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Here's How Inflation Has Eroded American Workers' Overtime Eligibility

Sheila Abramson serves customers of Langer's Delicatessen in Los Angeles in 2013.

Sheila Abramson serves customers of Langer’s Delicatessen in Los Angeles in 2013. Kevork Djansezian/Getty Images hide caption

itoggle caption Kevork Djansezian/Getty Images

President Obama is once again poised to go it alone on labor policy, this time on overtime. The Labor Department is expected in the coming weeks to release a rule making millions more Americans eligible for overtime work — currently, all workers earning below $455 a week, or $23,660 a year, are guaranteed time-and-a-half pay for working more than 40 hours a week. The law may raise that as high as $52,000, Politico reports.

The rule would also change the regulations outlining which employees earning above that threshold are eligible — currently, employers can exempt some employees above that threshold if those workers could be considered “white-collar.”

This would add to a series of workplace policies that, failing congressional approval, the president has expanded in limited form through executive order — upping the minimum wage among federal contractors and attempting to shrink the gender wage gap among federal contractors. He also mandated paid leave for federal workers.

This particular rule change would be a long time in coming — Obama had in March 2014 directed the Labor Department to overhaul the overtime regulations.

The overtime threshold has only been changed once since 1975. At that time, it was set at $250 per week. Then in 2004, President George W. Bush updated it to $455. And that means inflation has slowly diminished the share of Americans who are guaranteed eligibility.

When you adjust for inflation, you can see how much the threshold has fallen — data from the St. Louis Federal Reserve (going back to 1979) shows that, as of the late 1970s, the threshold was right at or slightly above the median worker’s pay level. Today, it’s at around half.

The income line in the chart — that top one — represents the exact middle wage, with half the full-time working population above and below it at any given time. So while the threshold fell away from the median pay level, so did the number of workers legally guaranteed overtime pay.

Indeed, according to the left-leaning Economic Policy Institute, as of 2013, only 11 percent of full-time workers were guaranteed overtime. Bumping the threshold up to around $50,000, for example — roughly where it was in 1975, adjusted for inflation — would bring 47 percent of workers under the threshold, making around 6 million more workers eligible, by one estimate.

The debate over the overtime threshold sounds remarkably similar to the minimum wage debate — in that debate, opponents in the business community say a higher wage would cost jobs. In the debate over overtime, the fear is that it could cost workers hours as employers decide they don’t want to shell out time-and-a-half pay.

And as in the minimum wage debate, advocates of higher overtime thresholds say lawmakers should simply index the level to inflation — not only would it save lawmakers from periodic fights over how much to change the law, but it would also help lower-paid hourly workers by making sure they’re all paid fairly by keeping wage policies consistent with where prices go.

“The original notion was that the people who don’t control their own hours, who don’t need the protection of the law, get paid overtime,” says Ross Eisenbrey, vice president at EPI. “Where the law set the threshold in 1975, that’s really supposed to demarcate the people about whom there’s no question — they are not the most powerful people.”

Tying the level to inflation, he says, would ensure that the workers who need the overtime are consistently eligible for it.

The threshold has never been tied to inflation, and advocates like Eisenbrey and the liberal Center for American Progress have long pushed for such a change.

But opponents see reason to keep the level static. One reason, says one economist, is that an indexed overtime level doesn’t give businesses enough leeway to deal with high inflation.

“I think it’s a bad idea [to index the overtime threshold to inflation] because you want to preserve some flexibility,” says Michael Strain, a resident scholar at the right-leaning American Enterprise Institute. “We have been in a low-inflation environment for some time, and we’re kind of used to that in how we look at things. But it’s entirely conceivable that 10 years from now, we may be in a different environment.”

And without that flexibility, employers might further restrict hours, or they might pressure employees to get even more work done in their 40 hours.

Another argument is that inflation isn’t uniform everywhere. The U.S. Chamber of Commerce argued in a February letter to Secretary of Labor Tom Perez that the price index used to adjust wages is based on prices in urban areas — it could distort labor markets in rural areas.

But then, inflation will still happen, and the threshold would still periodically have to rise. So how do you ensure that Congress does it? Strain says one solution could be including a provision in the overtime law that forces Congress to revisit the policy every few years. That way, the policy isn’t on “autopilot,” he says, but it still changes regularly.

Even then, however, there’s no guarantee Congress would actually regularly change the law. After all, they have an annual deadline to pass a budget. They haven’t passed all their spending bills on time in almost 20 years.

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In Atlantic City, A Silver Lining For Casinos Left Standing

A view of Atlantic City, N.J., in October. Two of the towering casinos in this photo, the Showboat (3rd tower from left) and the Revel (far right) closed at the end of last year.
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A view of Atlantic City, N.J., in October. Two of the towering casinos in this photo, the Showboat (3rd tower from left) and the Revel (far right) closed at the end of last year. Michael S. Williamson/The Washington Post hide caption

itoggle caption Michael S. Williamson/The Washington Post

New casinos are popping up all along the East Coast, giving Atlantic City a run for its money. Four casinos out of 12 in Atlantic City closed last year. But those closures have, in turn, helped the remaining gambling houses there.

Casino customers tend to be pretty loyal to one or two houses — to accrue rewards, or sometimes for other reasons.

“We like to bring the dog down once in a while because he likes to walk the boardwalk, go in the ocean,” says Patty Davis. She and her husband travel more than six hours to gamble in Atlantic City.

The Davises used to go to the Showboat casino because its hotel allowed dogs. When it closed in September, the couple and their Pomeranian started going to Harrah’s, because it allows dogs.

Many people have been taking their business to other casinos in the city since their usual haunts closed, which has meant better business for the places left standing.

Resorts, Atlantic City’s oldest casino, still lost money in the first quarter of this year but a lot less than it did last year.

“We’re certainly seeing the benefit of a smaller competitor base so our revenues and our profitability continue to improve steadily,” says Mark Giannantonio, president and CEO of Resorts.

In other words, Atlantic City went from having 25,000 slot machines at the start of last year to 17,000 now. It went from 12 underperforming casinos to eight fuller gambling houses. And that’s helped the remaining casinos grow their profits by 26 percent.

It certainly looked like the first good news for Atlantic City in a long time. But Moody’s Investors Service analyst Keith Foley says it doesn’t mean the rest of the casinos are in the clear.

“In addition to the fact that you’ve got larger and more competitors within that region, you’ve got a couple of trends going on in regional gaming that will affect Atlantic City and probably not positively,” Foley says.

Casinos need to replace their aging customers. But, Foley says, younger people not only have less disposable income, they’re also just less interested in playing the slot machines.

Joe Lupo is senior vice president at the Borgata, where profits were up 82 percent for the first quarter of this year. He says the most important thing for Atlantic City’s remaining casinos is to take their new profits and reinvest them in their properties.

“Product’s extremely important especially when you have a similar gaming product in your backyard in Pennsylvania, New York and Maryland, what’s the differentiator?” Lupo says.

While Lupo says the casino industry in Atlantic City has stabilized, the region is still reeling from the closures. The county has an unemployment rate that is twice the national average and leads the state in foreclosures.

Back at Resorts, a lounge beside the blackjack tables shows off one of the casinos’ biggest hopes for growth: its website for online gambling. However customers who log in from home will be able to pour their own gin and tonics. So even great success on the Internet won’t bring back many of the lost jobs.

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Apple Announces Music Streaming Service

Jimmy Iovine announces the new streaming service Apple Music in San Francisco, California.

Jimmy Iovine announces the new streaming service Apple Music in San Francisco, California. Justin Sullivan/Getty Images hide caption

itoggle caption Justin Sullivan/Getty Images

Apple has announced the launch of Apple Music, an app that adds a subscription streaming service to iTunes, the largest music retailer in the world.

The announcement, made at Apple’s annual Worldwide Developers Conference, comes more than a year after Apple acquired Beats Music, the streaming service founded by Jimmy Iovine, Dr. Dre and Trent Reznor. Iovine and Reznor both appeared in the presentation to explain and introduce elements of the service, which will include a live, “24/7 global radio” station and a social media-like feature called “Connect” where musicians can directly upload content like lyrics, videos and photos.

Apple Music will be available on June 30. The service, which will have no free option, will cost $9.99 a month for a single subscription or $14.99 a month for a “family” subscription that allows up to six people to share an account. In an indication of the company’s hopes for its reach, Apple CEO Tim Cook announced that the service would be available on Android phones in the fall. Until now, iTunes has only been available on Apple devices.

From the stage, Iovine, a longtime music executive employed by Apple since the acquisition of Beats, recalled the moment he first saw the iTunes store. It was a “simple, elegant way to buy music online” in an era when the recording industry had been decimated by filesharing, he said. But Apple Music is entering a playing field already crowded by other streaming services such as Spotify, Rdio, Pandora and Tidal.

As NPR’s Laura Sydell, who was in the audience at the event, tweeted, Iovine characterized the current streaming ecosystem as confusing and overwhelming, and positioned Apple Music as “a complete thought around music,” a slightly awkward catch phrase later echoed in a video presentation by musician Trent Reznor. (That phrase might have been an oblique reference to the Beats Music feature The Sentence, in which users could create a playlist by describing their listening scenario. Get it? The Sentence … a “complete thought.” Oh well.)

#WWDC15 Jimmy Iovine says this is a way to organize the mess of music.

— Laura Sydell (@Sydell) June 8, 2015

Announced after nearly two hours of presentations on how Apple’s various operating systems will be updated in the coming year (promised developments: a new news app, open source programming language, Siri will be better, Maps will be better, Apple Pay continues to expand to more retailers), the introduction of the music service featured the participation of many well-known musicians including The Alabama Shakes, Pharrell Williams and The Weeknd, who performed a radio-ready new song.

Apple Music’s “global 24/7 radio” station will be staffed by notable DJs hired from terrestrial and web radio stations: former BBC host Zane Lowe, Ebro Darden of New York’s HOT 97 and Julie Adenuga of Rinse FM.

Also part of the service, but relegated to a single mention at the end of the presentation, was the iTunes store itself, which Cook called “the best place to buy music.” If you’re still into that kind of thing.

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Online Health Searches Aren't Always Confidential

A researcher found that online medical searches may be seen by hidden parties, and the data sold for profit.

A researcher found that online medical searches may be seen by hidden parties, and the data sold for profit. Stuart Kinlough/Ikon Images/Getty Images hide caption

itoggle caption Stuart Kinlough/Ikon Images/Getty Images

In the privacy of a doctor’s office, a patient can ask any question and have it be covered under doctor-patient confidentiality. But what happens when patients want to search possible symptoms of a disease or ailment online?

It’s common to search for treatments for a migraine or stomach pain on WebMD, or a flu strain on the Centers for Disease Control and Prevention website. But there’s no way to know who else may be privy to that search information. So where does that data go when a patient presses enter?

That’s what Tim Libert, a doctoral student at the University of Pennsylvania, wanted to know. He’s been researching what happens with information people search online and spoke with NPR’s Robert Siegel about the privacy implications.


Interview Highlights

On what happens when someone searches a health issue

I took a list of 2,000 common disease names — I mean everything from migraines to breast cancer. I ran those through a search engine and I found about 80,000 pages that were related to those terms. I looked at those pages and I found about 90 percent of those, when you load the page on your computer it tells hidden parties the address of the page you’re looking at. In cases where that address has the name of the disease or something, these hidden parties get to find out what it is you’re interested in.

On who these hidden parties are, and why they’re interested

Most of the times it’s advertisers — so these are your marquee names, your Googles and Facebooks. But I also found kind of further down there a fair amount of tracking going on by data brokers. So these are companies like Experian and Acxiom. And their core business model is not advertising per se, but selling information about you to whoever wants to buy it.

On what they would do with this search information

There’s actually companies that sell lists of people who have different diseases or symptoms. There’s been some kind of chilling cases: [There were] companies selling lists of people who had been raped or people who had AIDS. So there’s a market for this stuff.

On the Health Insurance Portability and Accountability Act of 1996 [HIPPA] and its relation to online data privacy

HIPAA’s a pretty good law, but HIPAA was made long before the Web was really in everybody’s home and very well before smartphones existed.

Anything that is happening on the Web today is pretty much completely unregulated. There’s really no oversight and there’s no real standards either. Companies aren’t required to encrypt the information to keep it in a secure place. And we’ve also been seeing a lot lately that this is of interest to criminals, so there is additional kind of worry that not only is it not protected by HIPAA, it’s not really protected at all.


The CDC pointed us to its online privacy policy, which says the data its sends to Google Analytics, for instance, is anonymized. But Tim Libert says that’s “not nearly sufficient.” He says that doesn’t provide the kind of protection that federal law requires for doctors’ visits.

In a statement, WebMD says that it “may collect data about our users’ online browsing and use that data to deliver advertisements to our users. WebMD’s collection and use of data is described in greater detail in our Privacy Policy. The policy also describes how we protect user information and the choices we offer users for opting out of behavioral advertising by WebMD.”

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Insurer Uses Personal Data To Predict Who Will Get Sick

Carol and John Iovine say the health coach their insurer assigned John after he had a torrent of grave health problems in 2014 has helped them get the medical care he still needs. And it's helped keep him out of the hospital.

Carol and John Iovine say the health coach their insurer assigned John after he had a torrent of grave health problems in 2014 has helped them get the medical care he still needs. And it’s helped keep him out of the hospital. Todd Bookman/WHYY hide caption

itoggle caption Todd Bookman/WHYY

The first thing out of John Iovine’s mouth is an apology.

“You got to forgive me if I don’t remember too much,” he says. “I had a stroke.”

Signs of that stroke are everywhere — the bed in the dining room, a shower installed in the pantry. John is thin, and sits in blue pajama pants in the wheelchair he uses to get around.

He may, however, have overstated his memory problems.

“We went to Harding … that’s the school right up here,” he says. It was 1952, and that’s where he saw the woman who would become his wife — “this girl, in this long red sweater, and her red hair. And I said, ‘That’s the girl for me,’ ” he says of Carol Iovine.

“I came out on top,” he says, laughing.

Carol, who is sitting next to her husband, explains that John’s stroke came in the middle of a bad run of health. First, he developed an ulcer, she says. Then he needed a bowel resection. After that came the stroke — and more.

“He had pneumonia, jaundice, sepsis; clot in the right lung,” she adds. All of that hit between October 2013 and January 2014.

John, a former house painter, spent 79 days in the hospital — some of that unconscious, and nearly all of it stuck in a bed.

“Aw, man — it was hell,” he says.

Sink Or Swim

John Iovine finally went home in April of last year, after several months in a rehab facility.

And this point in patients’ recovery — when they’ve been discharged and have to sink or swim on their own — is the stage that everyone in the health system is paying special attention to right now. For too long, too many people like John Iovine would take a dive at this stage, and end up back in the hospital again.

The industry calls these returns to the hospital preventable readmissions, and they are a huge drain on finances, costing Medicare alone $15 billion annually. That’s why Medicare launched an initiative a few years ago that penalizes hospitals that see too many patients readmitted too soon. And in turn, that spurred many hospitals to pay more attention to the problem.

Now insurance companies are also taking a stab at a solution.

“We are trying to identify which patients are likely to be hospitalized in the next three months — so that’s our target,” says Somesh Nigam. He’s the chief informatics officer for Independence Blue Cross, a Philadelphia-based insurance firm.

Independence Blue Cross, he says, is working to identify all those among its customers who are sick or frail enough to be on the edge of hospitalization.

To do so, the company runs algorithms on the huge amounts of health data at its disposal: billing claims, lab readings, medications, height, weight and family history. It also throws in information about the client’s neighborhood, including poverty rates.

“The health care data we provided to build these algorithms is equivalent, I think, to five Wikipedias,” says Nigam.

The computer algorithm sifts through all that information and pops out a score for each individual patient, identifying those it deems at highest risk.

Independence Blue Cross then assigns each high scorer a staff member — what it calls a “health coach,” who will work at no charge to the client to see what extra services may be helpful.

“This coordinated effort then works for the patient,” Nigam says. The coach may assemble health information tailored to the patient’s needs; make medical appointments; resolve medication issues, or maybe help arrange transportation to the doctor’s office. Sometimes the coach helps arrange for a home care nurse.

“And all of that,” Nigam says, “is beginning to show a pretty significant drop in hospitalization rates in our region.”

Independence Blue Cross has identified 18,000 clients for this sort of extra attention and, as just one sign of success, has already seen a 40 to 50 percent reduction in expected hospital admission rates for people with congestive heart failure.

Early successes include the Iovines.

Carol Iovine’s life changed, too, after her husband’s stroke: She’s having to manage his new medications, and help John shower and get to the toilet. They need to hire a wheelchair-accessible van for each appointment and therapy session, of which there are many.

She says having the support of John’s health coach has made a big difference in helping her manage her husband’s needs.

“He was supposed to get blood work, and they wanted me to take him to the ER to get blood work,” Carol remembers. ” ‘Uh-uh,’ I said. ‘No way.’ “

She called their health coach, Donna Crockett, and told her the problem. “And the next thing,” Carol Iovine says, “a nurse was here taking blood.”

Big picture: The money the health insurance plan spends on having Crockett arrange a visiting nurse, or streamline appointments is nothing compared to the cost of a hospital admission.

Writing The Rules

That promise of savings has a lot of health care specialists taking a harder look at the useful potential — and possible drawbacks — of these predictive computer formulas.

“There is a lot of interest in the area right now,” says Glenn Cohen, a professor at Harvard’s law school, who has written about the legal and ethical concerns raised by the collision of health care and big data. “It is a great coming together of the health care world and the computer science world, as well as the patient experience world.”

Still, he has some qualms.

“There are questions of whether people whose data is going to be used to build the engine have the right to opt out,” Cohen says. “Do they have to affirmatively opt in? Do they have to even be notified it’s being used?” These are still grey areas, he says.

The field is so new it doesn’t yet have established standards for how this information should be handled, Cohen says.

Independence Blue Cross says it follows federal health privacy guidelines regarding anonymity, and is only using the information to better serve its members. But it doesn’t ask the clients who subscribe to its health plans if they want to opt in.

“The data is only used to improve or coordinate care,” Nigam says. “And that is something that you would agree is our role.”

Health-wise, coordinated care seems to have made all the difference for John Iovine. He hasn’t been hospitalized in the year since Independence Blue Cross assigned him a health coach.

The insurer says the early results are so promising that the company is expanding its efforts. The firm is partnering with New York University’s Langone Medical Center on a next target — Type 2 diabetes. The goal is to spot people who are most at risk of getting diabetes before they start showing symptoms — and then intervene, in hopes of preventing the illness.

This story is part of NPR’s reporting partnership with WHYY and Kaiser Health News.

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Georgia's Giant Clay Pots Hold An 8,000-Year-Old Secret To Great Wine

Winemaker Iago Batarshvili makes wine in clay vessels called qvevri, which he buries underground and fills with white grapes. There are no barrels, vats or monitoring systems for this ancient Georgian method, which is helping drive sales. Batarshvili plans to bury these new qvevri in his cellar to expand production.

Winemaker Iago Batarshvili makes wine in clay vessels called qvevri, which he buries underground and fills with white grapes. There are no barrels, vats or monitoring systems for this ancient Georgian method, which is helping drive sales. Batarshvili plans to bury these new qvevri in his cellar to expand production. Daniella Cheslow/for NPR hide caption

itoggle caption Daniella Cheslow/for NPR

When I ask Iago Batarshvili to climb into his qvevri, a Georgian clay wine barrel, he rolls his eyes before he drops a ladder into what looks like a hole in the ground and makes his way down. What is a novelty to an observer is, to Batarshvili, simply the way things are done.

“I don’t make anything special,” he says. “I only continue in the way started by my parents.”

Georgia’s winemaking heritage goes back 8,000 years and centers on the qvevri, a cavernous terra-cotta pot shaped like an egg, lined with beeswax and buried to the mouth underground. But these ancient vessels were sidelined by the industrial wine production dictated by seven decades of Soviet rule. Over the last 10 years, however, qvevri wine has slowly recovered. Today, it is a calling card for Georgian wine around the world.

Batarshvili says making white wine in qvevris imparts a unique flavor. He pours organic white Chinuri grapes, skins and stems into the qvevri in October each year, lets them ferment with natural yeast for two weeks, and then seals the qvevris and leaves them buried underground for six months before lifting the lids in April. Finally, Batarshvili transfers the wine to a smaller set of qvevris for a further half year of aging before bottling. There are no barrels, tanks or gauges — just the grapes and the qvevri.

In most commercial winemaking, only red wines are fermented with their skins. The extended skin contact gives Batarshvili’s white qvevri wine an orange tint and a deep tannin flavor that is prized by customers in Japan, Europe and the United States. Red qvevri wine is made through the same process.

A man stands next to a giant qvevri pot in Kakheti, Georgia, in this photo from the late 1800s. The beeswax-lined vessels have been used to make wine for thousands of years.

A man stands next to a giant qvevri pot in Kakheti, Georgia, in this photo from the late 1800s. The beeswax-lined vessels have been used to make wine for thousands of years. via Wikimedia hide caption

itoggle caption via Wikimedia

Batarshvili uses the same methods and even the same primitive wooden tools his parents and grandparents used, but for his forebears, qvevri wine was only a home craft.

That home craft was uprooted — literally — when the Soviets invaded Georgia in 1921. The Bolsheviks ripped up the hundreds of grape varieties grown on Georgia’s many family vineyards. Instead, the Communists planted just a handful of grapes varietals and nationalized viniculture, churning out some 200 million liters of mediocre, mass-produced wine a year.

Ironically, the Russians who dismissed qvevri wine were also instrumental in restoring it. In 2006, the Georgian wine industry, already contracted after the fall of the Soviet Union, faced a grave threat when Vladimir Putin banned exports to Russia. Putin claimed it was to avoid rampant health violations in the Georgian wine industry; Georgians saw the move as punishment for drawing too close to the West.

Without the Russian market, the Georgian wine industry tanked – and then reinvented itself for a global clientele. At its nadir, Georgia produced 22 million liters in 2009. By 2014, that figure had quadrupled.

James Beard award-winning wine writer Alice Feiring, who is writing a book about skin contact in Georgian wine, says the qvevri has been a major engine for interest in Georgian viniculture. The first of two International Qvevri Wine Symposia was held in 2011 in the Alaverdi Monastery, a stone compound surrounded by vineyards at the foothills of the Caucuses Mountains, in Georgia’s Kakheti wine-growing region. Feiring attended and was surprised to see that even the monastery, which has produced wine for 1,000 years, had used barrels for wine and was in the midst of switching back to qvevri.

“If you are a modern winemaker using barrels, you’re racking the wine several times, moving it from one barrel to another,” Feiring explains. “You’re checking things, you’re adding things to the fermentation, you’re messing with the temperature. Qvevri winemaking allows the winemaker to be as uninvolved as possible. It’s the way wine was made before any modern contraptions.”

Grapes on the vine in Kakheti, Georgia's wine-growing region

Grapes on the vine in Kakheti, Georgia’s wine-growing region via Wikimedia hide caption

itoggle caption via Wikimedia

Because qvevris are buried underground, the earth’s temperature remains relatively constant, Feiring says. The qvevri’s torpedo shape allows sediment to collect at the pointed bottom of the vessel, while the wine naturally moves around the middle.

Two years after the first symposium, the UN Educational, Scientific and Cultural Organization (UNESCO) recognized qvevris as an element of “Intangible Cultural Heritage of Humanity.”

“There’s a lot of wine in Georgia made in barrels or in stainless steel,” Feiring says. “But it really is the qvevri that put Georgian wine on the map for quality wine.”

Russia ended its ban in 2013; today, Russia once again is Georgia’s best customer, buying 60 percent of all wine exports. Yet the ban pushed Georgia to forge ties with far more foreign markets.

Irakli Cholobargia, marketing director of the state-run National Wine Agency, says qvevri wine is still a tiny portion – less than 1 percent — of the total Georgian output. Yet the number of qvevri winemakers is growing: Today at least 30 artisanal winemakers use the ancient vessels exclusively, and larger wineries are adding qvevri series to their lineups.

“To stand out from the crowd, it’s good to have the qvevri wine. It’s a different thing,” Cholobargia says. But, he adds, increasingly, qvevris are not enough to differentiate a winery. “You have to have new grape varieties in your range, a new one even for the Georgians.”

As for Batarshvili, growing global interest has helped him expand his wine operation five-fold since 2006. Now he does not have enough wine to fill his orders.

“We’ll produce maybe 8,000, maximum 10,000 bottles and that will be all,” he says, while drumming his hands on five new qvevri lying on their sides like dinosaur eggs on his front lawn. “After 10,000 bottles, we would need to use some factory mechanics.”

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5 Questions Answered On The Legal Challenge To Obamacare Subsidies

Protestors against the Affordable Care Act rallied outside the Supreme Court in March, before arguments in the second major challenge to the law.

Protestors against the Affordable Care Act rallied outside the Supreme Court in March, before arguments in the second major challenge to the law. Jim Lo Scalzo/EPA/Landov hide caption

itoggle caption Jim Lo Scalzo/EPA/Landov

By the end of June, the Supreme Court is expected to rule on King v. Burwell, a case challenging the validity of federal tax subsidies helping millions of Americans buy health insurance if they don’t get coverage through an employer. If the court rules against the Obama administration, those subsidies could be cut off for people in about three dozen states using HealthCare.gov, the federal exchange website.

Here are answers to some frequently asked questions about the case.

1) What is this case about?

The case challenges the federal government’s ability to provide subsidies to individuals who buy health insurance on the federal marketplace, sometimes called an exchange. Those subsidies are provided to lower- and middle-income customers since the health law mandates that most people have insurance. At issue is a line in the law stipulating that subsidies are available to those who sign up for coverage “through an exchange established by the state.” In the heated politics following the health law’s passage, a majority of states opted not to set up their own exchanges and instead rely on the federal government.

In regulations issued in 2012, the Internal Revenue Service said the subsidies would be available to those enrolling through both the state and the federal health insurance exchanges. Those challenging the law insist that Congress intended to limit the subsidies to state exchanges, but the Obama administration says the legislative history and other references in the law show that all exchanges are covered. Many lawmakers and staff members involved in the debate agree.

2) What happens if the court rules against the Obama administration?

According to the Department of Health and Human Services, more than 6 million people would lose their subsidies in the states where the federal government operates the health insurance exchanges.

An analysis from the Kaiser Family Foundation found that subsidized enrollees would face an average effective premium increase of 287 percent if the court rules against the administration. (Kaiser Health News is an editorially independent program of the foundation).

Florida would have the most people lose subsidies (1.3 million), worth nearly $400 million, with Texas ranked second in both categories (832,000 residents losing $206 million per month), according to the state-by-state analysis.

Even people who weren’t getting subsidies could be indirectly affected by a Supreme Court ruling against the administration. That’s because the elimination of subsidies would likely roil the insurance risk pool. Without the subsidies, many healthy people are likely to give up their coverage and that would drive up costs for those continuing to buy insurance.

Individuals in state-run exchanges and the District of Columbia would keep their federal subsidies.

3) If the Supreme Court rules against the Obama administration, when would subsidies disappear? Would those who lose subsidies still be required to buy health insurance under the law’s “individual mandate?”

Supreme Court decisions generally take effect 25 days after they are issued. That could mean subsidies would stop flowing as soon as August, assuming the decision is issued later this month, as expected.

Although the law’s requirement that individuals have health insurance would remain in effect, individuals aren’t required to purchase coverage if the lowest-priced plan in their area costs more than 8 percent of their income. So without the subsidies, many, if not most, people who had been receiving help would become exempt.

4) Will Congress fix this?

Congress could restore the subsidies by passing a bill striking the line about subsidies being available through exchanges “established by the state.” But given how many Republicans oppose the law, that sort of bipartisan cooperation is considered unlikely.

GOP lawmakers generally want to scrap the health law, but some back legislation that would keep the subsidies flowing temporarily.They would attach strings that Democrats and President BarackObama will surely object to. For example, a proposal from Sen. Ron Johnson, R-Wis., would maintain the subsidies for current beneficiaries through August 2017 but repeal the health law’s individual and employer mandates and requirements for specific types of coverage. However, a report from the American Academy of Actuaries said some changes favored by Johnson and other Republicans, such as eliminating the individual mandate, “could threaten the viability” of the health insurance market. Republicans have not coalesced around a specific strategy.

States could consider setting up their own exchanges, but that is a lengthy and complicated process and in most cases requires the consent of state legislatures. Many of those legislatures will likelynot be in session when the court rules and would have to be called back to take action.

Sylvia Burwell, the secretary of Health and Human Services, told Congress earlier this year that the administration has no authority to undo “massive damage” that would come if the court strikes down subsidies in federal exchanges. But she also has said the administration will work with states to help mitigate the effects.

5) Is this the last legal hurdle the health law will face?

No, but it’s probably the most significant one left. In other suits,House Republicans are challenging the money used for the law’s subsidies, saying it was not properly approved by Congress and that the administration did not have the power to delay the law’srequirements that larger employers provide coverage or face a penalty. Additional legal challenges include several dozen cases still pending over birth control coverage.

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Spain's Air Traffic Controllers Go On Strike; Pay Isn't The Big Complaint

Two Spanish Iberia airplanes stand on the the tarmac at the Adolfo Suarez Madrid-Barajas airport in Madrid Monday. Spanish air traffic controllers started a four-day partial strike that could affect some 5,300 flights.

Two Spanish Iberia airplanes stand on the the tarmac at the Adolfo Suarez Madrid-Barajas airport in Madrid Monday. Spanish air traffic controllers started a four-day partial strike that could affect some 5,300 flights. J.J. Guillen/EPA /LANDOV hide caption

itoggle caption J.J. Guillen/EPA /LANDOV

Despite being among the best-paid public workers in Spain, the country’s air traffic controllers started a strike Monday. Their union is protesting the punishment of dozens of controllers who were involved in a 2010 strike that sparked a national state of alarm.

“Some 5,300 flights to and from Spain are expected to be affected,” NPR’s Lauren Frayer reports from Madrid. “This is the first of four days of work stoppage by Spain’s air traffic controllers.”

Lauren adds, “But the workers get little sympathy in Spain. They’re among the best-paid civil servants, with average salaries almost half a million dollars a year.”

The 2010 strike created chaos for travelers in Spain and beyond; Enaire, the company that administers Spain’s commercial air navigation, recently ordered dozens of controllers to be suspended for a month without pay over the incident.

Unlike the action five years ago, today’s strike was announced well in advance; it also coincides with the start of the busy summertime tourist season.

So far, only minimal delays have been reported, according to Europa Press. The government has set a minimum staffing rate of at least 70 percent for the strike, which will occur in eight two-hour windows over the course of four days.

Spain’s air traffic controller union, the USCA, has set the strike for June 8 10, 12 and 14.

In addition to arguments over the punishments for workers over the 2010 strike, the union and Enaire have recently been in a dispute over attempts to boost the number of work hours and cut the pay of Spain’s air traffic controllers.

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