May 14, 2014

QUOTE OF THE DAY

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Chicago Tribune: Quinn should be livid about Illinois incidents

The boast rotates at the top of his campaign website: Gov. Pat Quinn “restored integrity to Illinois government.” Aides say that after taking office in 2009 he vanquished a climate of corruption, the legacy of his criminal predecessors.

Did he? Today the public’s trust in Quinn is strained as never before. Federal and Cook County prosecutors are exploring a botched anti-violence program on which Quinn spent $54.5 million. The bipartisan Legislative Audit Commission has voted 10-1 to seek subpoena powers to investigate how that money was doled out. Separately, Chicago attorney Michael Shakman alleges in federal court that Quinn’s Department of Transportation broke anti-patronage rules to put political cronies in state jobs.

At best, these still unfolding issues smack of serious mismanagement. They suggest that Quinn, eager to make permanent the 67-percent personal income rate tax increase he had described as “temporary,” has a maddeningly casual attitude about spending Other People’s Money.

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WBEZ: Chicago suburbs grapple with their own pension crisis

On a recent drizzly weekday afternoon, Mt. Prospect Mayor Arlene Juracek climbs into the back seat of an official white village SUV.

She’s guiding a tour of her local pension crisis.

Behind the wheel, Assistant Village Manager Dave Strahl hangs a right down Forest Avenue, on the northern end of this upper middle-class northwest suburb. In a few seconds, he’s slaloming around potholes on a road that’s crumbling, awash in gravel.

“We fell behind in our street maintenance,” Juracek explains, leaning forward from the backseat. “So as your revenue sources are limited and your costs are escalating, you start to make the tradeoffs. … One of the most escalating costs is the pension costs.”

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Public Sector Inc.: Chicagoans: Let somebody else pay for pension mess

The headline on the story in the Chicago Sun-Times today says that voters don’t favor  Mayor Rahm Emanuel’s proposal to raise property taxes by $250 million to devote to the city’s severely underfunded pensions. But that’s not the most interesting information in the poll the story refers to,  if you ask me. What’s most startling about the poll is that Chicago voters, only one percent of whom approved of Emanuel’s idea, instead favored two other solutions, but both involve having someone else pay for the mess that Chicago and Illinois politicians, regularly reelected over the years by city residents, have wrought.

As I argued here, places like Chicago (and Detroit and Los Angeles) now experiencing pension debt stress have known about their woes for years, but politicians declined to do anything about it and voters kept voting them back into office. As the Civic Federation of Chicago was warning way back in 2000, and repeatedly after that:

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Fox Chicago: Financial disaster for Ill. students buried in college loan debt

Soaring college tuition plus chronic, high unemployment equals financial disaster for many people here in Illinois. It’s a serious issue for graduates who because of interest and penalties, now owe far more than they originally borrowed.

“Don’t take out private loans,” responded Hannah Moore when asked what her advice would be to college kids today.

Graduating in 2007 from a for-profit college, Hannah Moore owed $124,000 in student loans, and as the recession struck, had trouble finding work. She’s paid more than $60,000 since then, but her debt has grown to $151,000. On the current payment schedule, Moore said she’ll be 57 before the debt is finally settled.

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Washington Post: One health insurer wants to cut rates 6.8 percent. Another wants to hike them 26 percent. What gives?

The first Obamacare enrollment period barely just ended, and it’s already time for insurers in some states to file information on premiums for 2015. The 2014 rate filings last year became major political stories in a non-election year, so it’s safe to assume the same will happen this year. And the 2015 rates will give us a glimpse into the future of the health-care industry.

In Virginia, insurers are seeking rate increases ranging from 3.3 percent to 14.9 percent in the individual market. In Washington State the range is even bigger: Insurers have requested between a 6.8 percent rate decrease and a 26 percent increase in rates.Though most of Washington’s rate proposals were modest increases, averaging 8 percent, the 26 percent rate hike is the kind of thing that would be natural fodder for attacking the Affordable Care Act.

The 2015 rates will be an interesting study of how insurers are adjusting after the first Obamacare enrollment period, which marked a huge shift for the industry. People can no longer be denied coverage or charged more for a preexisting health condition, which meant insurers this year braced for an early rush of sicker customers while trying to attract healthier customers to balance out their risk pools.

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Wire Points: Obamacare in Illinois: by the numbers

The 2014 enrollment period for Obamacare health insurance was Oct. 1, 2013 to April 19, 2014. Open-enrollment for 2015 begins November 15th. Here’s a recap for Illinois:

Who signed up? The federal government reports more than 217,000 people in Illinois enrolled, with no differentiation made between those who bought and those who bought and paid. Of that total, 104,000 or nearly half enrolled between March 1st and April 19th. A new McKinsey survey reports a large majority of people signing up in the U.S. are now paying for their coverage (83%). The survey also notes only about 26% of enrollees nationally signing up for individual coverage were previously uninsured. If you apply that number to Illinois, of the new enrollees only about 56,000 were previously uninsured.

How many are federally subsidized? 168,000 or 77% of the Illinois enrollees purchased insurance with the help of federal subsidies.

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Bloomberg: The Little States That Couldn’t on Obamacare

The state of Hawaii’s insurance exchange for the Affordable Care Actseems to be a financial disaster:

The rollout of Hawaii’s health exchange was delayed and plagued with technical problems. The Connector was awarded more than $200 million in federal funds. It has used about $100 million. It signed up 9,217 individuals, plus 628 employees and dependents. To date, the Connector has raised only $40,350 in user fees, according to Nathan Hokama, the exchange’s spokesman.

The exchange was projected to have annual operating costs of $15 million, which works out to about $1,500 a person. Those costs will be lower than expected, because enrollment is lower, but presumably a significant chunk of its expenses are fixed costs, which don’t fall just because the number of users does. The legislature has allocated just $1.5 million, or $150 per user, which is a lot cheaper — but not necessarily enough to run the exchange.

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CARTOON OF THE DAY

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