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Posts Tagged ‘Health Reform’

I like to think that very few people despise Obamacare more than me.

I don’t like Obamacare because it’s a fiscal boondoggle.

I don’t like Obamacare because it’s bad healthcare policy.

I don’t like Obamacare because it generated an embarrassingly bad decision by the Supreme Court.

I don’t like Obamacare because it is driving people out of the labor force and into government dependency.

I don’t like Obamacare because it has increased corruption in Washington.

And I don’t like Obamacare because it further enriches and empowers Washington’s political class.

But I also like being honest and that means I’m willing to acknowledge that there’s one small part of Obamacare that will have a positive impact.

More specifically, the so-called Cadillac tax on expensive employer-provided health plans will slightly reduce the distortion in the tax code that encourages over-insurance and exacerbates the healthcare system’s pervasive third-party payer problem.

Indeed, we’re seeing some signs of this already, even though the tax preference isn’t capped until 2018. Here are some excerpts from a story published by Fox News, starting with a description of the law.

…companies desperate to avoid a 40 percent ObamaCare “Cadillac tax” are finding ways to shift the costs to workers. The so-called “Cadillac tax,” now four years away, will affect health plans that spend more than $10,200 per worker. “The excise tax, when it hits in 2018, will affect both employers and employees,”said Brian Marcotte, president of the National Business Group on Health.

Allow me to make an important correction before sharing other parts of the story.

Companies aren’t shifting costs to workers. The money currently spent on health insurance policies is part of total employee compensation.

Think of it this way. If a company hires you for a salary of $50,000 and also includes a $10,000 health insurance policy, what’s your total compensation?

If you give an answer other than $60,000, you’re either very bad at math or you have the logic skills of a politician.

So the story should have stated that the Cadillac tax is merely making workers more aware of costs that already exist.

Thanks for letting me vent. Now back to our main point, which is that the Cadillac tax discourages overinsurance, and this is already leading to some positive changes in the marketplace.

Employees will get incentives to reduce costs through such arrangements as wellness programs, including losing weight or stopping smoking. Meanwhile, employers are shifting workers into plans with higher deductibles, just as ObamaCare does in the health care exchanges, and using health savings accounts to help defray the costs.

I’m particularly happy that employers and employees are shifting to plans with higher deductibles. As I’ve explained before, health insurance should cover large, unanticipated costs, such as the onset of cancer or getting injured in a car wreck.

But it shouldn’t cover annual checkups, elective surgery, and other routine and/or predictable expenses.

And we have one other bit of good news. The tax isn’t going to raise nearly as much money as the politicians wanted!

The “Cadillac tax” was originally intended to take effect sooner, but unions and other groups convinced officials to delay it until 2018, reducing the anticipated income from $137 billion to $80 billion over ten years. But many analysts predict it will be far less than that. Henry Aaron of the Brookings Institution said, before then, it’s expected that most of the businesses that offer that form of insurance will back off and make the insurance less generous, so the tax won’t bite.” …if employers are able to avoid it and less than expected is collected, ObamaCare could fall tens of billions short in paying for itself as promised.

I should hasten to add, by the way, that I’m glad that Obamacare isn’t paying for itself since that simply means lots of taxes to accompany all the additional spending.

I’d be even happier, of course, if we could figure out how to get rid of all the spending as well.

Just in case folks are thinking I’ve gone soft, let’s close today’s post with some humor directed at the rest of Obamacare.

Since the IRS is a big part of Obamacare, here’s a particularly good bumper sticker that shares a line with the above poster.

Here’s a poster mocking the delightful fiscal impact of the law.

Though whoever put this together should have been careful of using The Joker.

I like this next poster since it highlights how politicians have exempted themselves from the law.

Last but not least, here’s Dr. Obama making a cameo appearance.

Ah, the IRS shows up again. Do you sense a theme?

And don’t forget the IRS bureaucrats want to be exempt from the law as well.

P.S. If you’re a glass-one-tenth-full person, here’s some other good news about Obamacare.

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When government suppresses the free market and takes over the healthcare sector, you get some really odd results.

Consider these stories from Sweden:

 A man sewing up his own leg after getting frustrated with a long wait.

The government denying a wheelchair to a double amputee because the bureaucrats decided his impairment might not be permanent.

Speaking of amputations, an unfortunate man was put on such a long waiting list that his only treatment, when he was finally seen, was to have his penis removed.

Today, we’re going to augment that list. But not with another story from Sweden, which is actually a much better country in terms of public policy than most folks realize.

Instead, we’re going to look at some great moments in government-run healthcare in both the United States and the United Kingdom.

Our first story is from the Chicago Tribune and it deals with Medicaid and Medicare spending.

But we’re not going to look at the aggregate data. Those numbers are very sobering, to be sure, and you can click here and here to learn more about that problem.

Instead, we’re going to drill down into the details and get some up-close evidence of why the programs are so costly. Simply stated, providers learn how to bilk the government.

A few years ago, Illinois’ Medicaid program for the poor noticed some odd trends in its billings for group psychotherapy sessions. Nursing home residents were being taken several times a week to off-site locations, and Medicaid was picking up the tab for both the services and the transportation.  And then there was this: The sessions were often being performed by obstetricians and gynecologists, oncologists and urologists — “people who didn’t have any training really in psychiatry,” Medicaid director Theresa Eagleson recalled. So Medicaid began cracking down, and spending plummeted after new rules were implemented.Illinois doctors are still billing the federal Medicare program for large numbers of the same services, a ProPublica analysis of federal data shows. Medicare paid Illinois providers for more than 290,000 group psychotherapy sessions in 2012 — more than twice as many sessions as were reimbursed to providers in New York, the state with the second-highest total. Among the highest billers for group psychotherapy in Illinois were three OB-GYNs and a thoracic surgeon. The four combined for 37,864 sessions that year, more than the total for all providers in the state of California. They were reimbursed more than $730,000 by Medicare in 2012 just for psychotherapy sessions, according to an analysis of a separate Medicare data set released in April.

Some of the specific examples are beyond belief. Keep in mind as you read the next passage that there are only 365 days in a year, and only about 261 workdays.

Of the Illinois OB-GYNs billing for group psychotherapy, Dr. Josephine Kamper had the highest number of sessions. She was paid for 10,399 sessions in 2012, at a cost to Medicare of $207,980. …Another OB-GYN, Lofton Kennedy Jr., billed for 9,154 group psychotherapy services. He declined to comment. The third-highest-billing OB-GYN, Philip Okwuje, charged Medicare for 8,584 group therapy sessions.  

Illinois isn’t the only place where taxpayers are getting ripped off.

A Queens, N.Y., primary care doctor, Mark Burke, was paid for more sessions than anyone else in the country — 20,841. He accounted for nearly one in every six sessions delivered in the entire state of New York in Medicare, separate data show. He did not return messages left at his office. Another large biller was Makeba Gordon, a social worker in Detroit. She was reimbursed for nearly 5,000 group therapy sessions for her 26 Medicare patients, an average of 190 each. She also billed for 2,820 individual psychotherapy visits for the same 26 patients, who allegedly would have received an average of 298 therapy sessions apiece in 2012. Gordon could not be reached for comment.

And I’m sure you won’t be surprised to learn that the bureaucracy in Washington doesn’t seem overly worried about this preposterous waste of money.

Aaron Albright, a spokesman for the U.S. Centers for Medicare & Medicaid Services, said in an email that Medicare has no policy regarding which physicians may perform group psychotherapy. During such sessions, “personal and group dynamics are discussed and explored in a therapeutic setting allowing emotional catharsis, instruction, insight, and support,” according to rules set out by one of Medicare’s contractors.

The second story comes from the United Kingdom.

Regular readers know that the government-run healthcare system in the United Kingdom is an ongoing horror story of denied care, sub-standard care, and patient brutality (click here to see some sickening examples).

You would think the U.K.’s political class would respond by trying to use money more effectively.

You would be wrong. The bureaucrats somehow have decided that tax monies should be used to finance a sperm bank, even though private sperm banks already exist.

Here are some excerpts from a report in the Daily Mail.

Britain is to get its first NHS-funded national sperm bank to make it easier for lesbian couples and single women to have children.For as little as £300 – less than half the cost of the service at a private clinic –  they will be able to search an online database and choose an anonymous donor on the basis of his ethnicity, height, profession and even hobbies. …The National Sperm Bank will be based at Birmingham Women’s NHS Foundation Trust, which currently runs an existing NHS fertility clinic and recruits sperm donors from the local population. Funded by a £77,000 Government grant, the bank will be run by the National Gamete Donation Trust (NGDT) which this year received  an additional £120,000 of public money to organise egg and sperm donation.

Some have criticized the initiative because it will purposefully increase the number of fatherless children.

…the move – funded by the Department of Health – is largely designed to meet the increasing demand from thousands of women who want to start a family without having a relationship with a man. Critics last night called it a ‘dangerous social experiment’ that could result in hundreds of fatherless ‘designer families’. …Ms Witjens rejected suggestions that children suffer adverse consequences from lacking a father figure. …Ms Witjens pointed to the removal of the reference to a ‘need for a father’ in the Human Fertilisation and Embryology Act, when taking account of a child’s welfare when providing fertility treatment.

I’m sympathetic to the argument that children do best in conventional households with fathers, but my main reaction to this story is that government shouldn’t try to either penalize or subsidize unconventional households.

And a government-sponsored sperm bank definitely falls into the latter category.

But I’m not surprised. Governments love to squanders other people’s money, and the U.K. government has considerable expertise (if you can call it that) in this regard.

Heck, the U.K. healthcare system is even financing boob jobs. But we’re not talking about reconstructive surgery for women who had mastectomies. They pay for breast augmentation for women who claim “emotional distress.”

Though maybe the U.K. government deserves a special prize. It developed a giveaway program that was so convoluted that nobody signed up to take the money.

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Many of you probably heard about the “Halbig” decision, in which a federal court struck a blow against Obamacare by ruling that the IRS was wrong to arbitrarily grant subsidies for health insurance policies purchased through a federal exchange.

And why did the judges rule against the IRS? Well, for the simple reason that the Obamacare legislation specifically says that subsidies are only available for policies purchased through exchanges set up by state governments. My Cato colleague Michael Cannon explains:

The PPACA authorizes the IRS to issue health-insurance tax credits only to taxpayers who purchase coverage “through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.” The tax-credit eligibility rules repeat this restriction, without deviation, nine times. The undisputed plain meaning of these rules is that when states decline to establish an Exchange and thereby opt for a federal Exchange — as 34 states accounting for two-thirds of the U.S. population have done — the IRS cannot issue tax credits in those states.

The legal fight isn’t over, of course, and it’s quite likely that the Supreme Court will make the ultimate ruling (which is worrisome since Chief Justice Roberts already has demonstrated that he’s sometimes guided by politics rather than the law).

But that’s an issue for another day.

Our topic today is humor. Or maybe it’s hypocrisy. Or perhaps it’s duplicity. Heck, it’s all of those things and more. Why? Because a leading supporter of Obamacare (who often conveniently forgets to disclose that he got $400,000 of our tax dollars to help draft and promote the law) has been caught with his pants down.

As you can see in this video, Professor Gruber is now pretending the Halbig decision was wrong even though he repeatedly acknowledged in the past that states would have to set up exchanges in order for their citizens to get subsidies.

Wow.

I’ve never seen a more brutal video. And it’s effective because Gruber is hoisted on his own petard.

Heck, this puts him in the same category as Paul Krugman, who also has been caught changing his views (he used to admit that unemployment benefits increase joblessness, but more recently made the opposite argument to boost Obama’s agenda).

Though I should admit that hypocrisy and duplicity aren’t limited to the left. I’ve criticized Republicans, after all, for occasionally justifying their anti-tax views by citing the Keynesian analysis of the Congressional Budget Office.

But let’s not digress. Instead, let’s simply enjoy the emasculation of a statist.

And because the video is so enjoyable, I guess I’ll put it in the humor category.

And if you like humorous Obamacare-related videos, here are some other examples from the archives.

*Creepy Uncle Sam wants to conduct an OB/GYN exam.

*The head of the National Socialist Workers Party finds out he can’t keep his health plan.

*Young people discover that they’re screwed by Obamacare.

*The wrong circus comes to town.

*Remy of Reason TV sings about the joy of part-time work.

*A cartoon video imagines a world where buying coffee is like buying government-run healthcare.

*One of the biggest statists of the 20th century is angry that the Obamacare exchanges don’t work.

Let’s close with a pair of cartoons, both of which are related to the Halbig decision, at least in that we have an Administration that doesn’t seem to care about the rule of law.

We’ll start with Michael Ramirez.

Here’s Chip Bok’s contribution.

P.S. On a different topic, the battle over the Export-Import Bank is getting more heated. You probably won’t be surprised to learn that President Obama supports this corrupt example of corporate welfare (even though he said he was opposed back in 2008).

This is a rare issue where some honest leftists are on the correct side. That’s because, as illustrated by this Venn diagram (h/t: Charles Murray), some of them are willing to side with libertarians in the fight to makes sure big government and big business don’t get to conspire against taxpayers.

Sadly, too many DC leftists are hypocrites, happy to line the pockets of big companies if such policies also expand the power of government.

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Last September, I shared a disconcerting video showing an unfortunate young woman getting her OB/GYN exam from a very creepy version of Uncle Sam.

Well, you’ll be pleased to know that “Creepy Uncle Sam” does not discriminate. In this video, a young man faces the unpleasant experience of getting his prostate checked.

Kudos to Generation Opportunity for putting together such clever videos.

But I think their most recent video is a true masterpiece. It manages to showcase almost all the bad features of Obamacare in a short, amusing, pithy form.

And if you like videos that make fun of Obamacare, here are some other examples from the archives.

*The head of the National Socialist Workers Party finds out he can’t keep his health plan.

*Young people discover that they’re screwed by Obamacare.

*Remy of Reason TV sings about the joy of part-time work.

*A cartoon video imagines a world where buying coffee is like buying government-run healthcare.

*One of the biggest statists of the 20th century is angry that the Obamacare exchanges don’t work.

Let’s close with a good cartoon from Ken Catalino.

And whatever the government says Obamacare costs, you can feel confident (albeit depressed) that the real cost will be higher. Especially if you’re also counting non-fiscal costs such as fewer jobs.

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I thought TARP was the sleaziest-ever example of cronyism and corruption in Washington.

The Wall Street bailout rewarded politically well-connected companies, encouraged moral hazard, and ripped off taxpayers. Heck, it was so bad that it makes the sleaze at the Export-Import Bank seem almost angelic by comparison.

But I may have to reassess my views.

One of the provisions of Obamacare allows the White House to give bailouts to big health insurance companies. You’re probably wondering why these big firms would need bailouts. After all, didn’t Obamacare coerce millions of people into becoming involuntary customers of these companies? That should give them lots of unearned profits, right?

But here’s the catch. The President wasn’t being honest when he repeatedly promised that Obamacare would reduce premiums for health insurance. And since the Democrats don’t want consumers to get angry about rising costs (particularly before the 2014 elections), they want health insurance companies to under-charge.

Avik Roy of Forbes explains in greater detail how the White House is coercing health insurance companies to limit premium increases before the mid-term elections. Here are some excerpts.

Hidden in the midst of a 436 page regulatory update, and written in pure bureaucratese, the Department of Health and Human Services asked that insurance companies limit the looming premium increases for 2015 health plans. But don’t worry, HHS hinted: we’ll bail you out on the taxpayer’s dime if you lose money. …The White House is playing politics with Americans’ health care—and they’re bribing health insurance companies to play along. The administration’s intention is clear: Salvage the 2014 midterm elections. …Technically, the regulations don’t force health insurance companies to tamp down their premium spikes. But the White House isn’t asking nicely. …Under Obamacare, insurers are so heavily regulated that they have to play nice with the bureaucrats who call the shots. …If insurance companies don’t give in, regulators have powerful ways to make life hard for them. A shrewd CEO doesn’t need to look far to see what might happen if his company opts out.

But before you feel sorry for Big Insurance, remember that these corrupt companies supported Obamacare and fully expect to get bailed out by taxpayers. Here are some blurbs from an article last month in the Weekly Standard.

Most Americans don’t think it’s their job to bail out insurance companies who lose money under Obamacare, but that’s exactly what’s poised to happen. Obamacare’s risk-corridor program — which President Obama has been using as a slush fund to placate his insurance allies and keep them quiet about his lawlessness — shifts financial risk from insurers to taxpayers. According to the House Oversight Committee, health insurers expect Obamacare’s risk corridors to net them nearly $1 billion, at taxpayer expense, this year alone. …It was a win-win that would boost Obamacare in its early days — to the benefit of those who’ve gained extraordinary power at the expense of Americans’ liberty, and of those whose product has become mandatory for Americans to purchase.

In other words, we have a stereotypical example of Mitchell’s Law. Government screws up something, and then uses that mess as an excuse to impose more bad policy!

This Lisa Benson cartoon is a perfect summary of what’s happening.

P.S. If you’re in the mood for some dark humor, here’s the federal government’s satirical bailout application form.

P.P.S. Switching to a different topic, it’s time for me to rectify a mistake. When I first created the Moocher Hall of Fame last year, I didn’t include the “Octo-moocher” as a charter member. After all, having 14 kids while living on the dole didn’t seem particularly noteworthy.

But now we’ve discovered that she could afford her kids. She just wanted other people to pick up the tab.

Octomom Nadya Suleman pleaded no contest Monday to a single count of misdemeanor welfare fraud for failing to disclose income she was receiving from videos and personal appearances while collecting more than $26,000 in public assistance funds to care for her 14 children.

This may not be as impressive as the deadbeat who got handouts while living on a $1.2 million yacht, but still worthy of membership.

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Let’s enjoy some semi-good news today.

We’ve discussed many times why Obamacare is bad news, whether we’re looking at it from the perspective of the healthcare system, taxpayers, or workers.

But it could be worse. Writing in the Washington Post, Robert Samuelson explains that two-dozen states have refused the lure of expanding Medicaid (the means-tested health care program) in exchange for “free” federal money.

From 1989 to 2013, the share of states’ general funds devoted to Medicaid has risen from 9 percent to 19 percent, reports the National Association of State Budget Officers. Under present law, the squeeze will worsen. The White House report doesn’t discuss this. …To the White House, the right-wing anti-Obamacare crusade is mean-spirited partisanship at its worst. The 24 non- participating states are sacrificing huge amounts of almost-free money… Under the ACA, the federal government pays all the cost of the Medicaid expansion through 2016 and, after that, the reimbursement rate drops gradually to a still-generous 90 percent in 2020.

But that “almost-free money” isn’t free, of course. It’s simply money that the federal government (rather than state governments) is diverting from the productive sector of the economy.

So the 24 states that have rejected Medicaid expansion have done a huge favor for America’s taxpayers. To be more specific, Nic Horton of Watchdog.org explains that these states have lowered the burden of federal spending (compared to what it would have been) by almost $90 billion over the next three years.

By not expanding Medicaid, 24 states are saving taxpayers $88 billion over the next three years. That is $88 billion that will not be added to the national debt — debt that will not be passed on to future generations of taxpayers. On the other hand, states that have expanded Medicaid through Obamacare are adding roughly $84 billion to the national debt through 2016.

Returning to Samuelson’s column, he would like a grand bargain between states and the federal government, with Washington agreeing to pay for all of Medicaid (currently, states pay a portion of the bill) in exchange for states taking over all spending for things such as roads and education.

We could minimize this process for states and localities by transferring all Medicaid costs to Washington (or at least the costs of the elderly and disabled). To pay for it, Washington would reduce transportation and education grants to states. Let Washington mediate among generations. Let states and localities concentrate on their traditional roles of education, public safety and roads. Spare them the swamp of escalating health costs. This is the bargain we need — and probably won’t get.

I like half of that deal. I want to transfer education, law enforcement, and roads back to the state level (or even the local level).

But I don’t want Washington taking full responsibility for Medicaid. Instead, that program also should be sent down to the states as well. This video explains why that reform is so desirable.

P.S. Since we’re on the topic of Obamacare, this Chip Bok cartoon perfectly captures the essence of the Hobby Lobby decision. The left wants the mandate that contraception and abortifacients be part of health insurance packages.

Rather than exacerbate the damage of using insurance to cover routine costs, wouldn’t it make more sense to have employers simply give their workers more cash compensation and then allow the workers to use their money as they see fit?

That way there’s no role for those evil, patriarchal, oppressive, and misogynistic bosses!

I realize this might upset Sandra Fluke, but at least she has the comfort of knowing that her narcissistic statism generated some good jokes (here, here, and here).

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I wrote a few weeks ago about the hidden economic damage of Obamacare, particularly the harm to the job market.

Today, let’s get further depressed by looking at the ever-worsening fiscal damage of the law.

Here’s some of what Chuck Blahous of Mercatus wrote about this costly new entitlement.

The ACA was enacted in 2010 with the promise of reducing the federal budget deficit while expanding health insurance coverage. Nearly lost amid the recent press cheerleading over ACA enrollment figures is that this promise has disintegrated, and now no one…can say how much fiscal damage the ACA will ultimately cause. …CBO currently estimates that the ACA’s coverage provisions will cost the federal government $92 billion a year by FY2015. This is roughly 0.5 percent of projected U.S. economic output for 2015, well exceeding the relative costs of Social Security and Medicaid at similar points in their histories. (The amount falls just short of the proportion of GDP absorbed by all of early Medicare.) Worse, the federal fiscal position was far weaker when the ACA was passed than when Social Security, Medicare, and Medicaid were created.

That’s bad news, but things will get even worse in coming years.

Troubling though the ACA’s startup costs are, they represent only the tip of the fiscal iceberg that will be the fully phased-in law. CBO projects that its annual costs will hit $200 billion by FY2020, or nearly 0.9 percent of GDP. Yet this assumes that lawmakers will be content to allow the ACA’s health insurance subsidies to grow more slowly than low-income beneficiaries’ health care costs, as the law now stipulates. Thus there is every reason to believe that the ACA’s eventual costs will far exceed initial estimates, as happened with Social Security, Medicare, and Medicaid. …Also unclear is whether the ACA’s reinsurance and “risk corridor” provisions will produce unexpected federal budget costs; these provisions were included in the ACA to protect insurers… the Obama administration continues to promise both participating health insurers and taxpayers that they will each be protected from loss under the risk corridor provisions.

The potential bailout for insurance companies is bad news for taxpayers, but it’s even more upsetting for moral and practical reasons.

The big insurance companies got into bed with the White House, figuring it was a good idea for the federal government to coerce Americans into buying their product. As far as I’m concerned, they should swallow heavy losses.

But in Washington, there’s rarely a downside for doing the wrong thing. Instead, this could be like TARP. A reward for bad behavior.

By the way, it’s not just policy wonks who are concerned about the fiscal burden of Obamacare. According to Roll Call, the Congressional Budget Office has – for all intents and purposes – given up trying to estimate the fiscal burden of the legislation.

For Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit…the answer to that question has become something of a mystery. In its latest report on the law, the Congressional Budget Office said it is no longer possible to assess the overall fiscal impact of the law. That conclusion came as a surprise to some fiscal experts in Washington and is drawing concern. …In a little-noticed footnote to a report issued in April, “Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act,” the CBO wrote that it and the Joint Committee on Taxation “can no longer determine exactly how the provisions of the ACA that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues.”

Translated into plain English, Obamacare is a budgetary black hole.

If only somebody could have predicted that this would happen. But actually, many people did. The history of entitlement programs is that they are bad news in theory and even worse news in reality.

Indeed, even I warned that Obamacare was going to be a bigger fiscal nightmare than originally predicted, as seen in this video.

This Eric Allie cartoon doesn’t focus on the fiscal problems of Obamacare, but it’s worth sharing because the entire law is a mess.

Too bad the American people are the guinea pigs for this experiment in statism.

Wouldn’t it be nice if instead we had the freedom to experiment with market-based healthcare?

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