10 Ways the New Healthcare Bill May Affect You

From John Curry, March 27, 2010

http://finance.yahoo.com/family-home/article/109178/10-ways-the-new-healthcare-bill-may-affect-you?mod=family-love_money

10 Ways the New Healthcare Bill May Affect You

by Katie Adams
Friday, March 26, 2010

The Patient Protection and Affordable Healthcare Act, more commonly referred to as the "healthcare bill", has taken over a year to craft and has been a lightning rod for political debate because it effectively reshapes major facets of the country's healthcare industry.

Here are 10 things you need to know about how the new law may affect you:

1. Your Kids are Covered

Starting this year, if you have an adult child who cannot get health insurance from his or her employer and is to some degree dependent on you financially, your child can stay on your insurance policy until he or she is 26 years old. Currently, many insurance companies do not allow adult children to remain on their parents' plan once they reach 19 or leave school.

2. You Can't be Dropped

Starting this fall, your health insurance company will no longer be allowed to "drop" you (cancel your policy) if you get sick. In 2009, "rescission" was revealed to be a relatively common cost-cutting practice by several insurance companies. The practice proved to be common enough to spur several lawsuits; for example, in 2008 and 2009, California's largest insurers were made to pay out more than $19 million in fines for dropping policyholders who fell ill.

3. You Can't be Denied Insurance

Starting this year your child (or children) cannot be denied coverage simply because they have a pre-existing health condition. Health insurance companies will also be barred from denying adults applying for coverage if they have a pre-existing condition, but not until 2014.

4. You Can Spend What You Need to

Prior to the new law, health insurance companies set a maximum limit on the monetary amount of benefits that a policyholder could receive. This meant that those who developed expensive or long-lasting medical conditions could run out of coverage. Starting this year, companies will be barred from instituting caps on coverage.

5. You Don't Have to Wait

If you currently have pre-existing conditions that have prevented you from being able to qualify for health insurance for at least six months you will have coverage options before 2014. Starting this fall, you will be able to purchase insurance through a state-run "high-risk pool", which will cap your personal out-of-pocket expenses for healthcare. You will not be required to pay more than $5,950 of your own money for medical expenses; families will not have to pay any more than $11,900.

6. You Must be Insured

Under the new law starting in 2014, you will have to purchase health insurance or risk being fined. If your employer does not offer health insurance as a benefit or if you do not earn enough money to purchase a plan, you may get assistance from the government. The fines for not purchasing insurance will be levied according to a sliding scale based on income. Starting in 2014, the lowest fine would be $95 or 1% of a person's income (whichever is greater) and then increase to a high of $695 or 2.5% of an individual's taxable income by 2016. There will be a maximum cap on fines.

7. You'll Have More Options

Starting in 2014 (when you will be required by law to have health insurance), states will operate new insurance marketplaces - called "exchanges" - that will provide you with more options for buying an individual policy if you can't get, or afford, insurance from your workplace and you earn too much income to qualify for Medicaid. In addition, millions of low- and middle-income families (earning up to $88,200 annually) will be able to qualify for financial assistance from the federal government to purchase insurance through their state exchange.

8. Flexible Spending Accounts Will Become Less Flexible

Three years from now, flexible spending accounts (FSAs) will have lower contribution limits - meaning you won't be able to have as much money deducted from your paycheck pre-tax and deposited into an FSA for medical expenses as is currently allowed. The new maximum amount allowed will be $2,500. In addition, fewer expenses will qualify for FSA spending. For example, you will no longer be able to use your FSA to help defray the cost of over-the-counter drugs.

9. If You Earn More, You'll Pay More

Starting in 2018, if your combined family income exceeds $250,000 you are going to be taking less money home each pay period. That's because you will have more money deducted from your paycheck to go toward increased Medicare payroll taxes. In addition to higher payroll taxes you will also have to pay 3.8% tax on any unearned income, which is currently tax-exempt.

10. Medicare May Cover More or Less of Your Expenses

Starting this year, if Medicare is your primary form of health insurance you will no longer have to pay for preventive care such as an annual physical, screenings for treatable conditions or routine laboratory work. In addition, you will get a $250 check from the federal government to help pay for prescription drugs currently not covered as a result of the Medicare Part D "doughnut hole".

However, if you are a high-income individual or couple (making more than $85,000 individually or $170,000 jointly), your prescription drug subsidy will be reduced. In addition, if you are one of the more than 10 million people currently enrolled in a Medicare Advantage plan you may be facing higher premiums because your insurance company's subsidy from the federal government is going to be dramatically reduced.

Conclusion

Over the next few months you will most likely receive information in the mail from your health insurance company about how the newly signed law will affect your coverage. Read the correspondence carefully and don't hesitate to ask questions about your policy; there may be new, more affordable options for you down the road.

Believers.....
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Florida - legislature proposes pension reforms...once again, a two-tiered plan (unlike Ohio's proposals) not affecting current actives OR retirees

From John Curry, March 26, 2010

Pension plans: HB 1319 would require all public employees hired after July 1, 2011, to pay 1 percent of their salary for pension plans. Would exclude overtime, leave and other non-salary compensation from pension benefit calculations. Would do away with DROP by averaging compensation over an entire career rather than highest of five years. For workers hired after July 1, 2011, would raise retirement age from 62 to 65 and allow full retirement benefits after 33 years instead of the current 30 years.

Pension plans: SB 660, HB 413 would limit the option of enrolling in the state pension plan to employees employed before Jan. 1, 2011.

http://www.palmbeachpost.com/news/state/unions-say-these-bills-would-harm-the-states-456390.html

Unions say these bills would harm the state's workers By Dara Kam

The Palm Beach Post, March 26, 2010

Pay cuts: PCB CEED 10-02 would impose 3 percent salary cuts for all state workers, including university personnel. Would give agency heads the option of layoffs or demotions instead of across-the-board salary cuts.

Pension plans: HB 1319 would require all public employees hired after July 1, 2011, to pay 1 percent of their salary for pension plans. Would exclude overtime, leave and other non-salary compensation from pension benefit calculations. Would do away with DROP by averaging compensation over an entire career rather than highest of five years. For workers hired after July 1, 2011, would raise retirement age from 62 to 65 and allow full retirement benefits after 33 years instead of the current 30 years.

Pension plans: SB 660, HB 413 would limit the option of enrolling in the state pension plan to employees employed before Jan. 1, 2011.

Teacher pay: SB 6, PCB TP 10-02 would do away with teacher tenure and base educators' salaries on student performance.

Collective bargaining: SB 610, HB 4117 would give constitutional officers — sheriffs, tax collectors, property appraisers, supervisors of elections and clerks of court — the final say in contract negotiations at an impasse by taking away the current third-party decision-makers such as county commissions.

Prison privatization: SB 2070: Would shut down three state-run prisons, costing at least 600 state correction workers their jobs.

Right to vote by secret ballot: SB 2704 would ask voters to decide whether the state constitution should be amended to guarantee the right to vote by secret ballot in union votes as well governmental elections.

Class-size reduction: SJR 2, HJR 7039 would ask voters to decide whether to relax the class-size limits approved by voters in 2002. This would put more students in each teacher's classroom.

Collective bargaining: One of House Speaker Larry Cretul's priorities is a ballot question asking voters to do away with collective bargaining except for public safety and health workers. It has not been filed as a bill, but could come out of a committee as a committee bill.

Illinois legislature sends two-tier pension reform bill to Governor - it will only affect those hired after Jan. 2011!

From John Curry, March 26, 2010

Notice, STRSers, the new regulations (as are the reforms written into most other state reform initiatives and unlike the proposed Ohio STRS reform package) does NOT affect current actives OR retirees. There IS another way of legislating pension reform.

John

http://www.mysuburbanlife.com/westchester/opinions/x1447157373/Editorial-At-last-lawmakers-step-up-to-the-pension-plate

Editorial: At last, lawmakers step up to the pension plate

Featured Business »
By Anonymous
GateHouse News Service
March 26, 2010

What the Legislature couldn't accomplish in the last 20 years it did in the span of hours on Wednesday as a pension reform bill was moved to the governor for his signature.

Distrustful of that dizzying pace though we are, the overwhelming margins in favor of this legislation in the House and Senate -- 92-17 and 48-6, respectively -- on such short notice were indicative of how necessary such reform is in a state with the largest unfunded pension liability in America and a job-killing deficit of $13 billion. Something simply had to be done. This is a significant something.

Senate Bill 1946 creates a two-tier pension system. It moves the retirement age for future state workers and lawmakers looking to get full benefits to 67 from 62 (or lower in some cases). It caps the maximum pensionable salary at $106,800. It bases benefits on the highest average salary over eight years rather than four. It limits and likely lowers cost-of-living increases by hooking them to inflation. It reduces the number of employee groups qualifying for higher payouts from jobs considered high-risk. It eliminates one kind of double-dipping for those state retirees who take another government job; no longer would that person be able to collect both public salary and pension.

Importantly, as Speaker Mike Madigan noted, "This bill does not affect anybody who works for a government today" or is retired. Indeed, should Gov. Pat Quinn turn the bill into law, it would affect only those hired on or after Jan. 1, 2011.

Read the complete article here.

RH Jones: Public employment is dangerous, inculding teaching. Employer should pay, not the retiree or the active

From RH Jones, March 26, 2010
To all:

Re: John Curry's story: 'FL firefighter asks, 'When is it going to be better financially for us to just go out and pick oranges'.

I guess Ohio's active and retired educators should go out and pick apples, as well. Today's, 03/26/2010, Akron Beacon Journal on the front page told of an "Alternative school student accused of hurling scissors, throwing chair at principal". And, also, they mentioned on page B2: " ... Akron police arrested a Kenmore High school student Thursday morning after he allegedly threatened to 'shoot up the school.' ... .

I wonder if the firefighter's unions bowed down to offer up their COLA to be cut like educator' s unions have. All of the public "servants", including educators, face dangers every day of their "service". The employers need to do the right thing and increase their contributions. It should not be up to those who chose careers in the public sector to bear the burden of our promised delayed compensations. It is the duty of the employer, not the "servant", to bear the burden of supporting the financing of our retirement. In particular, it most certainly should not be the burden of we who are already retired. What a loss to Ohio's growth, especially when active & retired educators start leaving Ohio.

RHJones, retired OH educator and PUFL union member

From John Curry, March 26, 2010

Subject: FL firefighter asks, "When is it going to be better financially for us to just go out and pick oranges?"

He didn't choose the profession for the money or perks buy says it could be a reason to get out.

http://wdbo.com/localnews/2010/03/proposed-cuts-to-pension-plans.html
Proposed cuts to pension plans have firefighters on edge

WDBO Local News, March 26, 2010

Trying to clear a $3 billion budget shortfall, lawmakers in Tallahassee have proposed big cuts to the pension plans of government workers.

The League of Cities is working with lawmakers in both the House and Senate to craft bills that would ease the burden on local governments.

In the city of Orlando, pension payments to police officers and firefighters account for about 30 percent of payroll.

In Orange County, pensions for "special risk employees" equal almost a fourth of salaries to the same group.

Cutting pensions and forcing employees to work longer before retiring are among the proposals aimed at trimming the liability.

"Some of the stuff is pretty radical," said Mike Hoening who runs the fire science program at Seminole State College and was a firefighter for 25 years.

"Towards the end of my career, the 24 hour shifts got longer, and longer, and longer," he said.

Heoning says deluxe pension plans and early retirement are the light at the end of the tunnel for many firemen who work long hours under grueling conditions.

"It's kind of a reward for what you gave," he said.

Heoning worries that for the next generation it's a luxury that may no longer exist.

"One of the main reasons why I got into this profession is because of the retirement," said Jacob Curtis, 25.

He's set to graduate from Seminole State's School for Public Safety this summer.

"Our pay is already low enough... what's left for us?" he asked.

Heoning says some students will have to "follow their heads instead of their hearts" if benefits are cut too drastically.

"What's going to be stripped from us next?" wondered 22-year-old Peter Walsh, another student set to graduate the school this summer.

He didn't choose the profession for the money or perks buy says it could be a reason to get out.

"When is it going to be better financially for us to just go out and pick oranges?" he wondered.

Minutes: March CORE meeting

Minutes of the March 18, 2010 CORE Meeting

President Dave Parshall opened the March 18th meeting of the Concerned Ohio Retired Educators (CORE) , held on the second floor of the STRS Building in Columbus, at 12:05. Alice Faryna moved to dispense with the reading aloud of the February minutes since they’d been available on-line, as well as on the table inside the door of the Sublett Room. Mary Ellen Angeletti then made a motion to accept the minutes; John Curry seconded it. Members accepted the minutes as written.

Due to the absence of Herman Fisher, Dave functioned as our temporary treasurer stating that the group’s bank balance was fine. Dave then read the recent e-mail from Dennis Leone, explaining his return of the retirement cash-gift from CORE. Since Dr. Leone considered his years on the STRS Board to be a public service, he thanked the CORE membership for the gesture and was grateful for the thoughtfulness, but felt he had to decline the gift.

Dave continued his role as “treasurer” stating that CORE will be paying for Jim Stoll’s e-mail purveyor’s work. (Even though almost no one in attendance had seen the candidate’s e-mail flyer/bulletin yet, it was to have been sent to actives “A”-“K” as of Thursday.) CORE received a thank you note from active candidate Dale Price. He thanked the group for hosting him last month and appreciated the CORE membership endorsing him for the STRS Board.

President Dave announced candidates, Jim Stoll and Dale Price, as well as our endorsement would soon be placed on the CORE website.

The COLA’s possible reduction once again was addressed. Nancy Boomhower developed an idea she felt might be a solution to the unfair ideas currently being discussed. Nancy’s solution involved revamping the formula for computing the COL, which she thought would be more equitable. She planned to address the Board in the “Public Speaks” section later in the day.

Bob Buerkle also had COLA concerns. He, too, had worked on theories and handed out examples of a variety of COLA percentages. He also will speak during the afternoon session. Once again President Parshall stressed that he will depart as president in the fall. If no one wants to succeed Dave as president, perhaps a different form [for the structure of CORE] needs to be considered. Keeping in mind the future of CORE, he wants members to think about a possible reorganization as a lobby-type group; still attending monthly STRS meetings, but having fewer regular CORE meetings.

Alice Faryna, MD, retired faculty member from the Boonshoft School of Medicine, Wright State University, spoke about her concerns with health care. She is certain that insurance premiums will escalate whether the health bill passes or it fails. She also explained her belief that we are currently in a bubble which will burst. To that end she discussed the draft of a letter prepared by herself and Deb Silverstein. Her group would like to have CORE consider supporting them and their suggestions when she presents it to the STRS Board later in the spring. The CORE Board of Trustees will consider supporting the letter and will report to the membership in April.

The CORE meeting quickly ended when the Board reconvened upstairs at 1 p.m.

Respectfully submitted,
Marie M. Fetters
CORE secretary

OH, REALLY.....isn't Ohio trying hard to do this very same thing?

From John Curry, March 25, 2010
http://www.denverpost.com/recommended/ci_14749919

"Colorado is the only state which is cutting benefits for those already retired in order to fund its retirement plan for current public employees."

Bad News for PERA
By Myron Hulen
Denver Post, March 25, 2010
There is bad news for members of Colorado's Public Employees Retirement Association, and it may get much worse.

PERA's more than 400,000 members include teachers, state police, employees at public colleges and universities, state judges and most other state employees. Senate Bill-1, aimed at getting PERA back on its feet financially, recently was passed by the Colorado legislature and signed into law by the Governor.

The bad news is that under this bill, retirees will suffer a one year cost of living increase (COLA) holiday. After this holiday, current and future retirees will have their COLA reduced from an automatic 3.5 percent to a guaranteed 2 percent for the next 30 years regardless of actual inflation, as long as PERA's investment returns are positive.

Consequently, a person with the average monthly retirement benefit of $2,772 cumulatively will lose $170,964 over a 25 year period, ignoring the one year COLA holiday and possible negative returns on investments.

Further, there will be a phased-in 2 percent increase in current PERA employees" contributions, and a phased-in 2 percent increase in employer contributions that will be taken from future salary increases.

Retirement ages also are being raised. Despite the "2+2+2" marketing slogan that implied an equal sharing of the financial burden between employers, employees and retirees, retirees actually will shoulder about 90 percent of the burden of making the plan actuarially viable according to PERA officials.

This is because of the future value of compounding interest and the only significant near-term saving is from the COLA reduction. Colorado is the only state which is cutting benefits for those already retired in order to fund its retirement plan for current public employees.

The worse news for PERA members who are not retired is that a class action lawsuit challenging the COLA reductions has been filed. If it is successful and the 3.5 percent COLA is retained, employee contribution rates either must be raised to approximately 21 percent of salary (PERA's estimate) or the defined benefit plan will have to be changed to a defined contribution plan for those not currently retired.

Apparently current retirees would retain their defined benefit plan under the latter scenario. Changing from a defined benefit to a defined contribution plan transfers market risk from PERA to individuals. It would force workers to time their retirement according to favorable market conditions.

The situation is complicated.

A seemingly solid Attorney General's Opinion says that the legislature may change benefits for those not vested but may not change benefits for those already retired and who currently receive benefits. The legality of changing the plan for those vested but currently working is uncertain according to the Opinion.

In large part, the lawsuit will hinge on the legal definition of the words "retiree benefit." PERA claims that "retiree benefits" do not include legislated COLA raises and those bringing the lawsuit claim otherwise. The other issue will be whether the legislature can change the plan for those vested but not yet retired. The courts will decide.

How did PERA get in this mess? According to the impartial Pew Center on the States, "between the years 2003 and 2006, the amount of money (COLORADO) contributed to its pension systems fell far short of annual required contributions."

Several other factors also played a role. Around the turn of the century when PERA was funded at more than 100 percent, working members were allowed to purchase service credit at very low rates, PERA matched employee contributions to a Sec. 403(b) plan up to several thousand dollars, and the 3.5 percent COLA was enacted.

This made sense at the time: there was speculation that the legislature might try to take excess funds for general revenue purposes. More people than expected took advantage of these benefits and PERA soon began to be underfunded. Then the market crash of 2008 hit. PERA was heavily invested in Lehmann Brothers which went bankrupt. With Lehmann's bankruptcy, years of state underfunding, increases in benefits, and the overall market decline, PERA found itself in serious trouble financially.

What all of this means for PERA members and retirees is that they will work longer before retirement, pay more into the system, receive lower salary raises, receive lower pensions, and receive a benefit with reduced purchasing power if inflation goes above 2 percent. Most economists assume inflation will rise substantially above 2 percent in the next few years. If this happens, it will have a profoundly negative impact on PERA retirees.

Under present circumstances Senate Bill-1 probably was the best that could be achieved. There is one small window of hope for a slightly better plan, however. PERA has agreed to study a proposal for a progressive COLA where each retiree's benefit would be divided into several tiers. Benefits that fall into the lowest tier would receive a COLA to match inflation without any cap; benefits that fall into higher tiers would receive COLAs with progressively lower caps. Stay tuned.

Myron Hulen, Ph.D, Emeritus, was a professor at Colorado State University's College of Business. EDITOR'S NOTE: This is an online-only column and has not been edited.

Their executive pay got cut and guess what....they aren't leaving their jobs! STRS investors, take note!

From John Curry, March 23, 2010

Obama pay czar demands more trims at bailout firms

Yahoo News, March 23, 2010

By Karey Wutkowski

http://news.yahoo.com/s/nm/20100323/bs_nm/us_financial_regulation_pay/print

WASHINGTON (Reuters) – The Obama administration's pay czar on Tuesday slashed pay again at five U.S. firms that still depend on a government lifeline, but boasted that the clampdowns are not sending talented workers fleeing for the exits.

Kenneth Feinberg, a Washington lawyer who was appointed last year to oversee pay at firms receiving taxpayer bailouts, cut 2010 pay for the highest-paid employees at those firms on average by 15 percent, compared to 2009. Cash pay was cut 33 percent on average, the Treasury Department said.

The firms are AIG (AIG.N), General Motors (GM.UL), GMAC, Chrysler and Chrysler Financial.

The Treasury, where Feinberg's office is housed, also said about 84 percent of the top earners under the pay czar's jurisdiction are still with their firms despite having their pay dramatically cut back.

"People at these five companies are not leaving the companies to go elsewhere," Feinberg told a news briefing. "There is a striking number of holdovers."

Click here to view complete article.

Just what are those "pre-existing conditions?" that insurance companies may use to weasel out of the coverage...

...that they won't be able to much longer thanks to the Health Care and Education Affordability Reconciliation Act (whew!) that was passed yesterday? I know, if you are in a group policy you don't have to worry but not all Americans are educators in a public school system (or state retirement system for educators) that, by law, cannot exclude those with pre-existing conditions. So...where's the list? Here it is! There's a few more than you thought, isn't there? Some of these may not apply in all states or be used by all insurance companies.

John

P.S. I wonder how many potential policy holders ever suffered from Acne? That would be all it takes to deny claims. Insurance companies wouldn't do that, would they? You wanna' bet!
(From John Curry, March 22, 2010)
http://www.vaughns-1-pagers.com/medicine/pre-existing-conditions.htm
[Scroll down after clicking on link above.]
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Will somebody be there to stomp their wooden leg on the floor if our STRS investors become too risk happy?

From John Curry, March 22, 2010
Click images to enlarge

http://www.npr.org/templates/story/story.php?storyId=124909092

Gambling To Fix Pensions Can Lead To A Bigger Bind

by Jim Zarroli
March 21, 2010

Listen to the story

The owners of Stuyvesant Town in Manhattan abandoned the property to their creditors in January. The original purchase was funded in part by outside investors, including two state retirement funds.

Seth Wenig/AP The owners of Stuyvesant Town in Manhattan abandoned the property to their creditors in January. The original purchase was funded in part by outside investors, including two state retirement funds.

March 21, 2010 When the owners of Stuyvesant Town and Peter Cooper Village in Manhattan decided to abandon the properties to their creditors in January, residents were left in a kind of legal limbo, worrying about what would happen to the place they called home.

They weren't the only ones who felt the blow.

As it turned out, the $5.4 billion purchase of the two complexes had been funded in part by outside investors, including Florida's public pension fund and the California Public Employee Retirement System (or CalPERS), which is said to have invested about $500 million in the deal.

"Hindsight tells us clearly that that was gravely in error, and frankly the people who were responsible for that decision aren't at CalPERS anymore," says Joe Dear, CalPERS' chief investment officer. And Stuyvesant Town was only one of several bad investments for CalPERS, which saw its real estate portfolio lose half its value during the recent mortgage meltdown.

A Change Of Strategy

With $200 billion in assets, CalPERS can absorb the loss, but the collapse of the Stuyvesant Town deal says boatloads about how much public pension fund investing has changed over the past few decades. Once, public pension funds put their money into the safest of investments, like Treasury bills. But in the 1980s, many began shifting into stocks, which tended to have better returns over time.

When the dot-com bubble burst, many funds took a big hit, says Keith Brainard, research director of the National Association of State Retirement Administrators.

"A lot of these funds came out of the 2002 market decline believing they needed to further diversify their holdings," he says.

Map: U.S. State Pension Funding Levels

Click here for interactive map on U.S. State Pension Funding Levels.

Today, pension funds like CalPERS put their money in a wide range of assets, like foreign and domestic stocks, corporate bonds, real estate, commodity futures, private equity funds and hedge funds. By putting their money into lots of different assets, pension funds lower the risk that they will be adversely affected by the ups and downs of the market, Dear says.

"The most certain, time-tested risk management tool in pension investing is diversification. That means diversification among types of assets, among geographies and among managers' styles," he says.

By investing more broadly, pension funds can reap big rewards in the long run, and many now project average annual returns of 8 percent or more over time. But they can fall well short of those goals in down times — like the recent recession.

When Desperation Leads To Growing Risk

Meanwhile, there's a danger that some funds will go too far.

Many state and city governments have failed to fund their pension systems adequately over the years, leaving them far short of the money they'll need to pay retirement benefits they've promised their employees. The problem has grown worse during the recent recession, which has left governments scrambling for ways to meet their obligations.

As a result, many pension funds are falling under greater pressure to take risks as a way of compensating for the pension shortfall, says Joshua Rauh, associate professor of finance at Northwestern University's Kellogg School of Management.

North Carolina's General Assembly recently approved a law allowing its pension fund, long known for conservative management, to invest 5 percent of its assets in riskier assets, like junk bonds. Pension funds in states like Florida have racked up losses from collateralized debt obligations tied to subprime mortgages.

"Many funds are investing in strategies that people might classify as risky," Rauh says. "They're investing money in private equity and other investment vehicles that may have a higher expected return on average, but also more risk."

He adds, "One of the reasons they are trying to do this is they are trying to gamble their way out of the problem."

Most pension funds still have plenty of money to keep writing checks for retirees for the foreseeable future. But as the collapse of the Stuyvesant Town deal makes clear, funds are also growing comfortable with a level of risk that might have been unthinkable a few decades ago.

So, what's in the health care reform bill that will apply to me?

From John Curry, March 22, 2010

Well....how about those STRS retirees who are victims of "spousal trashing?"

Some of you STRS retiree stakeholders find yourselves victims of what I call "spousal trashing." You know who you are.....you insure your pre-Medicare aged spouse through STRS and STRS doesn't apply a subsidy to your spouse's healthcare premium. Because STRS doesn't subsidize your spouse's monthly premium you find that you have to pay $1,155 each month to insure both of you with the STRS Medical Mutual 80/20 PPO. Well, take a look at the following sentence from the article below: "There may even be cases where people would be eligible to buy insurance through an exchange instead of through their employer, Jost said: those who must pay more than 9.5 percent of their income for premiums, or those whose plans do not cover more than 60 percent of the cost of their benefits."

Wouldn't you say that $1,155 per month is a little more than 9.5% of your monthly income?

John

http://www.dispatchpolitics.com/live/content/national_world/stories/2010/03/22/copy/so-whats-in-it-for-consumers.html?adsec=politics&sid=101

So what's in it for consumers?

Monday, March 22, 2010
By Tara Siegel Bernard
The New York Times

The uninsured are clearly the biggest beneficiaries of the historic health-care legislation, which extends the health-care safety net for the lowest-income Americans. The legislation is also meant to provide coverage for as many as 32 million people who have been shut out of the market - whether because insurers deem them too sick or because they cannot afford ever-rising insurance premiums.

For people already covered by a large employer - most Americans, in other words - the effect will not be as significant. And yet, just about everyone might benefit from tighter insurance regulations.

"We think it's a big step forward," said Bill Vaughan, a policy analyst at Consumers Union. "It's going to provide a peace of mind that many Americans who really want or need health insurance will always be able to get a quality product at a reasonable price regardless of their health or financial situation."

There will be costs to consumers, too. Affluent families will be required to pay additional taxes. Most Americans would be required to have health insurance and face federal penalties if they do not buy it. And it is still unclear what effect, if any, the legislation would have on rising out-of-pocket medical costs and premiums.

But there is no question the legislation should benefit consumers in various ways. Beginning in 2014, for example, many employers - those with 50 or more workers - could face federal fines for not providing coverage.

Here is a look at some of the main ways the health-care overhaul might affect household budgets.

The uninsured

Although most Americans who do not obtain health insurance would face a federal penalty starting in 2014, many experts question how strict the enforcement of that penalty will actually be.

The first year, consumers who did not have insurance would owe $95, or 1 percent of income, whichever is greater. But the penalty would subsequently rise, reaching $695, or 2 percent of income.

Families who fall below the income-tax-filing thresholds would not owe anything. Nor would people who cannot find a policy that costs less than 8 percent of their income, said Sara R. Collins, a vice president at the Commonwealth Fund, an independent nonprofit research group.

• Expanded Medicaid : More lower-income individuals under the age of 65 would be covered by Medicaid. Under the new rules, households with income up to 133 percent of the federal poverty level, or about $29,327 for a family of four, would be eligible.

• Exchanges and subsidies : Most other uninsured people would be required to buy insurance through one of the new state-run insurance exchanges. People with incomes of more than 133 percent of the poverty level but less than 400 percent (that's $29,327 to $88,200 for a family of four) would be eligible for premium subsidies through the exchanges.

Premiums also would be capped at a percentage of income, ranging from

3 percent of income to as much as 9.5 percent.

• Employment flexibility : The exchanges also would help people who lose their jobs, quit or decide to start their own businesses.

"If you lose your employer-related insurance, you will be able to move seamlessly into the exchange," said Timothy Stoltzfus Jost, a professor at the Washington and Lee University School of Law.

Moreover, people of any age who cannot find a plan that costs less than 8 percent of their income would be allowed to buy a catastrophic policy that will be available for people under age 30.

Those with insurance

• Employer coverage : People who receive coverage through large employers are unlikely to see any dramatic changes, nor should premiums or coverage be affected. But almost everyone would benefit from new regulations, like the ban on pre-existing conditions that would apply to all policies come 2014.

There may even be cases where people would be eligible to buy insurance through an exchange instead of through their employer, Jost said: those who must pay more than 9.5 percent of their income for premiums, or those whose plans do not cover more than 60 percent of the cost of their benefits.

• Changes in Medicare : One of the biggest changes involves the Medicare prescription-drug program. Its unpopular "doughnut hole" - a big, expensive gap in coverage that affects millions - would be eliminated by 2020. Starting immediately, consumers who hit the gap would receive a $250 rebate. In 2011, they would receive a 50 percent discount on brand-name drugs.

• High-cost insurance : Starting in 2018, employers that offer workers pricier plans - or those with total premiums of $10,200 or more for singles and $27,500 for families - would be subject to a 40 percent tax on the excess premium, said C. Clinton Stretch, managing principal of tax policy at Deloitte. Retirees and workers in high-risk professions like firefighting would have higher thresholds ($11,850 singles, or $30,950 for families), pegged to inflation.

Although the taxes would be levied on the insurer, experts expect the assessment to be passed on to the consumer in the form of higher premiums or reduced benefits.

Report on March, 2010 STRS board meeting

From STRS, March 22, 2010

Last week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The March report follows.

MARCH BOARD NEWS

PENSION COMMUNITY CONTINUES IN HOLDING PATTERN Though recommendations relative to maintaining long-term solvency were submitted to the Ohio Retirement Study Council (ORSC) from the state's five public plans in September 2009, legislation has yet to be introduced. ORSC staff, however, anticipates having a bill before the council members in April, at which time staff will review the bill and provide its recommendation. A vote by ORSC members regarding their recommendation for passage and/or changes to the bill would then likely take place in May. While formal introduction of a bill and committee hearings in the Ohio House of Representatives could occur this spring, it is more likely that serious discussion on the bill will occur after the November election.

IMPACT OF HPA'S PROPOSED PENSION PLAN CHANGES REPORTED AT MARCH MEETING At the February 2010 board meeting, the Healthcare & Pension Advocates for STRS (HPA) presented an alternative proposal for pension benefit changes to the State Teachers Retirement Board for its consideration. At the March board meeting, staff reported on the impact the two major components of HPA's plan would have on the solvency of the pension fund and on STRS Ohio members.

The primary differences between the plan approved by the Retirement Board on Sept. 1, 2009, and the HPA plan is that the HPA plan calls for a longer phase-in of additional service required for full retirement benefits and provides for a different cost-of-living adjustment (COLA). In the HPA plan, current retirees would receive a 2% COLA, beginning on July 1, 2011. New retirees after that date would also receive a 2% COLA, but it would be deferred for 36 months from the date of retirement or until age 60, whichever comes later. The STRS Ohio staff analysis showed the cost of the longer phase-in for retirement eligibility is paid by a less valuable COLA for all new retirees because of the deferral period. The HPA plan does result in total additional savings of $60 million to the pension fund, and would reduce the funding period for the pension fund to 32.9 years versus 33.4 years under the board's adopted plan. During the discussion, staff reminded the board that additional pla n design changes may be necessary if economic and demographic assumptions are not met (e.g., investment return rates or mortality rates), and any plan components are removed or weakened and/or implementation dates change during the legislative process.

At its April meeting, the board will receive an update regarding the ORSC meeting being held earlier in the month and further discuss the HPA plan.

HEALTH CARE PROGRAM CHANGES RECEIVE INITIAL REVIEW At its March 2010 meeting, the Retirement Board took its first look at possible changes for the 2011 STRS Ohio Health Care Program. At this time, no changes are anticipated for the Medical Mutual Basic or Plus plans, the Aetna Medicare Plan (PPO) or the health care plans offered by Kaiser and Paramount. For the AultCare PPO plan, there may be a change to the family deductible and out-of-pocket maximums. Staff is also looking into expanding the Aetna Medicare Plan (PPO) to Medicare Part B-only enrollees in 2011 if premiums are less than what can be offered through the Plus Plan.

The board will be asked to finalize calendar year 2011 plan changes at its April meeting, as well as approve plan premiums for 2011 at its June 2010 meeting.

The board was also presented with a timeline for a long-term health care strategic planning process that would begin this fall. As noted in the February Board News (https://www.strsoh.org/boardnews/Feb10.html), without significant changes in premiums, program eligibility or plan design, the STRS Ohio Health Care Program cannot survive in the long term. During the next 18 months, board and staff will focus on designing long-term strategic solutions while taking into consideration any changes that come out of national health care reform that could reshape STRS Ohio's options.

PENSION CHECKS MOVE TO DIRECT DEPOSIT IN OCTOBER Every month, STRS Ohio pays benefits to more than 125,000 individuals by using safe, secure and reliable direct deposit for their payments. Unfortunately, benefit recipients who still receive paper checks can be impacted by delayed mail delivery or lost or stolen checks. When a paper check is lost, it can take 10 to 15 days to replace it.

To ensure the timely delivery of pension payments to benefit recipients, the Retirement Board approved a requirement for monthly benefit payments to be paid by direct deposit, effective Oct. 1, 2010. Timely deposits are made on the first banking day of the month - even when benefit recipients are out of town or unable to go to the bank. Benefit recipients who reside outside of the United States are exempt from this change.

Individuals who still receive paper checks will be sent a direct deposit form to complete and return in the coming months. Benefit payments can be deposited to a checking or savings account. Check memos will continue to be mailed when the net benefit amount changes (e.g., when withholding tax is changed or the annual cost-of-living adjustment is paid). Benefit recipients can also continue to use the Personal Account Information section of the STRS Ohio Web site to view monthly pension payment information, including all deductions.

ELECTION BALLOTS MAIL ON APRIL 2 The 2010 Retirement Board election packet will mail on April 2. It will include information about the three candidates - Mark Hill, Dale Price and James A. Stoll - who are running for the two contributing member seats on the board, as well as voting instructions. The top two vote-getters will win the seats.

Those eligible to vote in this election include all STRS Ohio contributing members, individuals who have contributions on deposit at STRS Ohio and disability benefit recipients. VR Election Services is conducting the election.

The deadline for voting is May 3. Results of the election will be announced following certification of the election results by the board of tellers on May 8.

RETIREMENTS APPROVED The Retirement Board approved 123 active members and 107 inactive members for service retirement benefits.

LA retirees warned against the pitfalls of a Defined Contributions retirement...

..."the retirement system is in the fight of its life against misinformation!"
From John Curry, March 21, 2010

http://www.slidellsentry.com/articles/2010/03/21/news/doc4ba4e8303db7a154335565.txt

Proposed legislation could affect state retirees

By Debbie Glover
St. Tammany News

Proposed legislation that would change the defined benefit plan to a 401-K-type defined contribution benefit won’t affect those already in the state’s retirement system—or will it?

The Louisiana State Employees’ Retirement System North Shore chapter of the Retired State Employees Association got an earful Monday from executive director Cindy Rougeou and State Rep. John Bell Edwards on the proposed legislation that would change the way those entering state employment would have their retirement money invested and a separate move to consolidate all the state employee’s various retirement systems into one.

Edwards cautioned the attendees, numbering about 100, to “be on guard to changes to the system you rely upon. These changes will be to your detriment if passed. A consolidation of all the systems will not save the state money and I will definitely not support this bill.”

[Click here to view the complete article.]

I'm a teacher; please remove 'kick me' sign

From John Curry, March 21, 2010

http://www.nj.com/gloucester/voices/index.ssf/2010/03/im_a_teacher_please_remove_kic.html

Times Op-Ed, NJ.com, March 21, 2010
By Anthony Klock

Could someone please help me remove the “Kick Me” sign from my back?

It seems to have become open season recently on public employees, particularly education workers, in the great State of New Jersey. From the governor on down through the media, I am being told that I’m overpaid, that my pension and health benefits are responsible for the ruination of society, and that I’m just being “fat” and “greedy” (I will not admit to the greedy part, however).

I have been characterized by the media as unmotivated. In other words, “I’m a low-life.”

More than 22 years ago, I graduated in the top 10 in my class from Rutgers University with a grade-point average greater than 3.8. I gained a masters’ degree and continue to develop and enhance my professional skill. I chose teaching as a career because I wanted to do something with my life that meant something. I knew that I could have gone into the private sector, and probably done quite well for myself.

My story is not unique. My work over the years with countless other teachers convinces me that the majority of the folks who enter the education field do so for the most noble of reasons, i.e., to serve young people and society for the betterment of the human condition.

To hear Gov. Chris Christie tell it, I’m basically a thief robbing the hapless citizens of New Jersey.

Through the years, I have lived with salaries far below the levels paid to other professions. Until the recent economic downturn, young people graduating from college surpassed the pay levels provided to teachers in a matter of a few months or years. We accepted this situation with a shrug and resignation, knowing in the backs of our minds that at least we’ll be contributing to a pension system that can help sustain us in our waning years.

The problem with the state’s pension system is not my fault. I have been faithfully paying my share year in and year out. The state, on the other hand has not. Beginning with Gov. Christie Whitman, my pension fund has been the funding source for various tax cuts and budget holes. As was predicted, this lack of diligence on the part of our elected officials, both Republican and Democrat, has resulted in a pension system that is supposedly collapsing.

Jon Corzine was the first governor in about a dozen years to put any money into the system. Meanwhile, the state completely missed the boat on recognizing gains in the funds as the stock market edged ever higher. But that is water under the bridge.

Those on the political right have taken to aggressively characterizing unionized labor as inherently evil and anti-American. Gov. Christie, with his “Tea Party” rabble rousing, stokes this fire of intolerance. With their corporate media cronies, they are attempting, somewhat successfully, to turn one group of middle-class folks on their way down the economic ladder against teachers, police officers, firefighters and state workers — that is, other middle-class people who are just trying to make a living as well. This is quintessential class warfare, nothing less.

Taxpayers in New Jersey aren’t suddenly going to be doing a lot better because their public servant is in the toilet next to them. I urge the citizens of the state and the country, after eight years of negligence and almost criminal incompetence at the highest levels of governance, to resist the temptation to go back there. Don’t get fooled again!

Anthony Klock is a fourth-grade teacher at the Kresson Elementary School in Voorhees Township. He resides in Port Norris, Cumberland County.