranking Republican, has said. The bill drafted by the Senate Finance Committee would set up a trial program allowing insurers in 10 states to use wellness-based incentives for individuals.

America's Health Insurance Plans, an industry lobby, has argued that insurers should be allowed to consider participation in wellness programs when setting individual premiums.

Wellness incentives voluntary
Employers and other advocates of expanded wellness incentives say taking steps to get healthier would be voluntary. Sen. John Ensign, a Nevada Republican and lead sponsor of the Finance Committee's wellness provision, said his proposal "would guarantee that the incentive is strong enough for Americans to want to participate."

Wellness incentives have been spreading rapidly in the corporate world. Unlike the legislative proposals, which address incentives based on results, the corporate programs typically compensate employees based on effort alone — for example, enrolling in smoking cessation programs even if they fail to kick the habit, or undergoing detailed medical assessments regardless of the findings. But there are exceptions: The Safeway supermarket company allows certain employees to reduce their premiums by meeting standards for body mass and other measures. Safeway chief executive Steve Burd has framed it as an issue of personal responsibility.

Valeo, a supplier of auto parts, four years ago raised the deductible on an employee health plan to $2,200 from $200 for individual coverage and to $4,400 from $400 for family coverage. Then it gave employees the opportunity to reduce the deductible to its starting point by being nonsmokers and meeting goals for blood pressure, cholesterol, and body mass index, said Robert Wade, Valeo's director of human resources for North America.

"If they don't comply they end up being penalized, if you will, but we refer to it as a Healthy Rewards program," Wade said.

Workers who choose not to submit to yearly medical assessments have been offered a different health plan that carries higher premiums, Wade said.

Results are mixed for some programs
The results are mixed. The number of employees meeting some targets in the Healthy Rewards program has risen while the number meeting others has fallen, Wade said. On average, employees have succeeded in bringing their deductibles down to about $600 in the case of individual coverage. Meanwhile, Valeo has managed to keep annual increases in health care costs per employee down to about 1 percent, he said, which is far below average.

Higher deductibles alone could explain some of the savings. They can make people more cost-conscious when deciding whether to go to the doctor or obtain other medical services.

Paychex, a payroll management company, offers incentives for participation in wellness programs but refrains from pegging them to biometric targets.

"Employees could be doing everything right and still not achieve the desired outcome. And so then you're holding them accountable for something that may not be achievable," said Jake Flaitz, the company's director of benefits.

Workers at a company called Bemis, which makes packaging, went on strike this year partly because the firm was insisting that they and their spouses submit to health risk assessments to remain eligible for their health insurance, the Workers United union said in an August news release. The union called the assessments "invasive."

North Carolina has angered some state employees by introducing a wellness program that would limit the most generous benefits package to those who meet body mass targets and don't smoke. The state would allow employees to satisfy the requirement by enrolling in weight management or smoking cessation programs.

When fully implemented, the program is projected to reduce the state health plan's medical expenses by 1.2 percent, spokeswoman Linda McCrudden said by e-mail.

The top executive at the health plan, Jack W. Walker, predicted that over the long run the federal government will pay for North Carolina's success. State workers who live longer will spend more time collecting benefits from Medicare, the federal insurance program for older Americans, he said.

© 2009 The Washington Post Company

URL: http://www.msnbc.msn.com/id/33336289/ns/politics-washington_post/

MSN Privacy . Legal

© 2009 MSNBC.com

Czar Blocks BofA Chief's Pay - WSJ.com

Czar Blocks BofA Chief's Pay - WSJ.com: "By DEBORAH SOLOMON and DAN FITZPATRICK

WASHINGTON—The Treasury Department's pay czar pushed outgoing Bank of America Corp. Chief Executive Kenneth D. Lewis into giving back about $1 million he received so far this year and forgoing the rest of his $1.5 million salary for 2009, say people familiar with the matter.

The move makes Mr. Lewis the biggest target so far of Kenneth Feinberg, the Treasury's 'special master' for compensation. He also asked that Mr. Lewis pass up any 2009 bonus from the Charlotte, N.C., bank.

Mr. Feinberg pushed for the deal because he thought the package of retirement benefits and unvested stock Mr. Lewis takes with him when he steps down at year's end—currently worth at least $69.3 million, according to securities filings—was large enough, and possibly too big."

The Young and the Jobless

"The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

The biggest explanation is of course the bad economy. But it's precisely when the economy is down and businesses are slashing costs that raising the minimum wage is so destructive to job creation. Congress began raising the minimum wage from $5.15 an hour in July 2007, and there are now 691,000 fewer teens working.....

Economic data and Treasury security prices - WSJ Oct. 3, 2009

The following reports the effect of a disappointing employment report (increase in the unemployment rate, decrease in payroll employment) on the market for U.S. Treasury securities.

Coming Auctions Weigh On Treasury Prices

"Another strong week for Treasurys ended on the skids, as investors turned their attention from disappointing U.S. economic data to the $71 billion of auctions ahead.

The market registered no more than a temporary burst on Friday's poor jobs figures, having exhausted its ability to capitalize on conflicting economic data.

Heavy buying in long-dated Treasurys after the nonfarm payrolls report pushed yields, which move inversely to prices, down sharply. The 10-year note hit 3.10% and looked as if it might be headed for the year's April low.

Late Friday in New York, the 10-year note was down 10/32 point, or $3.125 for each $1,000 invested, at 103 10/32. Its yield rose to 3.230% from 3.194% late Thursday. The 30-year bond fell 1 2/32 points to yield 4.018%.