Friday, August 31, 2012

How Would Paul Ryan Change Medicare?

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Last year, we reported that House Budget Committee Chairman Paul Ryan (R-WI) proposed a budget that would radically reshape Medicare and shift more costs to seniors and the disabled. At the time, we noted that “the plan may well become the Republican Party's de facto platform in 2012.”

Little did anyone know that the plan’s architect would become Republican candidate Mitt Romney’s choice as his running mate, putting the Ryan plan for Medicare center-stage less than three months before the election.  It is time, then, to review Rep. Ryan’s latest proposal to overhaul the popular Medicare program. 

Ryan would end Medicare as a government-funded program that pays all costs except for deductibles and co-pays.  Instead, Ryan would shift financial risk from the government to Medicare's beneficiaries.  Each beneficiary would receive a fixed amount of money every year (a “voucher”) to buy coverage either from traditional government-administered Medicare or from private health plans that would compete with Medicare while offering the same basic benefits.  The voucher program would begin when those who are currently 54 years of age and younger become eligible for Medicare. 

The amount of the voucher might cover the full cost of Medicare, especially in the early years, but there's no guarantee that it would.  If the voucher can’t cover the cost of the plan beneficiaries choose, they would have to pay the difference themselves (or reap savings if their plan costs less than the voucher amount).

Analyzing an earlier Ryan proposal very similar to the current one, the nonpartisan Congressional Budget Office (CBO) calculated that a decade into the program, the typical 65-year-old Medicare beneficiary would be spending $12,500 a year out-of-pocket in today's dollars, more than double under the current system.

At the same time, Ryan would gradually raise the eligibility age for Medicare from 65 to 67 by 2034.  Because Ryan would also repeal the new health reform law's coverage provisions, many 65- and 66-year-olds would be uninsured.  

The plan also puts a “hard cap” on Medicare spending that could result in significant benefit cuts. Spending would not be allowed to rise more than half a percentage point higher than the growth rate of the economy, or the gross domestic product.  If it rose higher than this, Medicare’s spending would have to be lowered one way or another, including cutting benefits to seniors.
 
Critics say that turning Medicare into a voucher program would create a two-tiered system and drive up costs for sicker beneficiaries.  The private plans would lure healthier seniors with perks like gym memberships, while the less healthy would stick with traditional Medicare, in part to keep their own doctors.  This would increase premiums for traditional Medicare and prompt doctors to abandon the program as reimbursement rates are cut, something that would affect current beneficiaries.   

Supporters of Ryan’s proposal contend that with "skin in the game," seniors would shop for the cheapest health care plans, which would spur competition among private health plans and push costs down. But “critics argue that elderly sick people aren't likely to be good comparison shoppers and could easily be misled by complicated insurance programs,” says the Los Angeles Times.

In addition, the Ryan plan would do away with one of the most popular parts of the health reform law – the gradual elimination of the so-called "doughnut hole" in the Medicare prescription drug benefit, which forces beneficiaries pay 100 percent of drug costs.  The doughnut hole would continue under the Ryan plan.  

For Kaiser Health News's answers to frequently asked questions about the Ryan plan, click here.

For a more detailed discussion by the Commonwealth Fund of the plan, which is also called "premium support," click here.

For more about Medicare, click here.

Reprinted with the permission of ElderLawAnswers.

Ontario Employment Law: Mitigating Damages By Staying With The Same Employer

In Ghanny v. 498326 Ontario Limited, the Ontario Superior Court of Justice was faced with a question that has become all too common in these difficult market conditions.

Must an employee whose job is being eliminated by its employer accept the same kind of position at a related company with the same pay in mitigation of his losses arising from a wrongful termination?

In the case, the Plaintiff, an 18 year employee was terminated with less than one month's notice. By any measure, this was highly inadequate and wrongful. The Plaintiff's job as Service Manager at Downtown Toyota had been eliminated by the company. But as it happened, his employer offered him immediate re-employment at the same job at the same salary at Downtown Suzuki, a recently obtained and related dealership, just a few blocks away.  The Defendant made the same offer again months later, after receiving a letter from the Plaintiff's lawyer stating that the Plaintiff had been wrongfully dismissed and was seeking compensation for same.

The Plaintiff turned down both offers of re-employment for two reasons:
  1. He thought that his 18 years of service at Downtown Toyota would not be recognized if he joined Downtown Suzuki; and
  2. He was concerned that the future of this dealership in spite of having received assurances to the contrary from his employer.  
The Plaintiff argued that he was under no obligation to accept the offer of employment; the Defendant argued the contrary. In the end, the Plaintiff obtained a job in mitigation of his losses. However, it had taken him several months to secure and his salary at the new job was considerably lower than at his old job.

The Court, in deciding that the Plaintiff should have accepted the offer that had been advanced by his employer, considered the leading Supreme Court case on the subject Evans v. Teamsers Local 31, [2008] 1 S.C.R. 661, wherein it is stated:
[I]n some circumstances it will be necessary for a dismissed employee to mitigate his or her damages by returning to work for the same employer ... requiring an employee to mitigate by taking temporary work with the dismissing employer is consistent with the notion that damages are meant to compensate for lack of notice, and not to penalize the employer for the dismissal itself. The notice period is meant to provide employees with sufficient opportunity to seek new employment and arrange their personal affairs, and employers who provide sufficient working notice are not required to pay an employee just because they have chosen to terminate the contract. Where notice is not given, the employer is required to pay damages in lieu of notice, but that requirement is subject to the employee making a reasonable effort to mitigate the damages by seeking an alternate source of income.

The Court held that a reasonable person, in the position of the Plaintiff, would have accepted the offer that had been advanced. The salary offered was the same; there were no changes in working conditions; and the personal relationships involved had not become acrimonious.

In so holding the Court had regard for the following statement of law from Evans:
The critical element is that an employee not [be] obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation … and it is that factor which must be at the forefront of the inquiry into what is reasonable. Thus, although an objective standard must be used to evaluate whether a reasonable person in the employee's position would have accepted the employer's offer … it is extremely important that the non-tangible elements of the situation -- including work atmosphere, stigma and loss of dignity, as well as nature and conditions of employment, the tangible elements -- be included in the evaluation.
The Court found that the Plaintiff, despite his statements to the contrary, had received assurances of job security from the Defendant  that his belief, that his 18 years of service would not be recognized, was not reasonable in all the circumstances. In any event, not enough reason him to refuse the position like he did.

This decision illustrates that  in certain circumstances, a wrongfully terminated employee may have to accept an offer of re-employment from its terminating employer.
- Robert Tanha, Toronto

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140Law - Legal Headlines for Friday, August 31, 2012

- Rachel Spence, Law Clerk
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Thursday, August 30, 2012

Apple Vs. Samsung - A $1 Billion dollar Law Suit

 
Judge Koh during the reading of the verdict.
(Credit: Vicki Behringer)

 
by
 

"SAN JOSE, Calif. -- It wasn't even close.
After 21 hours of deliberation, a nine-person jury has sided with Apple on a majority of its patent infringement claims against Samsung Electronics. The jury also awarded Apple more than $1 billion in damages.
Apple had originally sought $2.75 billion in damages, and though it wasn't unanimous on all counts, the verdict was overwhelmingly in Apple's favor. Samsung, which asked for $421 million in its counter-suit, did not receive a nickel. (Refer to jury document at the end of this story.)
The scorecard highlights:
  • Jury found Samsung infringement of Apple utility, design patents for some (though not all) products.
  • Jury found willful infringement on five of six patents.
  • Jury upheld Apple utility, design patents.
  • Jury upheld Apple trade dress '983.
  • Jury found Samsung "diluted" Apple's registered iPhone, iPhone 3, and "Combination iPhone" trade dress on some products, not on others.
  • Jury found no Apple infringement of Samsung utility patents.
  • Jury found Samsung did not violate antitrust law by monopolizing markets related to the UMTS standard.
  • Damages owed by Samsung: $1.05 billion ($1,049,393,540 to be exact)

  

The jury informed the court at 2:35 p.m. that it had reached a verdict, which was read in front of District Judge Lucy H. Koh as soon as the parties were assembled. The speed of the verdict apparently came as a surprise: One of Apple's lawyers walked into the courtroom wearing a polo shirt and jeans, so clearly he wasn't expecting this today.


The trial, which stretched more than three weeks, was characterized by a bewildering and massive trove of evidence that unveiled some of each companies' biggest secrets. By any measure, this was a complex case that presented jurors with page after page of technical minutiae. To reach their decision, jurors had to work through a 20-page document that required them to discern which devices from the two companies infringed on which patents -- a daunting task considering Apple had accused nearly two dozen of Samsung's devices of violating patents.

For Apple, information revealed during the trial included prototypes of iPhone and iPad designs that never saw the light of day, as well as highly detailed financial data that went far beyond what the company typically makes public. There were also e-mails between executives, one of which included mention of high interest in a smaller version of the iPad.

For Samsung, it was a series of damning internal documents, many of which showed that the company looked to Apple's devices for cues when designing its software icons and general features. One such internal report contained numerous side-by-side slides in which the company put a prerelease version of its initial Galaxy smartphone next to the iPhone and offered suggestions on how to make the Galaxy more similar to the Apple device.

Historians may want to note that all this took place as Tim Cook celebrated his first anniversary as CEO.
Samsung released the following statement after the verdict was delivered"


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