First of all, I think that these students are just unlucky to be attending the UC system during the worst recession in several generations.  The California government operates on boom and bust cycles.  If you look at the historic tuition in the UC system, you will see that tuition has actually  gone down before in the late 90s because the economy was booming.  When I attended UC Berkeley in 2001, I was actually paying less than a student who attended in 1994 if you account for inflation.  In fact, I met an alumnus who graduated in the early 90s later on at an internship and he was really surprised that my tuition was just a little bit above his.  Basically, I was lucky and graduated before the major fee increases started.  The fact of the matter is that the state spends everything they have got when they are flush with money, and pretty much falls flat on its face when it is without money.  Right now, the state is just flat out broke.  The biggest problem here is that the tuition was not raised incrementally, and now the 32% increase is felt particularly hard by this group of students.  This is not the fault of the universities, but the state government in charge of the money.

Now, are the schools still affordable?  As of now, I think the UC tuition of approximately $10000 per year is still quite affordable if you compare how much an equivalent education at a private school costs.  UC Berkeley still has the top ranked engineering school in the country, and $10,000 a year is much less than $36,000 at MIT.  Similarly, the other UC campuses have some of the highest ranked programs in the country, and still cost 1/2 or  1/3rd of many private schools.  I actually think that the UCs were just too damn cheap for what they offer.  Even now, I think tuition at an UC would be less than what I will spend on childcare next year and I am not waving a sign that says “affordable childcare for all”.   Considering that UC graduates get paid comparable salaries as graduates of the ivies,  I still think that the UCs offer a great bang for the buck.

What really concerns me is that a lack of money could decrease the quality of the UC system.  If great professors, academics, and researchers no longer wanted to work at the UCs due to all the salary cuts and furloughs and the high cost of living in California then the education of many future young Californians will suffer.  I have no idea how much the schools will cost in 18 years when my baby goes to college, but if the quality of the schools go down then they might not be worth what they are charging. Perhaps in 18 years California will be in another boom cycle and the tuition will go down?

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First of all, this bill is going to require everyone to buy  government approved health insurance or face a penalty from the IRS.  For individual tax payers, the penalty is   2.5% of gross pay.  For businesses, the tax penalty is 8% of a worker’s pay if the business does not pay for at least 72.5% of the worker’s health insurance premium.  There are also significant government subsidies for those who make under a certain income level to pay for premiums.

Additionally, there will be cuts to FSA and HSA plans and insurance companies will no longer be able to charge more premiums for preexisting conditions.  Also, the premium difference between the young and old will be lessened greatly.  The House bill says that the premium of an elderly person cannot be more than twice than that of a young person.  So essentially these changes will raise the price of health insurance for the young and healthy and punish those who try to save for their own medical expenses.

So what should the young and healthy do if this bill passes?  First of all, stay healthy.  Next,  if employed, ask the employer to give whatever they pay for your health insurance as a part of your pay instead if your employer is paying significantly more than 8% of your pay in health insurance premiums.  You will have to pay the 2.5% in tax penalty, and your employer will have to 8%, but you will have more cash in your pocket.  If you do get sick you will still be able to get insurance since the law basically says that everyone will be able to buy the same basic coverage regardless of preexisting conditions.

How do the numbers work out?  Here is a reference table from the Congressional Budget Office that shows how much the average health insurance premiums would be under the new plan for people in different income levels.  For a single person making around $38,000 a year, the estimated premium is $6100 a year, or 16% of income.  Suppose that this person is young and healthy and  simply pays for the tax penalty the cost is only $950 a year. Meanwhile, the person could save the difference.  Of course, right now this person pays no tax penalty, so the government is simply going to redistribute his or her money in subsidies for others.   If you look at the table, it seems that not a single income bracket pays less than 2.5% of their income for the premium, so even the poorest folks would do better to just skip health insurance while they are healthy, save the cash, and simply enroll when they do need to consume health care.  Of course, this will drive up health insurance premiums for everyone who is enrolled, and give more incentive for those who are enrolled to drop their coverage.

How does the math work out for employers?  Lets use the same employee making $38,000 as an example.  The employer is forced to pay 72.5% of the average premium of $6100, which is $4422.50  or  8% of 38,000 which is $3040.  Obviously, dropping the insurance is cheaper for the employer.  If the difference in cost were given to the employee directly then the employee still comes out ahead with more cash in his or her pocket.    When you go up in the income scale, the incentive is even higher to drop insurance.  For example, an employee making $102,000 a year with a family plan would cost   an employer around $15000 a year in insurance premiums or simply $8000 in tax penalties.  If the difference were given to that employee that employee would still come out ahead by several thousand dollars a year after the tax penalty.  That money could be used to pay for preventive care out of pocket.

Finally, lets examine why we have health insurance now.  It is to insure against future diseases  and healthcare consumption.  Your insurance doesn’t exactly buy you anything you can use right now.  For example, I was pregnant this year, and if I didn’t have health insurance to begin with  I would have had to pay quite a bit for the treatment I received.  Since pregnancy is a preexisting condition and I would not have been able to buy health insurance anywhere while pregnant.  Now if the new law passes, I could buy health insurance while pregnant since it would be illegal to refuse insurance to patients with preexisting conditions.  This completely changes the definition of insurance and makes it almost like a coupon program you can join at anytime.  Basically, your membership fee is your taxes, and then you can pay a middle layer of insurance companies when you need health care.  So, there is really no need to carry expensive health insurance that covers everything  when you are healthy because you can enroll anytime.

If all the young and healthy knew how to do basic math, they would be dropping their health insurance and opt for more cash  pay as soon as this bill is enacted.  Fortunately (or unfortunately) for Congress most American public schools aren’t so great so many people would become new insurance company customers because they cannot figure out that 2.5% is less of a penalty than the 15 or 16% they would be required to shell out.    I don’t know if this healthcare bill would actually raise the percentage of people who are insured because a lot of people out there do have common sense, and businesses will figure out that the 8% penalty is much less than what they would be required to pay otherwise.

So could you save money with Obamacare?  You probably can if you have a preexisting condition and need to consume a lot of health care.  On the other hand, this will cost a lot more for those who are young, healthy, or make too much money.   In the end, it is just another program to expand government and does not do anything at all to improve the quality of healthcare in this country.

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GREEN SHOOTS:

Unemployment rises to 10.2%, highest in 26 years – At least the pace is slowing!

JNJ cuts 7000 jobs. – Profitable companies found out that people are more productive in recessions, so they need less workers

Fannie Mae to allow borrowers in foreclosure to lease back homes – We are all landlords now.

CHANGE WE CAN BELIEVE IN:

Obama signs unemployment extension bill – 99 weeks of unemployment benefits available now in California

CLOWNSHOW:

Fannie Seeks Another $15 Billion In Emergency Capital

Fannie Seeks Permission to Sell $2.6 Billion in Tax Credits – This is just oxymoronic.

LOLS:

Fannie Mae Files $15.8 Billion in Claims in Lehman Bankruptcy

We are also making some guesses on what the yield of today’s Bank Failure Friday will bring.

In all honesty, I don’t think things have improved much in the past 12 months.  Sure, the stock market has regained ground, but it is mostly due to the fact that the US dollar has lost value.  That is not really a good thing for those who get paid in US dollars.   Unemployment and foreclosure are still going up so it is no time to celebrate the end of the recession yet.  The good news is that there are a lot of shopping, restaurant, and travel deals for the consumer this holiday season because everyone is trying to sell something to someone out there.  This is definitely a good time to save money on the things you need and enjoy.

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1. Find childcare – This is a huge thing I need to settle before going back to work.  We are thinking of asking around in church first to see if anyone we know offers childcare or could recommend someone trustworthy.    I have been looking on Craigslist just to see what the going rate for nannies and daycares are and it seems to average around $11 to $16 an hour.  We would need at least three to four full days of care a week so that works out to be  $1500 to $2000 a month.  If we share a nanny with another family the rate is possibly a little lower.  This definitely would be our biggest expense for the baby.

2. Sign up for Flexible Spending Accounts -  I have until the end of the year to enroll in my employer’s  medical and dependent care FSAs.  The depend care FSA’s maximum contribution is $5000 for each family, but our tax rate is fairly high when you throw in state, federal, and payroll taxes so it is worthwhile to spend that childcare money pretax.

3. Add the baby as a beneficiary to various accounts –   I need to make a list of all the accounts and insurance policies I should add the baby to as a beneficiary.  We just got his Social Security number this week so this can be done online for the bulk of our accounts.

4. Add the baby to health insurance - The hubby already  did this item so the baby is now covered under his plan. We all have Kaiser HMO and so far it has been quite good and convenient for us.

5. Pump lots of milk – I want to build up a good supply of milk in the freezer before I go back to work.  Since breastmilk could last 3 months in the freezer every bit of extra milk I store now is still good in January and beyond.  The frozen milk could be thawed and eaten by the baby in 24 hours so I could give the milk to whoever the caretaker is during the day.  Even though breastmilk is freely produced from me, it takes time to pump, label, and store everything.  However, formula is quite expensive so I don’t mind putting in the work now.

For the most part, I really enjoy being a mom now, but after these three weeks I realize that I need more stimulating interaction.  The baby is cute, but he is  not doing much besides eat, poop, and sleep now.  We are also trying to stay home as much as possible so the baby doesn’t catch any diseases so each day is quite boring.  Nevertheless, we can’t wait until the kid is old enough to talk, walk, and play boardgames with us.

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The hubby has been a lot of help in cleaning the house and changing diapers, but when it comes to feedings he just doesn’t really have the equipment.  At those 4 am feedings,  as Lynette from Desperate Housewives said, I am  “the only bar in town” for the little guy.    It takes at least 30 minutes for the baby to drift off to dreamland with my nipple in his mouth and a dribble of milk down his cheek. Meanwhile I am nodding off and trying not to drop him.  I am getting used to these feedings in the middle of the night, so they are not so bad now.  My hubby is also able to get quite a bit of sleep through the night now so he is feeling less tired during the day.

The more bizarre aspect about breastfeeding is how the baby seems to have a remote control on my boobs.  One time I was doing some business in the bathroom, and he woke up and cried for food.  I wasn’t finished, and I just felt this tingly itch in my boobs and a few drops of milk dripped on my thigh.  Apparently this is called letdown, and it is really the weirdest thing I have ever experienced.  I basically get this urge to shove my boobs into his mouth to relieve the itch.   How can this helpless little chubby guy control my body like this?

I also find the look on my baby’s face both endearing and frightening when he gets close to my breast.  He makes the most animalistic grunts with his mouth wide open and shakes his head from side to side as if he is possessed. Then he latches on like a rabid little beast and starts gulping down milk.  After a few minutes he would slow down and revert back to the peaceful little baby he usually looks like.  I don’t know if all babies do this, but the ferocity in my child’s face when he sees a breast is quite funny.

I am trying to pump a bit of extra milk every day just for the times that I cannot feed him, but I think my breasts are still trying to catch up to the demand of the little nugget  so I cannot spare too much milk, yet.   So far the bottles I pumped really helped in calming the baby during a couple doctor’s appointments, and today my mom fed the baby with one of my bottles and I think it was fun for her.

Another positive side effect of this marathon feeding schedule is that I am losing the fat I gained during pregnancy.  I am only 4 to 7 lbs above my pre-pregnancy weight now and I am on track to lose the extra weight I had.  Of course, my hypercritical Asian mom is still saying that I am fat even though I just had a baby 11 days ago.

Overall, I think  breastfeeding is  very worthwhile for us even though I do feel like a food dispenser for my spawn.  The little guy rarely spits up milk, and he has gained enough bulk to be above his birth weight.  I know that we are fortunate that the baby is able to get enough food from my breasts and he is taking the milk well and the free breastfeeding class we took at Kaiser definitely helped.  My hubby loves that breastfeeding is very easy and clean because it doesn’t involve washing bottles or mixing formula.  He actually said to me that he cannot believe that many women do not even try to breastfeed because it is the most economic and easy way to feed a baby.   Then again, men do not have to deal with cracked nipples and tingly letdown.  I will definitely try to continue feeding the baby breast milk for as long as I can, even though it will be a little tricky when I start work again.

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