Real, and available to pre-order. I refer to that BlackBerry wristwatch that was rumored for so, so long till it was “made official” several days ago. Created by Allerta (and not RIM), the watch, officially named the inPulse smartwatch for BlackBerry, will set you back $150 when it’s released in February, 2010.
Ares Capital Corp. (Nasdaq: ARCC) has agreed to acquire Allied Capital Corp. (NYSE: ALD). The all-stock deal is valued at $648 million, or approximately $3.47 per Allied share (27.38% premium to Friday’s closing price).
PRESS RELEASE
Ares Capital Corporation (NASDAQ: ARCC) and Allied Capital Corporation (NYSE: ALD) announced today that they have entered into a definitive agreement under which Ares Capital will acquire Allied Capital in an all stock transaction currently valued at $648 million, or approximately $3.47 per Allied Capital share. This represents a 27.3% premium to Allied Capital’s closing stock price on Friday, October 23, 2009. The Boards of Directors of both companies have each unanimously approved the transaction.
Under the terms of the transaction, Allied Capital stockholders will receive 0.325 Ares Capital shares for each Allied Capital share, resulting in approximately 58.3 million Ares Capital shares being issued in exchange for the approximately 179.4 million outstanding Allied Capital shares. Following the transaction, Ares Capital stockholders will own approximately 65% of the combined company and Allied Capital stockholders will own approximately 35%. The combined company will remain externally managed by Ares Capital Management LLC, an affiliate of Ares Management LLC and will remain headquartered in New York. Bennett Rosenthal, Michael Arougheti and Richard Davis will remain in their current roles as Ares Capital’s Chairman, President and Chief Financial Officer, respectively. It is expected that one member of Allied Capital’s Board will be nominated to serve on Ares Capital’s Board.
Consummation of the acquisition is subject to Allied Capital stockholder approval, Ares Capital stockholder approval, customary regulatory approvals, certain Ares Capital and Allied Capital lender consents and other closing conditions. The transaction is expected to close by the end of the first quarter of 2010.
“We believe this transaction presents an extraordinary opportunity for value creation for both Ares Capital and Allied Capital stockholders,” commented Michael Arougheti, President of Ares Capital. “This transformative transaction creates a middle-market capital provider with leading market coverage, access to capital, scale and diversification. We believe that our portfolio composition and prudent balance sheet management throughout the current cycle have positioned us to deliver value for our stockholders and to be an industry consolidator.”
“We are excited to have entered into this mutually beneficial combination with Ares Capital,” commented John Scheurer, Chief Executive Officer of Allied Capital. “Our stockholders should benefit through resumed receipt of dividends and ownership in a company with a stronger balance sheet and proven access to the capital markets. Through this transaction we expect to create a stronger company that is well positioned for future growth in a market which presents tremendous investment opportunities.”
Ares Capital expects to reposition Allied Capital’s portfolio into higher yielding assets and to seek to lower its financing costs. Ares Capital believes that it will be in a position to provide additional capital for portfolio company growth in order to optimize portfolio returns while mitigating the need for asset divestitures. Ares Capital expects the transaction to be accretive to both its net asset value and its core earnings per share in the first year. At closing, Ares Capital expects the combined company’s debt to equity ratio to be in a range of 0.65x to 0.75x.
The combined company had a pro forma investment portfolio at fair value of $4.5 billion as of June 30, 2009. Ares Capital believes that a balance sheet of this size will allow the combined company to commit greater amounts of capital in a single transaction, which should drive higher fee income and greater control over portfolio composition. This transaction also meaningfully expands the breadth of Ares Capital’s relationship network, particularly within the private equity community.
The acquisition would also significantly strengthen Ares Capital’s middle-market asset management platform, Ivy Hill Asset Management, L.P.. The acquisition will result in a platform with approximately $5.6 billion in committed capital under management and investments in a significant number of portfolio companies. Ares Capital believes that the size and breadth of Ivy Hill’s platform provides a robust source for new balance sheet investment opportunities and unique market insight.
In a separate transaction, Ares Capital has reached an agreement to acquire Allied Capital’s interests in its Senior Secured Loan Fund LLC (the “SL Fund,” formerly known as the Unitranche Fund) for $165 million in cash. With approximately $3.6 billion of committed capital, the SL Fund was formed in December 2007 to invest in “unitranche” securities of middle-market companies. The SL Fund currently holds unitranche loans totaling approximately $900 million. The SL Fund acquisition is expected to close by the end of October and is subject to completion of final documentation and satisfaction of other customary closing conditions. Upon closing, Ares Capital and its SL Fund partner expect to utilize the SL Fund to make new commitments to future unitranche transactions.
J.P. Morgan Securities Inc. served as financial advisor to Ares Capital and delivered a fairness opinion to the Ares Capital Board with respect to the acquisition of Allied Capital by Ares Capital. J.P. Morgan Securities Inc. also served as financial advisor to Ares Capital with respect to the acquisition of the interests in the SL Fund. Proskauer Rose LLP, Latham & Watkins LLP, Venable LLP and Willkie Farr & Gallagher LLP served as Ares Capital’s legal counsel in connection with the Allied Capital acquisition. BofA Merrill Lynch served as financial advisor to Allied Capital and delivered a fairness opinion to the Allied Capital Board and Sutherland Asbill & Brennan LLP served as Allied Capital’s legal counsel. Sullivan & Cromwell LLP served as legal counsel to the Allied Capital Board. Sandler O’Neill & Partners delivered a fairness opinion to the Allied Capital Board with respect to the acquisition by Ares Capital.
CONFERENCE CALL INFORMATION
Ares Capital and Allied Capital will be holding a joint conference call to discuss the transaction on November 5, 2009 at 11:00 am EST following Ares Capital’s regularly scheduled third quarter earnings conference call. A presentation outlining the transaction will be posted on the home page of the Investor Resources section of Ares Capital’s website on November 5, 2009.
ABOUT ARES CAPITAL CORPORATION
Ares Capital Corporation is a specialty finance company that provides integrated debt and equity financing solutions to U.S. middle-market companies. Ares Capital Corporation invests primarily in first- and second-lien loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, Ares Capital Corporation also makes equity investments. Ares Capital Corporation is externally managed by Ares Capital Management LLC, an affiliate of Ares Management LLC, an SEC registered investment advisor and alternative asset investment management firm with approximately $30.0 billion of committed capital under management as of September 30, 2009. Ares Capital Corporation is a closed-end, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act of 1940.
ABOUT ALLIED CAPITAL
Allied Capital (NYSE: ALD) is a business development company (BDC) that is regulated under the Investment Company Act of 1940. Allied Capital invests long-term debt and equity capital in middle-market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital has been investing in the U.S. entrepreneurial economy for 50 years. Allied Capital has a diverse portfolio of investments in 92 companies across a variety of industries. For more information, please visit
www.alliedcapital.com
Because we run a huge dating site—OkCupid, which is free—and we studied math together, Chris and I like to sit in a circle (a line, really) and look at your data. Normally the data is pertinent and leads to revealing studies of human interaction, like our last post about how race plays a big […]
On the same morning that Verizon announced the availability of Wi-Fi packing BlackBerry Storm2, Sprint has come out and announced that the Wi-Fi lacking Palm Pixi will go on sale in just under three weeks time. Available from November 15th and onwards in stores, online, over the phone and through retailers like Best Buy, RadioShack and select Wal-Marts, the Palm Pixi will set early adopters back $99.99 on contract after factoring in $150 worth of instant and mail-in rebates. If you ask us, it’s a lot of money to ask for what it offers considering the iPhone 3G can be for the same price (oh, boo and hiss all you like) and the flaghship Pre is only $50 more. And did we mention no Wi-Fi?
Today, Palm announced that the Pixi, the company’s second webOS device and slimmer, lighter-weight cousin to the Pre, will be available for the holiday season on November 15 exclusively through Sprint.
With a 2.63″ multi-touchscreen, 8 GB of internal memory, Bluetooth 2.1+EDR, a 2 megapixel LED flash camera, and integrated GPS, the Pixi lightens up on many of the Pre’s specs (smaller screen, slower processor) and eliminates the Wi-Fi radio entirely.
The Pixi will be available for $99 after rebates and with a two-year service contract, landing it on the sub-$100 tier which proves vital in stimulating consumer interest.
As fans of Palm have already pointed out, on the day that Pixi was announced in September, the Pre dropped to $149.99, putting only $50 between Palm’s upper and lower tiers after subsidies and rebates.
However, this tight pricing scheme likely means that a new high-end device is on its way, and that the Pre is actually destined to be the company’s midrange handset. As Palm CEO Jon Rubenstein said in September, webOS will be the only operating system the company supports from now on, and there has not yet been a replacement for the Treo Pro, Palm’s final Windows Mobile device and last flagship device up for replacement.
If you think about it, you’ll probably only need to hang your flat panel TV on the wall once. Maybe twice. Maybe three times if you really move around a lot, like in the middle of the night when you hear a knock on your door and thank god you slept in your clothes because there’s only enough time to put on a pair of Velcro shoes and grab your 40-inch TV.
Basically what I’m saying is if you want your one-time TV hanging experience to be as smooth as possible or if you have a habit of bolting down fire escapes in the middle of the night, then Samsung’s recently-unveiled 3.3 millimeter thick 40-inch LED TV might be right up your alley.
There’s not a whole lot of info other than that the TV contains a 40-inch, 120Hz panel, a total thickness of just 3.3 millimeters, and a contrast ratio of 5000:1 – pricing and availability (and weight) are unknown, although Akihabara reports that Samsung is looking to get the TV on the market as soon as possible.
[via Akihabara]
The personnel push-and-pull between tech companies is always interesting to watch; who goes where can be a sign of how insiders are placing their bets. And more than bragging rights appear to be at stake as Josh Elman, who used to work for Facebook, has joined Twitter.
We’re not saying that Elman’s move signals the end of Facebook, of course. It’s just that he was an important fellow at the company. Elman served as the Facebook Platform’s program manager and led the launch of Facebook Connect, so he may deserve a lot of credit for establishing Facebook’s relationships with other sites.
That also means that Elman has a lot of experience with apps, and they’ve obviously become key to Twitter.
As for the years before Elman worked for Facebook, he spent time at Zazzle (two years and eight months), LinkedIn (one year and seven months), and RealNetworks (six years and one month), which is an impressive enough bunch of companies. Elman attended Stanford University, too.
Anyway, a hat tip goes to Louis Gray, and Jeremiah Owyang commented on his article, "What a smart move for Twitter. Josh is a standup guy, knows his stuff, and will do a great job at Twitter."
Related Articles:
> Misleading Ad: Twitter is Hiring
> Twitter Adds New Exec Talent
> Twitter Obtains Lead Lawyer From Google
John Fenderson was the first of a few of you to send in a link (via Slashdot) to the story of how SPARC, the computer architecture company owned by Sun, is threatening SparkFun over trademark infringement claims. SparkFun is an electronics shop, which sells components and kits and the like. The two are pretty different. This whole situation apparently was “sparked” (heh heh) when SparkFun applied for its own trademark, at which point SPARC sought to block the trademark application. From there, they went on to sending a cease & desist. The folks at SparkFun do a nice job breaking down why the two marks are entirely different, and why even Sun employees seem to have no trouble understanding the difference between the two. This seems like yet another case of overly aggressive trademark enforcement, just because some lawyers feel the need to oppose anything that might conceivably be considered even close to similar.
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Two Spanish Apple sites are reporting that the latest build of Apple’s upcoming update to its Mac OS X Snow Leopard software contains references to as-yet unreleased new models of MacBook Pro.
Build 10C531 lists “MacBook Pro 6,1” and “MacBook Pro 6,2”, an indication of major revisions of the MacBook Pro lineup. The current family of MacBook Pro’s range from 5,1 to 5,5.
Last week’s introduction of refreshed iMacs brought Intel’s new Core i5 and i7 (Nehalem) processors to Apple’s most popular desktop machines, but the refreshed product lineup didn’t include any new MacBook Pros. Applesana suggests that the new MacBook Pro models will likely feature quad core processors based on Intel’s Arrandale architecture which brings i5/i7 technology to a more power-efficient mobile chip.
The last time Apple refreshed the MacBook Pro line was in early June at the Worldwide Developers Conference.
10.6.2 is a significant update to Snow Leopard, bringing a raft of bug fixes and performance improvements to existing functionality. Nothing has been said about new features, however, the user guide for Apple’s new Magic Mouse makes the following reference to Mac OS X 10.6.2:
To use your Apple Magic Mouse and its full range of features, update your Mac to Mac OS X version 10.5.8 or later and install the Wireless Mouse Software Update 1.0; or update to Mac OS X version 10.6.2 or later.
Apple’s developers have been working hard. For those keeping count, this is 10.6.2’s fourth developer build in less than a month. The first, 10C514f, was seeded on Oct. 5. Only four days later, on Oct. 9, Apple produced build 10C519f. Developers were treated to build 10C527f just one week after that. And finally, 10C531 brings us to today.
At nearly 500MB, 10.6.2 is a hefty update, addressing an equally hefty assortment of bugs and issues affecting Snow Leopard. Most notably, this update is expected to fix a serious bug that can result in users losing all their personal data. MacRumor’s Doctor Q lists other fixes.
The seed is said to contain dozens of minor bug fixes and performance improvements in these areas: Address Book, AppleScript, AppleScriptObjC, ATS, ColorSync, Component Manager, Core Animation, Core Audio, Core Chinese Engine, Core Data, Core Graphics, Core Text, File Manager, Garbage Collection, Graphic drivers, Help Viewer, ImageKit, IOHIDFamily, Networking, NS Image, OpenCL, OpenGL, OSA, QT Kit, Speech Recognition, Sync Services, and Xtype.
There is no indication yet as to when 10.6.2 will be released, though the speed at which these builds are being developed — and the urgent need for that data-wiping bug fix — mean we probably won’t be waiting much longer.
As Q4 begins, online video is now mainstream. Read the, “Connected Consumer Q3 Wrap-up.”
The cost of health insurance could hinder President Obama’s goal of achieving universal coverage.
“The high cost of health insurance premiums would continue to put coverage out of reach for millions even if Congress approves legislation President Obama says is intended to ensure ‘that every American has affordable health care,’” USA Today reports. “The number of people who remain uninsured will depend on how House and Senate leaders reconcile separate versions of health care legislation to arrive at a final bill. The factors include the size of government subsidies to help low-income families pay for insurance and the scope of penalties that would be charged for those who don’t buy a plan.” According to a Congressional Budget Office analysis, 17 million Americans would remain uninsured under the Senate Finance Committee’s 10-year, $829 billion health care bill,” including many “families who earn too much to qualify for Medicaid but not enough to pay for insurance. Others who could remain uninsured under the Finance Committee bill include people who choose to pay a proposed $750-a-year fine rather than buy coverage and those who are eligible for Medicaid but don’t enroll” (Fritze, 10/26).
The Washington Post reports that “the question of whether people will follow a government order that they carry health insurance — an issue that will help determine whether universal health care is a success or costly failure — will depend on more than the penalty they would pay for refusing, many economists say. This, they say, is the lesson of behavioral economics, a school of thought that holds that people do not necessarily make decisions out of well-reasoned self-interest. It is an approach that has gained a powerful foothold in the Obama White House.”
Behavioral economists say that “compliance will depend not only on the penalties and cost of coverage, but also on the ease of signing up for coverage and whether people can be persuaded that it is a widely accepted social norm. They point to the large number of eligible people who fail to take advantage of Medicaid, food stamps and Pell grants as a sign that perceived inconvenience can keep people from taking steps in their economic interest” (MacGillis, 10/26).
TomTom’s iPhone car dock is now available from the U.S. Apple Store for $120 with a shipping time of 2 to 3 weeks. You’ll recall that the actual TomTom iPhone app runs for $100 on top of that.
Aside from secure windshield docking, the kit also includes a secondary built-in GPS chip for “a truly reliable signal – even in high-rise urban areas,” according to the product description. There’s also a built-in speaker and microphone for hands free calling and a 3.5mm audio out connector that allows you to feed it directly into your car stereo’s audio-in jack.
TomTom Car Kit for iPhone [Apple Store via SlashGear]
The new week begins with a new Tablet-related rumor that’s bouncing its way cheekily around the tubes. This one comes to us courtesy of New York Times executive editor Bill Keller.
According to Nieman Journalism Lab, “…the digital staff gathered for an ‘all hands’ meeting at TheTimesCenter to hear updates on various initiatives in advertising, business development, and content.” Sounds riveting. Anyway, Keller delivered a lengthy monologue (you can watch the whole thing here) but, around eight minutes in, he says:
“I’m hoping we can get the newsroom more actively involved in the challenge of delivering our best journalism in the form of Times Reader, iPhone apps, WAP, or the impending Apple slate, or whatever comes after that.”
Is that simply speculation on Keller’s part, or is he a man in possession of privileged information? As I mentioned last week, Apple is said to have recently been in secret talks with publishers about content delivery via a new platform, and given Apple’s long relationship with the New York Times, it’s not beyond the realm of possibility Keller would be in on the inside track of those talks.
Lingering a little longer on the “slate” moniker, Edible Apple reminds us of a series of tweets from Kevin Rose a few weeks ago, who, while enjoying a few recreational beverages at a bar, met an inebriated lady claiming to be an Apple employee:
Omg just met a drunk girl from apple “no apple tablet coming… well, we wouldn’t call it a tablet” haha leak!!
So, they wouldn’t call it a Tablet… but perhaps they’d call it a Slate, yes? Kevin Rose has been wrong oh-so-many times before. But sometimes he’s right. So these two threads of discourse may be contextually connected in just the right way to lead to conclusions (and the “jumping to” thereof)… or they’re really a big fat nothing. Whichever you choose, I still recommend the usual pinch of salt.
The speculation fun doesn’t end there. Engadget is reporting the availability (via wholesaler China Ontrade Limited) of the snappily-titled “Apple iTablet iPhone 4 Generation SIM Tray.” The product description for the diminutive plastic-and-metal widget reads:
Original Apple iTablet iPhone 4 Generation (Probably iTablet) SIM Tray OEM
This part came from Foxconn to our warehouse at 10.23.2009.
China Ontrade’s website provides this visual comparison of the 4G tray with its 3G/3GS predecessor;
So there you have it. A bit unusual to start the week with a Tablet rumor roundup, but hey, it’s better than reading another Windows 7 review.
In Q3, Uncle Sam was the green IT king maker. Read the, “Green IT Q3 Wrap-up.”
If you want to wear your BlackBerry, your chance will come sometime next February. Allerta is producing the inPulse Smartwatch for BlackBerry. The company is working with RIM on the smartwatch and they have started taking pre-orders. The first BlackBerry watch will ship in February and it’s priced at $149. The inPulse Smartwatch features a 1.3 inch OLED dispaly, glass lens, full metal body, vibrating motor, microUSB port and a rechargeable battery that lasts for four days of normal use.
Interesting device, but is it practical? Let us know if you’d wear your BlackBerry? To pre-order, visit getinPulse.com.
[via Engadget]
Kaiser Health News staff writer Jenny Gold reports on issues related to using gender to set rates for large businesses. “Insurers say women under the age of 55 cost more to cover because they use more health services, and not just for maternal and infant care. But Bettinazzi, the president and CEO of Visiting Nurse Association of Indiana County, believes there’s something inherently wrong in charging her company more because it hires a lot of women” (10/25). Read the entire story.
In a story done by Kaiser Health News in collaboration with USA Today, KHN staff writer Phil Galewitz reports on a hospital in Tulsa, Okla. “An hour into knee replacement surgery — with U2’s I Still Haven’t Found What I’m Looking For playing in the background — Dr. Yogesh Mittal smiles as he raises the left leg of his patient, 76-year-old Frank Morrow. While holding Morrow’s thigh, the surgeon lets the bottom half of the leg fall. ‘Look at that,’ he says, pointing to the wide range of motion permitted by the metallic-colored implant. ‘He’s going to love this new knee.’ Medicare, the government program that is paying for Morrow’s surgery, likes it, too (10/26). Read the entire story. Watch the related video.
Kaiser Health News offers a fresh look at health policy developments with Dwane Powell’s “Woolly Mammoth.”
House Democratic leaders faced an impasse late last week as it became clear that a liberal version of the public option did not have enough support in the caucus.
Roll Call reports that the House Democratic leadership huddled Friday to find a way to move forward — particularly on a public option and its inclusion in the House bill — but “ended without a decision. … Speaker Nancy Pelosi (D-Calif.) had hoped to ‘freeze the design’ of the package last week, but moderate pushback to her preferred approach to the public plan — one that would reimburse doctors and hospitals at rates pegged to Medicare — forced another delay” (Newmyer and Dennis, 10/26).
Politico reports on how the public option feeds into the struggle to get congressional proposals to meet the President’s price tag target. “Costs and the political calendar are catching up with health care reform.
Having bet the farm, President Barack Obama needs a win and is willing to settle for a cheaper bill and a weaker public insurance option. Democrats in Congress, increasingly worried about the 2010 elections, want stronger medicine for fear the reforms will prove to be a house of cards if working-class voters can’t afford the coverage promised.” In the House, Speaker Nancy Pelosi, D-Calif., “needs the strongest possible public option for the cost control savings it promises,” while Senators face pressures of their own (Rogers, 10/26).
Meanwhile, The Hill reports that urban and rural House Democrats are fighting over the Medicare deal announcement in the House: “A group of Democrats announced the Medicare reimbursement rate agreement Thursday after months of negotiations with Democrats from large cities. Lawmakers from rural areas have long believed the Medicare formula shortchanges their local doctors and hospitals in favor of urban centers” (Allen, 10/24).
The health insurance industry is likely to benefit from a health care overhaul, but industry profits are not as high as many seem to believe.
“As President Obama’s push for a healthcare overhaul moves toward its final act, the oft-vilified health insurance industry is on the verge of seeing a plan enacted that largely protects its financial interests,” The Los Angeles Times reports. Legislation that includes an individual mandate and subsidies for those who can’t afford coverage would mean “millions of new paying customers” for the insurance industry, representing a major lobbying success. “What’s more, there are likely to be no limits on what insurers can charge, while at the same time the plan is expected to limit competition from any new national government insurance plan that lawmakers create.”
“These anticipated wins — from an initiative that has at times been portrayed as doomsday for health insurers — is the result of a strategy developed by one of Washington’s savviest lobbyists, Karen Ignagni.” Many are surprised “that lawmakers have not wrung more from an industry that, surveys show, is held in low regard by the public,” but “[f]or much of the last three years, industry leaders have been laying the groundwork for this battle.” The industry’s push for universal coverage was a shift from the early 1990’s but has allowed them to shape proposed legislation in favor of insurers (Levey and Girion, 10/26).
American Medical News reports that managed care companies are also angling to get a piece of the expanding Medicaid market. Enrollment in Medicaid has swelled, thanks to unemployment rates topping 10% in many states, a trend that also has sent commercial membership diving. … Even under best-case scenarios, the profit margins are more modest for Medicaid than for commercial insurance or Medicare Advantage. But Goldman Sachs investment analyst Matthew Borsch predicts the smaller managed care organizations that specialize in Medicaid will be gobbled up by the big national plans, which want to expand their presence in the growing business without having to start from scratch” (Berry, 10/26).
Meanwhile, The Associated Press reports that health insurance company profits are not as high as many believe. “In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making ‘immoral’ and ‘obscene’ returns while ‘the bodies pile up.’” But actual profits tell a different story. “Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones. Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans” (Woodward, 10/25).
Senate Democrats will need to move quickly if they want to pass some version of health overhaul legislation by the end of the year.
The Associated Press: With “time growing short,” Senate Democratic leaders “still face key decisions…” In the Senate, that “means deciding whether legislation will give the government a role in the marketplace at all, and if so, what rights individual states would have in deciding whether to participate.” The Senate is weighing its final choices as negotiators work to merge the bills from Senate Finance and from Health, Education, Labor and Pensions Committees. The latest talks have focused around getting rid of any mandate on businesses to provide health insurance for their employees (Espo, 10/26).
The Wall Street Journal reports that the Senate’s finalized health bill could be ready as soon as early this week, when the leaders will submit the bill to the Congressional Budget Office for scoring. Senate Majority Leader Harry Reid “spent the weekend shoring up support for the bill from Democrats in the chamber. But some key moderate Democrats signaled Sunday that they remain uneasy about main planks of the legislation.” Although some details could change, the “broad outlines are becoming more clear” (Adamy and Hitt, 10/26).
Politico reports that Sen. Chuck Schumer also believes 60 votes are within sight. But “Senate Minority Leader Mitch McConnell said that Democrats still have work to do in rallying support within their ranks, pointing to last week’s overwhelming vote to strike down a so-called doc fix to Medicare physician reimbursement that would have added nearly $250 billion to the deficit. A group of Democrats crossed party lines on the vote” (Isenstadt, 10/25).
The New York Times: “Several Democratic senators voiced optimism on Sunday that Congress would pass a health care bill containing at least the germ of a government-run insurance program. Their expectations were grudgingly seconded by Senator John McCain, the Republican presidential candidate in 2008. ‘I think the Democrats have the votes, and in the House, Blue Dogs bark but never bite,’ Mr. McCain said on CBS’s ‘Face the Nation,’ using the nickname for conservative Democrats.”
Democrats who said they see a public plan passing include Sens. Claire McCaskill, of Missouri; Chuck Schumer, of New York; and Russ Feingold, of Wisconsin. Sen. Ben Nelson, D-Neb., said he was willing to look at the proposal if the Senate allows states to opt out of that part of the plan (Berger, 10/25).
CNNMoney: “Senate Majority Leader Harry Reid, D-Nev., is poised to proceed with plans to introduce a Senate health care bill with a public health insurance option that would allow states to opt out, a senior aide to Reid told CNN on Sunday. The aide, who did not want to be quoted by name when talking about private deliberations, said a final decision would be made Monday. Reid is likely to make the move without having firm commitments of support from 60 senators, the number needed to break a filibuster, according to the aide” (Bash, 10/26).
Bloomberg: “The Senate is considering a version of the public option that would have to negotiate rates with providers, as private insurers do, likely resulting in higher reimbursements. There are other compromises, including (Maine Republican Sen. Olympia) Snowe’s plan to trigger a public option if there isn’t enough affordable insurance on the market” (Jensen and Litvan, 10/26).
Reuters has a rundown of the different proposals for a public plan in both the Senate and the House including the opt out plan, the trigger plan, a “robust” plan offered in the House, one with negotiated rates and one that would instead set up non-profit cooperatives (Smith, 10/25).
Politico reports that Democrats are trying to make the benefits start by 2010 to sell the plan to the public: “With Republicans expected to make next year a referendum on health care reform, Democrats are quietly lobbying to push up the effective dates on popular programs, so they’ll have something to run on in the congressional midterms. Democrats are anxious to mix the good with the bad since some of the pain would be phased in early, including more than $100 billion in industry fees that critics say could be passed on to consumers.” Billions in new taxes in the plans will already come due in 2010 (Budoff Brown, 10/25).
“Unions representing thousands of teachers and state and local government workers are bracing for the worst if Congress adopts a proposed ‘Cadillac’ tax on health insurance,” Newsday reports. “The 40 percent levy on health care costs above $8,000 for individuals and $21,000 for families passed the Senate Finance Committee on Oct. 13. If the tax were to become law, experts said, government employees in New York would be hit hard because their powerful unions have negotiated benefits that go beyond medical and prescription drug coverage to include, among others, dental and vision.” Although the tax would be paid directly by insurers, they are “expected to pass it along in the form of higher premiums, deductibles and co-pays.” Some state government employees have plans that could fall into the “Cadillac” bracket.
“Supporters of the ‘Cadillac’ tax, proposed to take effect in 2013, said it would act as a brake on runaway health care costs,” but opponents “said people with comprehensive insurance plans would be unfairly pitted against those with lesser ones, in order to pay for coverage for the uninsured” (Madore, 10/25).
