Amazing weekend:
+ Iran’s Supreme Leader, Ayatollah Ali Hosseini Khamenei,who is not elected by the people, criticized Iran’s elected president for taking a phone call from President Obama. He said taking the call was “inappropriate.” Hint: Next time let it go into voice mail.
+ The House of Representatives voted 407-0 on Saturday on a bill to guarantee that Federal workers — once characterized by conservatives as underpaid and underworked — will receive back pay once the government re-opens. Hence hundreds of thousands of Federal government workers will have a nice paid holiday.
+ Afganistan President Hamid Karzai is eager to leave the presidential palace and lead a quieter life in a 13,000 square foot lavish new house that he built just yards from the presidential palace complex that has been his home for over a decade. He became president on December 22, 2001. His government has been criticized for systemic corruption. Only 20% of Afghanistan’s budget is covered by taxes collected from within Afghanistan. The remaining 80% comes from donor states, including the U.S. — the biggest donor by far. We tolerate Afghanistan’s corruption because it provides jobs for Americans supplying, disbersing and investigating our wasted monies.
+ Over $200 million has been disbursed in the Republican/Tea Party fight to defund Obamacare. Much of the money has come from an organization called Freedom Partners, heavily funded by the billionaire Koch brothers. The Freedom Partners’ web site says, “Obamacare may well be the single greatest threat to the American economy and individual freedom in our time. The law harms those most in need and creates a barrier to a low-cost, high-quality health care system that offers access to all.” The site does not detail an alternative health care system which it would support. Criticism is cheap.
I understand Obamacare a little. It says you got to have insurance or buy it. If you don’t, the IRS will fine you $95 or 1% of your income, whichever is higher. If you’re too poor to buy insurance the government (state or federal) will help you. You can’t be denied insurance or charged a fortune if you’re forever sick — as today.
The reason some people think Obamacare will bankrupt the country has really less to with Obamacare and more to do with our exploding health care costs. We spend 18% of our GDP on health care — on the way to 20%. And that’s too much — much more than other industrialized countries — all of which keep their people alive longer and healthier than we do.
In short, our health care is broken. I instance my California dermatologist who charged me $135 for what my New York City dermatologist charged Medicare $4,400 — namely removing some dubious growths. Everyone and their uncle is gaming the system — forcing tests and MRIs and X-rays on frightened patients — and charging insurance companies an arm and a leg.
There are a zillion experiments simultaneously going on that have nothing to do with Obamacare — from doctors in pharmacies, to doctors who don’t take insurance, to hospitals buying other hospitals and automating their ghastly billing and patient record systems.
The sick part of the whole system is that health care is the only expense which patients don’t pay and can’t shop. We shop for cars, for groceries, for clothes and even tennis balls. But we don’t shop for health care. Medicare bargains my health care costs down to a point where some doctors say they can no longer make a living. But doctors also say their insurance costs are killing them. If liability insurance were reformed and lawyers couldn’t make a handsome living suing your doctor, then insurance costs would come down.. But that reform is for another day — if it ever happens, given heavy lawyer lobbying.
Meanwhile Obamacare is the law of the land and bumbling along. The best place to read about it is in this weekend’s Economist “Briefing America’s health care upheaval. Will it get better?” Excerpts:
+ Obamacare is loosely based on a health reform in Massachusetts, signed into law in 2006 by the state’s then governor, Mitt Romney. Some regard Romneycare as a success: last year just 4% of the state’s residents lacked health insurance, less than a third of the national average. But even before reform, Massachusetts had a relatively small uninsured population and the measure had broad political support. Obamacare is more ambitious and faces more determined opposition.
One of the biggest problems with America’s system is that insurers have long charged punishing rates to the sick, or refused to cover them at all. Beginning in January, this practice will be banned. Since insurers would soon go bankrupt if they sold only cheap plans to ailing patients needing expensive treatment, Obamacare pushes the young and fit to buy coverage, too. An “individual mandate” will require all Americans to have insurance or pay a penalty. This will give insurers revenue from cheap, healthy patients to offset the cost of insuring sick ones.
+ The hospitals’ present way of doing business looks untenable. The more services doctors provide, whether medically necessary or not, the more they are paid. Hospitals and doctors have few incentives to keep patients well, but plenty to shower them with unnecessary tests and operations. Charges are astoundingly high and hard to fathom. Shopping for health care is akin to choosing a car blindfolded, then learning the price three months later. Replacing a hip in America costs more than three times what it does in Britain.
+ Overhauling America’s $2.7 trillion health sector is no easy matter. In the world’s biggest economy nearly 50 million people, or one in seven, are uninsured. America spends 18% of GDP on health care. The people of Britain, Norway and Sweden, to name a few, spend half as much but live longer.
Because I’m old (my friends would argue decrepit), my healthcare is Medicare. I get copies of the bills Medicare paid. Many are outrageous. But if I complain, I’ll piss of my doctors. And frankly, I like them. I have declined tests like MRIs. But, as one doctor told me, “you don’t pay, so why do you care?” Do the tests. Maybe they’ll find something.
The only thing I’ve learned about my healthcare is that I’m 10000% responsible for it. And I’d better do everything necessary to stay healthy. The minute I’m forced into a hospital I’m probably doomed. too much bad stuff goes on there. Like nurses putting blood thinners into patients and not telling the doctor. (That happened to a friend this summer. He still hasn’t recovered.)
How to make money on the changing health care scene? The only way I can see (so far) is to buy drug company stocks, like GILD. Because of more people insured, more drugs will get prescribed. And because our government is restricted from bargaining with drug companies, the prices will stay high.. Our medicines cost a lot more than they do overseas, and why the bulk of doctors’ prescriptions are now written for generic drugs — where they exist.
You can read the Economist’s health care briefing here.
Barry Ritholtz writes:
If you want to be smart investors you should consider all aspects of how the insurance mandate of law will affect different sectors of the economy (including the companies within those sectors). This is simply an objective approach.
When the health-care law was passed, my team did just that: We sat down to discuss exactly what impact it might have. Not the politics or the electoral implications, but what result this was likely to have in the real world. We came to several conclusions:
● The nation was going to create up to 50 million new health-care consumers;
● Demand for medical services and equipment was likely to rise;
● Innovative pharmaceuticals, procedures and techniques would also see increased demand;
● Hospitals would no longer be on the hook for free emergency room services, as they have for almost 3 decades.
What’s that you say? Hospitals are mandated to give away free services?
Yes. In response to some earlier bad behavior from hospitals called “patient dumping,” a mandate for unfunded medical care was created and signed into law by President Ronald Reagan in 1986. It said, “Hospitals provide care to anyone needing emergency healthcare treatment regardless of citizenship, legal status or ability to pay.”
That’s right, Reagan created a universal coverage mandate, forced the private sector to pay for it, thereby creating the world’s most expensive, least efficient health-care program. Hospitals hated it, the poor and indigent took advantage of it, and prices were jacked up in response to it. Eventually, the costs spread to everyone else.
Given that history, it is no surprise that hospitals were quietly pleased with Obamacare. After the Supreme Court ruled on the legality of the new rules in June 2012, hospital stocks rallied. It should come as no surprise: They get to remove a huge cost that they had no ability to control. They also get a massive number of new paying customers. And they now have some control over who their patients will be. So we considered all of these issues objectively. Once we put aside our emotions, the investments were obvious. If I could have sat with Cruz three years ago, here is what I would have suggested that he do with his (Ted Cruz’s) portfolio:
● Overweight the health-care sector. I always prefer using exchange-traded funds, or ETFs, to individual stocks, and in this case, the Health Care ETF — XLV was a good choice: It is filled with pharmaceuticals, insurers and hospitals;
● Investors who prefer individual stocks should consider either the large pharmaceutical companies or medical-device makers. Larger firms such as Merck or Sanofi should be on your radar; Johnson & Johnson sells into the consumer market, makes pharmaceutical and medical devices, and yields almost 3 percent;
● For more aggressive investors, the SPDR S&P Biotech (XBI) owns the largest biotech, genomic and therapeutic companies.
Regardless of your viewpoint, the broad Healthcare Index has done well since the March 2009 lows — and has done nothing but go up since the Supreme Court’s ruling on Obamacare.
The politics of Obamacare are complex, confusing and partisan. The investing theses — and results — have been anything but.
They ripped my Visa off for $6.40. Visa called me, asked if it was my charge? It wasn’t. So they closed my Visa — for the third time this year. Pain, again. Now I have to change all those accounts it’s linked to — UPS, FedEx, Amazon, Netflix, the parking garage, the phone company, Verizon, DirecTV, the NYTimes, etc.
Why close me down for a miserable six bucks? Apparently, the crooks make an initial charge to test the card. If it works, they make bigger ones later. Congratulations to Citibank for catching the bad charge.
What can Harry to prevent this happening again and again — remember last time they got $10,000 as a cash advances out of ATM machines. Ideas:
+ Cut the cash advance limit down to $0. I will never be able to get any money at an ATM on my Visa credit card. But neither will the crooks. Since I never use ATM machines — except overseas where I use a JPMorgan debit card — this is no burden.
+ Don’t hand your credit card to a waiter. Accompany your waiter to his credit card machine and swipe it yourself. Don’t let the waiter, or anyone else, see your credit card. All he needs is your number, your expiration date and your “secret” three digit code — all of which are on your credit card. One day they’ll take the three digit code off. But for now it’s there in plain sight for all to see.
+ Get a separate credit card for buying stuff online. I bought a Citi Platinum Select AAdvantager World MasterCard. There are big pluses with this card (much better than my Citi Visa), including 30,000 American Airlines miles after $1,000 in purchases within the first 3 months. My first checked bag is free. I earn 10% of my redeemed AAdvantage miles back. I don’t know what this means. But it looks better than a slap in the belly with a cold fish.
You can find out more about this card and apply for it here.
Harry Newton who sees another lousy day in the market as Mr. Boehner messes around with the debt ceiling. He fails to understand that raising the debt ceiling won’t raise spending. That spending has already been decided by Congress. Having Congress vote on the debt ceiling makes zero sense. But Washington is eight square miles surrounded by reality. I feel sad for my friend who’s trying to get an SBA loan to fix his business after Hurricane Sandy destroyed it. And now he can’t get a callback. He’s guessing the SBA is on paid vacation. You and I are paying.
Here’s a picture of the Supreme Leader. I wonder how he keeps his beard so white? Susan is berating me because my hair is yellowing..
It’s already started. I received this at 9:21 AM.
Updating all my credit cards will take all day. Yuch.
Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) has so far made $10B from the $26B of funding it provided to six companies during the financial crisis, the WSJ calculates. I hope my BRKA pop today. They’ve been weak lately.
I’m feeling very positive to Apple (AAPL). Everyone in our family now has, or soon will have an iPhone 5S. And they all will love it as much as I love mine. More tomorrow.
Harry,
I called 2 credit card companies in an attempt to cut my cash advance limit to $0 and both told me my cash advance limit was a percentage of my credit limit so to cut my cash advance, they’d have to lower my credit limit. I declined to do it for now. You didn’t have that problem?
no. i didn’t have that problem with citi visa.
Some cards have virtual account numbers(Citi Bankcard, BOA Bankcard) just for this reason. You can only use it at one merchant and only for the max amount you set per purchase. You’ll need to get one virtual account for each merchant but if thieves get ahold of one of these numbers you will only have to change that one not all.
Vito
My new United Airlines Chase Visa gives me all the usual 40,000 miles plus free first checked bag for everyone on my reservation, Priority Boarding, Two free airport lounge passes and etc…the thing I really like is there zero foreign exchange fee…we like to travel to Europe and we live in Canada for 4 months each summer…this saves me a bundle. The annual fee of $99. is quickly made-up in checked baggage alone.I use Everbank debit card for ATM cash abroad 1% exchange fee and the card is free.
If you were more even handed (and less into your left wing partisanship) you might have pointed out that Obama has refused to concede anything or even meet with Republicans. Obamacare did not receive one
conservative vote — even Warren Buffet opposes it.
If you were more even handed (and less into your right wing partisanship) you might have used more than an urban legend to get your point across. Warren Buffet never opposed Obamacare.
http://www.motherjones.com/kevin-drum/2013/09/yet-another-conservative-urban-legend-takes-root
Yeah, Motherjones is sooo nonpartisan.
There is much that can be said about Obamacare. Bottom line, it is a small first step towards the only rational and workable system of universal coverage in a society that is all-inclusive and sincere about economic justice. The Left/Right meme in our country is a joke, except it’s no joke that it hurts people. There is no real left anymore, only a straw man that serves as convenient lightning rod for manipulating an assortment of frustrated (I’m being kind) people looking for a place to put blame. In the real world you need both genuine left/right- it’s as silly to establish a preference as it would be with night/day, heads/tails, male/female, etc. But the manipulators of history have done a good job of demonization of either left or right, for their own power-hungry purposes.