This Issue... ■■ MONEY Your Electricity Costs Get ready for the “Smart Meter” ■■ HEALTH Cuckoo for Cocoa Powder ■■ heard at the water cooler Attitude is Everything ■■ Big Government Tried... And Failed
There’s a New Hybrid in Town
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ove over Toyota Prius, you’ve just been passed! Ford’s recently unveiled entry into the hybrid utility vehicle market, the C-Max, is causing a stir in the market for fuel efficiency. October, 2012 marked the first full month of sales for the C-Max, and the results were outstanding. With nearly 3,200 sales, C-Max outsold the Prius by a whopping 15%, or more than 400 units. So, what are the qualities of the C-
Max that are causing this shift in the hybrid market? Well, fundamental fuel economy is the likely driver, with the C-Max offering an EPA rating of 47 mpg for combined city/highway driving, compared to the Prius ratings of 44 mpg (city) and 40 (highway). But that’s not all! Preliminary reports from owners are that the C-Max is fun to drive, with an inline four cylinder power plant that puts out substantially more horsepower than the lighter Prius (188 vs. 116). Other positives cited by owners are the panoramic view afforded by the relatively huge windshield and the tall greenhouse, short hood body style, continued on pg. 2
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News vol. 1 • issue 2
Healthcare Fees Impact Middle Class
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our medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health care overhaul. The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers. Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers. “Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it,” said Sheaks, a principal at Buck Consultants, a Xerox subsidiary. Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee. The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines. Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems.
Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014. The program “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all,” the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to “contributions” without detailing the total cost and scope of the program. Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees. The $25 billion fee is part of a bigger package of taxes and fees to finance Obama’s expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8% tax on their investment income. But the insurance fee had been overlooked as employers focused on other costs in the law, continued on pg. 4
money
Your Electricity Costs Get ready for the “Smart Meter”
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any electric companies are radically changing the way your use of electricity is measured. Instead of the old fashioned mechanical meter with the spinning dial, plans are to plug you into an Advanced Metering Infrastructure that has at its core something called a “smart meter.” These devices are electronic rather than mechanical, and provide for the real-time collection of usage data in the home. The meters also contain communication capabilities that allow information to be transferred from the home to the utility and vice versa, either in real time or according to a schedule. This is good news for the consumer. Your monthly energy costs are a large portion of your household budget. Ratepayers often look at their energy bills with a feeling of helplessness, attributing the costs to “just the way it is.” Conversely, industry trade groups have for years touted the fact that energy, particularly electricity, is relatively inexpensive compared to the rate of growth in areas like food, gasoline, and medical costs. For example, Edison Electric Institute (EEI) reports that retail electricity prices grew at an average annual rate of 1.1% during 1985-2000, well below the general rate of inflation. Since 2000, electricity rates have been growing at 2.5% per year, but that’s still only slightly higher than the general rate of inflation since that point. But a glance at your electric bill shows costs going up. EEI, in a report titled “Rising Electric Costs: A challenge for consumers, regulators, and utilities,” put it this way: “While electric utilities make continuous efficiency improvements…, the bottom line is that rising costs are becoming inevitable throughout the United States.” Enter the Smart Meter. Utility companies indicate that the “smart meter” can help lessen the impact of rising electricity costs in a number of ways. It gives the consumer the ability to control their electricity costs by using energy at the most affordable times. You will be able to sign up for real-time pricing,
which would enable a homeowner to set parameters for when, and at what price, electricity would be used (electricity is cheaper at certain times of the day, when the power grid is not as busy). Along this same line, the “smart meter” would enable the collection and display of device-level energy consumption information. Following the adage that “you need to be able to measure it in order to manage it,” simply knowing what each appliance is consuming will allow homeowners to change their usage patterns, moving high-use items like dishwashers, clothes dryers, etc. to lower pricing periods, avoiding periods of peak prices. It will take some getting used to, but utilities are confident that the “smart meter” can go a long way toward helping their customers help themselves.
There’s a New Hybrid in Town continued from pg 1
as well as the expanded cabin with its slightly increased front and rear headroom. To be fair to the Prius, though, these improvements in inside dimension are at the expense of cargo volume, which is down by about ten cubic feet. In terms of price, the 2013 CMax carries a base price of roughly $26,000, slightly under the lowest price Prius V. Overall, car enthusiasts seem to agree that the C-Max is a strong addition to Ford’s product line—one that will help the auto maker achieve its goal of becoming a genuine leader in the hybrid market. Likewise, the C-Max appears destined to continue Ford’s recovery as a premier car company, as evidenced by reports that 70% of C-Max purchasers are firsttime Ford buyers.
Health
Cuckoo for Cocoa Powder
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arvard researchers were astonished to discover that the Kuna Indians, living on an island off of the coast of Panama, had virtually no signs of high blood pressure. How is this possible when nearly one out of three adults in America suffer from hypertension? The Kuna's secret: drinking three to four cups of cocoa a day. The link between cocoa consumption and blood pressure was first discovered in 1944 during a study of the Kuna Indians. Less salt intake, diet other than cocoa intake, and genes were ruled out when studies proved that Kuna tribe members who moved off the island into Panama City experienced elevated blood pressure levels. Cocoa drinking in Panama City is less common. Meanwhile their island counterparts
continued to live hypertension free. How is this possible? Flavanols are a unique molecule found in cocoa products such as cocoa powder, dark chocolate, and to a lesser extent, milk chocolate. Flavanols are linked to cardiovascular health by improving blood flow via increased production of nitric acid. Is it safe to try this remedy at home? Of course! This is a preventive measure people of all ages can enjoy. Just remember: “Can one desire too much of a good thing?” (Shakespeare) Absolutely! So try to stick with the dark, unsweetened chocolate or cocoa powder as much as possible in order to keep your calories and fat intake down. If consumed in moderation, cocoa can be a delicious part of a healthy and balanced diet.
Big Government Tried... And Failed
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he monumental, government-manufactured crisis in Detroit is a dire warning for the rest of the country. The billions spent on housing programs, welfare and giveaways has proven to be an abysmal failure. A once great American city, Detroit has become a nightmare due to corruption and ineffective government policies. It’s lost more than half of its population in the last 60 years. Beautiful buildings in downtown Detroit are completely abandoned and have been for decades. The people of Detroit have lost the will to do things on their own. Expectations that government can cure all the ills of society are pipe dreams. What Detroit and the country needs is not more dependence on Washington, but less. Effective leadership should empower people to make it on their own. Handouts and entitlements only stifle ambition. We must take a serious look at Detroit and choose a better path.
Above: The decaying Michigan Central Train Station, as seen from Roosevelt Park in Detroit. Photo: Albert Duce
heard at the water cooler
Attitude is Everything
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en small business owners were asked the following question: What is the single most important quality of your best employees? Surprisingly, all 10 business owners gave the same answer: a Positive Attitude. While many business owners hire based on
ability and experience, a positive attitude will often help propel your career path in a positive direction. “It’s refreshing to work with people who go about their work with a positive attitude. These are the people I surround myself with. These are the people I need. Associates who
don’t see obstacles as problems, but rather see them as opportunities, and in doing so, infect the company with a contagious desire to be the best that they can be” - Chris Marro, CrisRay Printing
Healthcare Fees Impact Middle Class continued from pg. 1
including fines for medium and large firms that don’t provide coverage. “This kind of came out of the blue and was a surprisingly large amount,” said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues. Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year. America’s Health Insurance Plans, the ma-
jor industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama’s law take effect. But employers already offering coverage to their workers don’t see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars. “It just adds on to everything else that is expected to increase health care costs,” said economist Paul Fronstin of the nonprofit Employee Benefit
Research Institute. The fee will be assessed on all “major medical” insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That’s because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer. The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63. It will phase out completely in 2017, unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits, decides to extend it.
“There are two lasting bequests we can give our children: One is roots, the other is wings.” - Hodding Carter
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