There are 9.7 million people that use both Medicare and Medicaid for their health care expenses, according to a June 27 article in The Wall Street Journal. Even though this group represents only 16 percent of all enrollees in Medicare and just 15 percent in Medicaid, it accounts for 27 percent and 39 percent of each program’s annual expenditure, respectively. The cause? None other than inefficient bureaucracy.
The two government-run programs were “never designed to work together,” according to the overseer of dual-eligibility at the Centers for Medicare and Medicaid Services (CMS), Melanie Bella. This incongruence causes expensive inefficiencies of bureaucratic squabbling and of perverse incentives for beneficiaries and those who manage their care. For example, one enrollee spent an extra six months in a rehabilitation center after his admitting diagnosis had been assuaged because Medicare and Medicare engaged in a lengthy fight over which one would pay for home health services. Meanwhile, the rehab center billed the state Medicaid program $20,000 for the additional stay when home health services during that time would have only cost $11,000. Although the state Medicaid program only paid $16,000 of the bill (a chronic problem of our government-run health care programs that result in higher prices for the privately insured), a loss of at least $5,000 of taxpayer money could have been prevented if Medicare and Medicaid had not been passing the buck between themselves for six months.
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The Department of Labor (DOL) has proposed a new rule to broaden the definition of fiduciary. Fiduciaries under the Employee Retirement Income Security Act (ERISA) include persons who have discretionary authority over a plans management and provide investment advice. DOL’s original interpretation assigns fiduciary responsibilities only to individuals who provide advice regularly and are the primary provider of investment advice. The proposed rule change expands fiduciary duties by removing the language of primary and regular, leaving anyone who gives investment advice liable for losses to the plan. Besides the increased costs to the financial industry to comply with the rule change and loss of service to small and medium investors, DOL has not performed its duties as a department to justify the rule change.
DOLs proposed rule change intention is to protect American investors. However, DOL has not performed the proper procedures in rulemaking which potentially will cause more harm than good. As well, rulemaking of this sort, similar to Obamacare, of finalizing a rule before the details are worked out (seller exemptions and prohibited transaction exemptions) creates uncertainty, leading to less transparency in government — something the rule change is attempting to promote in the financial industry.
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Tech:
Google’s Schmidt unfazed by antitrust probes:
“Google is co-operating with a US antitrust investigation but is confident it has done nothing illegal to secure its position as the dominant search provider in the country, executive chairman Eric Schmidt said on Monday.”
Global Warming / Environment / Energy:
Bastardi on learning from the past:
“If you knew about the climate and nation’s weather the way I have to, you would see the links between what happened from 1925 to 1950 and what is going on now. During that time, we were in a warm version of the Pacific Ocean, the Atlantic turned warm, and the weather went haywire. And there were other challenges as great as the weather facing the nation.”
Insurance / Gambling:
New gaming laws ‘to improve transparency’:
“The Government is strengthening the powers of the Gaming and Racing Commission as the local regulator.”
Health / Safety:
Docs Want TV Fast-Food Ads Banned From Kids’ Shows:
“Fast food ads on TV are making American youth fatter and should be banned in children’s programming, an influential group of doctors said Monday.”
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California’s ban on the sale or rental of violent video games to minors has been struck down by the Supreme Court as a violation of the First Amendment in a 7-to-2 vote. The only dissenters were Justices Breyer and Thomas. The opinion, authored by Justice Scalia, is here. CEI joined in an amicus brief in support of the challengers, and CEI’s Ryan Radia wrote an op-ed about the case you can find here. As Radia noted, “a comprehensive survey of the major scientific literature . . . found no established link between exposure to media violence and aggressive feelings in children . . . juvenile violent crime fell 36 percent . . . even as the popularity of video games skyrocketed.”
Cato Institute’s Ilya Shapiro, who co-authored an influential amicus brief in the case, had the following to say about the decision in Brown v. Entertainment Merchants Association:
The Supreme Court scored an epic win for the First Amendment in striking down California’s prohibition on selling violent video games to minors. The law was both overly broad—sweeping in a wide variety of games based on no objective standard and no age-based gradations—and underinclusive—with no restrictions on other types of media. With a few strictly drawn exceptions for historically unprotected speech—obscenity, incitement, fighting words—government lacks the power to restrict expression simply because of its content. And a legislature cannot create new types of unprotected speech simply by weighing its purported social costs against its alleged value.
“Reading Dante is unquestionably more cultured and intellectually edifying than playing Mortal Kombat,” Justice Scalia points out in his majority opinion. “But these cultural and intellectual differences are not constitutional ones.”
Moreover, the Court, citing Cato’s amicus brief, described how each generation’s new media produces consternation from adults who want to avoid the “seduction of the innocent” (to borrow a phrase from the attack on comic books in the 1950s). In the 19th century, dime novels and “penny dreadfuls” were blamed for social ills and juvenile delinquency. Later, Congress held hearings on the cartoon menace, which prompted the comic book industry to voluntarily adopt a ratings system. Backlash against certain kinds of movies and music caused those respective industries also to adopt voluntary ratings systems. And the video game industry too adopted an effective and responsive ratings system after congressional hearings in the early ‘90s. Not only is all this hand-wringing overwrought, but self-regulation and parental oversight have worked—evidence from the Federal Trade Commission shows that the voluntary ratings system works more effectively with video games than with any other medium—and they avoid First Amendment thickets. Adding a level of governmental control, even if were constitutional, would be counterproductive.
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Tech:
Google Boots Transdroid Torrent Manager From Android Market:
“For many Android users Transdroid is the perfect remote access app for managing their BitTorrent clients on the go. The app allows users to start and stop torrents, search torrent files and even use the barcode scanner to find matching torrent files.”
Global Warming / Environment / Energy:
Oil release not a political move: Geithner:
“U.S. Treasury Secretary Timothy Geithner defended the decision by industrialized nations to release emergency oil reserves into global energy markets, saying on Friday that it was not a political move.”
Insurance / Gambling:
Legalization pushed to legalize and regulate online poker sites:
“A bipartisan group of lawmakers introduced a bill Friday that would legalize and license online poker sites, two months after the Obama administration shut down sites used by an estimated 10 million Americans.”
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Tech:
Hacker Cops Felony Pleas In “Brute Force” AT&T iPad Attack:
“A California man today pleaded guilty to federal charges for participating in a “brute force” hack on AT&T that yielded the personal data of 120,000 iPad owners.”
Twitter plans bolder advertisements:
“Twitter is looking at introducing advertisements among the short messages that users see in the most active part of the social networking service, according to people with direct knowledge of its plans.”
Feds to Launch Probe of Google:
“Federal regulators are poised to hit Google Inc. with subpoenas, launching a broad, formal investigation into whether the Internet giant has abused its dominance in Web-search advertising, people familiar with the matter said.”
Hacker Group Posts Arizona Police Documents:
“A group of hackers that has claimed attacks on websites run by the U.S. Senate and the Central Intelligence Agency posted a cache of documents from Arizona police, calling it a protest against a controversial state law.”
Global Warming / Environment / Energy:
‘Cars 2’: Big Oil Is The Bad Guy, Says Director John Lasseter:
“Could an animated film about cars become Big Oil’s next nemesis?”
Super! Obama to release part of strategic oil reserves:
“While everyone is briefly fixated on foreign policy questions following the president’s speech on Afghanistan, the White House quietly let slip that it was taking some action on the energy policy front. What’s that you say? Are they issuing new permits or easing EPA restrictions on exploration? No, no, silly rabbit. The president is going to dump off some of the strategic petroleum reserve.”
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When it comes down to outdated business model of the Post Office vs. taxpayers and postal workers, Rep. Darrell Issa (R-Calif.) sides with taxpayers and postal workers.
Yesterday, the United States Postal Service (USPS) announced it would stop paying the employer share of its employees’ retirement fund. ABC news reported about “sheer chaos on the work floor,” according to 32-year postal veteran Clarice Torrence. The action is yet another sign that the USPS is in continued financial strain.
Today, Issa, who is chairman of the House Committee on Oversight and Government Reform, introduced the Postal Reform Act (PRA), which seeks to reform the USPS and prevent a potential taxpayer bailout.
In a statement, Issa called the legislation the “most fundamental reform of the postal service that has been proposed since USPS was first created from the old Post Office Department.”
“The Postal Service lost $8.5 billion last year. It is going to lose, at least, $8.3 billion this year. And it is projected to lose $8.5 billion the year after that,” Issa said. “Congress can’t keep kicking the can down the road on out of control labor costs and excess infrastructure of USPS and needs to implement reforms that aren’t a multi-billion dollar taxpayer funded bailout.”
Among other thing the legislation would do is create a temporary agency called the Postal Service Financial Responsibility and Management Assistance Authority. PRA gives the Authority the ability to restructure many parts of the USPS and could recommend cost savings measures to bring it back to solvency.
Unlike many other government agencies that once created last in perpetuity, the PRA puts an explicit sunset provision on the Authority. Once the USPS meets several benchmarks the Authority will be disbanded.
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Have a listen here.
Bunker fuel is a heavy fuel used by large ships around the world. Oil tankers, container ships, and more rely on bunker fuel because it’s cheaper than other kinds of fuel. Land Use and Transportation Policy Analyst Marc Scribner takes a look at new environmental regulations in California intended to reduce bunker fuel usage. The rules are actually causing many ships to use more bunker fuel, not less. If proposed fixes succeed, the result would essentially be a tariff on most global trade — cargo valued at approximately $16 trillion.
On behalf of the Competitive Enterprise Institute, I’ve been involved in an ongoing proceeding before the Surface Transportation Board, the independent Department of Transportation agency charged with regulating the freight-rail industry. The proceeding, Competition in the Railroad Industry, is the culmination of a decades-long series of frivolous complaint-filing on the part of a minority of mostly western U.S. shippers in the agriculture industry, the coal industry, and the chemical industry. The first hearing in Ex Parte 705 took place yesterday and today.
These shippers claim the four major Class I railroads — Union Pacific, BNSF, Norfolk Southern, and CSX — have been charging so-called “captive shippers” who lack access to another rail carrier or economical transport mode such as a river barge rates that are too high. They are also trying to force railroads to accept regulator-determined “open access” and “reciprocal switching” contract requirements that are favorable to this small group of shippers. Railroads counter that enacting price controls, forced access, and forced switching agreements will reduce revenue, which will cause their investors to demand more dividends and stock repurchases, rather than allowing railroads to continue investing billions of dollars annually into much-needed network upgrades.
I didn’t speak before the STB, but have filed two comment letters and a reply comment letter so far. In our comments, CEI argues:
- “Bottleneck” pricing faced by “captive” shippers reflects low-demand and risks to capital investment
- Increasing regulation on “bottleneck” carriers would enhance neither competition nor economic efficiency.
- “Open access” regulation would increase the risk of investment, particularly to underserved areas.
- Regulatory inefficiencies in the railroad industry do exist. However, this is a matter more appropriately addressed by Congress, not through STB rulemaking.
- The shippers (in this case, Consumers United for Rail Equity, or “CURE”) ignore 49 U.S.C. § 10101(6) and fail to show that current “rail rates provide revenues which exceed the amount necessary to maintain the rail system and to attract capital.”
- CURE’s case for forced access does not consider the economic literature on the peculiarities of network industries and the dangers of overregulation.
- CURE and the firms it represents have long engaged in a pattern of rent-seeking behavior in which they have heavily criticized adequate rate-setting in the railroad industry.
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