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Discussing 'a $600 million dessert'

Updated: Friday, September 6, 2013
Discussing
KALAMZOO, Mich. (NEWSCHANNEL 3) - In the days after the State Senate narrowly extended Medicaid coverage to nearly a half-million Michigan residents, it became clear that Senators want poverty-stricken people to help pay for their own health care.

Tonight, in Tom's Corner, Tom Van Howe says that by turning down more than a half-billion dollars in Obamacare reimbursements over the first quarter of next year, and then asking poor people to help make up the difference, paints a picture of a remarkably insensitive group of politicians.

=====================

The Michigan Senate Minority Leader, Gretchen Whitmer, explained her Republican colleagues' opposition to medicaid expansion, which is a part of the affordable care act, this way:

"It's because (expansion) is associated with Obamacare and because the tea party in Michigan is the tail that's wagging the dog in this chamber."

And I think she's right.

There is no other logic to the Senate, 26 of whom are Republicans, and 12 are Democrats, in delaying enrollment from January 1st to April 1st.

By doing so they knew full well that they were turning their backs on $7 million a day in federal money to be used for Medicaid.

That's a total of more than $600 million. Six-hundred-million that the state loses.

That's not a number pulled out of the air by some hand-wringing alarmist. It comes from Jim Haveman, the Director of this state's Department of Community Health.

In fact, yesterday he said his estimate may, in fact, be too low.

Republican response? Well, we probably won't get that many enrolled right away, so that figure may be too high.

So what's their best guess? They haven't got one.

Senate Majority Leader Randy Richardville, who to his credit, helped form the tiny coalition to get the matter through the Senate last week, doesn't even want to talk about it.

"It's like we had this really big dinner," he said. "We got the dinner done and people are going to ask for dessert.
 
“We're going to skip the dessert on this one. We're done. The legislature in total has gone through enough with this issue."

Dessert? He thinks $600 million is dessert? Sounds more like a main course of steak, potatoes, and choice of vegetable for a half-million people to me.

And of course during that same 90 day period state hospitals will continue offering what will amount to roughly a quarter of a billion dollars in expensive emergency room care to poor people.

Much of the cost of that gets picked up by the insured who pay higher premiums, and some of it gets picked up by federal reimbursement. But reimbursements will be reduced as of January 1, because that's ostensibly when people start signing up for Obamacare.

Look, you don't have to be a fan of Obamacare to take the money. Obamacare—even though it's the law of the land—may not work.

But the money is there for the taking. It's just smart government.

Phil Power, a former University of Michigan Regent, now a writer for Bridge Magazine, said yesterday he sometimes wonders if Republican lawmakers in Lansing would even vote against something called "Obamataxcut." Good point.

And then the icing on the cake. The Senate wants poor people, not just the new ones, the ones just above the poverty line, but all of them, to pay 5 percent of their income in copay fees.

So in addition to rent, food, transportation, clothing, and other things they can't afford, they have to fork over 5 percent in copay fees.

After four years it'll go up to 7 percent. Nobody knows how it'll get collected.

But its an intimidating little add-on that'll probably keep any number of qualified people from breaking the door down to enroll.

And those fees, all by themselves, could actually block the Medicaid expansion itself. The Center for Medicare and Medicaid Expansion has to approve Michigan's legislation.

And an expert said yesterday she thought the CMS would be taking a close look at Michigan's bill before giving it an okay.

Forget dessert. We may lose the whole enchilada.

In this corner...I'm Tom Van Howe.

Business News

Last Update on October 31, 2014 17:47 GMT

CONSUMER SENTIMENT

WASHINGTON (AP) -- U.S. consumers expect better economic growth and rising incomes in the coming months, pushing a measure of confidence to a seven-year high in October.

The University of Michigan says that its index of consumer sentiment rose to 86.9 from 84.6 in September. That's the highest since July 2007, five months before the Great Recession began. Still, the index regularly topped 90 before the downturn.

Richard Curtin, the survey's chief economist, says that almost six in ten of the respondents said the economy has improved recently, the highest proportion in more than 10 years.

The measure is the second this week to show consumer confidence has reached the highest level since the recession. Greater confidence and more hiring could lead to faster spending and healthier economic growth.

CONSUMER SPENDING

WASHINGTON (AP) -- U.S. consumer spending fell in September, the first decline since January, as shoppers took a breather after a big spending spree in August. Income growth posted the slowest gain this year.

The Commerce Department says consumer spending dropped 0.2 percent in September. Income edged up 0.2 percent in September, the smallest monthly gain since a flat reading last December.

The spending decline followed a big 0.5 percent increase in August. In September demand fell for durable goods such as autos and for nondurable goods, a drop that partially reflected falling prices for gasoline.

Spending is closely watched because it accounts for 70 percent of economic activity. Economists believe September will be a temporary pause as continued hiring gains pushing up spending and the overall economy in coming months.

GASOLINE PRICES

NEW YORK (AP) -- The average price of gasoline in the U.S. hit $3 a gallon Friday, and should soon drop below the benchmark for the first time since December 2010.

The price at the pump fell 33 cents in October, thanks mainly to plunging oil prices, according to AAA.

Many exuberant drivers have taken to social media to post pictures of gas station signs with prices of $2.99 or lower. Drivers in South Carolina and Tennessee are paying the lowest prices, with an average of $2.75 a gallon.

Drivers in New York are paying the most in the continental U.S., at an average of $3.37. That's still 22 cents cheaper than a year ago.

Gasoline is cheaper than milk again. In September the national average price of milk was $3.73 per gallon.

EARNS-BIG OIL

NEW YORK (AP) -- Falling oil prices hardly seem to be bothering the two biggest U.S. oil companies, but things could get tougher in the coming months.

Exxon and Chevron leaned on strong performances from their refining operations to increase profits in the third quarter despite plummeting global oil prices.

The global price of oil fell 18 percent from the beginning of the quarter to the end, and it cost both companies. Revenue slipped at Exxon by 4 percent and at Chevron by 8 percent.

But low oil and natural gas prices make for low raw material costs -- and higher profit -- for refining and chemical operations, which turn oil and gas into fuels and chemicals. Profit at Exxon's refining and chemicals operations rose 38 percent compared with a year earlier, and Chevron's profit from its so-called downstream operations more than tripled.

Those results helped Exxon's overall earning rise 3 percent in the quarter to $8.07 billion. Chevron's earnings rose 13 percent to $5.59 billion.

NISSAN-AIR BAG RECALL

DETROIT (AP) -- Nissan says it's recalling more than 1,800 Infiniti SUVs in the U.S. for an air bag problem that could send shrapnel into the passenger compartment.

The recall covers the QX56 SUVs from 2013 and the QX80s from 2014. The company says inflators made by Takata Corp. were built with an incorrect outer baffle part. That can cause pressure to build up, and the inflators can rupture if driver's side air bags are deployed.

Nissan has no reports of injuries from the problem. It was discovered after General Motors recalled 33,000 Cruze compact cars for the same problem in June. The Infiniti recall is part of a larger global recall of 260,000 Nissans announced last week.

Takata says the recall is separate from another one affecting 8 million vehicles in the U.S.

EUROPE-ECONOMY

FRANKFURT, Germany (AP) -- Inflation has crept higher in the 18 countries that use the euro but the rise to 0.4 percent in the year to October is unlikely to offer much relief to the European Central Bank as it tries to boost a weak economy.

The official figure released Friday was up from 0.3 percent the month before.

The European Central Bank is under pressure to give the eurozone another dose of stimulus measures in coming months because inflation is so low and growth so weak. There are fears the eurozone could even fall into outright deflation, a crippling downward price spiral.

Core inflation, a key measure because it excludes volatile food and energy prices, fell to 0.7 percent from 0.8 percent.

The bank's goal is to keep inflation just below 2 percent.

BRITAIN-RBS

LONDON (AP) -- Royal Bank of Scotland, which is majority-owned by the U.K. government, has set aside 400 million pounds ($639 million) to cover potential fines arising from international investigations into alleged manipulation of foreign currency trading.

The total represents over half the 780 million pounds the bank earmarked for "conduct and litigation costs" in third-quarter earnings released Friday.

The results show the bank, which was bailed out by the government during the 2008 financial crisis, swung back to profit during the July-September period. Its net income of 896 million pounds follows an 828 million-pound loss last year.

CEO Ross McEwan says the bank knows it has "a long list of conduct and litigation issues to deal with and much, much more to do to restore our customers' trust in us."

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