ObamaCare To Result In Increased Costs For Small Groups Next Year (And For Large Groups In 2015)

For newbies, there are three parts to ObamaCare:

• the employer mandate: delayed for one year
• the individual mandate: (sort of) delayed for one year
• taxes on medical devices (and a whole bunch of other things, including oil royalties)

The one-year delay in the employer mandate allowed insurers to see how much this was going to cost them (previously reported on the blog; it's now being reported -- see linked story below). [That's why it will individual premiums will actually be increased if customers/insurers agree to "re-issue" canceled polices per President Obama's announcement last week.

For North Dakotans: group plans will increase by as much as 30% next year.

Increasing demand for health care services and new provisions under the Affordable Care Act will combine to drive up insurance costs for many individuals and small groups next year.

Beginning Jan. 1, Blue Cross Blue Shield of North Dakota has approval to increase premium rates for group plans.

Generally, group plans that were in place when the health reform law was passed in 2010 and meet the law’s provisions will see increases ranging from 10 to 20 percent, according to the insurer, which covers about 400,000 North Dakotans.

For small groups, those that cover fewer than 50 employees, the increases are sharper and range from 20 to 30 percent.

The "increasing demand for health care services" is a direct result of ObamaCare. 

What's not being reported yet is that group plans will eventually subsidize individual health care plans.

The article does not report on cost shifting by employers.

The article goes on:

The increases will depend largely on individuals’ previous coverage. Those who had coverage with comprehensive benefits will not see dramatic changes, while those with leaner-benefit, high-deductible plans will see sharp rises, Keefer said.

For small groups, those with 50 or fewer employees, the average increase will be about 30 percent, Keefer said.

The increases are largely due to the Affordable Care Act, said Jim McManus, a Blue Cross Blue Shield of Minnesota spokesman.

“This is all being driven by changes the law is bringing to the market,” McManus said. “Price is an indicator of those changes.”

Thousands of individual insurance customers have received notices informing them that their coverage is being discontinued because it does not meet coverage and affordability standards under the Affordable Care Act, the reform law also known as Obamacare.

I Knew It Was Big; I Did Not Know It Was This Big

I was aware of Warren Buffett's foray into XOM. I did not know it was his biggest stock "bet" in two years.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you might have read here.

Bloomberg reports: Berkshire Hathaway reported a stake in Exxon Mobil valued at about $3.7 billion as Warren Buffett’s company disclosed its largest new holding since IBM in 2011.

Rail Cars And The Bakken; Barron's Posts A Warning

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here. 

A reader caught this story in Barron's over the weekend: railcar maker may have overbuilt. This is a long two-pager article; well worth the read.

As oil gushes from North Dakota and Western Canada, far away from most pipelines and refineries, railroads are carrying record volumes of crude in trains a hundred tank cars long. One of the best investment plays on this rising crude-by-rail traffic has been the shares of railcar manufacturers, whose backlog on tank-car orders happily stretches out to 2015. In the four years since the recession's bottom, the stocks of Trinity Industries, American Railcar Industries, and Greenbrier Cos. have more than tripled, outpacing the S&P 500's 60% gain. The tank-car upturn attests once more to the smarts of guys like Warren Buffett, whose Berkshire Hathaway owns industry leader Union Tank Car, and Carl Icahn, whose Icahn Enterprises controls American Railcar.

But the railcar makers may have become too successful for their own good.

I did not know both Warren and Carl owned/controlled two railcar makers. the Keystone XL story gets curiouser and curiouser. [Wow, I love to blog/connect the dots. A big "thank you" to the reader for alerting me to this Barron's story.]

It should be noted that RBN Energy has had many stories related to rail cars and CBR. And, of course, I mentioned that the most recent issue of BloombergBusinessweek had a short article on CBR and Warren Buffett.

Three Dots To Connect -- And, Yes, It's A Bakken Story

George Soros recent equity position.

American Airlines -- US Airways merger.

East coast refineries.

The most recent Bloomberg Businessweek issue -- the "special issue" -- did provide an "aha" moment for me.

On page 126 of that issue: a great graphic of "the fallout from fewer carriers."

How many US national carriers will remain after the AA - US Airways merger? Four. And one of the four might be considered a regional airline by some folks, albeit a "huge" regional. Here are the four: United, Delta, American Airways, and Southwest.

Four.

The George Soros connection.

Now the Delta connection.

WTI: $93

LTO: $71

I can't do the math but I can connect the dots.

Monday: The Unlimited Liability Facing Health Insurers; Leonid Meteor Shower Peaks Tonight; Doris Lessing Dies

Active rigs: 184

RBN Energy: How all that crude will be distributed across the Gulf Coast (a continuation of the series)

We estimate that over 4 MMb/d of new crude transportation capacity will have opened up to the Texas Gulf Coast by the end of 2015 – to a region with just under 3.7 MMb/d of nameplate refining capacity. With crude exports restricted by Federal law, some of that crude is going to need to find a home – most likely at Eastern Gulf refineries in Louisiana and Mississippi. Today we look at how some of the incoming flood of crude could be redistributed across the Gulf Coast region.

Three companies, including MDU announce increased dividends/distributions.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

The Wall Street Journal

Military eyes cuts for military benefits.

Off the table for now are changes in the retirement system. Because the military hopes to allow current service members to keep their existing retirement plans, it will be two decades until any savings from changes in military retirement are realized, making shifts in the program less urgent. 

We've been blogging about this from the beginning: ObamaCare's death spiral and high-risk patients. Now a front page story in TWSJ: high-risk patients fuel more health-law worries.  For now, some states are keeping the pools, but long-term will probably result in higher rates for everyone. Good news for insurers for now.

So-called high-risk pools for people rejected by commercial health-insurance companies were supposed to be largely phased out when President Barack Obama's health law kicked in. Instead, they are gaining a brief second life in some states due to the problems with the federal health-insurance exchange created by the law. The development may represent short-term good news for the law, because it would keep some people with costly medical conditions out of the new policies, at least temporarily. But it adds to the uncertainty for insurers, analysts say, increasing concerns that could cause rates to rise for everyone next year.

Health-law fracas leaves Congress in limbo. 

Furor over the botched implementation of President Barack Obama's health-care law has allowed Congress to engage in a familiar activity: procrastination. Prospects already were dim for substantial legislation in the dwindling days of 2013, but the headline-grabbing fights over the federal health exchange and canceled insurance policies have given House Republicans no incentive to change the subject. The issue has drowned out talk of an immigration overhaul, taken the focus off high-stakes budget talks and stalled efforts to rewrite the tax code.

Nobel author Doris Lessing dies at age 94. 

Insurance costs may hurt customer spending -- Wal-Mart. This may be the big story in 2014. Yellen doing everything she can to prevent a downturn in the US recovery due to high health care insurance premiums.

Bloomberg's news division to lay off about 50 employees. What interesting timing, see my post on BloombergBusinessweek from yesterday. There was one interesting "dot-to-connect" in that issue; if I remember, I will post it later. It actually has something to do with the Bakken.

The Los Angeles Times

The Leonid meteor shower peaks tonight. The Leonid meteor shower occurs each November when the Earth passes through a stream of debris left in the wake of comet Tempel-Tuttle. The icy comet orbits the sun once every 33 years, shedding dust and detritus as it zips through space. When bits of that detritus burn up in our planet's atmosphere, we see meteors. Apparently, the viewing might be in prime time, 7:00 to 10:45 pm.