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Obamacare Rates In California Will Rise Only 4% in 2016

by NicholeAuricht Posted on July 28, 2015

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Obamacare’s moment of truth is coming. By now we’ve heard all the scare stories about a few health insurers in a few states requesting gigantic rate hikes for next year. But over the next few weeks, states are going to start publishing the actual average rate increases that consumers will see in 2016. California released its report today. It’s still marked preliminary, but you can expect that the final numbers will be very close to these:

I’ve highlighted two numbers. First, the overall average rate increase is 4.0 percent. That’s way lower than you’ve seen in the scary headlines. And this is for a state that makes up more than a tenth of the country all by itself.

Second, the price of the second-lowest-price silver plan has gone up 1.8 percent. This is the figure used to calculate subsidy levels, so it’s an important one. In fact, here’s an interesting consequence of that number: because subsidies will be going up roughly 1.8 percent, and the cost of the lowest-price silver plan is going up only 1.5 percent, the net cost (including subsidies) of buying the cheapest silver plan is actually going down. As you can see in the bottom row, if you shop for the lowest-priced plan, your premiums are likely to decrease about 4.5 percent.

I have a feeling this number is not going to be widely reported on Fox News.

Now, California isn’t necessarily a bellwether for all the other states. Because it’s the biggest state in the union, it has lots of competition that helps drive down prices. A big population also means less variability from year to year. Also: California’s program is pretty well run, and the California insurance market is fairly tightly regulated. All this adds up to a good deal for consumers.

In any case, the headline number here is a very reasonable 4 percent increase in overall premiums, and a 4.5 percent decrease for consumers shopping for the cheapest plans. These are real statewide numbers, not cherry-picked bits and pieces designed to encourage hysteria. Once again, it looks like Obamacare is working pretty well.

This all comes via Andrew Sprung, who has much more detail here.

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Obamacare Rates In California Will Rise Only 4% in 2016

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Even the World Bank Has to Worry About the Competition

by CarltonDecosta Posted on April 16, 2015

Mother Jones

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The International Consortium of Investigative Journalists has just published a deep look into the World Bank’s track record of ensuring that the projects it sponsors don’t end up harming local communities.

Since 2004, more than 3.4 million people have been economically or physically displaced by Bank projects, according to the report’s analysis of the lender’s data. And while the Bank has policies requiring it to reestablish and resettle such communities, the ICIJ’s investigation found that they were falling short, operating under a troubling lack of safeguards, through bank officials too willing to ignore abuses committed by local partners, and with an institutional culture that values closing big deals over following up on human rights.

After being presented with the ICIJ’s findings, the bank quickly promised reforms. But one part of the investigation contains this interesting passage, which suggests an unexpected reason the Bank may not be able to clean up its act: competition has gotten too stiff.

As it enters its eighth decade, the World Bank faces an identity crisis.

It is no longer the only lender willing to venture into struggling nations and finance huge projects. It is being challenged by new competition from other development banks that don’t have the same social standards—and are rapidly drawing support from the World Bank’s traditional backers.

China has launched a new development bank and persuaded Britain, Germany and other American allies to join, despite open U.S. opposition.

These geopolitical shifts have fueled doubts about whether the World Bank still has the clout—or the desire—to impose strong protections for people living in the way of development.

United Nations human rights officials have written World Bank President Kim to say they’re concerned that the growing ability of borrowers to access other financing has spurred the bank to join a “race to the bottom” and push its standards for protecting people even lower.

Today’s package of stories, published with the Huffington Post, is the first installment of a series reported in 14 countries by over 50 journalists. More than 20 news organizations were involved in the effort.

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Even the World Bank Has to Worry About the Competition

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Repeat After Me: Competition Is Good. Competition Is Good.

by EveretteLavalli Posted on January 6, 2015

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Did you know that companies facing no competition are likely to charge you more? It’s true! But in case you’d like a bit of evidence for this truism, Binyamin Appelbaum directs our attention to a clever study of mortgage rates from the Chicago Fed. It turns out that when the federal government authorized the mortgage refinancing program called HARP, they set up the rules in a way that discouraged anyone from participating aside from the original lender. This meant that, effectively, the original lender had little or no competition for the refinanced loan.

The results are shown on the right. The HARP rules took effect for mortgages with a loan-to-value ratio of 80 percent or higher. Private label mortgages, which didn’t fall under the new rules, show a normal range of interest rate spreads at all LTV values. Loans backed by Fannie Mae, which did fall under the new rules, show a sharp discontinuity upward precisely at an LTV of 80.

In other words, at exactly the point where lenders faced no effective competition thanks to HARP rules—i.e., Fannie-backed loans with an LTV of 80 or above—interest rate spreads suddenly increased by about 0.2 percent. Without competition, lenders were free to charge a little more, and they did.

I know: you’re shocked. And in case you’re tempted to think that 0.2 percent doesn’t really seem like that much, the authors point out that it adds up fast: “While the anti-competitive features of HARP may appear to have curtailed borrower gains by relatively small amounts, they resulted in sizable increases in profitability for a subset of lenders. These results further highlight the importance of restoring full competitiveness to mortgage refinancing markets.”

Quite so. Competition is good. We’ve paid less and less attention to this over the past few decades, and we do so at our peril. It’s the heart and soul of capitalism.

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Repeat After Me: Competition Is Good. Competition Is Good.

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Obama to create largest marine protected area ever, because bigger is better

by XVNEmilqkoj Posted on June 17, 2014

Obama to create largest marine protected area ever, because bigger is better

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Say what you will about the U.S., when we do something, we do it supersized.

So when Obama decides to make a marine reserve, he doesn’t just put your average patch of ocean off-limits to commercial fishing, energy exploration, and other shenanigans. No. It’s a massive portion of the Pacific that more than doubles the total amount of protected ocean. In the world. From The Washington Post:

[T]he Pacific Remote Islands Marine National Monument would be expanded from almost 87,000 square miles to nearly 782,000 square miles — all of it adjacent to seven islands and atolls controlled by the United States. The designation would include waters up to 200 nautical miles offshore from the territories.

“It’s the closest thing I’ve seen to the pristine ocean,” said Enric Sala, a National Geographic explorer-in-residence who has researched the area’s reefs and atolls since 2005.

Marine protected areas are widely acknowledged as one of the most effective tools to fight back against overfishing, habitat destruction, and ecological loss. By roping off some of the most productive waters, we give fish a fighting chance. In this case, the proposed boundaries encompass a number of “underwater mountains,” habitats which are important as fish nurseries and centers of marine biodiversity.

The potential expansion area would quintuple the number of underwater mountains under protection. It would also end tuna fishing and provide shelter for nearly two dozen species of marine mammals, five types of threatened sea turtles, and a variety of sharks and other predatory fish species.

There will likely be the usual sighing about the pushiness of a president who refuses to work with his old pals in Congress. And the American tuna industry is likely to be one of the more vocal opponents, as about 3 percent of the U.S. catch comes from the area proposed for protection. But as Pacific bluefin tuna are one of the most overfished species in the sea, they could use the break. If all goes well, this sanctuary could actually help ensure that there are lots of fish out there for us to catch.

It’s a little early to declare victory — this announcement is merely a proposal, to be followed by a public comment period that will end later this year, hopefully with the official expansion of the reserve. But today’s announcement — coming on the tails of Capitol Hill Ocean Week and John Kerry’s “Our Ocean” conference in D.C. and the announcement of a new public nomination process for marine sanctuaries and a crackdown on seafood fraud — might signal a turning of the tides. (What, you thought you’d get out of this without seaing a pun?)

Or you could look at it another way: Small island nations like Palau and Kiribati have set aside their own swaths of sea as marine sanctuaries, and the U.K. is considering doing the same to the area around the Pitcairn Islands in the South Pacific. We may have taken our time about it, but it looks like we’re finally embracing the healthy spirit of competition to massively outdo all of them.


Source
Obama will propose vast expansion of Pacific Ocean marine sanctuary, The Washington Post

Amelia Urry is Grist’s intern. Follow her on Twitter.

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Want Better Broadband? Unbundle the Local Loop.

by XOCKellieqnkfp Posted on February 21, 2014

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Felix Salmon says we have plenty of bandwidth in America. Contra Tyler Cowen, we don’t need to spend a bajillion dollars rolling out a new nationwide network based on new pipes or new technology:

What we do need, on the other hand, is the ability of different companies to provide broadband services to America’s households. And here’s where the real problem lies: the cable companies own the cable pipes, and the regulators refuse to force them to allow anybody else to provide services over those pipes. This is called local loop unbundling, it’s the main reason for low broadband prices in Europe, and of course it’s vehemently opposed by the cable companies.

Local loop unbundling, in the broadband space, would be vastly more effective than waiting for some hugely expensive new technology to be built, nationally, in parallel to the existing internet infrastructure. The problem with Cowen’s dream is precisely the monopoly rents that the cable companies are currently extracting. If and when any new competitor arrives, the local monopolist has more room to cut prices and drive the competitor out of business than the newcomer has.

Cable companies have a thousand ready-made technical incantations to explain why they can’t possibly open up their networks to competitors. To listen to them, you’d think this would be akin to letting a five-year-old mess around with your electric wiring. This is delicate stuff! You can’t just let anyone start sending bits around on it.

It’s all special pleading, of course, of the same type that Ma Bell engaged in when people wanted to start putting answering machines on their phone lines. But everyone understands there would be technical requirements they’d have to meet, just as answering machines had to meet reasonable technical requirements back in the day. Regulators would have to be involved to make sure everyone plays nice with each other, but that’s far from impossible.

No, this is all about money, as you already guessed. Allowing other companies to use their last-mile pipes would (a) take away some of their broadband rents, (b) force cable companies to genuinely compete on price and features, and (c) allow competitors onto their network who couldn’t care less about cannibalizing TV business. If I were a cable company, I’d fight that tooth and nail too.

But that doesn’t mean the rest of us have to take their arguments seriously. The rest of us should be in favor of competition, not the profit margins of local cable TV monopolies.

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Want Better Broadband? Unbundle the Local Loop.

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Forget TV, It’s Internet Access at Stake in the Comcast Deal

by KathleenEdmundl Posted on February 17, 2014

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Paul Krugman says we made a mistake when we stopped worrying about monopolies:

At first, arguments against policing monopoly power pointed to the alleged benefits of mergers in terms of economic efficiency. Later, it became common to assert that the world had changed in ways that made all those old-fashioned concerns about monopoly irrelevant. Aren’t we living in an era of global competition? Doesn’t the creative destruction of new technology constantly tear down old industry giants and create new ones?

The truth, however, is that many goods and especially services aren’t subject to international competition: New Jersey families can’t subscribe to Korean broadband. Meanwhile, creative destruction has been oversold: Microsoft may be an empire in decline, but it’s still enormously profitable thanks to the monopoly position it established decades ago.

….And the same phenomenon may be playing an important role in holding back the economy as a whole. One puzzle about recent U.S. experience has been the disconnect between profits and investment. Profits are at a record high as a share of G.D.P., yet corporations aren’t reinvesting their returns in their businesses. Instead, they’re buying back shares, or accumulating huge piles of cash. This is exactly what you’d expect to see if a lot of those record profits represent monopoly rents.

It’s time, in other words, to go back to worrying about monopoly power, which we should have been doing all along. And the first step on the road back from our grand detour on this issue is obvious: Say no to Comcast.

I can’t find anything to disagree with here. Our current situation is mostly a result of the Borkian revolution in antitrust law, which began in the 1970s and has since upended the way courts think about monopolies. Instead of caring about competition per se—or its lack—Bork invented a beguiling tautology in which any company with lots of customers is ipso facto creating a lot of consumer welfare and must therefore be OK. And since successful monopolies always have lots of customer, consumers must be benefiting.

This has been a huge mistake. Competition is what drives creative destruction, and it’s valuable for its own sake. We’ve lost sight of that, and it’s time to reverse course.

In the case of Comcast, of course, it’s possible to argue that cable TV is already a monopoly in every geographical area, so it doesn’t really matter who the monopolist is. That’s not entirely true, but it’s true enough to give one pause. More clearly dangerous, though, would be Comcast’s newfound monopoly over broadband internet in half the country. There are, theoretically, multiple ways to get broadband internet in your home, but in practice you’re limited to cable in about 90 percent of the country. That monopoly has given us some of the world’s worst broadband, both painfully slow and painfully expensive.

What’s more, as Michael Hiltzik points out, broadband is a direct competitor to cable in the streaming video market, and having a single company with a monopoly position in both is just begging for trouble. Comcast will almost certainly be willing to make promises of net neutrality in order to win approval for its merger with Time-Warner, but those promises will be short-lived. The truth is that if this deal were allowed to go through under any circumstances, it would probably deal a serious blow to our ability to use the internet the way we want, not the way Comcast wants us to.1 But if it goes through under our actual existing current circumstances, in which enforcement of net neutrality has already been reduced to a husk of its former self, then we can just kiss streaming video goodbye.

Our real public priority ought to be figuring out a way to insist on broadband competition. There are various ways of doing this, some more free-marketish than others. But that should be the minimum price for approving this merger. A bigger cable TV provider might or might not be dangerous. A bigger monopoly in broadband internet will undeniably be. Competition is the answer to this, the more the better.

1Just to be clear for those new to this, Comcast wants us to use the internet only in ways that don’t interfere with the money they make from bringing TV and other video streams into our homes. In other words, their self-interest is directly opposed to net neutrality: they will push at every turn to block, slow down, or otherwise interfere with access to high quality streaming video over the internet. They want you to get that stuff from Comcast via cable TV, not via Netflix or Hulu or BitTorrent or any other provider via high-speed broadband.

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Forget TV, It’s Internet Access at Stake in the Comcast Deal

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They’ll say whatever it takes

by Posted on May 23, 2013

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Today, the American Petroleum Institute gathered reporters on a conference call to try and escape blame for what are sure to be record-high gas prices this summer. And while this event was full of API’s typical misdirection, one particular claim stood out to us – that compliance with the Renewable Fuel Standard will cause gasoline prices to increase by 30 percent in 2015. This could not be further from the truth.

The RFS and its associated “RIN credits” have not been a factor in higher retail gasoline prices, according to a new analysis conducted by Informa Economics, Inc. In fact, the study found ethanol costs significantly less than gasoline at the wholesale level and is reducing pump prices for consumers across the country.

Underlying API’s claims about the RFS is the idea that there’s a “blend wall” preventing the wider adoption of E15 renewable fuel (which happens to be the DoE’s most extensively tested fuel, ever). Back when the RFS was first passed, oil companies who supported the law effectively pledged to invest in the infrastructure necessary to bring E15 to our gas pumps. But now that they see renewable fuel as viable competition, they’ve done everything in their power to prevent its adoption. That means engaging in frivolous lawsuits, fabricating safety concerns about E15 and discouraging franchisees from carrying the fuel.

The oil companies don’t want to blend more renewable fuel into gasoline because it hurts their bottom line. In fact, it cost them (and saved you) $50 billion in 2012, so it’s no surprise they’re doing what they can to squash the competition. So who benefits from renewable fuel? You do, in the form of lower gas prices, reduced carbon emissions and increased national security. The choice should be clear.

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Watch the video the oil companies don’t want you to see

by Posted on March 20, 2013

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Why has the oil industry been so relentless in attacking E15 renewable fuel?

Because they’ll do anything to squash the competition:

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Wind power is poised to kick nuclear’s ass

by jiigy3e Posted on March 14, 2013

Wind power is poised to kick nuclear’s ass

By John Upton

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/ Tim MessickBlowing away the competition in California.

In 2012, wind energy became the fastest-growing source of new electricity generation in the U.S., providing 42 percent of new generation capacity, according to the American Wind Energy Association.

Wind power is becoming so cheap and so commonplace that it appears poised to help blow up the country’s nuclear power sector, according to a recent Bloomberg article (which you really should read in full). Other highlights from the piece:

$25 billion was spent on wind energy in the U.S. in 2012.
The $25 billion outlay increased nationwide wind generating capacity by 13,124 megawatts – up 28 percent from 2011.
That spending spree was fueled in large part by a mad scramble to qualify for federal tax credits that were set to expire at the end of last year (but were ultimately renewed by Congress).
Wind-generated electricity met about 3.4 percent of of American demand in 2012, a figure that’s expected to reach 4.2 percent next year.
$120 billion spent on wind turbines since 2003 has increased wind power supplies 1,000 percent and created as much new electricity generation as could be provided by 14 new nuclear power plants.

In addition to federal tax credits, state-level renewable energy requirements are helping to spur wind’s growth, and the nuclear industry thinks that’s unfair:

Wind power has two advantages. Green energy laws in many states require utilities to buy wind energy under long-term contracts as part of their clean-energy goals and take that power even when they don’t need it. Wind farms also receive a federal tax credit of $22 for every megawatt-hour generated.

Thus, even when there is no demand for the power they produce, operators keep turbines spinning, sending their surplus to the grid because the tax credit assures them a profit. …

Meanwhile, nuclear and coal plants must continue running even as this “negative pricing” dynamic forces them to pay grid operators to take the power they produce.

“It is becoming more pronounced as more wind is coming on,” Christopher Crane, chief executive officer of Chicago-based Exelon Corp. (EXC), said in a phone interview.

If the push to “over-develop” subsidized wind continues, “there is a very high probability that existing safe, reliable nuclear plants will no longer be competitive and will have to be retired early,” according to Crane.

But Exelon, the biggest nuclear-power producer in the country, gets plenty of government help itself. A 2011 report from the Union of Concerned Scientists found that the nuclear power industry wouldn’t even be viable without government support: “more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage.”

And wind turbines don’t generate toxic waste or nuclear meltdowns.

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Walmart’s big push into groceries is not good for small farmers

by sssaa Posted on February 5, 2013

Walmart’s big push into groceries is not good for small farmers

By Susie Cagle

Walmart StoresYes it’s cheap, but …

When you think of Walmart, you probably think of cheap Chinese products and labor. But about two-thirds of the money Walmart spends to stock up its U.S. stores now goes for domestic products. That’s because, over the last decade, Walmart has moved aggressively into the grocery sector, and most of our food items are grown and produced here in the U.S. Ten years ago, groceries made up less than 25 percent of the retail giant’s sales; they now make up 55 percent. From CNN:

Experts say that this shift was no accident. The nation’s largest retailer adapted to fit the needs of its cash-strapped customers in the midst of a slow economic recovery. Shoppers today are more concerned with buying basics like milk and bread than electronics and apparel, many of which are foreign-made, and the retailer is shifting focus to keep up.

“Consumers have been shopping more for ‘needs’ than for ‘wants,’ and that’s why groceries are still the number one thing in their budgets,” said Craig Johnson, president of independent consulting firm Customer Growth Partners. “In return, Wal-Mart has become a needs-oriented store.”

Walmart’s crushing the competition, with higher sales than Kroger, Safeway, and SuperValu grocery chains combined. Its house “Great Value” brand boasts the biggest sales of any food brand in the U.S. To assert its dominance in the grocery sector, Walmart “leverages its scale” so its suppliers can pay lower prices to farmers, as investing site Trefis reports — which is bad news for small farmers across the country. Sure, god made a farmer, but god also made an American profit motive. From NPR’s The Salt blog:

Wal-Mart claims its emphasis on local has saved customers over $1 billion while helping farmers. But Wyatt Fraas, of the Center for Rural Affairs in Lyon, Neb., would like to see those benefits and cost savings broken down.

“Unfortunately, there’s so little definition and transparency about how that happens that we don’t really know if that happens or how that happens,” he said.

Of the eight farms highlighted on Wal-Mart’s locally grown web site, five are very large farms by the U.S. Department of Agriculture’s definition, with annual sales in the millions of dollars.

Walmart’s claim that it supports small-scale farmers just doesn’t add up. One of the retail behemoth’s suppliers says that all farms, big or small, “have to modify their operations” if they want to succeed in this new age of Walmart groceries.

But LaDonna Redmond, a senior policy associate with the Institute of Agriculture and Trade Policy in Minneapolis, says it’s a slippery slope.

“That’s the question: Will it actually benefit [farmers], or will the situation turn out to be one where the benefit really is transferred to Wal-Mart?” Redmond says.

Oh come on, NPR, you don’t need to he-said she-said on this one. We know who benefits: Walmart sold $244 billion of groceries last year.

Finally, there’s this greasy little nugget: While Walmart is claiming a new allegiance to local foods and sustainability, it’s also adding more fast-food franchises to its stores. Take that, small farmers.

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