But first, another reason to be angry at insurers, especially if you are female, and living in one of thirty-nine states in the union, as this article highlights, Women Pay Up To 50% More For Health Insurance Premiums. Now, maybe I was just naive to not realize this was happening, but happening it is. This article focuses on the state of Colorado:

Checking the “female” box when buying health insurance is likely to cost extra — perhaps up to 50 percent more than a man would pay for the same coverage.

Gender-rating — or what some term as flat-out sexual discrimination — is linked to the simple fact that women, particularly those under age 50 or so, go to the doctor more often than men.

But outrage over how women are treated in the individual health insurance market is mounting as stories emerge of companies refusing to cover maternity benefits and denying coverage because of past domestic violence or cesarean sections, including a Colorado woman who was told she would have to get sterilized to qualify for insurance.

Federal proposals, as well as pending state legislation, would ban gender-rating and require maternity coverage, even as the insurance industry warns that lowering premiums for younger women could mean higher premiums for most everyone else.

Colorado women age 40 and under shopping for health insurance in the individual market, not through an employer, pay from 10 percent to 59 percent more than men, according to analysis by the National Women’s Law Center.

They pay more even when maternity coverage is not included. And in many cases, a female nonsmoker pays more for health coverage than a man who smokes.

“Women should not be penalized because their plumbing works differently and needs ongoing maintenance,” Colorado Insurance Commissioner Marcy Morrison told a state health care task force.

Holy smokes. Did you know this?? So, being a woman is a pre-existing condition? That’s a pretty difficult one to overcome. Especially since we’re the only ones who can get pregnant, which has its OWN set of issues:

As a state lawmaker, Morrison fought insurance companies to stop “drive-through deliveries” so women could stay in the hospital longer after childbirth. She said gender-rating is discrimination tied to decades-old salary disparity, particularly in female-dominated professions such as nursing and teaching. And she is skeptical of insurance company claims that “the sky is going to fall” and premiums would rise if gender-rating were outlawed.

America’s Health Insurance Plans, the industry’s national association, proposed ending gender-rating and the practice of rejecting customers based on pre-existing conditions. In exchange, insurance companies want powerful legislation that would compel everyone to buy insurance.

Discrimination against women in the insurance market goes far beyond premium rates, reform advocates said.

And you are not even going to believe how:

Sterilization Suggested

Take, for example, Centennial resident Peggy Robertson, who was denied insurance by Golden Rule Insurance Co. because she delivered her second child by cesarean section in 2006. Maternity benefits weren’t even part of the package.

Robertson, whose husband is a self-employed chiropractor, contacted the International Cesarean Awareness Network and filed a complaint with the state Division of Insurance, arguing the denial was unfair and that the company had asked her offensive questions during the application process.

Later, she received a letter from Golden Rule telling her the company would consider covering her if “some form of sterilization has occurred since the caesarean-section delivery.”

“It was just really horrific and terribly insulting,” said Robertson, a stay-at-home mom of two boys. “You felt like you were a herd of cattle or something.”

Robertson’s recent testimony before the U.S. Senate health committee in part prompted Sen. Michael Bennet, D-Colo., to write a letter to Senate leaders adding his voice to the call for reform to ban gender-rating and other “harmful insurance industry practices.”

Since denying Robertson, Golden Rule, an Indianapolis-based division of United Healthcare, now covers women who have had cesarean sections but only with increased premiums to cover the risk of a future cesarean birth or with exclusionary riders — clauses that deny coverage for cesareans for a certain number of years or forever.

“This helps us extend coverage to more people while keeping premiums lower for all of our customers,” said Ellen Laden, public relations director for Golden Rule. “The real issue is how to deal broadly with providing access to health care for everyone while still keeping health insurance from being cost-prohibitive.”

Sterilization??? What, are we back in the mid-1950’s or something?? I noticed that they didn’t suggest sterilization for MEN, which makes a lot more sense for the health insurers since it’s CHEAPER, and doesn’t require hospitalization. This is just staggering in this day and age. Thank heavens there are people fighting this suggestion:

Bennet and others, including the National Women’s Law Center, are calling for an end to coverage denials based on pre-existing conditions such as pregnancy and surviving domestic violence or sexual assault — a problem revealed in a recent report from the law center.

Along those lines, there is another big issue that applies to women only:

Lack Of Maternity Benefits

Another common frustration among women who buy insurance individually — and there are 125,000 such women in Colorado — is that maternity benefits are almost nonexistent.

Suzanne Pariser, a Denver lawyer and mother of 2-year-old Willa, is putting off expanding her family because she cannot find an affordable insurance plan that includes maternity coverage.

“That’s the main reason we’re not having a baby right now,” she said. “We definitely want to have another child.”

Pariser is annoyed that insurance company executives, in essence, are determining her family planning.

“My anger is mostly that insurance companies view having a baby as a medical complication that costs them money,” she said. “They view it as a disease.”

The only plan she could find that offered maternity coverage was more expensive in the long run than paying out of pocket to have a baby, Pariser figured.

Costs vary by hospital or birthing center, but the average bill for a vaginal birth with no complications is about $7,500 and for a cesarean section, $13,200.

Viewing having a baby as a “disease.” That is quite an indictment, especially taken in conjunction with suggesting sterilization.

Back to the overall concept of gender-biased insurance:

The insurance industry in Colorado has not taken an official position on statehouse bills that would ban gender-rating in the individual market and require maternity coverage. Their stance likely depends on national reform — and in particular, whether federal law will force everyone, even the healthiest people, to buy insurance.

But industry officials point out that higher premiums for women are based on analysis from actuaries, which show women are much more likely to visit the doctor. The rate at which women visit primary care physicians is more than 50 percent higher than for men, according to the New America Foundation.

By about age 50 or 55, men typically begin using health services more than women, and premiums for older men are typically more expensive than those for older women, said Ben Price, executive director of the Colorado Association of Health Plans.

“The insurance industry is engaged in its own internal discussion on this issue, and health plans here in Colorado are of course taking a fresh look at gender-rating and many other issues that have been raised as a part of the debate both in Washington and here in Colorado,” he said.

Officials with Anthem Blue Cross Blue Shield of Colorado have “strong reservations” about eliminating gender-rating and requiring maternity coverage. The practice is rampant in the auto insurance industry, they argue.

“The most expensive purchase in auto (insurance) is the young, invincible male; they are the risk-takers,” said Rebecca Weiss, director of government affairs. “For some reason, auto insurance doesn’t seem as inflammatory to people as health insurance.

“Shouldn’t health insurance premiums be based on some degree on how many medical services you receive so that everyone is paying according to what they are using?”

I am no doctor, or health insurer, but if women go go the doctor more often, isn’t it possible that will keep them out of the hospital more often? Unless it’s for a “disease” like having a baby or something. Ahem. But you know what the bottom line is: “

It Would Raise Prices”

Insurance companies probably would have to raise prices on other groups to make up the difference if they were forced to lower prices for younger women, said Tom Gosselin, director of small-group underwriting at Anthem.

“It definitely would raise the prices, is the simple thing,” he said. “You are now charging the 22-year-old guy who has no concept in the world about having a baby for maternity. He’s more likely to choose not to have health insurance at all.”

Eleven states ban gender-rating in the individual insurance market.

A review by the National Conference of State Legislatures found that those states had not determined whether their bans caused health insurance rates to rise.

In Montana, which outlawed gender-rating in 1983, some lawmakers want to repeal the ban, arguing fewer insurers are willing to operate in the state because of it.

Colorado is among several states that have banned gender-rating in the small-group insurance market, which in this state applies to businesses with 50 or fewer employees. For businesses with more than 50 employees, insurance companies can consider age and sex when setting rates — but the risk is spread throughout the company so everyone’s premiums are equal.

Reform advocates argue the policy adversely affects businesses where the workforce is predominantly female, such as child-care centers or home health agencies.

I just wonder if this issue is being addressed by the Congress as it looks at this whole health care reform thing? Seems to me it is a pretty big issue, as is the cost in general:

Care Requires Doctor Visits

A Denver Post review of online health insurance quotes found that a woman living in the same Denver ZIP code with the same date of birth would pay $20 to $35 per month — or up to $420 more per year — than a man for the same coverage. The rates reviewed were for basic, high-deductible plans, ranging from $71 to $158 per month.

NARAL Pro-Choice Colorado is among those fighting for change in the law, arguing that women are typically the responsible sex when it comes to birth control and that those prescriptions often require an annual doctor visit.

“Under the current health care system, women are penalized for taking responsibility for their own health,” said Toni Panetta, NARAL’s political director.

State Rep. Beth McCann, a Denver Democrat sponsoring the bill banning gender-rating, said insurance companies failed to produce “sufficient factual basis to charge different premiums for women and men.”

“It seems as though it’s somewhat arbitrary,” she said. “It’s a matter of equality and fairness.”

If the state legislation passes during the next legislative session, it probably would take effect about two years ahead of national reform.

Mary Saracino, a self-employed writer in Lafayette who has had to purchase insurance on the individual market, said she is shocked “and, dare I say, angry” that monthly premiums for women are higher.

“It seems highly discriminatory,” said Saracino, 55. “Would consumers put up with that if, say, men had to pay more for tires than women because some statistic says that male drivers are harder on their cars than female drivers?”

Uh, hell to the yes, it seems discriminatory! There just isn’t a whole helluva lot we can do about being female (without getting into the whole issue of gender-realignment surgery, that is). Or want to do anything about it. A whole lot of us are actually happy to be women. To make us pay more money, especially when we typically make less money, for health insurance is reprehensible.

Here are the places you can live without fear of being charged for being a woman:

Some Protection

These 11 states ban gender- rating by insurers in the individual insurance market:

California, Maine, Massachusetts, Montana, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oregon, and Washington. (Jennifer Brown: 303-954-1593 or jenbrown@denverpost.com)

That’s it.

And now for the big surprise. I am telling you, I was really shocked when I learned this. Would you like to take a guess as to how much Insurers actually make in profits? About 2.2% above the amount of money they take in. In fact, they are 35th out of 53 for industries. I have no love lost for insurance companies, especially in light of articles like the one above, but that is startling. It is in complete opposition to EVERYTHING we have heard about them. Are they a pain in the ass to deal with in general, like filing claims, or having claims paid? Often, yes. But are they raking in the cash hand over fist as we have been hearing from Congress on a daily basis? Apparently not. That shocked the crap out of me. That doesn’t immediately absolve them, of course, but it does greatly affect the very foundation for the arguments about health care in this country. Something to consider.

And since we are talking about women and health care, October is Breast Cancer Awareness Month. Many of us, myself included, need to take the appropriate actions for our health.

Along those lines, I would like to leave you with the following, a recent interview with Elizabeth Edwards:

A brave soul, Elizabeth is. And one who is in my thoughts and prayers as she continues to live with breast cancer (I am trying really hard not to say something snarky here about her husband…). All the best to her. And to all women who are living with this disease, and hopefully, being cured of it.

Now you know I am a huge Yankees fan. I was telling my dear friend Bronwyn’s Harbor about the series, and got her started watching the games. I mentioned that I had a shrine to the Yankees in my living room. She suggested I share it with you, so here it is:

Let me just say, besides the t-shirt, and the baseball, I didn’t buy ANY of those things. My Mets loving cousin was kind enough to send most of them to me. She has an eye for all things Yankees for me. She knows of my deep and abiding love for both the Yankees and their captain, Derek Jeter. The small framed piece is actually a painted feather from Belize that my niece gave me.

I might add, the baseball you can see there was not purchased, either, at least not with money from me. My partner took me to Cleveland for 3 games with the Indians for my 50th birthday (it just happened that they were in Cleveland for the day of my birthday). We were in the section to get autographs during batting practice. That baseball was hit by A-Rod, a screaming foul ball that hit my partner. While it was bad that it hit her, had she not been where she was, it would have hit the very pregnant woman next to her in the abdomen, which would NOT Have been good. Anyway, after batting practice, Johnny Damon came over and signed it for me while my partner was getting medical treatment (no permanent damage, but the bruise lasted for WEEKS. Seriously. It was A-Rod, after all!).

Speaking of Derek Jeter, he has been playing sick the past few days. Not that that has stopped him from hitting a home run, and getting on base in every game, not to mention great defensive plays. He embodies the very best of a Yankees Captain, IMHO.

And in a totally “Entertainment Weekly” kind of way, don’t you think Derek Jeter and the singer, Leona Lewis, would make a beautiful couple? Check them out:

(PRNewsFoto/J Records)

Right?? I know! But, Derek is with the actress, Minka Kelly, and Leona lives with her high school boyfriend. Oh, well, as long as they’re happy…(Don’t worry – this is but a slight foray into Hollywood-style gossip. I’ll be back to political pontificating ASAP.)

Anyhoo – I’m not going to take any chances about the Yankees winning tonight. I’ll don my Yankees away gray t-shirt, put on my Derek Jeter official jersey, grab my Yankees cap, and watch the game with a Diet IBC Root Brewski or Diet Dr. Pepper in hand. Maybe if I play the video below a bunch, my prayers will be answered (major H/T to Nunly at Bad Habit). I warn you, the song may get stuck in your head, but it is SO worth it:

I just hope I won’t be laughing so hard I don’t miss a great play by the Captain, or another home run by A-Rod. And say what you will, but despite some apparent clashing between his new girlfriend, Kate Hudson, and the other Yankees’ wives/girlfriends, he is having the very best post season he has ever had since he started seeing her (h/t to Bronwyn for the link). Maybe he’s just a big Kurt Russell and/or Goldie Hawn fan, and likes having them around, too, since they often accompany Kate. Who knows? As long as he keeps hitting like this, I am happy, happy, happy.

So, you know what I’ll be doing tonight – wishing, hoping, and yes, praying. Hopefully, I’ll be CELEBRATING, too. Then, you know I’ll be at the MLB shop getting my new American League Champions t-shirt to add to the shrine for the upcoming World Series!

Consider this an Open Thread. What’s on YOUR mind today? Maybe that it’s been fifty-four days since Gen. McChrystal;’s recommendations landed on Obama’s desk about Afghanistan? Maybe the economy? Health Care Reform? Whatever it is, have at it!

UPDATE: And No. Swisher, for the second time with runners in scoring position (top of the 9th, bases LOADED), popped up. The series is going back to New York.

ABC News’ Matthew Jaffe reports: President Obama, like any other President, has his fair share of critics. Even fourth-graders have noticed.

“Why do people hate you?”, a fourth-grade boy asked Obama at a town hall event in New Orleans today. “They’re supposed to love you. And God is love.”

“That’s what I’m talking about,” replied the President.

Here’s the video of the exchange, though the transcript is below if you’d prefer:

Um, what the hell was he talking about BEFORE the little boy asked his question? Wasn’t he saying, “It’s a man’s turn. Isn’t it? It’s a guy’s turn.” That’s what it sounded like to me, anyway…So, just what came BEFORE that?? Curious.

Obama continued his response to the child:

“First of all, I did get elected president, so not everybody hates me,” Obama noted, before adding, “What is true is if you were watching TV lately, it seems like everybody’s just getting mad all the time. And I — you know, I think that you’ve got to take it with a grain of salt. Some of it is just what’s called politics where, you know, once one party wins, then the other party kind of gets — feels like it needs to poke you a little bit to keep you on your toes.”

“And so you shouldn’t take it too seriously,” Obama told the boy. “And then, sometimes, as I said before, people just — I think they’re worried about their own lives. A lot of people are losing their jobs right now. A lot of people are losing their health care or they’ve lost their homes to foreclosure, and they’re feeling frustrated. And when you’re president of the United States, you know, you’ve got to deal with all of that.”

So, um, not to quibble or anything, but just when do you think you are going to get around to dealing with job loss, home loss, and losing health care? Hey, just asking:

“You get some of the credit when things go good. And when things are going tough, then, you know, you’re going to get some of the blame, and that’s part of the job,” he continued. “But, you know, I’m a pretty tough guy.”

“You’ve just got to keep on going, even when folks are criticizing you, because — as long as you know that you’re doing it for other people, all right?” Obama concluded.

The boy’s question was the last one the President fielded at his event at the University of New Orleans, his first trip to the city since being elected to the Oval Office.

Well, there is a good reason the child asked that question. While Obama did get elected, the latest Fox Poll shows that he wouldn’t if the election was held today, as this article highlights, Fox News Poll: 43 Percent Would Vote To Re-Elect President Obama:If the election were held today, 43 percent of American voters would back Barack Obama for president, according to a new Fox News poll.

Oh dear. I guess that’s some of the “blame” Obama is getting for not fulfilling his campaign promises, for starters, not to mention his continued constant campaigning instead of working thing he’s got going on. Here are the results of this poll:

In what may be the ultimate job rating, 43 percent of voters say that they would vote to re-elect President Obama if the 2012 election were held today, down from 52 percent six months ago, from April 22-23, 2009.

Obama’s job approval rating comes in at 49 percent this week. (Emphasis mine.) That’s down just one percentage point from late September, but it marks a new low approval for the president — and the first time the Fox News poll has measured his approval below 50 percent.

Moreover, the number of Americans saying they would vote to re-elect President Obama has dropped. If the election were held today the poll finds more voters say they would back someone else in the 2012 election than would back the president.

Despite winning the Nobel Peace Prize last Friday, the latest Fox News poll finds the president’s ratings on foreign issues are lower than his overall job ratings. All in all, 49 percent of Americans say they approve of the job President Obama is doing and 45 percent disapprove. His average approval for the term so far is 58 percent.

Yep, Obama’s approval numbers are below 50% for the first time at 49%. How about on some of the issues:

On Afghanistan, 41 percent of Americans say they approve of the job Obama is doing and 43 percent disapprove. For his handling of Iran, 44 percent approve and 43 percent disapprove.

On the president’s handling of the economy, voters are almost equally split: 48 percent approve and 49 percent disapprove. On health care, some 42 percent approve of the president’s performance and half disapprove, 50 percent.

Among Democrats, 78 percent say they would vote to re-elect President Obama, down from 87 percent in April. For 2008 Obama voters, 81 percent say they would vote to re-elect him — that’s a slight up tick from the 79 percent who said so previously.

Six in 10 Americans — 60 percent — think Obama is a strong and decisive leader.
And while 38 percent think President Obama is getting good advice from his advisors, a larger number — 45 percent — think he is “listening to the wrong people.” (Opinion Dynamics Corp. conducted the national telephone poll of 900 registered voters for FOX News from October 13 to October 14. The poll has a 3-point error margin.)

Like Rahm Emmanuel, or David Axelrod, or Nancy Pelosi, or Harry Reid? Yeah, I’d say he’s listening to the wrong people.

And about that whole Nobel Peace Prize thing:

Did He Deserve It?

Upon winning the Nobel Peace Prize, Barack Obama said, “To be honest, I do not feel that I deserve to be in the company of so many transformational figures.” Most Americans agree with the president — 65 percent say he did not deserve to win, while 29 percent say he did.

Furthermore, a slim 54 percent majority of Democrats think Obama did deserve to win, while 38 percent disagree. For independents, 19 percent think he deserved it, while nearly three-quarters, 74 percent, say he did not. Among Republicans, almost all — 91 percent — say he did not deserve it.

When asked why the Nobel Committee gave the president the prize, about a third of Americans, 32 percent, say because he deserved it, while the largest number — 44 percent — think the committee hoped the prize would make Obama “think twice before using military force in the future.”

About that whole Nobel Peace Prize thing. Remember how we were all told the Committee Was unanimous in their decision to give it to Obama? Turns out that 3 out of 5 of them did NOT want to give it to him. Golly gee, I guess truth really DOES will out! Evidently, their reaction was the same as many of ours – he hasn’t DONE anything yet but speechify, for cryin’ out loud!

The poll also address how Congress was doing:

Most Americans are unhappy with Congress these days — 66 percent disapprove, including 45 percent of Democrats, 77 percent of independents and 84 percent of Republicans. Overall, less than one of four Americans, 24 percent, approve of the job Congress is doing.

Looking ahead to the 2010 Congressional election, for the first time this year the Republicans have the advantage: 42 percent of voters say they are more likely to back the Republicans to provide a check on President Obama’s power, while 38 percent say they would vote for the Democrat to help the president pass his policies.

Finally, in a rare example of bipartisan agreement, majorities of Democrats, 53 percent, Republicans, 78 percent, and Independents, 61 percent, agree the country is more divided these days. All in all, 64 percent of Americans think the country is more politically divided today — that’s more than twice the number who say it is not more divided, 31 percent.

Click here for the raw data.

What a bang-up job Obama has done in uniting us, just like he said he would. Blech. Can’t believe people fell for THAT line again, can you? Great – so glad there is one area that is truly bipartisan. Ahem.

And while President Obama is still feeling the love, the numbers of those who love him seem to be decreasing the more they open their eyes to see and their ears to hear. Such a shame they couldn’t muster that BEFORE the election, isn’t it? Now, his daily tracking poll continues to go down; Secretary Clinton’s approval numbers are higher than his (no big surprise to ME there); and his overall rating is at 49%. COngress doesn’t fare much better. Oh, how the mighty have fallen. Couldn’t have happened to a more deserving guy, or more deserving Congress, could it?

Can you guess which health care costs are rising the fastest? I’ll even help you out by listing the top five (and portraying them in my toon).

Cancer
Asthma
Trauma (externally inflicted injuries)
Heart Conditions
Mental illness

Got your answer in mind?

If you guessed Mental Illness or Trauma, you would be right. Both have skyrocketed in recent years (even accounting for inflation). According to a study by Medical Expenditure Panel Survey:

In terms of health care expenditures, the same five conditions were ranked as the five most costly conditions in 1996 and 2006. There was an increase in the expenditures for each of these conditions when comparing them over time. The number of people with expenditures associated with these conditions increased from 1996 to 2006 for all conditions except trauma-related disorders.

The biggest increase in number of people accounting for expenditures was for mental disorders (19.3 million to 36.2 million).

The expenditures for mental disorders rose from $35.2 billion in 1996 (in 2006 dollars) to 57.5 billion in 2006. Medical expenditures on trauma-related disorders also increased substantially from 1996 (in 2006 dollars) to 2006, $46.2 billion to $68.1 billion.

When we talk about health problems, we are usually refering to chronic physical illnesses. That the number of people accounting for expenses for mental disorders almost doubled in recent years should be of great concern. But who is talking about this? Who is concerned about the debilitating depression and anxiety caused by the economic collapse and feelings of insecurity?

We have multiple types of mental health professionals, and people who are experiencing emotional distress should consider consulting one. But unlike physical conditions, research reveals that stigma remains attached to seeking help for emotional problems. It’s no problem to announce, “I broke my leg in three places last week” compared to, “I am seeing a psychologist for my deep depression.” Stigma increases isolation which, in turn, can exacerbate symptoms.

However, even those who seek assistance may find it lacking, not because of any shortcoming on the part of the professionals but because one’s insurance allows far fewer sessions than needed to adequately resolve the problem. My colleagues complain that they can often barely scratch the surface before the allotted number of sessions (often as few as 4) are up, especially when the matter is of long duration. Meds may relieve symptoms, but they can’t fix an underlying problem.

My main point for doing this story is to help bring to light the fact that mental disorders comprise a major health issue in terms of cost as well as frequency. Thirty six million people went for help in 2006. That’s a lot of troubled folks. I would bet that number has increased in the last three years. And how many just suffer alone, remaining uncounted?

One ray of hope is us. Most of us can’t perform surgery or find a cure for cancer, but we can reach out to others who are depressed or stressed out. Not every mental disorder can be treated by simple caring, of course, but friendship is a powerful medicine for those who are having trouble coping with a troubled world.

But wait, it gets worse. The White House, through Health and Human Services, isn’t just telling them to STF up, they are THREATENING Humana and these insurance companies in general:

The government might take enforcement action against insurers that have tried to mobilize opposition to the legislation by sending their enrollees “misleading and confusing” messages, a senior official of the Department of Health and Human Services said in a memo Monday.

The mailings in question urge enrollees to contact their congressional representatives and protest the legislation, the memo said.

A spokesman for America’s Health Insurance Plans, the industry’s main lobbying group, issued a statement Tuesday criticizing what he described as the government’s “gag order.”

“Seniors have a right to know how the current reform proposals will affect the coverage they currently like and rely on,” AHIP spokesman Robert Zirkelbach said.

Now, all of us who said that Obama was simply going to take Chicago Politics national, raise your hand. Yep – we were all right. Honestly, though, I’d rather be wrong on this, but that ship has sailed. In essence, the White House is saying, “If we don’t like what you’re saying, we’ll come after you.” Nice. Really nice. And we thought Bush was bad. (Remember that? When we were so upset about his “propaganda” through the media? At least he wasn’t threatening private companies who didn’t agree with his proposed policies. Never thought I’d be defending Bush. See what Obama has done to me?!?!)

But I digress.

Remember when all of Obama’s supporters kept touting his legal expertise particularly in terms of the Constitution during the campaign? And I kept saying, “the better to tear it to shreds.” Sure seems to me that’s exactly what he is trying to do with the First Amendment:

Proposed health reform legislation would sharply reduce funding for Medicare Advantage plans, and the insurance industry has been battling to prevent that from happening. The bill unveiled last week by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, would directly cut payments to Medicare Advantage plans by an estimated $123 billion over 10 years, and it would indirectly reduce funding for those plans by another $15.6 billion, according to the Congressional Budget Office.

The big insurer Humana triggered the HHS crackdown with a letter to Medicare enrollees claiming that health reform proposals could hurt “millions of seniors and disabled individuals” who “could lose many of the important benefits and services that make Medicare Advantage plans so valuable.” The letter was sent in envelopes marked “important information about your Medicare Advantage plan — open today!”

HHS wrote to Humana last week instructing it to stop the mailings, and it wrote to all Medicare Advantage plans Monday, saying “such communications are potentially contrary to . . . federal law.” The government regulates communications between the health plans and their members.

Baucus had urged HHS to crack down on the mailings. (Emphasis mine.)

“It is wholly unacceptable for insurance companies to mislead seniors,” he said in a Monday news release. “The health care reform bill we released last week strengthens Medicare and does not cut benefits under the Medicare program — and seniors need to know that,” he said.

The AHIP spokesman countered that if the proposed cuts are enacted, “seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether.”

Humana spokesman Tom Noland said beneficiaries “deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums.”

Peter Johnson provided a VERY good overview of the issue in the video below:

Here’s the question this just begs to be asked: If this plan is so great, why is it unable to withstand any real scrutiny without threats of retaliation for stating what is in it? That, to me, is a big, huge red flag that someone is lying here, and it does not seem to be Humana.

Oh, and since I’m on the topic of the Health Care Bill, here is a HUGE issue that may be facing us if this plan, as it is, goes through:

Holy toledo. So, a gag order to insurance companies for telling the truth, and another possible truth we’re not hearing enough about – there likely will not be enough doctors to care for us under this new plan. Yep, no more First Amendment, and not enough doctors willing to provide care under this plan.

Well,that’s just jake.

We must have misunderstood. We actually thought the whole point of reforming health care was to help the american people have better, more affordable health care. We thought the promise was:

BARACK OBAMA’S PLAN FOR A HEALTHY AMERICA:
Lowering health care costs and ensuring affordable, high-quality health care for all

We must have missed the fine print that explained the caveat:

Did the American people not get the memo that explained this? Or was our copy of Obama’s plan smudged? The media and politicians must have got the fine print copy. What else would explain why all the politicians and media hacks are morally outraged at seeing townhall anger, but those selfsame politicians and media hacks are apparently not even shocked to learn of this administration’s sell-out backroom deals with the health care industry?

And why the continued, almost obsessive focus on painting protesters as un-American? While these sweetheart deals, that are truly un-American and so beautifully depict why Americans no longer trust their government, are received in blissful willful silence.

From Miles Mogulescu at HuffPo:

The first hint of the real story came when Rahm Emanuel summoned leaders of liberal organizations to the White House and reamed them out for criticizing Blue Dogs who were trying to gut the public option, telling the liberals that they were “f..king stupid” and ordering them to stop…

Gutted: The public health care option – bad for health care and insurance industry profits!

The next hint was a New York Times story in which the White House confirmed it had cut a back-room deal with Billy Tauzin, chief lobbyist for Big Pharma, to block any Health Reform bill that would allow Medicare to negotiate for lower drug prices. …

Blocked: The negotiation for or importation of lower priced drug – bad for health care and insurance industry profits!

A few days later came Business Week’s cover story entitled “The Health Insurers Have Already Won: How UnitedHealth and rival carriers, maneuvering behind the scenes in Washington, shaped health-care reform for their own benefit”. …

Encouraged: Behind the scenes maneuvers in Washington to shape reform – good for health care and insurance industry profits!

Thursday’s New York Times confirmed Business Week’s analysis, reporting that the White House, in conjunction with Sen. Baucus, has made a deal with hospital lobbyists limiting reductions in hospital costs to $155 billion over 10 years and crippling the public option by agreeing “that the final legislation would not include a government-run health plan paying Medicare rates — generally 80 percent of private sector rates — or controlled by the secretary of health and human services“. According to Chip Kahn, a top industry lobbyist, “We have an agreement with the White House that I’m very confident will be seen all the way through conference”. …

Limited: The reducion of hospital costs – bad for health care and insurance industry profits!

Crippled: A government-run health plan with Medicare rates or controlled by the secretary of health and human services – bad for health care and insurance industry profits!

Which leaves one to wonder what exactly is the point of these town hall meetings with the American people. Why even go through the motions when as the extensively detailed, must read Business Week article on the health insurance giants points out:

… much more of the battle than most people realize is already over. The likely victors are insurance giants such as UnitedHealth Group (UNH), Aetna (AET), and WellPoint (WLP). The carriers have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable.

And these companies will not just maintain or increase profits, but could very well realize a windfall.

What people in Washington tend not to discuss, at least on the record, is the open secret that insurers are minimizing their forecasts of the eventual windfall they will enjoy from expanded coverage for Americans. UnitedHealth has given certain key members of Congress details about its finances and tax liability—both historical numbers and figures projected under various cost-sharing scenarios. But some on Capitol Hill are skeptical. “The bottom line,” says an aide to the Senate Finance Committee, “is that health reform would lead to increased revenues and profits [for the insurance industry]. … There will be [added] costs [to the companies], but we’re not sure the revenues and profits will be as low as they say.”

So when do we start discussing the fine print of this “reform” honestly. We are not reforming health care for the benefit of the American people. Our government is not interested in providing for the health and well being of the Americans so we can be better functioning members of our society. No, our supposed moral imperative to pass health care reform is to ensure the health and well being of the health care and insurance industries so they can be even more profitable members of our society.

When will the media finally realize, as Miles Mogulescu has that:

…The real story should be about the back room deals reportedly being negotiated between the Obama administration and Blue Dog Democrat Max Baucus, on the one hand, and Big Pharma, for-profit hospitals, and the private insurance industry, on the other hand. This is where the real action is taking place and it’s looking increasingly likely, as a result, that the Health Care bill which ends up emerging from Congress could represent a massive public subsidy to the private health care industry. …

Our government may not be calling this a bailout, but by creating another entitlement to support and protect a few large, for profit, public entities at the expense of the American people it sure sounds eerily similiar to what our government is still doing for Wall Street.

And don’t forget, the powers that be want to “reform” Social Security and Medicare next.

**Update** Somehow I missed this great video from Dylan Ratigan’s Morning meeting.

One proposal is to mimic the Massachusetts’ plan. Except there are some problems with that:

Huh. Well, that sounds just perfect – go ahead and implement a program that has quickly gone into the red. Perfect management of our tax-paying dollars, right? Oh, yeah.

So, just how would we even pay for this? Oh, you are gonna love this plan by the US Senate:
Senate Health Plan Could Tax 1 in 8 Workers. One in EIGHT. 12.5% of Americans will be helping to foot the bill for everyone else. Holy smokes. Here’s the nitty gritty:

About one in eight U.S. workers who receive health benefits from an employer — more than nine million workers — could pay higher income taxes on benefits as part of a Senate proposal that aims to raise billions of dollars to finance health-care reform, according an independent analysis of the proposal.

A five-page presentation, obtained by FOX Business, was prepared by the chairman of the Senate Finance Committee, Sen. Max Baucus (D-Mont.), who is leading efforts by Senate Democrats to formulate funding alternatives for a reform plan. In the document, Baucus proposes “options to limit allowable tax free health benefits.”

Since World War II, when companies facing work-force shortages began offering comprehensive health-care coverage to attract and retain workers, such benefits have been tax-free to employees. Today, more than 150 million workers and their dependents receive health insurance from their current — or, if retired, former — employer.

Preliminary estimates from the Congressional Budget Office put the cost of health-care reform at $1 trillion or more over 10 years.

Read the whole presentation here.

According to the document, Sen. Baucus is looking at four ways to tax benefits starting in 2013, when many reform proposals would take full effect:

* Tax benefits of single workers who earn more than $100,000 a year and couples that earn more than $200,000. The presentation cites a previous estimate from the Congressional Joint Committee on Taxation [JCT] that the proposal would raise $161.9 billion over 10 years if the changes were effective on January 1, 2010.
* Tax benefits that exceed a value of $6,182 for a single worker and a value of $15,700 for a worker who also receives coverage for his family. The document cites a previous JCT estimate that the proposal would raise $418 billion over a decade if the changes were effective January 1, 2010.
* Tax those “base” benefits plus 10%, or a value of $6,800 for an individual worker and a value of $17,240 for families. The higher cap would eliminate taxes for some workers. The document says Baucus has requested an estimate, presumably from the JCT, of how much this proposal would generate in new tax revenue with the change effective January 1, 2013.
* Tax base benefits plus 20%, or a value of $7,420 for an individual and a value of $18,840 for families, which would shelter even more workers from tax liability. Baucus also has requested, presumably from the JTC, an estimate for this proposal also effective January 1, 2013.

Now, I know numbers like these can make your head spin. But what they are considering is pretty important for, well, one out of EIGHT of us, who will be helping to provide health care. Ahem. It is actually important to all of us, I know. Especially since health care is an important part of many people’s benefits package:

Most of the value of amounts cited in the presentation is the cost of insurance premiums that companies pay for their employees’ health benefits. But the presentation says the total value calculated for taxation would also include supplemental health plans for vision and dental care, as well as contributions employees make to their flexible spending accounts and health savings accounts, which workers contribute to with pre-tax dollars. Baucus would also adjust benchmarks annually to inflation.

A 2008 survey of employer health benefits suggests more than nine million workers could face new tax liabilities under the Baucus proposals, according one of the survey’s authors. The survey was conducted by the National Opinion Research Center, for the Kaiser Family Foundation and the Health Research and Education Trust.

The survey, of 1,900 small and large companies, can be found here.

Among other things, the survey identified insurance-premium levels employers paid for their workers’ coverage last year. To analyze variations around national averages, the survey reported higher premiums due to factors such as geography and benefit differences.

Based on the survey, Jon Gabel, NORC senior fellow for health policy and evaluation in Washington, D.C., said that if the Baucus proposal to tax single workers receiving more than $6,182 in benefits were in effect today, about 15% of single workers, or 4.7 million, could face new tax payments — potentially hundreds of dollars or more per person per year, depending on tax brackets and the size of benefit packages.

Gabel estimated that about 17% of workers with family coverage, or 4.5 million workers, could face new taxes if the proposal to tax employees with families who receive more than $15,700 in health benefits were in effect today. Under the survey methodology, with family coverage defined as a policy insuring four people, the tax could affect benefits for about 18 million people, Gabel estimated.

The survey and the Baucus proposals did not address another 12 million workers who receive coverage for themselves and one dependent, usually a spouse. Presumably any tax proposal would apply to a subset of them as well.

With health care inflation, even more workers could face tax payments by 2013 as premium payments rose. But by adopting higher benchmarks, such as Baucus’ “base plus 10%” and “base plus 20%,” policymakers would narrow the number of workers required to pay taxes, if Congress adopts such proposals. Congress could also limit their impact by combining a benefits level cap with an income test — such as taxing only single workers who receive $6,182 in annual health care benefits and who earn more than $100,000 a year.

Gabel said most workers will have to ask their employer for benefit information to determine the value of their individual health care packages.

For more information on taxation of health benefits, you can read Center for Budget Policy and Priorities report here.

In these difficult economic times, I’m sure this is just what these people want to hear. But this seems to be one area in which there is agreement across the aisle:

The idea of taxing health-care benefits has bipartisan roots. Some conservative economists and Republican policymakers believe health-care costs are soaring faster then general inflation in part because such benefits are excluded from taxable income, encouraging excessive health care spending by consumers. Some Democrats agree.

During the presidential campaign last year, then-candidate Barack Obama criticized his Republican opponent, Sen. John McCain (R-Ariz.), for proposing to tax all health-care benefits. Under his health-care reform plan, McCain would have used the new revenues to the government to fund health-care tax credits.

But in a meeting with Baucus and other senators earlier this month, President Obama signaled he would not rule out taxing benefits to help finance a reform plan.

“If I’m not mistaken, I can think of at least one Republican off the top of my head that talked about changing the tax benefits for the exclusion,” White House Press Secretary Robert Gibbs said at his daily press briefing on Friday. “I think if I sat at Google for about five minutes I could probably get you several dozen. I think one of the major reform bills that’s up there right now that’s been written by Sen. [Richard] Burr (R-N.C.) includes, if not a complete ending of the exclusion, some cap of it.”

The Obama Administration has already proposed more than $300 billion in tax increases to pay for reform, mainly by limiting deductions for wealthier families, and proposed more than $600 billion in cuts in Medicare and Medicaid spending.

But NORC’s Gabel said of specifically taxing benefits, “I think it’s very difficult to sell. As we know, Americans are almost schizophrenic in their views on taxing and spending. You name it, they think we should do more on it — spend more on education, more on defense, more on health care. On the other hand, they think taxes are too high and they don’t see a contradiction between the two.”

Well, at least this proposal would apply to everyone, right? Wrong:

The tax proposals also likely face strong opposition from some of the President’s and the Democratic party’s key supporters — unions that enjoy more generous health-care benefits won through hard-fought contact negotiations over decades. Apparently anticipating some objections about the possibility of affecting contracts already in place, Baucus has proposed protecting some union benefits by “grandfathering” collective-bargaining agreements existing on January 1, 2013, in his “base plus 10%” and “base plus 20%” options, according to his presentation.

Did you catch that? Unions may be exempt from having to pony up like everyone else will have to do. WOW – they really DID buy themselves a president, didn’t they??? I wonder how hard it would be to organize a United Office Workers Union (h/t to my partner for that union idea)?? How long are most Americans just going to accept that Union workers have far better benefits and pensions than the rest of us because we are subsidizing them? (Again, I’m not anti-union, but these things kind of stick in my craw…)

But there does seem to be agreement (more or less) that something needs to change:

On Sunday, a New York Times poll on health-care reform suggested taxing health benefits may not be as politically treacherous as assumed: the Times reported that 57% of voters said they would be willing to pay higher taxes “so that all Americans have health insurance that they can’t lose no matter what.” Just over a third — 37% — said they would not be willing to pay such taxes, and 6% had no opinion.

In a press briefing on June 9, Baucus said he was considering either a 50-50 or 60-40 split between taxes and savings to pay for a reform plan. Baucus specifically mentioned a “grandfathering” idea that he said would help mitigate taxes to some people who receive health-insurance benefits and said he favored an income test to narrow the impact as well.

In the House, Democratic leaders announced their own draft reform plan on Friday. But they did not present any options for financing it.

Gabel said taxes on benefits could not only raise some revenue for a new government plan but could also help to reduce health care spending, and thus inflation, as some economists believe.

“People will move from rich benefits where they don’t face deductibles to higher deductibles so their premiums are lower, and this will reduce the use of services,” Gabel said. “Also, they may move back into tightly managed HMOs like Kaiser, which have shown they can deliver care at lower cost.”

Well, that would be something at least. I think it would be great if everyone had health care – as long as we can PAY for it without going further into massive debt as a country. Or without putting the lion’s share of burden on some employees while allowing others off scott free. Surely a more just proposal can be worked out, yes? Let’s hope so, otherwise, those aren’t great odds for the 12.5% of employees who will pay more…

No TARP for you!

Who can ever forget the Seinfeld episode featuring the Soup Nazi? Well, in that same vein, the insurance company Genworth Financial was just summarily thrown out of the Treasury “line” to receive TARP funds. The WSJ reports, Genworth Financial Shares Slump on TARP Ineligibility:

Shares of Genworth Financial Inc. fell as much as 31% Monday as investors responded to the insurer’s late-Thursday announcement that it is ineligible to participate in the Treasury’s Capital Purchase Plan because it missed a deadline that Treasury won’t extend.

The mere fact that Genworth, Hartford Financial, Protective Life, or any other insurer are requesting government funds is another version of the “putting perfume on a pig” play we saw with the FASB relaxation of the mark-to-market. Why is that?

The TARP (Troubled Asset Recovery Program) was designed by Congress for banks needing increased capital. If investment banks can become bank holding companies, why not insurance companies as well? Perhaps, the next thing you know, we’ll have plumbers designating themselves as banks. How about construction companies? Maybe a bakery or two? Anybody for a newly defined U.S. Financial Blogging Bank? Where do I sign? We could all use some “soup.”

Effectively, Genworth was late in returning their homework. The WSJ article highlights:

Late Thursday, Genworth said it was informed by Treasury that the deadline it set for approval by the Office of Thrift Supervision to become a bank-holding company wouldn’t be extended. As a result of the announcement, Genworth said it won’t be able to complete its intended acquisition of Minnesota-based Interbank. The two companies had entered an agreement last November.

Wow! Genworth had 5 full months to complete necessary approvals, akin to a homework assignment, and they did not get it done. With a performance like that, Genworth truly does not deserve to get TARP money. In all honesty, insurance commissioners around the country may want to check what else Genworth has not completed. When you’re on life support and you don’t follow the directions to apply for medication, how badly do you really want to live?

While insurance executives may put out the “All Is Well” sign, the WSJ highlights a widely known fact:

Life insurers have struggled with losses related to their guarantees on variable annuities as well as their portfolios that are largely exposed to the financial sector and equities in general. Their troubles led to a string of rating-agency downgrades that, in a vicious cycle, made it more difficult for some insurers to raise funds.

TARP “likely will temporarily boost investor confidence, but TARP funds alone cannot eliminate the capital/liquidity pressures caused by weak credit, equity market and economic conditions.”

As for Genworth . . . No Tarp for You!!

LD

This past Sunday evening on NQR’s Sense on Cents with Larry Doyle, I spoke extensively about the massive financial shortfall within the insurance industry. In addition, relatively early on I warned that the hedge fund industry had likely been severely mismarking many investments. From a piece I wrote on November 12, 2008:

Give it time, because hedge funds do not have to report to anybody as to what their positions are and where they have them marked. There is no doubt they have positions that are grossly mismarked and have many positions that are totally illiquid. For many investors in these funds, these are truly “roach motels.” Hedge funds will sell what is most liquid when they can to meet redemption requests. We should expect a significant number of hedge fund liquidations, consolidations, and out and out disasters.

The same can be said for a number of private equity shops. Consumer finance companies with large holdings of a variety of consumer assets are fighting for their lives as delinquencies and defaults on these assets ratchet higher.

With massive debt obligations along with capital redemptions coming due, a number of companies within these industries will be unable to refinance that debt or replace that capital.

State guarantee funds to support insolvent insurance companies total a mere $8 billion. Who would step in to support some of these other entities as they approach financial armageddon? Are banks in a position to take over these entities and liquidate assets in a quick and orderly fashion? The markets are in no position to provide the necessary liquidity without massive discounts in price.

Enter Turbo-man, Tim Geithner. U.S. Seeks Expanded Power to Seize Firms is not a mere power grab by our government, but an indication that a number of companies are on the precipice of default. The manpower shortage at Treasury to handle these upcoming situations is a very real concern.

A disorderly collapse of a number of these companies could quickly throw our markets and economy into a further tailspin. The cost of the government assuming and exercising this power, though, is not fully known and should not be underestimated.

How are contracts and outstanding liabilities handled? How are assets liquidated? Who has access to purchasing assets? The transferral of assets and wealth presents enormous challenges and opportunities. Will our government promote financial protectionism in this process? Will certain financial entities be accorded preferable treatment?

So many questions to be asked and answered in the weeks and months ahead. Make no mistake, though, this move by Treasury is an indication that a number of companies are close to going down.

LD

"We need a BIGGER boat!"

In similar fashion, the size of the losses embedded in our banking, insurance, automotive, and states and municipalities will similarly require “a bigger boat!!”

Capital needs in the banking industry are projected from at least $500 billion to $1.5 trillion. Bloomberg reports former Fed chair Greenspan Says Banks Need $750 Billion More Capital. Nouriel Roubini puts the needs at upwards of $1.5 trillion.

In my Sunday evening radio show, NQR’s Sense on Cents with Larry Doyle, I highlighted how the insurance industry will very likely need anywhere from $100-500 billion in capital.

The advisor to the automotive industry, Steven Rattner, has informed the administration that GM, Chrysler May Need More Aid Than Requested. Long term capital needs could run as high as $100 billion.

States and local municipalities? Who knows how great the needs may run, but they will have to be funded either in the form of higher taxes, fewer services, federal injections of capital, or all of the above.

Add it all up and these capital injections are probably at least $1 trillion over and above the federal capital outlays for budgetary demands and fiscal stimulus.

The crowding out effect will not go away anytime soon. I can’t begin to get constructive on the equity market in the face of these capital shortcomings.

LD

I have previously stated that firms that were truly bailed out by the government should be subject to strict government compensation controls. A number of firms – such as Northern Trust, JP Morgan, Wells Fargo, and Goldman Sachs – were compelled to take government funds. If employees of these firms are subject to this tax, it will be a travesty and injustice of unprecedented proportions. I believe that Congress is unknowingly escalating class warfare amidst a facade and charade of protecting the public. I believe we will see public outrage from employees at these firms (JP Morgan, Northern Trust, Goldman, Wells Fargo) that can only be rivaled by our forefathers back in the 1770s. This tax is another means of promoting the income redistribution upon which Obama ran his campaign. Taxation without representation is tyranny!!!

Amidst the smoke and mirrors emanating from Washington, make no mistake this legislation passed today is an attempt to cover the incompetence and ineptitude of these legislators. This smokescreen is further displayed as Nancy Pelosi Blames Bernanke Over AIG Bonus Fiasco.

In my opinion, public outrage would be mollified to a much larger extent by payments from our politicians in addition to the AIG employees and others. I am referring to the grotesque sums paid by Wall Street firms (banks, insurance companies, hedge funds, accounting firms) in the form of campaign contributions and lobbyist dollars to curry favor with Washington.

I called on the return of these payments from politicians on March 9th in How Wall Street Bought Washington. Well, the WSJ has picked up on this theme and is making the same point in highlighting Critics Got Donations from Insurer. If the government plans to take employee bonuses, let’s have the political crowd exposed for their greed and incompetence as well. At that point, perhaps we may really start to make some progress.

Yesterday, as President Obama informed the press that the buck stops at his desk, a reporter asked him whether he would return the $104k his campaign received from AIG in 2008.

He ducked the question.

Change? Sounds like more of the same to me!!

LD

***Cross-posted from my blog, Sense on Cents. Come by and visit!

Edward Liddy, AIG Chairman & CEO, appearing before congress, stated that he has asked AIG employees who received bonus money to return some of the money. He also said that “in reviewing how AIG had been run in prior years, I have … seen evidence of its bad side.”

NOW on C-SPAN3   
AIG CEO Liddy: Today’s Opening Statement
Treasury Dept.: Letter to Lawmakers on AIG
AIG CEO Liddy’s Op-Ed in Wash. Post   
AIG Chairman & CEO Edward Liddy Bio

Also post any news you’re hearing that concerns you.

Given the public outrage over the millions in bonus payments at AIG, is there any doubt that there has been a massive failure to perform by all involved?

When AIG was on the verge of bankruptcy last September, I am willing to bet the topic of employment contracts was not the lead item on the agenda. In fairly short order, though, as AIG was moving ahead with its attempt to sell divisions and repay the government loan, I have to believe outstanding liabilities, such as employment contracts, became a topic of discussion.

Let’s bring the main players at that point in the process back to the table. What does Hank Paulson have to say? How about Robert Willumstad, former AIG CEO? How about current AIG CEO, Edward Liddy?

Make no mistake, both the government and AIG executives could have imposed their will to renegotiate – if not outright dismiss – any outstanding contracts. How?

When an entity such as the government takes over a company, a change of control occurs. That change of control does not unilaterally extinguish outstanding liabilities, but it certainly opens them for renegotiation. The fact that these contracts were not seriously renegotiated is a massive failure to perform on behalf of the government officials and AIG executives.

I have personal experience with renegotiating contracts. When I was at JP Morgan, the firm took massive hits to income from exposure to Enron and Worldcom. The business I managed had no involvement whatsoever in those exposures. That said, when it came time to pay our people at year end, the firm “strongly encouraged” everybody (whether on contract or not) to share in the firm’s underperformance. As a result, every single individual on contract took a haircut.

Many people maintain that all contracts must be honored and paid in full in order to maintain continuity at AIG Financial Products, the division which took the risks and incurred billions in losses. If it even exists a year from now, AIG FP can very easily restaff given the enormous number of layoffs on Wall Street. Every single new hire could easily occur without a contractual obligation. The current work situation on Wall Street is a buyers’ market.
Back to the matter at hand. Are we to believe that the same scenario that occurred at JP Morgan in 2002 could not, or more importantly should not, have already occurred at AIG? It seems to me that everybody involved in managing AIG and the government’s ownership of this entity has had a massive brain freeze.

Congressman Steny Hoyer (D-MD) commented this morning regarding individuals at AIG who received bonuses, “these people have no shame.” I would make the very same statement about the government officials and AIG executives who have failed to perform.

Why am I not surprised?

LD

We may see some arm waving and loud pronouncements from Congress about investigations, but the question still begs as to how this happened. The government took this majority stake in AIG last September. Are we to believe government representatives were both unaware of potential contractual payments and that they did not approve them? How could the government approve payments within a division that brought the global markets to its knees?

Perhaps we should revisit the theme of my piece, How Wall Street Bought Washington. Embedded in that piece, we can see the insurance industry lavished $220 million in campaign contributions and $1.1 billion in lobbying dollars on Washington over the last decade. AIG was one of the primary sources of that money.

Follow the money!!

LD

***Cross-posted from my blog, Sense on Cents. Come by and visit!

Sheila Bair is proactively managing expectations for all concerned, those being politicians, regulators, bankers, and consumers. In fact, if she did not highlight the current state of the FDIC reserve fund and expectations for future declines, she would not be fulfilling her obligations.

The FDIC is funded by making assessments on all the banks throughout the country. With those assessments assuredly headed much higher, bank earnings will be dramatically impacted this year. In fact, analysts believe that many banks’ earnings will decline by anywhere from 50% to 100%!! The smaller community banks are enraged by the prospects of higher assessments given that many if not most of these banks managed their businesses with appropriate risk controls.

Read the rest ->

While taxpayers do not directly fund the FDIC, the fees incurred by member banks will be passed along to consumers in the form of increased charges on every transaction. If you feel like you are getting “nickeled and dimed” to death it is due to these increased FDIC assessments.

In light of this situation, what is one to do? First and foremost, make sure you do not have any deposits over the FDIC insured deposit limit of $250k at any one institution. The FDIC website has a wealth of information including an online estimator to assist you in calculating your FDIC insurance coverage. Additionally, proactively manage your finances so you can minimize your banking needs. I continue to encourage people to shop around for your banking needs, as well as for insurance and all other financial needs. Credit unions remain a great alternative to many traditional banks.

LD