Since it is highly unlikely that my grandfathered health insurance plan will be offered to me next year, I have been looking at various health care strategies for 2017. I see two options available to us, self-insurance or figuring out a way to get subsidized health insurance.
Our favorite option is to self-insure from 2017 until 2019 when we become eligible for Medicare. The reason we are self-insuring is because health insurance from the exchange is greater than 8.05% of our adjusted gross income. The good news is that we are exempt from the individual mandate tax because health insurance is too expensive. In 2016 we are on schedule to max out our Health Savings Account(HSA) contribution. Assuming that we do not have any significant medical issues before 2017 we will start the year out with about $10,000 in the HSA. In 2017 we plan on depositing an amount equivalent to our current health insurance premium, $547, into a savings account. Ideally it would be a HSA since a HSA account should be completely flexible. Under current regulations people who self-insure are not allowed to contribute to a HSA. If we run into a major medical issue we will either pay it, delay treatment until we can get health insurance from the exchange, or use an interim health insurance plan to tie us over until we become eligible to purchase insurance from the exchange. If we can make it through 2017 without a major medical issue, we could enter 2018 with about $16,500 in savings for medical care.
An option I have not fully evaluated are strategies to reduce my taxable income below the subsidy threshold(4 times the Federal Poverty Limit). If we both contributed to a traditional IRA then our Adjusted Gross Income might qualify. Even if we qualified for a health insurance plan through the health exchange, I am not sure it we would buy it. My grandfathered health insurance plan has a $3,000/$5,000 deductible. This means I need to dedicate about $5,000 of my emergency fund to health care costs. When I look at the health insurance plans on the exchanges, they had much higher deductibles, $6,500/$13,000. In this case I should have about $13,000 in my emergency fund. If you have only $10,000 and are healthy, it probably make more sense to use our health care money to build up the savings until we exceed $13,000 money and then use an interim health insurance plan to tie us over until the next health insurance exchange enrollment period.
I was fascinated with an Instapundit post about Hillary Clinton and autofill. In the Instapundit screenshot the search terms “hillary clinton indictment” appeared before “hillary clinton”. Although autofill(autocomplete) primarily uses your web browser cache to offer suggestions, it also looks at what people in your region have been searching for. In the post the author was using the Bing search engine so I was curious what Bing and other search engines would show for me. Here is my Bing and Google search screenshots.
Bing Search Form for Hillary
Google search for hillary
The three most interesting search terms for me was “hillary clinton email”, “hillary indictment”, and “hillary fbi” since I was pretty sure I had never used those search terms. So I went over to Google Trends to see why the search engines are including those search terms.
From this Google Trends chart we can conclude that the public has significantly increased their interest in fact checking Ms. Clinton and the media’s version of the story. To put the significance of this chart in perspective I created one more chart to show the relative size of searches versus a generic search for “hillary clinton”. We can see that although there has been significant increase of interest in Ms. Clinton’s legal problems, it is a relatively small portion of the searches for “hillary clinton”.
Last year I reviewed the Tesla Powerwall and said that the price of this battery needed to drop by 50% to around $1,500 to catch my attention. Since the Powerwall battery was priced at $428/kWh I was hoping to see a price closer to $214/kWh to get me interested. Last week I saw an article about the BioSolar battery that said it might be the “Game Changer” because this battery is estimated to cost $54/kWh. With my current electrical cost of 12¢ per kilowatt hour a 7 kWh battery will save me $0.84 a day. If we make a guess that a 7 kWh BioSolar battery will cost less than a $1,000 then the payback is now 3.26 years versus 9.78 years for the Powerwall. If the Powerwall was a small step forward for green technology then the Biosolar battery is a great leap forward. The cost effectiveness of the BioSolar battery has the potential to make a subsidy-less, solar panel project a financial reality. Since going off the grid is quickly becoming both simple and cost effective, look out utility companies!
On Sunday my wife and I were shopping for a new lawn mower and decided to check the lawn mower prices at our local hardware store. I thought this store was out of business since it has had such a difficult time competing with the nearby Home Depot and Lowes stores. We did not find a lawn mower but I was intrigued that out of the three store employees, two were working at the gun counter. Of the the seven customers in the store five customers were at the gun counter. A couple of years ago this store did not sell guns and now they have more guns and ammo customers than hardware customers.
One of the promises of the 2009 stimulus bill was that the government would start work on a large number of “shovel-ready” projects that would generate jobs. Probably the greatest disappointment with the bill is that most of the purported shovel-ready projects got tied up in the regulatory process and never generated any jobs. Since the border wall has been on the books since the 1980s you have to think that the regulatory process is complete. If the 2009 stimulus bill was screaming for any shovel-ready project that could generate jobs, why didn’t we build the wall?
Here is a nice story about the Cadillac Tax provision of the Affordable Care Act. Although I am not affected by the Cadillac Tax I found the video clips of Mr. Gruber and Mr. Emanuel to be particularly insightful at explaining why lying and deception was necessary to pass the Affordable Care Act. Since most of America expected that passing the Affordable Care Act would result in more affordable health care, it would have been wiser if these two men spent more of their time thinking of ways slow down health care cost increases rather than gloating over how they pulled one over on the American public.
Last year I wrote a post early in 2015 that asked whether 2015 would be the year active stock pickers finally caught up to passive investors. Looking back at 2015 we can see that it was not a good year for stock pickers. The S&P 500 return was propped up by the FANG stocks, Facebook, Amazon, Netflix, and Google. It is hard to be a successful stock picker if the market is stuck on four stocks and refuses to rotate into cyclical or value oriented stocks. At some point the S&P 500’s dependence on FANG stocks for growth should become a liability when earnings and dividends become important again. It may be early but 2016 looks like it will be different. My current favorite US stock ETF, SCHD, and my son’s moderately conservative mutual fund from USAA(UCMCX) are both doing better than the S&P 500. If conservative stock ETFs and mutual funds can outperform the S&P 500, active stock pickers should not be far behind.
Many people including me thought that the science behind Ivanpah Solar Plant was so much better than the rest of the pack that it was the renewable energy idea that was most likely to succeed. Last year I heard stories that the plant was using considerably more natural gas than anticipated in an effort to start steam generation from solar power earlier in the day. So either the brine was cooling off too quickly overnight or someone had dramatically underestimated the power available from the morning sun. It is an intriguing mechanical engineering problem but it looked more like a problem with bad solar science rather than bad luck with the weather. The unanswered question was whether this solar science problem could be overcome with a small additional cost or was this a deal breaker for this plant?
California electric utility regulators on Thursday, March 17, approved a deal between Pacific Gas & Electric and the owners of Ivanpah solar plant that gives plant operators more time to increase electricity production.
The plant’s owners have agreed to pay PG&E an undisclosed sum in exchange for getting time to improve the plant’s electricity output. The deal followed realizations that the plant is failing to meet its production obligations to the utility.
Technically the plant’s owners signed a forbearance agreement so that PG&E will not declare that its power purchase agreement with the plant owners is in default. When PG&E uses the word default the problem is serious and activists are forcing it to confront the production problem. If Californians opted to buy renewable power through higher utility rates, they better be getting their power from solar powered generators and not from gas powered generators. If the plant owners do not get their act together by July 31 then they probably have only one six month extension they can count on before PG&E will push for default. According to the report the solar power production for last year amounted to only 624,500 megawatt hours of solar power or about 62% of what they expected to produce. This production number is 50% better than the previous year and it was achieved primarily by preheating the water to extend the solar production day. Once again this looks like a mechanical engineering patch for bad solar science rather than luck with the weather.
The really interesting question is what can the plant owner’s do to avoid default and what is the future for renewable energy. The plant owner’s have enough solar data from running the plant in 2014 and 2015 to predict the maximum amount of electricity they can generate from solar power. Do they have any engineering tricks left that will improve solar power production by 50% or is the best strategy is to avoid the sunk cost fallacy and admit defeat. Negotiating a new contract with lower production quotas sounds like a better financial solution for the plant owners than throwing additional money at the problem or shutting down the plant. The enduring problem is that the Ivanpah failure will give credence to the argument that big renewable energy projects are not only bad investments but are prone to corruption through the use of bad science. Future renewable energy projects will be slower to fund and construct since they will have to meet much tougher scientific standards.
Last week spiral sliced ham last week was on sale at Meijer for $1.15 per pound and Jeff Phillips sent me a newsletter about his Double Smoked Spiral Sliced Ham recipe. It was either a remarkable coincidence or it was meant to be. The recipe is pretty simple. You drizzle honey in between the slices and apply Jeff’s rub on the outside. So I prepped the ham and stuck it in the smoker before going to church. When I came back I brought it upstairs to finish it off in the oven.
That somewhat boring ham had transformed into a interesting combination of smoky flavor, spiciness, and sweetness. My wife wanted cheese grits with jalapenos so I balanced the meal with some green peas. It probably took me no more than thirty minutes to put this meal together. This is an easy, fun change of pace from the traditional Easter meal.
Although I like my previous recipe for Cooking Pork Chops With The Anova Sous-Vide Cooker, I changed the recipe slightly to get a better sear on the pork chop without drying it out. Since my pork chops are about 1 inch thick, I cook the pork chops in my sous-vide cooker to a temperature of 135° for about 45 minutes. Then I heat a cast iron griddle to a medium high temperature for about ten minutes. This allows me to get the good, quick sear on the pork chops without too much of a temperature drop. When I sear the meat for about two minutes a side, the inside is done, and it looks like this.