Hawaii, Once Again

Angelika Loyal newsletter readers know that we are big fans of Hawaii. Before the pandemic, we usually traveled once a year to the island of Oahu, to the quiet corner near Waimanalo. Then the pandemic hit. Since Hawaii had very strict quarantine regulations, we stayed away from the islands for a long time. Eventually, sun-seekers were able to travel to Hawaii again, but prices had risen significantly after the pandemic, and at times there were no rental cars available on any Hawaiian island because car rental companies had drastically reduced their fleets during the pandemic due to the lack of tourists visiting.

The government of Oahu has further restricted renting of vacation apartments or houses through platforms like Airbnb or VRBO ("Vacation Rental by Owner"). On October 23, 2022, Bill 41, also known as Ordinance 22-7, came into effect. It now stipulates that any property outside of the resort zones must be rented for a minimum of 90 days. Renting something short-term, such as for a week, is practically only possible in Waikiki, in Ko Olina around the Disney Resort, and at Turtle Bay at the north end of the island.

However, Waikiki is much too crowded and filled with high-rises for us, and it's not what we have in mind for a Hawaii vacation. We understand that living space is limited on the islands and that measures need to be taken to ensure that people living on Oahu can still find housing. However, perhaps the authorities could have proceeded a bit less radically, because after all, the islands also rely on tourists. The inlaw unit we used to rent in Waimanalo was in the owners' garden and was very nice, but really not suitable or recommended for long-term rentals. But since it's now located in the wrong zone, it's no longer available. What a shame! Nevertheless, we are drawn back to Hawaii. I step off the plane and immediately feel relaxed. The beautiful turquoise warm water, the stunning beaches, the laid-back atmosphere, perfect surfing conditions for Michael, the gorgeous nature —- what more could you want?

Since the school I work at partially follows the German school holiday calendar, and we always have a week of autumn break in October when American schools do not have time off, we took the opportunity to fly to the Hawaiian island of Kauai this year. We hadn't been there in a long time. Kauai was the first island we ever visited way back, and remembered it for its lush vegetation and great beaches. This time, we were drawn to the north side of the island, and we rented a nice little apartment in Princeville. The landlord, Gary, lived next door in the big house. Gary was super generous and even lent Michael his surfboards without batting an eye. We spent every day swimming in the warm ocean, discovered hidden beaches, and ate endless amounts of poke, the traditional Hawaiian dish made from raw fish. We are already planning our next vacation in Hawaii.

Newly insured with Kaiser

Angelika In the newsletter, we have often expressed our views on the deplorable health insurance system in the USA. It is completely overpriced, inefficient, and only produces mediocre results. A huge, complex, bureaucratic apparatus in which everything has fallen apart and no one can see through it anymore, causing grief to both doctors and patients.

We believe that the system is on the verge of collapse if reforms do not happen soon, but we have little hope that this will occur in the near future. As is the case everywhere, action is only taken when it is already far too late. I also find it downright crazy that some people now deem it acceptable that the CEO of a health insurance company is shot in the open street, and for the murderer to be glorified as a hero because the frustration with the behavior of the health insurance companies is so great.

Obamacare has indeed improved US healthcare and led to far more Americans being insured. For example, 2024 was a record year in which over 21 million Americans had health insurance with the help of Obamacare. However, Obamacare is also part of a system with rising costs and ever-increasing monthly premiums. Most notably, the insured cannot choose other health insurance options through Obamacare; only the large, well-known insurance companies offer their contracts under Obamacare. Currently, there are still tax benefits that significantly lower premiums for most people who purchase health insurance policies through the "Affordable Care Act" (i.e., Obamacare). However, these government subsidies are set to expire at the end of 2025 unless the U.S. Congress decides to extend them.

In my opinion, a significant drawback of the American health insurance system is that employees typically receive their health insurance through their employer. Depending on the size of the company one works for, the company can offer its employees corresponding health insurance contracts, called "plans." Large companies with thousands of employees, like Apple or Google, accordingly have many different plans with various health insurance providers that offer generous benefits.

The health insurance companies are, of course, very interested in offering these companies good conditions. When Michael was still at Apple, we both had a top plan with the insurance company United Healthcare. It was never a problem to receive services because Apple always had a handle on it. Now, as is well known, Michael no longer works at Apple, and our Cobra insurance (Rundbrief 12/2022) has also expired after 18 months.

What now? Obamacare is not really an option if you have the possibility to be insured through your employer, because in this case the Obamacare-insured person always pays the full expensive premiums without subsidies. However, my school also offers a health insurance plan for me and allows me to insure my partner and children for higher monthly contributions. Now, my school is not a big company like Apple and therefore cannot offer a large number of health insurance plans. Specifically, there are only two plans to choose from and only one insurance provider, namely Kaiser Permanente.

Kaiser Permanente is a very interesting health insurance provider because it operates its own network of hospitals, clinics, and doctors. Members typically receive services only at Kaiser facilities, meaning they cannot simply choose a doctor who is not part of the Kaiser network or have surgery at a non-Kaiser hospital. Exceptions are only allowed if the Kaiser-insured individual has a life-threatening emergency and there is no Kaiser hospital nearby, or if the patient has something so complicated that Kaiser is overwhelmed, such as an extremely complex brain surgery.

However, Kaiser must first approve this. Kaiser Permanente now has over 12 million members. It operates approximately 700 medical facilities such as medical offices and clinics in nine states. Kaiser has a strong presence, particularly in California, as the company's headquarters is in Oakland, right across the Bay from San Francisco.

Kaiser operates a mixed organizational model, with the Kaiser Foundation Health Plan and the Kaiser Foundation Hospitals being non-profit organizations. This means that revenues and surpluses are reinvested back into these medical facilities. Additionally, there is a third component, the for-profit "Permanente Medical Group," where Kaiser doctors are employed.

The History of Kaiser Permanente., by the way, dates back to the 1930s. A young doctor named Sidney Garfield opened a hospital in the Mojave Desert in California at that time to treat workers involved in the construction of the Los Angeles Aqueduct. The workers paid five cents daily in advance for their future medical care. The idea of modern health insurance was born. Henry J. Kaiser, an industrialist, then collaborated with Garfield in the 1940s to offer this health model to shipyard workers in Richmond, California, during World War II. After World War II, in 1945, Kaiser Permanente introduced this health insurance model, namely the integration of hospitals, clinics, and doctors under the umbrella of a health insurance plan, to the broader population. Starting in the 1950s, Kaiser expanded beyond California and opened medical facilities in Hawaii, Colorado, and other states.

Now you must know that I had always sworn to myself never to be insured with Kaiser. For a long time, that was my absolute nightmare. Coming from Germany, it was extremely important to me to have the freedom to choose my doctor and, if necessary, to go to top hospitals like the University Hospital in San Francisco (UCSF) or Stanford in Palo Alto. I knew people who were either absolutely convinced and enthusiastic about the Kaiser system or others who avoided Kaiser like the plague because they hadn't been adequately helped in more complex medical cases, with dramatic consequences. However, since my school offered nothing but Kaiser, and after intensive questioning of my colleagues, who are also well acquainted with the German system, I heard mostly positive things, and in the end, I thought to myself, let's just give it a try.

Now one must know that Kaiser has undergone a significant metamorphosis lately. Just 20 years ago, every doctor wanted to open their own practice, which sometimes meant that Kaiser couldn't always recruit the absolute best medical professionals. However, nowadays it is completely insane to run one's own medical practice. The bureaucracy is so time-consuming and absurd, and it becomes more cumbersome every year, that many doctors hardly have any time left for their patients.

In a previous issue, I had already mentioned once that it is almost impossible to find a new general practitioner in San Francisco (Rundbrief 10/2023). As a patient, you often have to wait weeks and months for an appointment, whether it's with a general practitioner or a specialist. For example, I used to go to a gynecologist at the UCSF university hospital. Getting an appointment with her required a lot of advance notice and planning. You see: it doesn't help the patient much if the doctor is an expert but the patient can't get an appointment. That's why more and more doctors are choosing to work in group practices. The Kaiser system, as a very large group practice, is particularly attractive to many doctors because they don't have to deal with various American health insurance companies with hundreds of different plans, but instead operate as employees within one system. Interestingly, Kaiser is now attracting better and better doctors.

But now back to our personal experiences at Kaiser. First of all, I sent Michael, who is known to be more flexible and has more time nowadays. He was impressed by the efficiency and a system that is relatively patient-friendly.

Michael chose a primary care doctor at the state-of-the-art Kaiser facility in the Mission Bay neighborhood. The general thread at Kaiser is that the primary care doctor is the central point of contact who takes care of all health-related matters and coordinates them, such as referring you to a specialist or for a blood test. As a new Kaiser member, you first select a primary care doctor through the patient online portal. There is also the option to receive advice on this by phone, but we did it online. The portal provides the doctors' resumes and indicates whether they are still accepting new patients.

With one click each, we selected our primary care physicians. It is very easy to change your primary care doctor later if you want, which can also be done through the portal. Women are allowed to choose a primary care doctor and a gynecologist and do not need a referral from their primary care doctor if they want to see their gynecologist. At Kaiser, the primary care doctor is not isolated in their practice; you should imagine the whole thing as a huge medical center where everything is under one roof: primary care doctors, internists, orthopedists, dermatologists, gynecologists, and ear, nose, and throat doctors. The radiology department, pharmacy, and laboratory are also all part of the same system. The doctors all work together since they are employed by Kaiser and all have access to the patient records.

Doctors aren't paid based on the individual procedures they perform on the patient, but simply receive a salary. This means that doctors have much more time for their patients and do not have to rush them through in 10-minute intervals to keep their practice running. Kaiser places great emphasis on prevention and generally has a good reputation in this area. Appointments are relatively easy to get. Patients can usually choose whether they want a video conference or an in-person visit. Video conferences are suitable for follow-up appointments to discuss results or are practical if you don't want to sit in a waiting room with the flu, although sometimes it is important for the doctor to examine you in person.

Meanwhile, I've visited with my general practitioner and it was great. In the USA, it is quite common to have an annual check-up that includes a blood test, listening to the lungs, measuring blood pressure, etc., which I signed up for to get to know the doctor. She took a lot of time for me and first chatted extensively about what I do for work and my Christmas plans. For the blood test, I simply went three floors down. I have to say that I've had to somewhat revise my prejudices about Kaiser, although I still worry about what will happen if I ever have something super complicated, because the best system only proves itself when you are really sick.

What many insured individuals particularly appreciate about Kaiser is that the hassle of dealing with unexpected bills is generally reduced, as everything takes place within the same network. In this regard, we have already experienced quite a bit with various other health insurance companies we have been insured with, and the Kaiser system is significantly less nerve-wracking.

Amazon delivery driver off course

Michael Not only do we order like crazy from Amazon, but also the neighbors in our apartment building seem to shop at the online giant, and so packages often pile up in rows in the so-called "lobby" at the street entrance. The delivery drivers ring recipients through the intercom, and the recipient presses the so-called "buzzer" on the phone, which unlocks the entrance door. The delivery driver briefly enters the lobby, leaves the package, and takes a photo (Figure 17), which then appears on the buyer's Amazon app. As soon as I get a notification, I immediately rush down the stairs excitedly to receive my delivery.

Delivery drivers would, of course, prefer to just throw down the packages in front of the lobby door and quickly move on to the next house, but unfortunately, such deliveries are stolen by criminal creatures loitering in our neighborhood, and then Amazonn has to replace them. That's why Amazon forces the delivery drivers to ring the doorbell and bring the packages inside. This almost always works, but sometimes things go wrong. I have already found packages that the delivery drivers, under time pressure, have thrown over the gate into the garage; some I later found torn open on the street as if by wild animals, and some had completely and mysteriously disappeared.

Consequently, when I am expecting a delivery, I am as vigilant as a hawk and not only take possession of packages immediately upon delivery but also bring up the packages for neighbors on our floor who are not quite as attentive. However, something strange happened recently: a delivery was supposedly made, but the package was nowhere to be found. The delivery photo on the Amazon app did not show our lobby with the mailboxes but instead appeared to be a shelf with groceries and kitchen utensils (Image 19). Amidst all the chaos, there was also a yellow envelope that looked just like my order.

I thought hard, and suddenly it hit me like a ton of bricks: The photo showed the shelf of a restaurant kitchen! And as luck would have it, there is indeed a restaurant with a bar in the building next door, and the photo could be showing the kitchen there! So I went downstairs, into the restaurant, and explained my problem to the waitress. She fetched the manager, and I showed him the delivery photo. After I assured him that I wasn't crazy, he took my phone, marched into the kitchen with it, and came back a short time later with my package. We had a good laugh! Apparently, the Amazon guy, instead of ringing our doorbell, must have lazily thrown my order through the open kitchen window of the restaurant next door. You can't make this stuff up.

Real Estate Trap Property Tax

Michael An average single-family home in our neighborhood costs just under two million dollars. Now, in the heart of the tech industry, many people in the tech sector have money burning holes in their pockets, so the exorbitant purchase price isn't really the problem. But one must consider that the city of San Francisco levies a property tax of 1.17% per year on the assessed house price. That amounts to $23,400 a year on 2 million house, which is almost $2,000 a month. For that, you could almost rent a ramshackle place in a bad neighborhood! You could even say that homeowners are essentially renting their house from the county, at the price of the annual property tax, even though they bought it with already taxed income. We live in crazy times.

These property tax payments are not insignificant and are collected by the county and used to initiate relatively sensible things, such as supporting local public schools. Wealthy suburbs that collect a lot of property tax usually have the best public schools, while poorer areas often have deplorable ones. Since most parents prefer good schools for their children, this way they're driving up house prices in expensive areas with good schools.

Now, until 2017, homeowners were able to fully deduct their property tax (and also interest on loans) from their income tax to the federal tax office (Federal Income Tax). However, then-President Trump pushed through with Congress the SALT-Law which limited the maximum deductible property tax to $10,000. In the state of California, homeowners can still fully deduct their property tax bills from their state income tax. However, the state tax amounts to only about $12,500 for a typical annual income of $200,000, while the federal income tax amounts to $38,500. And, mind you, "deduct" simply means that you don't have to pay income tax on the amount of property tax paid: a sort of consolation prize from the tax office.

That wasn't always so extreme, because 40 years ago, real estate prices were still about one-tenth of today's level. You heard that right, the little house that costs 2 million today was available for 200,000 dollars in 1984. So that Grandma Meume, with her little cottage that she bought 40 years ago for 200,000 dollars but which is now worth two million, doesn't run into financial difficulties with her modest pension and has to move away from her neighborhood, the so-called Proposition13 was introduced in 1976. The law stipulates that the property tax will remain at the 1976 level, with annual increases of about 2-3%.

This leads to extreme unequal treatment of homeowners regarding property tax. Some time ago, a Luxury property in San Francisco's prestigious Sea Cliff neighborhood was for sale at a price of nearly 10 million dollars. According to the real estate listing, the current owner's property tax bill was only 3,721 dollars annually! The lucky owner probably bought the house ages ago at a bargain price. However, since the property tax adjusts sharply to the purchase price upon the sale of a property, the new owner would then have to shell out a hefty 117,000 dollars per year, which is almost 10,000 dollars a month! Such a decision requires careful consideration.

Now, the process is not without controversy, as tax fairness would look different, and even when Arnie Schwarzenegger was governor, he brought up a reform for discussion. However, he quickly backed down when he sensed the growing opposition from homeowners. Therefore, the regulation is unlikely to change anytime soon, as no one wants to evict the scruffy hippies from their multi-million dollar shacks. It's a hopeless endeavor for any politician.

Recently, it became known that our governor, Gavin Newsom, bought a house in affluent Marin County (north of the Golden Gate Bridge). His new luxury estate cost a modest nine million dollars. Now how a governor can manage the property tax of about 110,000 dollars per year, when his official annual salary is only 250,000 dollars? That's honestly a mystery to me.

Top Product: The Tire Inflator

Michael It's estimated that twice a year, one of our cars runs a flat tire. Typically, a nail or a screw is stuck in it, causing the air to escape rather slowly, so we often don't notice anything for days. But suddenly, the sensor on the dashboard sounds an alarm due to the low pressure. Changing to the spare tire to drive to the tire repair shop is cumbersome, so I'm glad to have a tire pump that allows me to quickly inflate the tire and slowly drive about a mile to the tire shop "Larkin Bros." where expert staff take care of the problem for $35. The man at the reception once assured me that people like me keep his shop running.

Such a traditional tire inflator draws its power from the car's cigarette lighter and makes a hell of a noise while it breathes new life into the tire. Using the pump stations at gas stations at exorbitant prices has never been my thing. That's why I've had such a pump in the trunk for 20 years, for emergencies, and also to pump a few huffs into the tires for maintenance every few months.

However, connecting the electric cable from the cigarette lighter to the pump next to the tire is somewhat labor-intensive, and so I was surprised to learn that nowadays there are mini pumps with such brutally enduring batteries that they make the power cable unnecessary. When I saw the Fanttik pump at my favorite supermarket, Costco, for $39.99, I first thought, "Ah, I'll wait until the price goes down," but suddenly this miracle product of Chinese manufacturing was no longer in stock. Grudgingly I bought a similar model on Amazon and must say: inflating tires with these battery pumps is a lot of fun, they delight the child in the man.

Since I've had the Fanttik device, it has happened that I go down to the garage just for fun of checking the tire pressure of our two cars, even though it rarely strays outside the tolerance range within just one week since the last check.

The operation is incredibly simple: you screw the air nozzle at the end of the device's hose onto the tire valve, use the arrow keys to set the desired pressure (for example, 35 PSI for the front tires of the Integra), press the middle button, and the Fanttik gets to work, pumping air into the tire until the target pressure is reached, then it stops. Foolproof. The charge of the built-in lithium-ion battery still showed all three bars after I had inflated 8 car tires by one or two PSIs. I would estimate that you could inflate several tires from empty to full before needing to recharge it via its USB-C port.

In America, pressure is measured in PSI (pounds per square inch). In Europe, "bar" is common. The conversion factor is 0.0689, so 35 PSI is approximately 2.41 bar. The pump can not only inflate car tires but also effortlessly fill bicycle tires. Mountain bikes need about 35 PSI. The pump even provides the nearly 100 PSI required by a Tour de France rider's racing bike tire. Valves for soccer balls and similar sports equipment are also included. Just set it to 3 or 4 PSI and you're good to go, no problem. Top product! However, the price on Amazon has skyrocketed in the meantime; currently, the Costco deal is the better one, as the item has come back in stock.

Trump!

Angelika I now have the difficult task of explaining to you why Trump was re-elected President. I actually wanted to let this topic slide, but Michael said that wasn't an option. To be honest, we weren't too surprised that Trump was the winner this time. It became quite clear to me early on that Kamala Harris was not the person who could beat Trump. However, I was quickly put in my place whenever I expressed this opinion. Nowadays, very few people are willing to engage in open and honest discussions or are even interested in listening to opinions that slightly differ from their own. One should not conclude that someone supports Trump just because they considered Kamala Harris a weak candidate.

I had already mentioned in our last newsletter (Rundbrief 10/2024) that the election came down to reaching undecided voters, as the base voters of both the Democratic and Republican parties had already made up their minds when Kamala Harris entered the race. Harris's close connection to Biden weakened her position from the start. Issues such as illegal immigration, the dire and chaotic situation at the Mexican border, the continued high cost of living, and rising crime in major cities were central for many undecided voters.

Statistics about declining inflation or crime, which many Democrats frequently cited, did not convince these voters, as their everyday experiences did not align with the statistics. The fact that the Democratic Party sent Harris into the race, who had been tasked by Biden to curb the flow of migrants at the borders, which was unsuccessful, indicates a certain level of tunnel vision. However, Democratic leadership seemed to rely on emphasizing the dangers of a second Trump term leading to a Democratic victory. This strategy had already failed in 2016. It is not enough to simply say, vote for me because I am not Trump.

Many undecided voters were looking for clearer answers from Kamala Harris and more charisma, a truly not to be underestimated factor in American election campaigns. Trump ruthlessly exploited the fears of voters and positioned himself as the savior of the working class and the common man, gaining many votes from voter groups that had once tended to choose Democratic candidates, such as Latinos and Blacks. This time, Trump even achieved the majority of all direct votes, and the majorities in the Senate and the House of Representatives also shifted in favor of Republicans. What particularly worries me about Trump as president is his lack of impulse control, his narcissism, and a cabinet full of people who have no idea about the departments they are leading. When did it actually start that people constantly overestimate themselves and think they can hold important positions without any experience? I wouldn't apply for a brain surgeon position either. We have four interesting years ahead of us.

And finally, a piece of local political news from San Francisco: Daniel Lurie is the new mayor of San Francisco (Rundbrief 10/2024). He won against previous mayor London Breed and left-wing favorite Aaron Peskin.

Greetings from Trumpistan:

Angelika und Michael