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.

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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.

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Last Update on September 03, 2015 17:40 GMT

UNEMPLOYMENT BENEFITS

WASHINGTON (AP) -- More Americans applied for unemployment benefits last week, but applications remain at historically near low levels in a positive sign for the U.S. economy amid a broader global slowdown.

The Labor Department says weekly applications for unemployment aid rose 12,000 to a seasonally adjusted 282,000. The four-week average, a less volatile measure, increased 3,250 to 275,500. That average has fallen 9.2 percent over the past 12 months.

The relatively meager number of layoffs generally corresponds with strong hiring levels in the monthly jobs report being released Friday.

Economists expect that employers added 207,500 jobs in August as the unemployment rate dips to 5.2 percent from 5.3 percent. Hiring at that pace suggests the U.S. economy has been insulated from uncertainty about China's financial health that sparked a recent stock sell-off.

ECONOMY-SERVICES

WASHINGTON (AP) -- U.S. services companies expanded at a healthy pace in August, lifted by robust consumer spending resulting from steady job gains.

The Institute for Supply Management says that its services index slipped to 59 from 60.3 in the previous month. July's reading was the highest in a decade, and any reading over 50 indicates expansion.

The index remains at a high level despite the decline and suggests that Americans have been spending freely at retail stores, hotels, restaurants and other firms that make up the index. The ISM is a trade group of purchasing managers. Its services survey covers businesses that employ 90 percent of workers.

A measure of sales and production fell one point but remained at a solid level of 63.9. A gauge of new orders also fell slightly.

MORTGAGE RATES

WASHINGTON (AP) -- Average long-term U.S. mortgage rates rose this week after a sharp drop the previous week, as global markets continued to whipsaw amid economic disruption in China and uncertainty over Federal Reserve interest-rate policy.

Mortgage giant Freddie Mac says the average rate on a 30-year fixed-rate mortgage increased to 3.89 percent from 3.84 percent a week earlier. The rate on 15-year fixed-rate mortgages advanced to 3.09 percent from 3.06 percent.

The rates remain well below their levels of a year ago, when the 30-year loan rate was 4.10 percent and the 15-year rate was 3.24 percent.

Mortgage rates have been tracking the yield on the 10-year Treasury bond, as investors have fled turbulent stock markets in recent weeks for the safety of U.S. government bonds, and then markets have sharply recovered.

TRADE GAP

WASHINGTON (AP) -- The U.S. trade deficit fell in July to the lowest level in five months as exports posted a small gain while imports declined, reflecting a big drop in shipments of consumer goods such as cell phones.

The Commerce Department says the deficit narrowed to $41.9 billion in July, a 7.4 percent decline from a June imbalance of $45.2 billion. Exports were up a small 0.4 percent to $188.5 billion, helped by stronger sales of U.S.-made autos and machinery, while imports declined 1.1 percent to $230.4 billion.

So far this year, the deficit is running 3.6 percent above last year's level, reflecting weaker export sales. The concern is that U.S. growth will be hurt by further declines in exports, reflecting a stronger dollar and overseas weakness in nations such as China.

EUROPE-ECONOMY

FRANKFURT, Germany (AP) --

The European Central Bank says it's ready to give the eurozone a bigger dose of stimulus should inflation across the 19-country bloc fail to pick up, President Mario Draghi said. Along with lower interest rates, the ECB is pumping 60 billion euros a month into the economy through purchases of government and corporate bonds. The program is slated to run at least through September 2016.

European markets jumped on the news. Germany's DAX added 2.3 percent, France's CAC-40 rose 2.1 percent and U.K.'s FTSE 100 rose 1.6 percent.

The stimulus is intended to help get consumer price inflation back toward the ECB's target of just below 2 percent. In the year to August, it stood at 0.2 percent. Draghi said it could go negative in coming months following the recent drop in oil prices.

HEALTH DISCRIMINATION-TRANSGENDER

WASHINGTON (AP) -- The Obama administration says it wants to end discrimination against transgender people throughout the health care system.

The new protections are part of a much broader proposed regulation released Thursday by the Department of Health and Human Services.

The long-delayed rule amounts to a manual for carrying out the anti-discrimination section of President Barack Obama's health care law.

That law prohibits bias in medical care on the basis of race, color, national origin, sex, age, or disability. Those underlying provisions are in effect.

The latest proposal clarifies that gender identity is covered under the law's ban against sex discrimination.

Hospitals that accept Medicare would have to comply with the rule, as well as most doctors.

The rule doesn't require insurers to cover gender transition surgery.

TECH JOBS-SETTLEMENT

SAN JOSE, Calif. (AP) -- A federal judge has approved a $415 million settlement to resolve a class-action lawsuit alleging Apple, Google, Intel and two other Silicon Valley companies illegally conspired to prevent their workers from getting better job offers.

The settlement will pay more than 64,000 technology workers about $5,800 apiece.

The approval granted Wednesday by U.S. District Judge Lucy Koh ends a lengthy legal saga that exposed internal emails that cast former Apple CEO Steve Jobs in an unflattering light. Koh had rejected an earlier $324.5 million settlement of the case reached last year as inadequate.

The lawsuit accused Apple, Google, Intel and Adobe Systems of forming a secret cartel that agreed not to recruit each other's workers. Lawyers for the employees argued the pact illegally suppressed the wages of the affected technology workers.

INTERNET SEX TRAFFICKING

SEATTLE (AP) -- The Washington Supreme Court has ruled in favor of three young girls who sued Backpage.com after they were sold as prostitutes on the site.

Thursday's ruling says the Communications Decency Act does not protect Backpage from state lawsuits because of allegations that the company didn't just host the ads, but helped develop the content.

The lawsuit claimed Backpage.com markets itself as a place to sell "escort services" but actually provides pimps with instructions on how to write an ad that works.

Backpage had filed a motion to dismiss the suit. A lower court denied that request and the company appealed, saying it was immune from liability.

But the Supreme Court says the case should proceed because the girls have alleged facts that, if proved, would show that Backpage helped produce illegal content.

GULF OIL SPILL

NEW ORLEANS (AP) -- BP is going back to a federal appeals court in a case involving businesses' damage claims from the 2010 oil spill in the Gulf of Mexico.

The oil giant wants restitution of some of the money it paid in claims to businesses as part of a 2012 settlement. BP eventually won a revision in the way losses were calculated after arguing the settlement claims administrator wasn't correctly matching business's revenues and expenses.

Now, BP is seeking restitution and interest on some of the money paid out prior to October 2013 -- before the revision was approved. In court documents, the company says hundreds of millions of dollars are at stake.

A three-judge panel of the 5th U.S. Circuit Court of Appeals will hear arguments Thursday. A ruling isn't expected immediately.

MISSISSIPPI RIVER-OIL SPILL

Part of Mississippi River closes; 2 boats collide, spill oil

PADUCAH, Ky. (AP) -- The U.S. Coast Guard says part of the Mississippi River has been closed as crews investigate and clean up an oil spill caused by the collision of two tow boats.

The Coast Guard says the collision Wednesday evening near Paducah, Kentucky, damaged at least one barge carrying clarified slurry oil. The cargo tank was ruptured, causing an unknown amount of oil to spill into the river.

Officials say the river is closed from mile markers 938 to 922.

The Coast Guard said Thursday that the maximum amount of oil that could have spilled is 250,000 gallons. The agency says it's working with the barge owner and an oil spill response organization to determine the exact amount of oil that poured into the water.

The cause of the collision is being investigated.

GREEN ENERGY-PONZI SCHEME

PHILADELPHIA (AP) -- Prosecutors have charged three people with running a $54 million Ponzi scheme they say was built on promises of a green energy technology that would turn trash into fuel that they never developed.

Federal prosecutors in Philadelphia unsealed an indictment Thursday against 34-year-old Troy Wragg, of Georgia, 32-year-old Amanda Knorr, of Pennsylvania, and 52-year-old Wayde McKelvy, of Colorado. They were charged with wire and securities fraud and conspiracy.

It wasn't immediately clear if they had attorneys who could comment on their behalf.

Prosecutors say they lied to investors that their "biochar" technology and "carbon-negative" housing in Tennessee made millions, but they had almost no earnings and used the money to repay earlier investors and for themselves.

Wragg and Knorr were ordered to pay $37 million each after losing a Securities and Exchange Commission civil suit in 2012.

OVATION GUITAR FACTORY

HARTFORD, Conn. (AP) -- A Connecticut factory that produced Ovation guitars for nearly a half century before closing last year will be making the renowned instruments once again, thanks to factory employees' efforts.

Fender Musical Instruments Corp. closed the New Hartford facility in June 2014, citing market conditions, while continuing to make them in Asia. More than 40 workers lost their jobs.

Darren Wallace was among a few workers who were retained by Ovation. He kept up part of the plant on his own time with the hope it would reopen someday. Fender sold Ovation in December to Drum Workshop of Oxnard, California.

The new owners have decided to resume production at the plant with Wallace and five other workers, who will be turning out new instruments in a few weeks.

STUDENT LOAN DEBT

WASHINGTON (AP) -- Almost 12,000 students are asking the federal government to forgive their college loan debt, asserting their school either closed or lied to them about job prospects.

The figure represents an unprecedented spike in what's called a "borrower's defense" claim following the collapse Corinthian Colleges for-profit college chain, which had become a symbol of fraud in higher education. Under higher education law, students who believe they are victims of fraud can apply to have their loans discharged.

Officials say they know of five or so such cases in the past 20 years; some 4,140 have been filed since the Education Department's June announcement that it would make the debt-relief process easier.

Officials say an additional 7,815 Corinthian students have filed claims for debt-relief because their school closed.

GENERAL MILLS-GREEN GIANT

MINNEAPOLIS (AP) -- General Mills is selling its Green Giant and Le Sueur vegetable businesses to B&G Foods Inc. for about $765 million in cash.

The transaction includes the Green Giant and Le Sueur businesses in the U.S., Canada and some other markets.

General Mills will still run Green Giant's European business and certain other export markets under license from B&G Foods.

The food company said Thursday that it plans to use net proceeds from the deal to lower debt and buy back stock.

General Mills Inc. anticipates the transaction adding about 5 cents to 7 cents per share to fiscal 2016 earnings, excluding transaction costs and a one-time gain on the sale.

The deal is targeted to close by year's end.

BANGLADESH-FACTORY FIRE CHARGES

DHAKA, Bangladesh (AP) -- A court in Bangladesh's capital indicted the two owners of a garment factory and 11 others on homicide charges Thursday for a 2012 fire that killed 112 workers.

It is the first time that factory owners have been prosecuted in Bangladesh's lucrative garment industry, the world's second largest after China.

Delwar Hossain and his wife Mahmuda Akter, the owners of Tazreen Fashions Ltd., pleaded not guilty to the charges. The factory produced clothing for large international retailers including Wal-Mart.

Prosecutor Mizanur Rahman said the judge also indicted 11 factory managers and security guards. Eight of the accused were present in court while five remain at large and will be tried in absentia. The trial will begin Oct. 1, Rahman said.

Prosecutors argued that the owners and the others were responsible for the deaths of the workers because the factory outside Dhaka had no emergency exits and the main exit was locked when the fire broke out in November 2012. The defendants' lawyer argued that the fire was an accident and that they should not be indicted.

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