The Layman’s Guide to News

Health care

The brief- The recently passed health care bill, known commonly as the Patient Protection and Affordable Care Act, contains a large variety of measures designed to reduce spending and increase coverage. In a March 21 New York Times piece, Rep. James Clyburn, it was “the Civil Rights Act of the 21st century”, while House Republican leader John Boehner declared “shame on us [for passing this bill.]” Whatever side you lean towards, here are the facts.

What it means for you- The most immediate effect for teenagers is that they will be able to stay on their parents’ insurance policy until they’re 26 years old. Previously, laws varied state by state. Most states did not require insurance companies to allow children to stay on their parents’ plans for that long.

One of the bill’s most important and bipartisan provisions that will take effect in 2010 is that insurance companies will not be allowed to deny coverage to children with pre-existing conditions. Insurers are also prevented from dropping people when they become ill. By 2014, that rule will be extended to adults.

For the time being, adults with pre-existing conditions will be able to join a temporary high-risk insurance pool . Basically, a group of people who are “high risk” (likely to collect on insurance payments) buy insurance in a group. By doing so, they’re able to get lower prices – similar to buying groceries in bulk.

In 2014, those high-risk pools would be replaced by health insurance exchanges, created and managed at the state level. The health insurance exchanges are actually marketplaces for people without insurance, and also small businesses. Theoretically, this will keep prices lower for those consumers.

The individual mandate – which says that most Americans must have health insurance – is one of the most controversial aspects of the bill, and will also take effect in 2014. For families without insurance, the fine will be either 1 percent of their income or $95 for each uninsured person (capped at $285) in the family. This mandate is also one of the foundations for the legal challenges to the bill. According to a March 23 Yahoo News article, attorneys general from 13 different states plan to challenge the bill.

Besides health insurance exchanges, several other measures are designed to provide health care for more Americans. Medicaid, government funded healthcare for the poor, will be expanded so people who are 33 percent over the poverty line can still apply for it. Tax credits will be given to employers with less than 25 employees who help pay for their employees’ health care.

Funding for the bill will come primarily from cuts in Medicare and Medicaid benefits, as well as payments to those who treat patients in those programs. More funding will come from tax on “Cadillac insurance plans”, which are simply high-cost plans.

Economy

The brief- The US recession was, and is, an extraordinarily complex series of events. Nevertheless, there are some widely agreed upon factors.

One major factor was the subprime loan crisis. In very simple terms, here’s what happened. As New  York Times business journalist Gretchen Morgenson said in an NPR interview, the crisis can be explained simply as “very lax lending and extremely large uses of borrowed money.”

In the real estate market, banks began to loan money to people with poor credit — people who may or may not have been able to pay back the loans — so that those people could buy houses. One reason for this is that, like in the Great Depression, the housing market was rising, and houses became more valuable. People who bought houses that they couldn’t afford assumed that, since prices usually went up, they could just wait for their houses to become more valuable. When their houses rose in value, they would be able to pay back the loan.

The downfall- For a while, this theory was accurate. But eventually, the prices stopped rising and leveled off. Homeowners worried that prices would go down, so they began to put their houses on the market. But far too many houses were put on the market. This created too much supply and not enough demand — there were more houses on the market than buyers, and so, just as the homeowners feared, their houses were worth less.

Thus, banks worried about their investment and began asking homeowners to pay back their loans.  Many of those homeowners either couldn’t sell their house at enough value or couldn’t sell it at all. Banks then became more reluctant to loan money, and continue to be reluctant to do so, which makes it difficult for the economy to grow.

Afghanistan

The brief- In a speech given by Pres. Barack Obama on Dec. 1, 2009 at U.S. Military Academy at Westpoint, he announced an additional 30,000 troops will be deployed in “the first part of 2010,” and troops will start to come home by July 2011. Obama defined the goal to “disrupt, dismantle and defeat Al Qaeda,” and outlined the three ways that goal would be met:

Partnership with Pakistan-Obama said in his address that we must recognize that the stability of Pakistan is tied to success in Afghanistan. This stability will be achieved by helping Pakistan to fight extremists and foster democracy.