Breaking News -- United States
Oil falls sharply after Iran nuclear deal
by Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Oil futures opened Monday’s electronic trading sharply lower, as markets reacted to a deal between Iran and major world powers that could head off further sanctions on Iranian crude.
Crude oil for January delivery /quotes/zigman/2196833/realtime CLF4 -1.08% fell 77 cents, or 0.8%, to $94.07 a barrel, moving off a more than 1% drop at the open of electronic trade late Sunday U.S. Eastern time.
The contract had ended Friday’s regular session on the New York Mercantile Exchange 0.6% lower.
January Brent crude /quotes/zigman/2648923/realtime UK:LCOF4 -2.27% — more sensitive to Mideast supply developments — tumbled $2.44, or 2.2%, to $108.61 a barrel
The Iranian agreement with the U.S., along with other permanent members of U.N. Security Council as well as Germany, runs for six month and includes a halt to Iranian efforts to improve its uranium-enrichment capacity and allow increased monitoring of its nuclear program.
The deal, announced Saturday, didn’t include any easing of sanctions on Iran’s sales of crude oil, which analysts have said would likely be held back until a longer-term agreement is reached.
The U.S. State Department said the accord would “allow purchases of Iranian oil to remain at their currently significantly reduced levels — levels that are 60% less than two years ago. $4.2 billion from these sales will be allowed to be transferred in installments if, and as, Iran fulfills its commitments.”
However, Reuters reported that the terms of the deal are meant to forestall any further tightening of sanctions, and that an easing of a European shipping-insurance ban could result in more Iranian crude reaching markets in Asia.
On the other hand, several U.S. lawmakers — both Republican and Democratic — said Congress could seek new legislation to tighten Iranian oil sanctions, despite the terms of the agreement.
In other energy trade early Monday, December gasoline /quotes/zigman/2776245/realtime RBZ3 -1.92% tracked crude’s losses to fall 4 cents, or 1.4%, to $2.69 a gallon.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles. You can follow him on Twitter at @KitchenNews.
Obamacare Burdens Shift to States as Mandate Rollback Creates New Woes
by Andrea Billups
The burden for delivering much of the Obamacare health plan has shifted to the states, which now need to sort out how to restore insurance plans that were canceled before the president's recent shift on mandates.
After President Obama's decision last week to allow insurance companies to maintain plans that don't match the requirements in the Affordable Care Act, the hard work falls into the laps of state insurance chiefs, who need to make decisions about the nearly 6 million Americans who already lost coverage.
Some have compared it to putting leaves back on trees or pushing toothpaste back into the tube, as the healthcare law's goal of offering more people insurance coverage will likely do the opposite, especially for those who pay for their own plans and saw them disappear.
When the president says he is going to reverse the regulations that have resulted in plan cancellations, it's not necessarily an easy step to restore those plans "because state-level insurance commissioners get to decide if those plans get reinstated in those states," Hadley Heath, a senior policy analyst at the Independent Women's Forum in Washington, D.C., told Newsmax
Already insurance regulators in Indiana, Massachusetts, Minnesota, Rhode Island, Vermont, Washington, and most recently California said they will not be going along with Obama's "fix," and will not allow insurers to renew plans that don't comply fully with Obamacare mandates.
“Such action would seriously destabilize Indiana's insurance market and create logistical chaos, fueling even more uncertainty for Hoosiers,” Stephen W. Robertson, Indiana’s insurance commissioner, said in a statement on Wednesday.
Heath said the future outlook for Obamacare appears grim as it becomes fully implemented: "It's going to be a slow drip of bad news, I'm afraid."
Heath noted that the president's reversal would extend only to canceled individual plans for a year. Next year, the debate shifts to employer-sponsored insurance plans, impacting a much bigger swatch of the population who risk losing their current plans.
An analysis by the American Enterprise Institute released this week predicted that up to 100 million employees receiving their health insurance from their place of work could have their policies canceled next year, with as many as two-thirds of all small businesses dumping their workers into Obamacare.
"The real fascinating issue here is that the president wants to create the perception that he wants people's canceled plans to be restored, but from a cost perspective, that undermines the Affordable Care Act," Heath said.
The system, Heath observed, only works if there is a sufficient level of participation. But now, "to allow people to stay on their canceled plans, it removes them from the system. So from a policy standpoint, the White House certainly doesn't want to restore their canceled plans."
The frustration generated by Obamacare exploded publicly in the White House's face this week as a single mom once touted by the president as a benefactor of the plan now says her Washington State healthcare plan turned out to be far too expensive for her to afford enrollment.
The current problems stems largely from the vast number of mandates in the new law that many healthcare plans cannot meet, especially on the individual market where consumers often tailor plans for their own needs.
Under Obamacare, the essential health benefits package covers 10 mandatory categories of services, and all items must be covered by all plans starting in 2014 whether consumers want them or would ever use them.
According to the Healthcare.gov website, the 10 essential benefits include ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
All must be covered not only in the health insurance marketplace but by state Medicaid programs, where many new people are now eligible under the new healthcare law.
Another provision in the law allows states participating in the exchanges to decide the specific benefits to be offered. That is creating huge disparities.
For example, some states, 24 to date, have chosen to cover autism disorders and an expensive and intense form of care called Applied Behavior Analysis. At least four states thus far cover bariatric surgery for weight loss, and 10 states offer coverage for chiropractic services.
Analysts at the Heritage Foundation's Center for Health Policy Studies wrote in a report published in April: "The effect will be disparities among states, as the package of essential benefits will be more generous in some states than in others. Of course, those differences will also be reflected in plan premiums."
This portion of the law likely will also create yet another divisive hitch, noted the report's authors, Heritage Senior Research Fellow Edmund F. Haislmaier and Alyene Senger, a research associate.
"The amount paid by those receiving Obamacare's exchange subsidies will not vary by state – despite individuals in one state receiving more generous (and more costly) coverage than individuals in another state," they said. "The reason is that the Obamacare subsidies are based on the recipient's income, not the cost of the available coverage."
Heath said heightened state flexibility initially sounded like a good idea.
"States can mandate anything they want for inclusion in health insurance but it's not the case that that necessarily improves the quality of health insurance," she pointed out. "In the end, some people will be buying coverage for things they don't want to pay for."
Such coverage differences, purchasing differences, and even website differences that vary from the federal government and state to state all add up to public confusion, with little guidance available for people to find credible and up-to-date information to make decisions.
"Instead of fixing the system, Obamacare creates a new set of losers – people who will be paying more for coverage they don't want and have plans canceled that they liked," Heath added. "I think there is a growing realization among the America public that as laudable as the goals of Affordable Care Act have been, strategically, the law won't get us there."
Hawks in US Congress may try and derail deal with Iran
Despite an historic deal being reached between Iran and the world powers, some political commentators are warning that there is still much work to be done in terms of regaining trust.
Soraya Sepahpour Ulrich, an expert in US-Iran relations, warned that America is not run by the president and his administration alone and that there are various other forces in the US, which may want to derail the diplomatic process.
“Lobby groups and congressional members at the moment, especially with this president, are far more powerful than Mr. Obama. So to think that things will change now because there has been this initial first step, its being very optimistic,” she told RT.
“It’s taken 34 years to demonize Iran; it will not go away overnight. The US lobby groups, the media, the think tanks, they are not on board yet,” she added.
Normon Solomon, director of the institute for public accuracy, said that while this is a key breakthrough for diplomacy, there are still elements in the US Congress who are still pushing for a hawkish stance on Iran and are happy to cozy up to Benjamin Netanyahu and the Saudis who have said that the deal will make the world less safe.
“I think the right wing elements in the US Congress, those who follow the lead of Benjamin Netanyahu, some Republicans and Democrats, tonight and in the next few days will be back on their heels,” he told RT.
While he said “the momentum is now with the agreement” he cautioned that “the Israeli government and those in the US Congress who want an attack on Iran, they will not rest, they will hate this agreement.”
However, he stressed that the success of the talks has reversed the momentum away from the hawks in Washington.
“That is a crucial dynamic because when you have all the major players of those negotiations wanting the deal and getting the deal, it’s a very favorable foreshadowing of the six months beyond,” he added.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.
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