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News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

• Galen Institute: What They Agree On. Excerpts: Now that it appears the Democratic presidential contest will keep going for some time, health care will continue to be a major topic of debate. While most of the disagreement between Sens. Hillary Clinton and Barack Obama has focused on universal coverage -- and particularly an individual mandate -- that dispute is actually overshadowing how many similarities there are between their two health policy proposals. The sooner that voters focus on the larger picture, the better informed their decisions can be. There are a number of provisions in both of their plans which are not controversial, such as a greater emphasis on using health information technologies, offering a choice of health plans, better prevention and chronic care management, etc.

  But here is a partial list of what Sen. Clinton and Sen. Obama are proposing that reveals their visions of a much larger role for government in our health sector. They both would create new health care purchasing arrangements and propose...

  Most of the Republican presidential candidates' plans were organized around the idea of moving more power and control over health insurance and health care decisions to patients, as I described in my recent Wall Street Journal article. Because there was little debate in the GOP contest over health care, the issue received little attention. But to prepare for the general election, Sen. McCain must do more work to refine and develop his plan.

• Wall Street Journal: Insurers Pressed To Pay More For Prostheses. By Vanessa Fuhrmans. Excerpts: Big advances in technology have raised the costs of prosthetic limbs, and that has made them a target for cutbacks in health-care coverage. Many private health plans cap prosthesis coverage at $2,500 or $5,000 a year, or pay for just one device per limb in a lifetime, sometimes even for a growing child. The most basic devices can cost between $3,000 and $15,000, while mechanically advanced or computer-assisted models can cost up to $40,000.

  Now, amputees and prosthetic-device makers are pushing state legislatures around the country to pass laws that mandate prosthesis coverage. The goal is to force private health plans to offer coverage comparable to that provided by Medicare, which pays at least 80% of the cost of prostheses and allows regular replacement of artificial limbs. Health insurers oppose such mandates, saying they reduce consumer choice and drive up costs.

  Prosthetic devices are among the biggest-ticket items affected by the growing effort of insurers and employers to curb rising health costs by asking patients to pay a bigger percentage of their medical bills. For people who need artificial limbs, the receding coverage can mean paying tens of thousands of dollars to fill the gap. ...

  "You'd think that there isn't anything more basic than making sure someone has an arm and leg," says Keith Molinari, who found his private health insurance covered only a fraction of a basic prosthesis when his 10-year-old son, Chase, lost his leg to cancer as an infant. The Molinaris, in Roscoe, N.Y., made what they say was an emotionally difficult decision to have their son, who outgrows his artificial legs nearly every year, declared disabled so he would qualify for Medicaid, the joint state/federal program for the poor. Mr. Molinari has since changed jobs and now is enrolled in a plan that provides adequate coverage for prostheses.

• The Commonwealth Fund: Health Policy Reform in the 2008 Election Season. Excerpts: With the 2008 presidential election dominating headlines, health policy reform—and the candidates' health plans—are also making news. The Commonwealth Fund has published a number of pieces, available below, that explain and analyze the candidates' proposals, as well as the issues at stake in the campaign and beyond.

  Also check out Commonwealth Fund staff discussing the candidates' plans in the media. Commonwealth Fund president Karen Davis appeared on ABC's "World News Tonight" in a two-part series on health care in the presidential election. Watch the December 12, 2007 video clip. Karen Davis also appeared on the CUNY TV show, "One to One" on February 20, 2008. Watch the interview with Sheryl McCarthy of Newsday. Sara Collins, assistant vice president for the Program on the Future of Health Insurance at Commonwealth Fund, reviewed the candidates' plans on the March 3, 2008 episode of "The Bob Edwards Show."

• The State (South Carolina): Parental umbrella would cover young S.C. adults. Bill would extend health care protection for dependents years longer. By Roddie A. Burris. Excerpts: South Carolina would be taking one of the most aggressive stands in the nation in extending health insurance to its young adults under a proposal lawmakers will discuss today. A bill proposed by Sen. Joel Lourie, D-Richland, would require insurance companies to insure adult dependents up to age 25. Full-time college or trade school students could remain on their parents’ coverage until age 30. Military veterans — those who join the service for a few years then return home to attend college or trade school —could be covered under a parental health insurance policy up to age 33.

  Access to health insurance is one of the greatest challenges facing the United States today, Lourie said, and with fewer employers offering insurance in a troubled economy, young people are struggling to afford coverage.

• Physicians for a National Health Program: Do health benefits reduce wages? The Mandate Wars, In California And Beyond. By Rick Kronick. Excerpt: There are many reasons that most moderate-income workers are covered by insurance, while hardly any moderate-income who are not covered by employer-sponsored insurance choose to purchase coverage on their own. These reasons include: the fact that non-group insurance is a much less good buy than group coverage; the fact that people with health problems often cannot buy non-group coverage at any price; differences in tax treatment (although premiums are fully deductible for the self-employed, and relatively few self-employed purchase coverage, so tax treatment is far from the whole story); and the possibility of self-selection in which people who most value insurance manage to find jobs that offer coverage.

  Part of the difference is no doubt due to confusion about who is really paying the bill — although most economists would swear that employer contributions to insurance are really paid for by workers in the form of foregone wages, the very high coverage rates for moderate income workers suggests that many economists swear too much. Regardless of the reasons for the difference, the very high coverage rates for moderate-income workers and the very low purchase rates among moderate-income workers who do not have employer sponsored insurance provide diametrically opposed views of affordability, and complicate the discussion about the level of income at which a person can fully afford insurance.

• BusinessWeek: Outsourcing the Patients. More U.S. health insurers are slashing costs by sending policyholders overseas for pricey procedures. By Bruce Einhorn. Excerpts: For years, Americans have been traveling abroad to save money on elective procedures or dental work. David Boucher, 49, doesn't fit the usual profile for such medical tourists. An assistant vice-president of health-care services at Blue Cross & Blue Shield of South Carolina, he has ample health benefits. But Boucher recently chose to have a colonoscopy at Bumrungrad International Hospital in Bangkok, mainly to make a point about the expanding options available to Blue Cross customers. And his company happily picked up the $640 tab—a bargain by U.S. standards.

  Blue Cross and other insurers would like to see more policyholders traveling abroad for medical care. Since the start of the year, Boucher has signed alliances with seven overseas hospitals and hopes to add five more by yearend, including them all in coverage for his company's 1.5 million members. As health-care costs continue to rise in the U.S., "medical travel is going to be part of the solution," he says. ...

  Blue Cross took the lead in medical offshoring when it formed its first partnership, with Bumrungrad Hospital, in February. Since then the insurer has signed similar pacts with the Parkway Group Healthcare, owner of three hospitals in Singapore, and hospitals in Turkey, Ireland, and Costa Rica. Three members of India's Apollo Hospitals Group are also joining the network. And another large Indian chain, Wockhardt Hospitals, is talking with U.S. insurers as well. "Americans haven't come to grips with having their heart surgery in Thailand," says Curtis Schroeder, the American CEO of Bumrungrad. "But that will change."

  The shift is sure to leave some policyholders disgruntled, of course. Offering international coverage might make it easier for employers to limit benefits at home, for instance, by raising the deductibles on U.S.-based procedures. It's also extremely difficult for patients to sue for malpractice in most Asian countries. Bumrungrad has offices for marketing and promotion in 20 countries, but not the U.S.—in part because having a U.S. office would open the door to potential liability, hospital officials say. So it will take a while for the trickle of insured U.S. patients in Asia to become a torrent. But over time, for policyholders and payers alike, the price may be hard to resist.

New on the Alliance@IBM Site:

• Alert: Be aware that IBM is blocking e-mail from the endicottalliance address to IBM internal e-mail and filtering from employee to employee with the term Alliance@IBM
• A view of the pay cut. By a Poughkeepsie IBM employee. Excerpt: Executives shamelessly claim “we feel your pain” when cutting pay but the company can’t afford to pay overtime because we won’t be able to compete. We’re only talking about 7600 people out of 125,000, or 6% of its U.S. workforce. Boy, that’ll scare away the shareholders – we’re paying the help too much! Speaking of pandering to Wall St. – IBM just announced another $15 Billion in stock buybacks ($94 Billion since 1995) – more for the executives! In fact CEO Palmisano received an 11% raise in compensation for 2007 of $20 million. Consider, too IBM made $10 Billion profit last year, the 7th straight year of profits greater than $5 Billion - which you’ve helped earn. So IBM can easily afford to pay OT. The pay-cut is about revenge.
• Tell IBM to rescind employee pay cuts. Effective February 1st, IBM unilaterally reclassified 7600 employees from exempt from overtime to non-exempt AND cut their pay 15%. IBM is also rebanding employees to lower bands which will also affect future wages. IBM Executives are meeting with employees around the country who are getting their salary cut. Is this simply damage control?

  Keep the Pressure on! Take a stand! SAY NO to Pay Cuts! Tell me more...

• Plan Now! Make your voice heard at the IBM Stockholder meeting April 29th in Charlotte, North Carolina. Details to follow...
• From the Job Cuts Status & Comments page
  • Comment 3/07/08: I know someone hit by an RA today. This person does software support in IT Delivery. His job is being outsourced to China. He has been given 30 days notice.. -Anonymous-
  • Comment 3/09/08: Its been confirmed that there will be another huge layoff in May. Expect the same approach as last May with two rounds. Initial numbers are somewhere in the 400 to mid 500's in each round. GBS and ITD will be the target. Focus will be on the 06A and a smaller percentage in the 08A families They are working the numbers for the following month / quarter as well. This will be the norm until the vast majority of the higher paying jobs are COTS over to BRIC -insider-
  • Comment 3/10/08: insider: How are the May job cuts any different than what we see EVERY quarter? Heck, there were job cuts just last week!. -member-
  • Comment 3/10/08: Anyone know any info about upcoming cuts in Canada? My usual 'contacts' know nothing but I have seen H.R. and LEAN Managers meeting in our building for the last few weeks. -DM-
  • Comment 3/11/08: To Nobody: Try adding whatis@us.ibm.com to your IBM buddy list. It shows up like a person but it's a bot you can query for all those crazy acronyms. If you type in "what is bric", just as if you were having a conversation with someone, it returns: "(Buzz) Definitions Found (1) Brazil Russia India China." Long address: WhatIs Bot/Southbury/Contr/IBM@IBMUS -NotNobody-
  • Comment 3/15/08: Open your eyes mrmx. The only reason Gates wants what he wants has nothing to do with hiring all their employees from the same 'culture.' Companies want to hire labor at lower cost. If there is a problem with the gene pool then it is at the level of CEO management that puts short term profit ahead of long term vision. -OpenYourEyes-
• General Visitor's Comment page:
  • Comment 3/06/08: This came out Tuesday: "Each year we are challenged to improve upon our business performance to drive continued positive growth in the AIS Service Line. In order to meet our 2008 business objectives, we have aggressive utilization targets that require that we drive at or above 10% every week as an organization. This equates to an average of 4 hours of billable overtime per person each week.

    I do recognize that many of you spend time travelling that is not considered billable. You should continue to log that time as nonbillable for the actual time worked. However, to achieve our growth objectives, our model requires that each practitioner average a minimum of 44 billable hours per week. For those of you who are currently exceeding this run rate, I thank you and encourage you to keep up the great work. For those practitioners averaging less than 44 hours per week, please work with your project management to structure your workload to accommodate the minimum of 10% overtime. Exceptions, including contracts capped at 40 hours, should be brought to your Practice Leader or RDM's attention for escalation. Billable utilization has a major impact on our financial results, so your efforts do make a difference. I sincerely appreciate the value, innovation, hard work and commitment each of you deliver on a daily basis!

    Donna D. Satterfield AIS Americas Cross-Sector Leader Global Business Services" -Leaving-

  • Comment 3/08/08: I have been part of IBM/Tivoli for 10 years and in that time I have seen it go from innovative, help the customer company to a process and spreadsheet driven organization. If you try to think 'outside' the box it is not well received. It has worn me down to the point I have decided to leave. I guess it is just the nature of business here at IBM, but there are many other opportunities out there and I found one. If you wonder what it is like outside of IBM there is opportunity as others have said, see for yourself. I refuse to stay and turn bitter...... -DJ-
  • Comment 3/08/08: To "Leaving". This has been IBM's scummy tactics for years. You are forced to work overtime so they can bill the customers extra, although you won't get any of that for your efforts. They finally got caught with that lawsuit but did not learn their lesson. I'm sure there are more lawsuits to come. I'm amazed they sent a letter saying you have to work more hours. They never in the past would admit that they told us we had to work ot or else. -Anon-
  • Comment 3/08/08: Nice to know that come next year I will move down a band from 08 to 07 as a Senior I/T Specialist which I have been for 12 years and 25 years in IBM total. This statement is on w3 about the reclassification action:: IBM says they have to do this because 'it's a government regulation and does not reflect less of the value to IBM of the job'. So why am I effectively going to be demoted? Nice to know that I thought staying strong technically and constantly up with the skills for hardware, software, middleware skills for all these years (effectively a career) to offer a value to IBM was really valued in IBM.

    If the value of a Senior I/T Specialist is the same to IBM then why a deband/demotion? Maybe if I decided to just push paper, did Powerpoints, and asked people for their task and project due dates to fill out my Excel or PM tool, then I would be easily band 09 by now or even higher. That is obviously still valued in IBM. -Anonymous-

  • Comment 3/09/08: Does everyone know what "Sitting in The Catbird seat" means? I'm sure you've heard that expression before. It's an idiomatic phrase used to describe someone an enviable position, often in terms of having the upper hand or greater advantage in all types of dealings among various parties. At IBM, I'm sitting in the Catbird seat, and if you could see me, you'd know you'd be looking at one cackling assed Catbird! I'm loving it!

    See, I've got 32 years of service, and I'm watching the effect things like LEAN, Resource Actions, and Global Resoursing are having on the "Virtual IBM's" business. You know the "Virtual IBM" don't you? You know, everybody is phoning it in from everywhere and can do any job from anywhere. That alone has had a very large detrimental effect on IBM's business , but when that's combined with all three things I listed previously, well let's just say IBM's death knell has been sounded. It isn't pretty, but it sure is FUN sitting here in The Catbird seat watching this three ring circus!

    My accounts are in a shambles, complete and total paralysis has set in. The customers are starting to see things they haven't ever seen from IBM before. And they don't like it. But I don't care! Let the chips fall where they may! From my Catbird vantage point, I'm just sitting back and I cant wait to see what tomorrow's fiasco will be! Oh... I forgot something... I'm NOT leaving voluntarily. No sir!! It'll cost IBM six months salary for me to walk out the door. -Catbird-

  • Comment 3/09/08: Catbird - I don't have quite as many years as you, but I agree with you. Nobody up the management chain is willing to report how poorly this "globally integrated enterprise" bunk is not working and no one is willing to report the poor quality and productivity of most of the globalized functions. Nobody cares that LEAN has reduced us to the point where we aren't able to meet contracted customer agreements and customers are complaining. Yet no one in the executive ranks (that's you Joanne Collins Smee) gives a rat's ass about the problems because of their myopic focus on cost reductions.

    My coworkers and I have done as best we can to prevent the coming disaster, but there is nothing more we can say or do to prevent the inevitable implosion of the IBM services organization. It's time to hang on as long as possible and await the natural consequences of executive stupidity occur. If you can't prevent it, you might as well sit back and watch the disaster unfold. -Frank-

  • Comment 3/09/08: Catbird, Frank, Thanks for the chuckle. I spent almost 9 years at IBM when I was thrown under the bus on the May1st RA's. I was a 08A Family PM who was asked to go over and help a team that was desperate for the skills I had, hands on technical and PM skills, data center moves, transitions.. the fun stuff. Two months after I was asked to come over to help, they whacked a ton of folks in the department, including myself.

    I have watched this company spin out of control for the past 6 years. We use to be drive by customer sat.. that's now laughable. IF you customer sat is anywhere near good, you are way over staffed. If the client is engaging legal for a contract review and penalties assessment, you are about staffed properly. All of the top notch folks have left because, after 3 years with no raise, why stay? Moral is in the crapper and folks are tired of the fire drills. Staffing has been cut past the muscle and bone, they are loping off limbs at this point. Add to this the demotion on the 24A family.

    The funny thing is that the blue pig loved the OT from the salary folks.. it was pure profit. Now that those worker bees have to claim / total the exact hours, the blue pig is going to lose yet another stream of income.

    The total lack of a moral compass has been the worst to see.. I have seen folks close to retirement or in my case, partial disability, get canned with no concern what so ever. I called in to the folks when I was RA'd and tried to plea about the need for me to work at home due to my spinal injury.. the man on the other end told me "Its not our problem" and hung up on me! No kidding. They RA'd me in May.. but kept extending me.. I found a job and told them I no longer wanted to be a pawn and I would not want to be extended anymore. I was released in August. I took 2 weeks off for another surgery and joined my new employer. More money less stress no bullsh&t.

    IBM is dead.. its over. Its a big ponzi scheme for the upper management stock option folks.. I also hear that the last of the big gerstner era options are up soon? JCS is the one who coined the phrase of pound the square peg in the round hole.. keep pounding until it fits.. In my 8 years as well as all of the veterans I have talked to, IBM has never reached the moral lows they have at this point. Please notice that no one from management is attempting to repair credibility and worker morale anymore.. THEY DONT CARE.

    I feel for everyone left.. I really do, but in a perverse way, I am enjoying the show from the outside. Its like a slow motion car wreck. Everything folks have said would happen, has. There will be a LOT more layoffs and more global resourcing. Divisions will be spun off soon as well. Get your experience, but do not plan on staying to retirement.. look after yourself for once.. the camaraderie and ibm'er spirit is dead -exibm'er-

  • Comment 3/12/08: Someone asked this question a while back. Is there a law that protects employees from working too many hours? Or is it what this union is all about? -A Band 9 Employee in Tucson- Alliance reply: The law only states that if you are non-exempt you get paid overtime. Theoretically IBM can make you work (and pay you) 24 hours a day. There is no law on the number of hours you can be made to work. Also there is no law that says IBM must offer vacation or sick leave. There is no law that requires IBM to pay holiday pay. There is no law that says IBM must give you severance pay.

    This union is about many things. First and foremost it is about giving employees a legal voice in the workplace. A union contract, negotiated between employees, the union and the company is a legal document and spells out the terms and conditions of employment. Each contract is different. (we have examples on our web site). If the employees want limits on working hours in the contract, then that gets negotiated.

  • Comment 3/12/08: Gee, whatever happened to that IBM Spirit group or program? Remember the barbeques, the fun and games, etc. sponsored by IBM at some larger IBM sites (Fishkill, Poughkeepsie, Southbury, Somers, etc.) Haven't heard a peep from them this year. I guess it was another thing IBM cut to save costs considering morale in the company is looking more unsalvageable with each job cut, with each base pay cut, with each offshored job, etc. IBM is no longer Big Blue: it is big blew, the blue pig, or pale blue. Maybe if the IBM Spirit sponsors are still around they should conduct a contest to pick the most appropriate IBM moniker for the times! -IBM-spirit-is-a-ghost-
  • Comment 3/12/08: Message to = No sir!! It'll cost IBM six months salary for me to walk out the door. -Catbird- Do not count on a package. The game is now that IBM offers you a job (100 % travel is in our job descriptions now), and if you do not take it, you are in effect resigning. No package and no unemployment. Sitting waiting for a package is a fool's game now. -Anonymous-
• Pension Comments page
• Raise and Salary Comments
  • Comment 3/08/08: If any of you were expecting a reasonable salary plan this year, you won't see it. IBM will find any excuse to gut it and the slowdown in the US economy is going to be the excuse. They're counting on the lack of jobs due to the downturn to force people to stay in their miserably underpaid IBM jobs. -Renege-
  • Comment 3/09/08: Salary = 76500; Band Level = 6; Job Title = Technical Services Professional; Years Service = 4; Hours/Week = 50; Div Name = 7; Location = Chicago Message; = No raises ever. Was maxed out in my band. I put in work every weekend and over 30 OT hours per month. Managers can't even be bothered with passing on the appeals requests over on the Bank of America account. These same managers supposedly also neglected to change the job band of their employees when IBM initially got the contract. Unlike some of their peers in other ares of the same account who looked out for folks. (Yes, those people did not receive cuts). -IBM=thesuxorz-
  • Comment 3/11/08: My team consists of four non-exempts, a contractor, and the team lead (who is exempt). We have a weekly on call rotation. Is it legal (ethical? moral? absolutely NOT!) for the exempt team lead to take his share of the rotation? This was mentioned to our manager and the manager says that HR told him that it's perfectly fine. I disagree...he's taking standby and overtime hours (and thus, compensation) away from the rest of us in my opinion. In fact, one of the nonexempts had a family emergency during his rotation...and the team lead took it upon himself to take that week, even though some of the rest of us volunteered!! -nohope-
  • Comment 3/13/08: Salary = 36000; Band Level = 3; Job Title = ssr; Years Service = 25; Hours/Week = 40; Div Name = 48; Location = nj; Message = how do i compare -Anonymous-
  • Comment 3/15/08: My last three MERIT increases wiped out with pay remix and reclassification. I wonder if McDonald, Moffatt, Palmisano and the rest of the thieving bastards would like to have their pay remixed this way? -No merit IBM-
• PBC Comments
  • Comment 3/11/08: Prior Yr PBC = na This Yr PBC = na This Yr Bonus = a life Prior Yr Bonus = retired Message = The PBC system is working perfectly. You are all scrambling like mad to gain an extra crumb that falls from Sammy's mouth. You mostly know to the minute what hours you are putting in and yet you have no idea what your compensation for it will be either in bonus money or raises. Then when its lower than even you imagined you look for something or someone to blame. The butt kisser must have gotten my bonus or my raise. etc. etc. The real problem is you are working without a contract and IBM management is playing you for a fool by pitting you against each other to pretend your competing for a pool of money that never existed in the first place.

    You can bust your butt, go from a 3 to a 1 and only get a 300 dollar bonus if the boss does not like you and there is nothing you can do about it because you do not have a say in anything. There is a reason you see auto workers standing in the snow in Detroit on a picket line. Because when its done they know exactly what they will be paid and exactly what their benefits will cost and that for the length of the contract they have a say in creating they will have job security . All they have to worry about is getting to work and just doing their job. Then getting home and enjoying their time off with friends and family. Unionize now while IBM is making record profits and carve out your piece of the pie. -Exodus 2007 -

• International Comments
  • Comment 3/12/08: Country = Ireland; Union Affiliate = n/a; Job Title = Ireland; IBM Division = SERVER; Message = Well boys and girls; 2 co-workers fired in the space of a few days. One appealed and was re-instated .Is this all falling in with (lean) we see the damage it has done in the USA and as you know this has now been introduced into server in dublin, so how long have we left!? It looks like they will get rid of the weak and layoff the rest. If any of you guys have contact with our fallen friend tell HIM/HER to appeal immediately even if nothing happens at least fight. 8 years down the drain!and for what! well done IBM! -Cisco101-

Vault Message Board Posts:

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.

Modern-Day Robber Baron Corner:

Today's highly compensated executives face many difficulties, including figuring out how they can possibly spend all of the rich rewards they've earned on the backs of ordinary workers. Take a look at the insider trading of many of our IBM executives—spending the cash from all that stock "acquired at $0 per share" must be a real challenge! Or, imagine the difficulty IBM CEO Sam Palmisano will face spending his $10,000 to $20,000 a day pension when he retires!

As a way of helping out our beleaguered, modern-day robber barons this site will periodically feature "spending opportunities" that the "upper crust" of our society may want to take advantage of!

• The Telegraph (United Kingdom): Homes of the really super rich. By Harry Wallop. Excerpts: With a starting price of £40 million, these five properties are considered the most sumptuous on the market in the world. They include a Parisian mansion, complete with library and ballroom, for £75 million and an eight-bedroom estate in upstate New York, which is a relative snip at £48 million (US$ 97 million).

  The list, compiled by Country Life magazine, comes as figures show while the credit crunch may be squeezing the housing market as a whole, it is having little effect on homes at the very top end. ... Mark Hedges, editor of Country Life, said: "For the super-rich, price is not an issue. The appeal is privacy, accessibility and rarity value in architecture, design and location. They probably own four or five homes around the world and may only visit the properties briefly, but when they do, the house has to deliver perfection."

• Wall Street Journal: Hamptons by the Bay. By Christina S.N. Lewis. Excerpts: What: Bayfront compound on 10 acres with 16,000-square-foot main house with nine bedrooms and nine full baths. Where: Westhampton Beach, N.Y., about 75 miles east of Manhattan. Amenities: Greenhouse, pool house, three-bedroom staff house with two garages, four-car garage, boat house, dock with room for 50-foot boat, ocean view, 1,000 feet fronting bay, one mile from ocean beach. Due Diligence: Property on the bay is less valuable than on the ocean, where a house on one acre recently sold for $10 million. Asking price: $39 million.
• Wall Street Journal, The Wealth Report: How the New Rich Are Changing the Oldest Profession. Excerpts: The complaint filed in the Emperors Club escort bust, which apparently nabbed Eliot Spitzer, casts a rare spotlight on the dealings between the wealthy and high-priced escort services. (See the Journal’s article on Mr. Spitzer.) For one, the complaint makes clear that the wealth boom — and the explosion in the number of multi-millionaires — has created entirely new pricing levels for escorts. According to the complaint, the Emperors Club escorts charged between $1,000 and $5,000 an hour, depending on their “rankings.” Clients could also pay between $25,000 and $50,000 for a three-day visit. It may be the world’s oldest profession: but the prices reflect the new realities of wealth.

  The escorts were well-versed in the lucrative potential of this new market. In the complaint, a prospective escort in London turns down the job based on price, saying that £500 an hour for starting escorts — close to $1,000 an hour — was chump change, especially since it didn’t include dinner. “This is the kind of money I make very easily on photoshoots,” the woman said. ...

  According to a survey by Russ Alan Prince, president of Connecticut-based wealth-research firm Prince & Associates, in his book “The Sky’s The Limit,” a sizable percentage of the super wealthy use escorts. He surveyed 661 people who owned private jets. It found that 34% of males and 20% of females had paid for sex. The most popular reason was “unique experiences” (71%), followed by “higher quality experiences” (57%). Conventional wisdom says that the rich visit escorts to avoid messy break-ups or extra demands for cash. But the study shows otherwise: “No strings attached,” ranked last as a reason. “With the wealthy,” Mr. Prince says “it’s all about power and control and new experiences.”

• New York Times: New Hope for the Rich. Excerpts: Americans are getting poorer. In 2007, home equity fell below 50 percent for the first time on record since 1945. Total equity also fell for three straight quarters through last December. Adjusted for inflation, the annual income of the typical working household is still below its peak before the last recession, in 2001. That means the Bush-era expansion is on track to be the first since the government began keeping records in the 1960s in which household income fails to hit a new high.

  And yet, in the Senate, Republicans are ready to do battle on behalf of America’s wealthiest families.

  Starting in 2009, the estate tax will apply to Americans with property at death worth more than $7 million per couple, or $3.5 million for individuals — a whopping 0.3 percent of people who die each year. As part of the 2009 budget resolution, Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, has proposed to keep the tax at those levels, with annual adjustments for inflation. The proposal is expected to pass, as early as Thursday.

  Everyone knows that the Baucus proposal is better than the status quo: under current law, the estate tax will be eliminated in 2010 then revert in 2011 to the far higher levels that applied in 2001, before the Bush tax cuts. Republicans, however, think that Mr. Baucus’s more-than-generous fix does not do enough to shield the wealthy. After it passes, Senator Jon Kyl, Republican of Arizona, is expected to propose further cutting the estate taxes of those still covered by the 2009 rules.

  That would give the wealthiest Americans an additional $200 billion in tax cuts over 10 years, with most of that largess going to estates valued at more than $10 million per person, the top 0.1 percent. The government would have to borrow to make up for the $200 billion giveaway to rich heirs, worsening the deficit and adding about $100 billion in interest to the nation’s tab.