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Sister Survivors

The Detroit News story, January 2018 “What MSU Knew” details when the abuse started. For twenty years, the female athletes who engaged in the Michigan State Gymnastics program complained of Dr. Larry Nassar to university representatives. MSU President Lou Anna Simon was amongst those who were informed and had known of the 2014 Title IX complaint and police report filed against an unnamed physician.

According to university records and victim’s accounts, amongst those who knew of the abuse were athletic trainers, coaches, a university police detective, the local police and an official who is now MSU’s assistant general counsel. Larissa Boyce is believed to be the first to complain in 1997 to the head Gymnastics Coach Kathie Klages at MSU. Klages then told Larry Nasser, no one else, and advised Larissa there could be serious consequences in filing a report. A fellow female Gymnast had also confirmed she had also been touched while being treated by Nasser.

A runner, Christie Achenbach told her coach Kelli Bert about Nassar’s behavior in 1999 while seeking treatment for a hamstring injury. Christie recalled coach Kelli Bert words; “he is an Olympic doctor and he should know what he is doing.” According to Kelli Bert, she does not remember the conversation and did not know Nasser was an Olympic doctor.

Spartan softball player Tiffany Thomas Lopez went to Nassar to be treated for lower back pain. She later told MSU Trainer Lianna Hadden of Nassar’s treatment regime. Hadden advised Tiffany to talk to MSU trainer Destiny Teachnor-Hauk. Destiny told Tiffany she could file a report if she was uncomfortable; but, there may be consequences.

Two years after Tiffany’s abuse, Jennifer Rood Bedford complained to Destiny Teachnor-Hauk about being uncomfortable with Nasser’s treatment. As told by Jennifer, Hauk said “that filing a report would involve an investigation, making an accusation against Nassar, and requires a statement that I felt what Nassar did was unprofessional or criminally wrong.” Rood could not say with certainty the treatment was wrong or unprofessional.

The stories being told by female athletes stopped with those who should have been advocating for them. Larissa Boyce had hoped this would come from a female coach. Over seventeen years, Destiny Teachnor-Hauk claims she never heard a complaint about Larry Nasser. The system failed, it failed at the coach/teaching level and not with the athletes who sounded the alarm of sexual abuse at the hands of a doctor. The abuse also happened outside of the MSU system.

The first to publicly testify against Nassar about abuse outside of MSU, Kyle Stephens said he began molesting her in 1998 by exposing himself in the basement of his home. She was 6. In 2004, she told her parents who told MSU Clinical Psychologist Dr. Gary Stollak. The parents met with Nassar and Stollak. Nassar denied everything and her parents believed the doctors. A retired Dr. Stollak testified he had a stroke in 2016 and could not remember any details of the meeting.

Upon leaving the second visit for back pain with Nassar in the Spring of 2004, Brianne Randall-Gay went to local police. She told them he had touched her bare breast and put his hand between her legs. A few weeks later, police asked Randall-Gay and her parents to meet with Nassar. Randall-Gay‘s parents went without her. Nassar said and the police confirmed what she experienced was a legitimate treatment.

Doctors and the police did not believe the young women and girl’s complaints.

Lindsey Lemke is a “Sister Survivor,” the name taken by the 256 survivors of Larry Nassar’s physical sexual assault. She and the others spent the last 18 months fighting “not just for justice for Nassar;” but, they also fought for accountability, “the accountability of Michigan State University who enabled Nassar’s continued abuse” by not reacting.

April of this year found Lindsey attending a dinner at Michigan State, an Athletic Gala sponsored by the university hosts and meant to honor student athletes having a GPA of 3.0 or higher. Lindsey was happy to have a night out celebrating her athletic accomplishments. It turned to a night of frustration and anger as the host talked about the disappointment the Michigan Spartans experienced over the last 16 months because of one man. And no, they were not going to let him bring it down for the University and the remaining Sister Survivors at the university.

Lindsey grew angry as she listened to the comparison being made by the speaker about the hard time MSU was having answering questions and explaining for 16 months about Nasser’s physical sexual abuse of Lindsey and the other female athletes. As explained in The Detroit News, the abuse continued over 20 years. It continued even though Lindsey and the other athletes went to their coaches and others . . . nothing was done.

A false equivalency was being made by the speaker as if the spotlight on Michigan State was the equivalent of the sexual abuse, or worse, then what the women athletes experienced, and endured again as they told their stories in public. The speaker spoke as if there could be an equivalency to each experience endured . . . making the University’s reputation more important than the sexual abuse at the hands of a MSU employee. There was no apology being made to Lindsey Lemke or her Sister Survivors.

In the same week as the dinner and in a Jane Doe investigation, Michigan State University allowed a female witness to be identified as a complainant. This can be a violation of federal law in response to a Title IX lawsuit.

A federal lawsuit filed Monday alleges a former female student was raped by three unnamed members of the school’s basketball team in April 2015. Following that alleged assault, the woman said the school’s counseling center discouraged her from reporting, telling her to “just get yourself better.”

The university responded by posting a detailed response online, raising concerns about student privacy.

Again, MSU failed to take into regard the importance of a student’s safety, their privacy, and the care required to protect them while answering various questions and reports. MSU acts according to its own best interest at the expense of its students.

Between 1997 and 2015, young women, girls, and older women alike raised concerns about Nassar’s treatments. It started to come to a head when Amanda Thomashow filed a formal Title IX complaint about Nassar in 2014. The complaint still did not result in the removal of Nassar.

Over 20 years, Nassar abused hundreds of women while at MSU. The University, its athletic department, and it’s president would continue to deflect responsibility for not taking action. In her letter of resignation, Lou Anna K. Simon the President in charge 13 of the 20 years in her letter of resignation stated:

“I have been told it is virtually impossible to stop a determined sexual predator and pedophile, that they will go to incomprehensible lengths to keep what they do in the shadows. As tragedies are politicized, blame is inevitable. As president, it is only natural that I am the focus of this anger.”

The State of Michigan appointed former Governor John Engler as the interim president after former President Lou Anna K. Simon was asked to resign by the Board of Trustees. She is still being paid a $750,000 salary for one year and will return to teaching at $500,000 annually. The same Board of Trustees failed to take action in an earlier 2014 Title IX investigation complaint about Nassar is still in place. The abuse was allowed to continue. MSU maintains it did nothing wrong during that investigation the 2014 filing.

John Engler was the political choice;

I will move forward as though my own daughters were on this campus.”

were the words Engler used to help build trust with the MSU Sister Survivors and the public.

Instead of helping to provide greater protection for MSU women and Nassar’s victims, Engler personally campaigned in the legislature against bills meant to increase the statute of limitations for victims of sex abuse and make more authority figures mandatory reporters of child sex abuse. The 15 public universities in Michigan also opposed the bills. Engler claimed Nassar’s victims were only interested in leveraging MSU and were not interested in mediation.

Engler comment raises the question of how does the one responsible for taking action mediate the results of their failure with the victim? The outcome will always be in the mediator’s best intersts.

Engler argued publicly with Rachael Denhollander, the first woman to come forward publicly with allegations against Nassar. At a Trustee’s meeting early in April, “Engler publicly threatened Kaylee Lorincz when she shared the story about his attempt to buy her silence. Kaylee Lorincz also revealed during that meeting Engler lied to her about his settlement talks with other survivors, and downplayed the sexual harassment charges against Nassar’s boss, Dean William Strampel, calling them merely a ‘slap on the butt.’”

The Board of Trustees remains in place and reiterated their support for John Engler.

It is a pattern and a practice for MSU. As Think Progress points out “sexual assault allegations against football and basketball players have been ignored or mishandled by the athletic department and administration at MSU. Investigations into allegations have been shoddy and well hidden (if they happen at all). Victims have been encouraged not to come forward with allegations against high-profile players or coaches on campus due to potential backlash or retaliation.”

The same pattern and practice was experienced by the Sister Survivors as told by them about Nassar experienced by them with the Board of Trustees and the interim President John Engler. The Department of Education’s Office for Civil Rights investigation confirmed MSU had not met multiple Title IX requirements, including notifying students of the name of the Title IX coordinator, conducting investigations within appropriate time frames, and following proper grievance procedures.

Jerry Sandusky’s sexual abuse case at Penn State received around-the-clock attention for weeks. The Sister Survivor’s case has disappeared from the public eye since MSU’s Nassar was sentenced. Attorney John Manly believes he knows why:

I think it’s sexism, misogyny, and you know, it’s not college football, it’s gymnastics. And the audience for gymnastics doesn’t generate hundreds of millions or billions of dollars.

Think Progress updated its initial report on Michigan State University. The law firm representing MSU sent a letter to the NCAA on May 4. The letter acknowledges Nassar, “under the guise of medical treatment, sexually assaulted at least 25 MSU student-athletes between 1997-2016, including six student-athletes since 2014, when MSU botched its Title IX investigation into Nasser’s abuse.”

The letter was sent to clarify and despite the sexual assaults that,

“no violations of NCAA rules occurred with regard to the criminal conduct of Dr. Larry Nassar, a former employee at the University.”

In spite of the many sexual abuse over 20 years, the assaults mostly occurring on the MSU campus, the deaf ear by MSU employees to female athletes, the condemnation by the Michigan state legislature of MSU for its failure to protect female athletes, and the Gymnastics Coach Kathy asking her team (including survivors of Nassar’s abuse) to sign a card of support for him after he was fired due to the allegations of sexual abuse in 2016; Michigan State University is more concerned about violations of NCAA rules and its image rather than Nassar’s female victims. There is no sympathy, morose, embarrassment when confronted with what was allowed to happen over the years. Business as usual.

The NCAA has not responded to the victims or Michigan State University.

References:

Michigan State still doesn’t care about victims of sexual assault Lindsay Gibbs, Think Progress, March 23, 2018

Michigan State is finding new ways to victimize the survivors of Larry Nassar’s abuse Lindsay Gibbs, Think Progress, April 18, 2018

Michigan State admits Nassar sexually abused student-athletes, but says he didn’t break NCAA bylaws? Think Progress, Lindsay Gibbs, May 4, 2018

What MSU knew: 14 were warned of Nassar abuse Kim Kozlowski, The Detroit News 2018

Michigan State ‘regrets’ providing an ‘unnecessary amount of detail’ in response to Title IX lawsuit‘ MLive, April 13, 2018

run75441 @ Angry Bear Blog

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Michigan Medicaid Waiver

The State of Michigan Legislature is applying for an ACA Waiver as I pointed out in my post Why States Should Not Be Allowed to Alter the ACA with Waviers

This is a relief valve for “counties” with high unemployment. In effect if Michigan counties have a high unemployment rate (8.5% or above), the unemployed workers in that county can have Medicaid until such time as the Unemployment Rate drops to 5%. Then the workers are expected to seek employment to be eligible for Medicaid. Ok, that should cover Detroit, Flint, Saginaw, Muskegon, etc. high unemployment rate. which exceeds 8.5%. Or does it qualify them?

The issue with SEC 107B is the word “Counties.” By using solely the word counties, SEC 107B does not make an exception for townships, villages, or cities. For example, Wayne County has an unemployment rate of 5.5% and not 8.5% or greater. As a result, Detroit which does have an unemployment rate greater than 8.5% and sits in Wayne County does not qualify for a Medicaid exemption because it is not a county. Neither would the other Michigan cities in other counties with low unemployment rates qualify. Set this aside for a moment.

The waiver strips predominantly Black populated Michigan cities of Medicaid if the county in which the city resides has an unemployment rate lower than 8.5% even though the city has an unemployment rate higher than 8.5%. Additionally and besides a work requirement of 29 hours per week, the bill will end Medicaid and expanded eligibility for residents after they’ve been on Medicaid for 48 months for those earning between 100% and 133% FPL and eliminate the option to extend coverage by completing healthy behaviors.

To force the issue with lame duck governor Rick Snyder, the Senate on Thursday (May 7th) approved a $56.6 billion budget which includes a suspension of the salaries of Health and Human Services Director Nick Lyon and other top officials in the department if Governor Snyder does not request and secure a federal waiver to implement the Republican legislation passed Medicaid work requirement, and other proposed parts of the legislation. The CMS has already blocked a lifetime limitation on healthcare in Kentucky’s waiver request. When the legislature includes a particular mandate on a budgetary piece of legislation, it can not be overturned by a vote. Both the House and the Senate are controlled by Repubs.

It is unlikely the CMS will approve Michigan’s waiver as they have already blocked Kansas and I believe Kentucky.

Sponsor of the Legislation Sentaor Shirkey:

“This is personal for me, because I laid a lot of political capital on the line to try to get this done,” (Shirkey coaxed fellow Republicans to support the Medicaid expansion in 2013 but is now leading the reform effort).

I still believe it was the right thing to do, but I’m not going to go back on the promises that were made to get those votes.”

Republican Michigan State Senators Shirkey and Joseph Hune have lifetime healthcare benefits which they passed for themselves in 2012.

run75441 @ Angry Bear Blog

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Why Republican Short Term Healthcare Plans “Suck”

Having talked about the proposed state High Risk Pools and why they are bad; Charles Gaba at ACASignups.net turns his attention to the proposed Short Term Plans and why they are also bad. Keep in mind the proposed Short Term Plans are not the same as the ACA Catastrophic plans.

Most of the protection found in the ACA plans are not in the proposed short term plans. This would include insurability, rates, pre-exiting conditions, essential benefits, etc.

run75441 @ Angry Bear Blog

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CHIPS Funding

CBO Director Keith Hall responded to a request from House Majority Leader Kevin McCarthy to project the impact of the $7 billion CHIP rescission package. The CBO letter estimates that the rescission “would not affect outlays, or the number of individuals with insurance coverage.”

Well this is good news, I guess? Except, the key here is this is based upon the present number of children enrolled in CHIPS. However, “In its estimates, CBO doesn’t (and can’t) assume recessions or natural disasters will happen. So while the CBO expects that the Contingency Fund dollars being rescinded will not be needed by some states, it is critical for sufficient funding to remain available in the event of an unforeseen recession or natural disaster.”

Part of the funds being clawed back by Trump and Republicans are in the Contingency Fund which is maintained the same as what states do in establishing a rainy-day fund. It is a reserve set aside to meet economic or catastrophic events. If we depended upon Congress to allocate funding immediately after catastrophic events, we would be waiting a long time. Even Texas was complaining about a slow response by Congress after a hurricane hit recently. And Puerto Rico, Puerto Rico is the result of deliberate negligence on the part of the President. Neither Dems or Repubs will protest the president’s discrimination.

Joan Akers at the Georgetown University Center for Children and Families had this to say:

“Two billion dollars in cuts would come from the Child Enrollment Contingency Fund.” As I said, the Contingency Fund is a reserve put in place to help and prevent states from running out of money. In a case of disaster or shortfall, there is little time to react. Unforeseen disasters and shortfalls do not wait for the politics of Congress to turn. Having a reserve available to cover unforeseen circumstance makes sense.

The other $5 billion comes from the actual funding. Over time some of the CHIP funding authorized is not spent leaving an excess. In the past, a fully aware Congress of the excess has reached a bipartisan agreement to allow allocation of the excess and unspent funds authorized solely for CHIPS to be used for other children’s programs. Trump’s clawback violates the bipartisanism on Congress to use these funds solely for children’s programs. A clawback of these funds is unlikely to impact states’ CHIP programs unless there is a shortfall; however, it does take away the bipartisan history of a Congress to utilize these funds in ways to continue to help low income children and families.

OMB Deputy Director Russ Vought had this to say: “Rescinding these funds will have no impact on the program. At some point Congress will likely ‘rescind’ those funds as a budget gimmick to offset new spending elsewhere (the elsewhere in the past has been other programs benefiting children), as it did on the recently passed omnibus. Instead Congress should rescind the money now.”

This statement comes after the past budget contingency funds were used to keep CHIPS afloat after the regular funding lapsed while Trump and Repubs held CHIPS hostage in a plan to force Dems to support ACA changes . . . a Sophie’s choice so to speak. Furthermore, a rescission of money not spent would not reduce the deficit created by the tax cuts according to David Super, a law professor at Georgetown University.

run75441 @ Angry Bear Blog

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Mick’s Progress in Taking Apart the Consumer Financial Protection Bureau

February of this year and Mick Mulvaney already started to dismantle the CFPB by stripping the agency’s fair-lending office of enforcement powers reducing oversight and penalties for firms that discriminate against borrowers. Enforcement of fair-lending laws is governed by the 2010 financial reform law. Taking away the agency’s enforcement powers creates a vacuum making it unclear as to what happens now. Senator Elizabeth Warren sees Mulvaney’s actions as an attempt to gut the agency’s power in regulating fair lending practices.

Also in February, Mick Mulvaney scrapped an investigation into payday lender Golden Valley Lending . Golden Valley Lending contributed to Mulvaney’s congressional campaign, according to NPR. Michigan resident 27-year-old Julie Bonenfant took out a $900 loan from Golden Valley. In less than 12 months, her scheduled payments will total $3,735. Apparently, 950% interest is ok to Mick Mulvaney.

In March as reported by AP, Janet Matricciani, former CEO of payday lending company World Acceptance, contacted Mick Mulvaney on his personal email account suggesting she be made CFPB director.

“I would love to apply for the position of director of the CFPB. Who better than me in understanding the need to treat consumers respectfully, and honestly, the equal need to offer credit to lower income consumers in order to help them manage their daily lives?

I have in-depth experience of what a CFPB investigation is like, and so I am in an unparalleled position to understand the effect of various CFPB actions on a company, its workforce, its customers, and the industry,”

World Acceptance has been under investigation by the CFPB for three years. Reportedly, it trapped its customers in debt they could not repay and charged higher than normal interest rates than what was disclosed. Even the thought of appointing Ms. Matricciani suggests an abnormal business – government relationship. World Acceptance contributed $thousands to Mick’s congressional campaigns in the past.

In April; Mick Mulvaney lectured the American Bankers Association, the same group “Showdown in Chicago” protested in the Loop a few years back and which I attended. Here is what Mick had to say:

“We had a hierarchy in my office in Congress. If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you. At the top of the hierarchy were my constituents. If you came from back home and sat in my lobby, I talked to you without exception, regardless of the financial contributions.” Mick received nearly $63,000 from payday lenders for his congressional campaigns.

In May; “Mick Mulvaney will close down the CFPB Student Lending Office, according to a bureau-wide memo written by him. The student loan office at the CFPB has been responsible for returning $750 million in relief to students and for investigating the troublesome student lender Navient. The CFPB sued Navient last year for unfair and abusive practices. If there is one student loan lender I have heard repeated complaints about, it is Navient. The Student Lending Office also investigated and sued for-profit education company Corinthian Colleges.

Denouncing the actions of Mick Mulvaney closing the Student Loan Lending Office, Whitney Barkley-Denney, Senior Policy Counsel with the Center for Responsible Lending had this to say: “Education (of students) alone cannot stop predatory behaviors on the part of for-profit schools and servicers, nor can it help hundreds of thousands of Americans in serious debt because of these practices.” The office will continue to do its work; but, it come under closer scrutiny of Mick Mulvaney who favors business and loan servicers over students.

run75441 @ Angry Bear Blog

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Medical Risk Pools, ACA/Medicaid Waviers, Hypocrite State Senator, CMC Director, CSRs, and Tom Price

Charles Gaba: Why Risk Pools are Bad

Charles Gaba at ACA Signups.net has an excellent explanation on how Risk Pools work and how they harm those amongst us who depend upon a community rating system to balance out cost.

Michigan Medicaid Wavier Strikes at the Poor

The Center on Budget and Policy Priorities reported on how Michigan’s Medicaid Proposal would lead to “Large Coverage Losses” harming Low Income Workers.

The coverage reduction in Michigan would be in the range of 150,000 people. Those impacted would lose coverage Michigan’s proposal and would also be denied coverage for a year after they were eligible for coverage once they met the the work requirement. It is called revenge. Many of the Michigan Medicaid enrollees subject to the new policy already work in unstable jobs with fluctuating hours, in industries like retail, restaurant work, home health, construction, or in seasonal jobs such as in the state’s tourism industry. The Michigan Senate Fiscal Agency initially recommended the state squirrel away the excess from the federal subsidy to extend the ability of the state to cover Medicaid expenditures until 2027.

Cities such as Michigan’s Detroit with unemployment higher than 8.5% would still be ineligible for unemployment as the county they reside in has an unemployment rate lower than 8.5%. The determination is county based. 15 of 17 counties with Unemployment hire than 8.5% are under Republican legislators with the remaining 2 being under Democrat legislators.

The same state agency estimates it would cost the state between $20 million and $30 million a year to administer a work requirement and with an increased number of uninsured would result in increased uncompensated care provided by hospitals and in the end increase state costs for public hospitals. I suspect the state spent the excess Medicaid funds.

One Hypocritical Michigan State Senator

Allow me to introduce you to “I am nauseated with the passage of the Medicaid Expansion in Michigan,” Michigan State Senator Joseph Hune.

In 2012, first term Michigan State Senator Joseph Hune voted ‘yea’ for life time healthcare insurance coverage without contribution by present Senators (himself included).

One year later, Michigan State Senator Joseph Hune opposed passage of the Medicaid Expansion. “This is simply bad policy. I am utterly disappointed in this legislation, I voted no because I could not stomach pushing this garbage forward.”

In 2018, Senator Joe Hune is no longer nauseated as the Republican legislature passed a bill requiring all Michigan able-bodied-people to work 29 hours per week. The bill does not take into account people with disorders or illness which may prevent them from working 29 hours per week. Of course Joe Hume who has worked very little outside of government voted “Yea.”

This pudgy face is a self declared expert on working in the private sector although he never did.

CMS Administrator Seema Verma

April 30, 2018 MedPage Today editorial entitled “CMS Chief Slams Administration Critics, Obamacare ‘failing long before Donald Trump became president.”

“‘Health insurers have fled the exchange markets after losing millions of dollars’, ‘half the counties in America, and 10 states in our country, don’t even have a choice of health insurer’, ‘ Congress repealed the mandate’, ‘with one insurer offering policies, half of the counties in America and 10 states in our country do not have a choice of health insurer’.” etc., etc. etc. None of this is Trump’s or Republican’s fault.

Unfortunately Ms. Verma, it is Trumps and Republican’s fault. The only thing you can blame Obama and Democrats for is not making sure Congress allocated the money through Congress. From day one of the Obama administration, Republicans made it their objective to block everything Obama did and make him a one term president. From day one of Trump’s administration, Trump has over turned anything he could by Executive Order and the Republican House and Senate made it their objective to repeal the ACA. The ones who are hurting from the Republican vindictiveness are those in the unsubsidized individual market, those who bought off the exchanges, and those who live in states where Medicaid was not expanded.

In the end, Colorado Rep. Jack Kingston’s one sentence in Section 227 of the 2015 Appropriations Act (dated December 16, 2014) created a $2.5 billion shortfall in the Risk-Corridor program in 2015 as the HHS had collected $362 million in fees. Insurers who had misjudged the market sought nearly $2.9 billion in payments. Gerhart’ canary in a coal mine played out with many nonprofit insurance Co-ops failing due to a lack of reimbursements for losses, for-profit healthcare insurance companies lost money, healthcare insurance companies began to raise premiums to compensate, healthcare insurance companies recognizing an untenable environment created by Republicans took their losses and left the healthcare exchange market, and consumers were left without policies.

Ms. Seema Verma, you are using Ms. Sarah Huckabee Sander tactics to deny the truth.

New Choices in the ACA resulting from the CSR Cancelation

An excellent article is on the blogosphere analyzing the impact of Trump killing the CSR, “Rational Choice in the ACA Market Place.” What did Trump and Republican’s cancellation of the CSR cause in the market place? Simple answer, not what they expected. Andrew Sprung at Expostfactoid explains the result of Trump’s Executive Order.

Chart by David Anderson at Balloon Juice. So, what is going on here? Trump stops the CSR subsidies going to people 150% to 300% FPL and states responded by allowing or requiring insurers to concentrate the cost of CSR in premiums for silver plans only. What Balloon Juice is showing in its chart in the decrease in the numbers of Silver plans for Bronze plans and Gold plans that are now less costly and not required anymore due to cancellation of the CSR.

xpostfactoid’s Andrew Sprung:
Since ACA premium subsidies are keyed to the price of the benchmark (second cheapest) silver plan in each rating area, subsidies rose to cover inflated silver premiums, generating often dramatic discounts in non-silver plans, i.e. gold and bronze (platinum availability and purchase is negligible). In many states, steep increases in silver plan premiums resulted in zero-premium bronze plans becoming available to many buyers (or nominal $1-3/month premiums), and gold plans that were either cheaper than silver or close in price.

Cheap gold plans were a particular boon to enrollees with incomes between 200% and 400% of the Federal Poverty Level (FPL). These buyers are not eligible for strong CSR, which makes silver plans roughly equivalent to platinum plans for buyers up to the 200% FPL threshold. Normally, enrollees in the 200-400% FPL range would pay between 6% and 10% of their income (percentage rising with income) for a benchmark silver plan with an actuarial value of 70%, i.e. with an average deductible of around $3600). With CSR priced into silver plans in 2018, gold plans (80% AV, with an average deductible of around $1100) came within reach of many in this income range. Gold plan selection quadrupled in Maryland in 2018.”

Bronze plans could be free and Gold plans cheaper than Silver plans. Again, David Anderson at Balloon Juice presents an excellent chart detailing state by state a Silver to other Metal comparison. Click on the link to see Least Expensive Spreads.

ACA Signups, xposfactoid, and Balloon Juice will all tell you and I would also, the impact on people 150% to 400% FPL was not catastrophic. The impact of Trump’s cancellation of the CSR was felt on those making greater than 400% FPL and getting their insurance on and off the exchanges. Trumps and Republican’s cancellation will cause their premiums to rise the same as the cancellation of the mandate.

Former Secretary of HHS Tom Price

May 1, 2018, Med Page Today Former HHS Sec. Price Calls Individual Mandate Repeal a Mistake. Funny thing, Price never said it would be a problem while he was HHS Secretary. While Price criticized the GOP-led Congress for repealing the individual mandate, he also said they did little else to repeal or reform the ACA, suggesting the action might do more harm than good and was not enough.

run75441 @ angry bear blog

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Why States Should Not Be Allowed to Alter the ACA with Waivers

CMS is allowing states to seek waivers to alter parts of the ACA. According to Republicans, state government knows better than the federal government the needs of its citizens and can design a better healthcare plan for them. Michigan along with Kentucky and another state have applied for waivers. Michigan and Kentucky have been approved. The Michigan bill has made it through the Republican legislature and will go to the governor to be signed (hopefully vetoed). The troublesome part of Michigan State Senate Bill 0897 (2018) can be found in SEC. 107B.

(E) If A COUNTY’S UNEMPLOYMENT RATE REACHES 8.5%, ALLOW A RECIPIENT IN THAT COUNTY TO MEET THE WORKFORCE ENGAGEMENT REQUIREMENT IN THIS SECTION BY ACTIVELY SEEKING EMPLOYMENT ACCORDING TO THE MICHIGAN EMPLOYMENT SECURITY ACT, 1936 (EX SESS) PA 1, MCL 421.1 TO 421.75. IF, ONLY AFTER A COUNTY’S UNEMPLOYMENT RATE HAS REACHED 8.5%, THE COUNTY’S UNEMPLOYMENT RATE SUBSEQUENTLY DROPS TO 5.0%, THE RECIPIENT MUST, AGAIN, MEET THE WORKFORCE ENGAGEMENT REQUIREMENTS AS REQUIRED UNDER THIS SECTION.

This is a relief valve for “counties” with high unemployment. In effect if Michigan counties have a high unemployment rate (8.5% or above), the unemployed workers in that county can have Medicaid until such time as the Unemployment Rate drops to 5%. Then the workers are expected to seek employment to be eligible for Medicaid. Ok, that should cover Detroit, Flint, Saginaw, Muskegon, etc. high unemployment rate. which exceeds 8.5%. Or does it qualify them?

The issue with SEC 107B is the word “Counties.” By using solely the word counties, SEC 107B does not make an exception for townships, villages, or cities. For example, Wayne County has an unemployment rate of 5.5% and not 8.5% or greater. As a result, Detroit which does have an unemployment rate greater than 8.5% does not qualify because it is not a county. Neither would the other Michigan cities in other counties with low unemployment rates qualify. Set this aside for a moment.

As many of you may know, Amazon rejected Detroit as a site for HQ2. While mentioned in the Amazon response, the claim of a lack of talent can be refuted as there are 52 million people living within 5 hours of Detroit, plenty of schools of higher education located in and around the Detroit, and also far more of each than exists Seattle. What Fortune Magazine pointed out as the primary issue for Detroit being rejected was the lack of a regional transportation system similar to what may be found in Chicago. Dan Gilbert fleshes out the bones of the reason with this detail:

“What became crystal clear to us from countless surveys, discussions, observations, studies, and even Amazon itself, is that having a strong mass transit solution is the ante to play for a ‘millennial’ workforce, as well as for the most successful and dynamic companies in the world.

Amazon conducted an internal survey of their employees, and the results showed that the ability to move seamlessly around a city with strong mass transit was a critical priority.

Companies like Amazon and their employee base require and depend upon a dynamic and reliable transit. If we are determined to attract exciting opportunities to metropolitan Detroit, then it’s time to get in a room and figure it out.”

The last go-around for a mass transit system was rejected.

The largest citizen cohort in the US wants to utilize public transportation rather than tool-around in pickup trucks to get to work. Amazon and other companies are looking beyond the baby boomer generation requirements to satisfy this new and larger cohort of citizens – Millennials. Automotive OEMs are in for another rude awakening in the next decade after they cut back on building smaller vehicles in favor of ever larger SUVs and Pickups. Gasoline sits at $2.90 today. If demand goes away and gasoline goes up in price, the OEMs will be retooling again.

Now back to high unemployment rates in cities as compared to the counties in which they reside.

Detroit Free Press, Nancy Kaffer:

Sen. Patrick Colbeck, R-Canton, who is a gubernatorial candidate, told Gongwer that there were 31,000 job openings within an “easy commute” of his district. Colbeck, an Islamophobe and general holder of screwy beliefs, failed to mention that Canton opts out of SMART, the regional bus system. Commuting how, Senator?”

If Amazon believes there is not enough Public Transportation available for its “desired” labor force to get back and forth to work, then why would the legislature believe it is possible for the residents of cities to be able to travel outside of city limits? The cost and insured ownership of an automobile is expensive by national standards. Senate Bill 0897 will require residents in high unemployment cities to travel a distances even if there is no regional transportation available or a community with jobs opts out if the already low income and unemployed want Medicaid. It begs a question:

Is the failure to allow Michigan cities the same exemption as counties a feature or a bug?

The Great Lakes Beacon’s Danielle Emerson had this to say about the application of the exemptions.

So, who will get exemptions? Based on the unemployment information collected, there are 17 counties with unemployment rates meeting or exceeding 8.5 percent: Kalkaska, Oceana, Alcona, Iosco, Lake, Emmet, Chippewa, Ogemaw, Ontonagon, Arenac, Schoolcraft, Roscommon, Alger, Montmorency, Presque Isle, Cheboygan and Mackinac.

The majority of those counties (15) are represented solely by the Republicans with only parts of two counties being represented by Democrats.”

It is a feature and meant to penalize cities of which, by-the-way, the population is predominately minority. SEC 107B pits cities against rural areas. Michigan is going back to pre-ACA when it penalized single adults and under employed married adults with or without children if they were not working enough hours to satisfy the state mandated minimum. In the end the hidden costs of no insurance surpass the cost of Medicaid.

In 2013 upon the passage of Medicaid Expansion in Michigan, Michigan State Senator (Fowlerville) Joe Hune said; “I voted ‘no’ because I could not stomach pushing this garbage forward.”

Here is what Senator Joe Hune had to say in 2018 on Senate Bill 0897: “Making people reliant on the government for life’s necessities does not empower them or improve their situation, I heard a lot of absurd language calling this bill disgraceful. What I think is truly disgraceful is trapping people in a cycle of poverty and victimhood so that they have no choice but to relinquish their God-given freedom to certain politicians who genuinely disdain them.”

During his first term, Senator Joe Hune voted himself and other Senators a lifetime of taxpayer paid-for healthcare insurance in 2012. Soon to be citizen Joe Hune has had little experience in the private sector; but, he has little to worry about as his healthcare will still be intact if he loses a job there.

Of course the trapping of people in a cycle of poverty only applies only to cities with a predominantly minority population and not those populations living in rural areas outside of cities. Go figure what the reasoning is . . .

HT to Charles Gaba at ACAsignups.net whose article caught my attention.

run75441 at angry bear blog

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“Yes, that is called having a country, with all due respect.”

Michigan Senator Debbie Stabenow zeroes in on Mick Mulvaney cutting funding to preserve the Great lakes which no one state controls and will suddenly become a Federal issue if this vast national resource of fresh water is polluted.

Quelle Surprise! Mick Mulvaney purposely gets it wrong by comparing Arkansas dependency on Federal taxes to Michigan and Wisconsin dependency. Arkansas ranks 22nd in dependency on Federal $, Michigan 25th and Wisconsin 32nd in dependency on Federal $. Of the states surrounding the Great Lakes, only Pence’s Indiana has a greater dependency on Federal government aid. It is still true, Blue States lose Federal $ to Red States.

Source: WalletHub

“Most & Least Federally Dependent States”

Mr. Mulvaney: “Consistent with many other things that we did across the budget Senator, we look at programs that should be local. Programs that are more appropriately local in nature as opposed to national in nature. Again, go back to the original premise. I’m looking at this through the eyes of someone in Arkansas. Can I really look them in the eye and say I need to take some of your tax money to go do something in Michigan or Wisconsin?”

Senator Stabenow:Yes, that is called having a country, with all due respect. 20 percent of the world’s freshwater surrounds Michigan and eight other Great Lakes states and this is something that we not only do in the state and by the community but it is a major national resource. The idea that we would not recognize that in this budget is just stunning to me.”

Women as Senators appear to be more astute on the issues than men and are quick to zero in on people like Mick Mulvaney who try to deflect from the issues in their answers.

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The Citigroup Analysis of the Amazon – USPS Relationship

Steve Hutkins of Save the Post Office blog also reviewed the WSJ/Citigroup analysis of the Amazon – USPS agreement in the second half of his article, “Fake News, Flawed Analysis, and Bogus Tweets,” April 8 on Angry Bear. As noted in the first half on Steve’s article presented at Angry Bear; Trump’s tweet about the Postal Service undercharging Amazon by $1.50 per parcel is based on a July 2017 Wall Street Journal article undercharging Amazon was based on an April 2017 report by Citigroup.

Citigroup is bullish on UPS and FedEx because, it says, they will enjoy “a better pricing environment in the future” since the Postal Service is soon going to need “to raise rates meaningfully to capture its true costs.” (Of course, if USPS shipping rates were to go up, UPS and FedEx would need to pay more for “last mile” deliveries by the Postal Service, but with higher rates or a bigger market share for their own deliveries, the net result would be to their advantage.)

If these “true costs” are not eventually covered by higher rates, says Citigroup, the taxpayer is going to be on hook for the Postal Service’s financial problems and, by extension, for the “free shipping” Amazon is offering.

In order to identify these “true costs,” the Citi analysts outline two scenarios that illustrate how the Postal Service is charging below market prices for shipping services.

Scenario #1: Paying off the prefunding

In the first scenario, Citigroup focuses on the so-called “prefunding mandate” established in 2006 by Congress with the Postal Accountability and Enhancement Act. Under PAEA, the Postal Service was required to pay $5.5 billion a year, for ten years, into a fund to cover the costs of retiree health care for decades down the road.

How this Retiree Healthcare Benefit Fund (RHBF) came to be is a long story, as discussed in this previous post. Much of the story remains shrouded in mystery, though, because the U.S. Senate decided to withhold publication of the Committee report that described its rationales for the Act’s provisions. But the long and short of it is that the decision to mandate annual contributions of $5.5 billion turned out to be a disaster.

In 2006, the Postal Service was doing great and coming up with over $5 billion a year didn’t seem like a big problem, but then the Great Recession hit, postal revenues took a dive, and it wasn’t long before the Postal Service had to start borrowing from the Treasury to make the payments. When it reached the borrowing limit, the Postal Service just started defaulting on the payments.

This prefunding mandate is responsible for almost all the deficits you read about in the news every time a USPS fiscal report is published. Were it not for the prefunding requirement, the Postal Service would be doing just fine over the past few years, usually breaking even or showing a relatively small profit or loss. According to the FY 2017 10-K report (p. 17), if one looks solely at “controllable” costs and income (i.e., excluding the RHBF payments and other actuarial issues), the Postal Service lost $814 million in 2017 and made a profit of $610 million in 2016 and $1.188 billion in 2015.

In any case, for their first scenario, the Citigroup analysis assumes that “a day of reckoning is approaching” when the Postal Service “must resume making annual prefunding payments to the PSRHBF as well as meeting the amortization schedule on the accumulated $33.9B it owes, as laid out in its FY16 annual report to Congress.”

In addition, says Citi, the Postal Service will need to contend with rising operating costs and declining Market Dominant revenues. According to Citigroup, in fiscal year 2017 the Postal Service will therefore need to bring in an additional $8.3 billion, growing to $9.6 billion in 2019.

For some reason, the Citi analysts then assume that parcel mail would need to cover all of this additional revenue. This, they estimate, would require a 50 percent hike in the price of an average parcel, an increase from $3.50 to $5.25 — or about $1.75 per piece.

The problems with Scenario #1

This scenario is seriously flawed for several reasons. First of all, there’s no reason to believe that such “a day of reckoning” is coming. If anything, we’re heading for a day when Congress recognizes the mess it created with the prefunding mandate and does something to fix it.

As reported by Government Executive, there’s currently a bill in Congress (the text isn’t available yet) under which “Outstanding payments [to the PSRHBF] would be wiped clean and USPS would make actuarial payments toward the remaining liabilities over the next 40 years.”

A 40-year amortization schedule was actually being recommended back in 2006, but the Bush administration pushed for the 10-year schedule that caused all the problems. Such a relaxed schedule would mean annual payments on the order of $1 billion rather than $6 billion, and essentially eliminate the premise on which Citi’s Scenario #1 is based.

A second problem with this scenario is that it assumes the entire $8 billion in increased revenue would have to come from shipping services. But if the Postal Service had to bring in an additional $8.3 billion, it would surely spread the hurt out over all types of mail and not put it all on parcel shippers.

Annual revenues in 2017 were about $70 billion. To bring in another $8.3 billion would require an across-the-board rate increase of about 12 percent. Since such an increase exceeds the price cap on Market Dominant products, the Postal Service would need to request what’s called an exigent rate increase from the PRC due to the “extraordinary” circumstances of being required to pay off the prefunding mandate. That’s happened once before. In 2013, the PRC granted a 4.3 percent increase for about two years to help the Postal Service make up losses due to the Great Recession.

An across-the-board increase of 12 percent would be a serious matter, and mailers, large and small, would go ballistic. One of the effects would be that the rates Citigroup pays to send credit card bills and solicitations would also go up, which would cost the corporation millions of dollars. Maybe that’s why the Citi analysts assume that parcels would need to bear the entire burden of producing the additional revenue.

Anyway, a 12 percent increase on an average piece of Parcel Select ($2) might mean about 24 cents more on a typical Amazon package — not the kind of thing to generate headlines or presidential tweets.

Citigroup actually acknowledges the problems with this scenario later in its report. It notes that the Postal Service could increase postage on other types of mail, Congress might permit the partial reinstatement of the exigent surcharges previously approved by the PRC, and Congress could also provide relief from statutory obligations to prefund certain benefits obligations. Plus, if the Postal Service were to increase parcel pricing significantly, it would do so gradually.

Citigroup calls these “caveats” but they are really much more. Each of these possibilities is much more likely to happen than a 50 percent increase on parcel rates just to cover the costs of retiree health care. Scenario #1 is never going to happen.

Scenario #2: Changing the contribution to institutional costs

In the second scenario, Citigroup notes that when PAEA became law in 2006, Competitive products were assigned a 5.5% share of institutional costs. At the time, parcels represented a relatively small part of the Postal Service’s business, but with the boom in e-Commerce, parcels have become a much larger part. Competitive products now account for about a third of the Postal Service’s revenues.

Over the past few years, UPS has filed several analytic studies and legal briefs with the PRC arguing that Competitive products are not paying their “appropriate share” of institutional costs. According to UPS, the appropriate share would be 24.6% (or even more), as opposed to the 5.5% determined over a decade ago. UPS’ motives are not ambiguous. An increase in contribution to institutional costs would mean an increase in the Postal Service’s parcel prices, which would improve UPS’ position in the market — it could raise its own rates and/or grab a larger piece of the pie.

For its Scenario #2, the Citigroup analysts “work through the impact if the UPS’s suggested 24.6% estimate is instituted.” To do this, they “calculate competitive products’ share at both the current understated 5.5% rate and the updated 24.6% rate proposed by UPS. The difference between the two rates represents the incremental institutional costs that need to be allocated to competitive products.” Here’s how that works out.

For 2017, total USPS operating expenses (i.e., not including the retiree health care expense) were about $70 billion, about half of which were categorized as variable (attributable) costs and half were fixed (institutional) costs. Figured at the 5.5 percent set by PAEA and Citigroup’s estimate of institutional costs (52 percent of total costs), the appropriate share for Competitive products would come to about $2 billion (that’s $70 billion x 52% x 5.5%).

Citi then looks at what would happen if Competitive products had to cover their appropriate share of the fixed costs by using the 24.5 percent figure. The result would be that Competitive products would have to contribute about $9 billion (i.e., $70 billion x 52% x 24.3%).

According to Scenario #2, Competitive products would therefore need to pay $7 billion more for Institutional costs. That would require a rate increase on shipping services comparable to the one determined by Scenario #1 — almost 50 percent. Average parcel rates would go from $3.51 to $4.97, an increase of $1.46. That is the origin of the claim made in the WSJ article, and it’s the basis of Trump’s tweets.

The fatal flaw in Scenario #2

The fatal flaw in Scenario #2 is the assumption that competitive products are currently contributing only 5.5 percent to institutional costs. This 5.5 percent share is actually just the floor set after PAEA was enacted back in 2006, when the PRC determined (as stated in the ACDR) “that if Competitive products contribute at least 5.5 percent toward the Postal Service’s total institutional costs, then, as a whole, they will cover an appropriate share of the Postal Service’s total institutional costs” (p.92).

But competitive products contribute much more than 5.5 percent. According to the 2017 Compliance report, “In FY 2017, the total institutional costs of the Postal Service were $29.700 billion. To comply with 39 U.S.C. § 3633(a)(3) for FY 2017, Competitive products must have contributed at least $1.634 billion toward the Postal Service’s institutional costs. In FY 2017, the total Competitive products contribution was $6.806 billion (approximately 23 percent), which exceeds the minimum contribution requirement.” (italics added, p. 92).

While the numbers differ slightly from Citigroup’s estimates for 2017, the point is clear enough. Competitive products are not contributing 5.5 percent to institutional costs; they are contributing more than four times that amount, and they are contributing almost exactly what Citigroup and UPS say they should be contributing, about 23 or 24 percent.

The Citigroup report observes in a footnote that UPS has subsequently argued that competitive products’ appropriate share should be even higher, like 29 percent. Even at that level, the impact on the prices of Competitive products would be modest compared to what Scenario #2 envisions.

For the past couple of years, there’s been a lively debate at the PRC about how much Competitive products should contribute to institutional costs. (See, for example, PRC Docket No. RM2017-1 on “Institutional Cost Contribution Requirement for Competitive Products.”) While UPS has argued for a higher minimum floor, others have argued that there doesn’t need to be a minimum at all. In its comments on the issue (January 23, 2017), for example, Amazon states this:

“Competitive products are covering almost are four times the share of the Postal Service’s institutional costs that the Commission mandated five years ago. The contribution and cost coverage of competitive products are now far too high to support any credible allegation that a binding minimum contribution requirement is needed to preserve a ‘level playing field’ for the Postal Service’s competitors, let alone to avoid cross-subsidy, predatory pricing, or any other alleged form of unfair price competition, or provide a margin of safety.”

Whatever the Commission ultimately decides to do about the minimum contribution level, the key point here is that Citigroup’s Scenario #2 is based on the mistaken assumption that Competitive products are currently covering only 5.5 percent of the Postal Service’s institutional costs, when in fact they are contributing more than four times that amount. There’s no shortfall of $7 billion that needs to be made up by a big increase in parcel prices.

Considering how sophisticated the Citigroup analysts are when it comes to making projections, it’s perplexing that they missed this basic fact.

The $2.6 billion in additional costs for Amazon

The other number that Trump has tweeted also comes from the Citigroup report. In this tweet, Trump says, “If the P.O. ‘increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.’ This Post Office scam must stop. Amazon must pay real costs (and taxes) now!”

Here’s where that number $2.6 billion comes from.

The Citi analysts outline a “worst case scenario” in which Amazon must bear a 50 percent increase in its costs with the Postal Service, plus a 20 percent price jump with FedEx and UPS, which will be able to raise their prices thanks to the price hike by their competitor.

The analysis gets pretty complicated, but the bottom line, says Citigroup, is that Amazon would incur an additional $2.6 billion in shipping costs.

Trump’s tweet makes it sound as if the Postal Service itself is missing out on $2.6 billion a year in revenue from Amazon, but that’s not the case, and it’s really misleading, to say the least, to make such a claim.

Cost coverage on the Amazon deal

If you want to get even deeper into the weeds on all this, let’s take a look at the cost coverage for the type of mail Amazon is using.

While the Amazon NSAs are nonpublic, one can get a good sense of just how successfully the products are covering costs by looking at a couple of USPS financial reports.

This USPS report shows that in 2017 Parcel Select brought in $5.67 billion on 2.8 billion pieces. This second USPS report shows the cost coverage for each type of mail. It doesn’t mention Parcel Select, but it provides data for Total Ground mail, which includes Parcel Select, Standard Post, and Parcel Return Service. It shows that in 2017, Ground brought in about $6.2 billion in revenue on about 2.88 billion pieces. Parcel Select thus accounts for almost all Ground mail, so the data on cost coverage for Ground can give us a ballpark view of the cost coverage for Parcel Select and, by extension, the Amazon NSAs.

The second report shows that the average Ground piece brought in $2.148 in revenue. The variable cost was $1.221; the rest — $0.927 — was contribution to institutional costs. The cost coverage was 175.86 percent.

If you compare this to the cost coverage for other types of mail, you’ll see it’s typical. First Class letters, for example, have a cost coverage of 164 percent, and First-Class mail overall has a cost overage of 210 percent.

A few types of mail have a cost coverage below 100 percent. Standard Mail flats, for example, have a cost coverage of about 74 percent, and Periodicals, about 70 percent. While these types of mail do not cover their attributable costs, there are legal and policy reasons why some of that failure may be considered excusable. In any case, the issue is regularly discussed in the PRC’s compliance reviews, and all the stakeholders are well aware of the issues.

If the cost coverage on Amazon’s Parcel Select is anything like 175 percent, there’s clearly no cause for concern that the Postal Service or the taxpayer is somehow subsidizing Amazon delivery.

Perhaps an upside

There are many reasons to criticize Amazon — its success is hurting brick-and-mortar businesses, it exploits its workers with low pay and poor working conditions, and it’s “no fan of labor unions” — and there are plenty of reasons for criticizing the Postal Service as well, like the way it underpays its non-union employees and abuses the emergency suspension provision to close post offices without due process.

There are also reasons to raise questions about the relationship between Amazon and the Postal Service, as we’ve done on this website since the deal to deliver for Amazon on Sundays was first announced in 2013. STPO contributor Mark Jamison’s posts on Amazon and the lack of transparency in the NSAs are still worth reading. (Our Amazon posts are archived here.)

Criticisms aside, there’s little reason to believe that the Postal Service is significantly undercharging Amazon for delivering its parcels. The cost coverage data show that parcels are more than covering both their attributable and institutional costs, the PRC has reviewed the NSAs and found them in compliance with the relevant statutes, and there are serious flaws with the Citi analysis on which the claims for underpaying are based. There’s absolutely no evidence that the Postal Service is losing a fortune on the Amazon deal.

While Trump’s tweets on the post office are bogus, perhaps we should at least be thankful to the President for raising some important questions about the Postal Service. Perhaps his tweets will lead to some thoughtful Congressional hearings on postal topics. Perhaps the pension and health care cost issues will finally get clarified. Perhaps the Postal Service will address public concerns by providing more transparency about the deals it strikes with companies like Amazon. Perhaps, perhaps.

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