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Monday, January 16, 2012

Drug affordability affects 1 in 10 Canadians

Public release date: 16-Jan-2012
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Contact: Kim Barnhardt
kim.barnhardt@cmaj.ca
613-520-7116 x2224
Canadian Medical Association Journal

One in 10 Canadians have problems affording medications they have been prescribed, and one in four people without drug insurance cannot afford to have their prescriptions filled, according to a study in CMAJ (Canadian Medical Association Journal).

Researchers from the University of British Columbia, University of Toronto and the Institute for Clinical Evaluative Sciences analyzed data from 5732 people who participated in the 2007 Canada Community Health Survey. Participants who received a prescription were asked if they had problems filling a prescription, avoided refilling a prescription or tried to make a prescription last longer because of the cost. A positive answer to any of the three questions was deemed to be cost-related nonadherence to prescription medication.

Although Canada has publicly funded health care for hospital and physician services, the country lacks universal drug coverage. Many Canadians do not have insurance for prescription drugs and must pay out-of-pocket for medications. Two-thirds of Canadian households incur these expenses each year, totaling $4.6 billion in 2010, or about 17.5% of total spending on prescription drugs.
According to the study, about 10% of Canadians who received one or more prescriptions had problems filling a prescription because of cost, with the highest rates of cost-related nonadherence in British Columbia (17%). Rates were higher for people with lower incomes and those with poorer health as well as for people without drug insurance.

"We found cost-related nonadherence was most commonly reported by individuals who were poor, who reported worse health status, and who had multiple chronic conditions," stated Dr. Michael Law, Centre for Health Services and Policy Research, University of British Columbia. "Among those without drug insurance, cost-related nonadherence was reported by 26.5% compared with only 6.8% among those who reported having drug insurance."

Statistical projections indicate a 35.6% likelihood of nonadherence for uninsured low-income people compared with 3.6% for high-income insured people.

"Reducing cost-related nonadherence would likely improve health and reduce spending in other areas, such as admissions to hospital for acute care, conclude the authors. "Of all the factors we found to be associated with cost-related nonadherence, insurance coverage is the most amenable to being addressed through changes in public policy."

"We think these findings are timely, with the premiers' Council of the Federation meeting January 16, 2012 in Victoria, BC," adds Dr. Law. "The country's 13 provincial and territorial premiers should focus on how to address this disparity to improve access to prescription drugs for all Canadians."

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Drug affordability affects 1 in 10 Canadians Public release date: 16-Jan-2012
[ | E-mail | Share ]
Contact: Kim Barnhardt
kim.barnhardt@cmaj.ca
613-520-7116 x2224
Canadian Medical Association Journal

One in 10 Canadians have problems affording medications they have been prescribed, and one in four people without drug insurance cannot afford to have their prescriptions filled, according to a study in CMAJ (Canadian Medical Association Journal).

Researchers from the University of British Columbia, University of Toronto and the Institute for Clinical Evaluative Sciences analyzed data from 5732 people who participated in the 2007 Canada Community Health Survey. Participants who received a prescription were asked if they had problems filling a prescription, avoided refilling a prescription or tried to make a prescription last longer because of the cost. A positive answer to any of the three questions was deemed to be cost-related nonadherence to prescription medication.

Although Canada has publicly funded health care for hospital and physician services, the country lacks universal drug coverage. Many Canadians do not have insurance for prescription drugs and must pay out-of-pocket for medications. Two-thirds of Canadian households incur these expenses each year, totaling $4.6 billion in 2010, or about 17.5% of total spending on prescription drugs.
According to the study, about 10% of Canadians who received one or more prescriptions had problems filling a prescription because of cost, with the highest rates of cost-related nonadherence in British Columbia (17%). Rates were higher for people with lower incomes and those with poorer health as well as for people without drug insurance.

"We found cost-related nonadherence was most commonly reported by individuals who were poor, who reported worse health status, and who had multiple chronic conditions," stated Dr. Michael Law, Centre for Health Services and Policy Research, University of British Columbia. "Among those without drug insurance, cost-related nonadherence was reported by 26.5% compared with only 6.8% among those who reported having drug insurance."

Statistical projections indicate a 35.6% likelihood of nonadherence for uninsured low-income people compared with 3.6% for high-income insured people.

"Reducing cost-related nonadherence would likely improve health and reduce spending in other areas, such as admissions to hospital for acute care, conclude the authors. "Of all the factors we found to be associated with cost-related nonadherence, insurance coverage is the most amenable to being addressed through changes in public policy."

"We think these findings are timely, with the premiers' Council of the Federation meeting January 16, 2012 in Victoria, BC," adds Dr. Law. "The country's 13 provincial and territorial premiers should focus on how to address this disparity to improve access to prescription drugs for all Canadians."

###

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AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.

Source: http://www.eurekalert.org/pub_releases/2012-01/cmaj-daa011012.php
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2 road accidents in China kill 14 people (AP)

BEIJING ? Two road accidents in China have killed 14 people in one day.

The official Xinhua News Agency says seven people were killed and another five injured when the bus they were traveling in crashed with a trailer in eastern Anhui province. The accident happened Saturday in a rural area.

Later on Saturday, seven people were killed when the van they were in fell off a cliff in southwest Yunnan province. Xinhua said Sunday that the vehicle had been hit from behind by another van.

Serious traffic accidents are common in China due to often overloaded vehicles and poorly trained drivers who often ignore traffic laws.

Source: http://us.rd.yahoo.com/dailynews/rss/china/*http%3A//news.yahoo.com/s/ap/20120115/ap_on_re_as/as_china_road_accidents

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Guatemalan congressman slain outside party HQ

Investigators from the attorney general's office work at the crime scene where Congressman Valentin Leal Caal and his brother Erick were shot to death in downtown Guatemala City, Friday Jan. 13, 2012. Leal Caal was a member of congress since 2008 and reelected in Nov. 2011 general elections for four more years. (AP Photo/Moises Castillo)

In this photo taken on May 5, 2009 Guatemala's Congressman Valentin Leal Caal poses for photo at the Democratic Freedom Revival party offices in Guatemala City. Leal Caal and his brother Erick were shot to death in downtown Guatemala City on Friday Jan. 13, 2012. (AP Photo)

Investigators from the attorney general's office work at the crime scene where Congressman Valentin Leal Caal and his brother Erick were shot dead inside a vehicle in downtown Guatemala City, Friday Jan. 13, 2012. Leal Caal was a member of Congress since 2008 and reelected in Nov. 2011 general elections for four more years. (AP Photo/Moises Castillo)

Guatemala's President of Congress Roberto Alejos stands at the crime scene where Congressman Valentin Leal Caal and his brother Erick were shot to death in downtown Guatemala City, Friday Jan. 13, 2012. Leal Caal was a member of Congress since 2008 and reelected in Nov. 2011 general elections. (AP Photo/Moises Castillo)

Congressman Gudy Rivera, left, hugs Guatemala's President of Congress Roberto Alejos at the crime scene where Congressman Valentin Leal Caal and his brother Erick were shot to death in downtown Guatemala City, Friday Jan. 13, 2012. Leal Caal was a member of Congress since 2008 and reelected in Nov. 2011 general elections. (AP Photo/Moises Castillo)

GUATEMALA CITY (AP) ? A congressman who was reportedly negotiating a switch to the law-and-order party of Guatemala's conservative president-elect was shot to death early Friday, a day before the presidential inauguration ceremony.

Investigators said two attackers killed Oscar Valentin Leal Caal and his brother outside the headquarters of the legislator's current party, the populist Democratic Freedom Revival.

Leal Caal's bodyguard was wounded by the gunmen, who abandoned their motorcycle nearby, chief investigator Fernando Gomez said.

Retired general Otto Perez Molina is being sworn in as president Saturday and he told the newspaper Prensa Libre that Leal had been receiving death threats since beginning discussions about joining Perez's conservative Patriotic Party.

Perez has pledged to crack down on organized crime and Mexican drug cartels.

Outgoing President Alvaro Colom said there was no immediate evidence the crime was linked to congressional affairs or Perez's inauguration.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/cae69a7523db45408eeb2b3a98c0c9c5/Article_2012-01-13-LT-Guatemala-Assassination/id-cb747e2eac444058bb5fadde45e621a8

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Justin Bieber Teams Up With will.i.am For Believe

Bieber tweets that he hit the studio with the Black Eyed Peas rapper for his 2012 album.
By Jocelyn Vena

Justin Bieber
Photo: WireImage

He's already teased that Drake and Kanye West may make appearances on his next album, and on Thursday, Justin Bieber confirmed that another music industry heavyweight, will.i.am, will be assisting him on Believe.

Letting his fans know on Twitter that he's "gonna make that," the Black Eyed Peas frontman hyped up the collaboration further when he added, "let's make a hit tomorrow!! #collab. 'I gotta feeling this song is ganne be bigger than huge' #willpower."

The news comes as Bieber is deep in the studio working on his highly anticipated 2012 release. The team-up should make for an interesting track for the teen star. With Bieber hoping to recapture some of that Justin Timberlake/Timbaland magic from Timberlake's Future Sex/Love Sounds, will.i.am could bring some of that frenetic pop energy to Bieber's own work.

Last year, will made headlines when he worked with Britney Spears on her Femme Fatale song "Big Fat Bass."

Earlier this week, Bieber's manager, Scooter Braun, teased that what he's heard of Believe has been "ridiculous." Bieber will turn 18 in March, and his team is hoping to bridge the gap between the boy we met on "Baby" and the man he's growing up to be.

"The only conversation we've had about Justin's album that we're about to do is it's really important that it's the proper transition, because we've seen him [with] 'Baby,' now we're watching him grow up," Bieber's longtime vocal producer, Kuk Harrell, told MTV News in November. "And we can't just throw him into the adult game right away. It has to be the proper transition. There's a record in between."

Are you excited for Justin Bieber's collabo with will.i.am? Let us know in the comments!

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Sunday, January 15, 2012

Union threatens oil production shutdown in Nigeria (AP)

LAGOS, Nigeria ? A major union threatened Thursday to stop the beating heart of Nigeria's economy ? crude oil production ? as part of a nationwide strike and protests gripping Africa's most populous nation.

World oil prices climbed on the news. Nigeria is the fifth-largest oil exporter to the U.S., and a shutdown would force American refineries to replace 630,000 barrels per day of crude.

The union's ability to enforce a shutdown, beginning Sunday, across the swamps of Nigeria's southern delta to its massive offshore oil fields, remains in question. But the threat of a strike caused jitters on global oil markets as traders worldwide worried about supply.

Nigeria has been paralyzed by a strike that began Monday after President Goodluck Jonathan's government abandoned subsidies that kept gasoline prices low. Overnight, prices at the pump more than doubled, from $1.70 per gallon (45 cents per liter) to at least $3.50 per gallon (94 cents per liter). The costs of food and transportation also doubled in a nation where most people live on less than $2 a day.

Anger over losing one of the few benefits average Nigerians see from being an oil-rich country, as well as disgust over government corruption, have led to demonstrations across this nation of 160 million people and violence that has killed at least 10 people.

The Petroleum and Natural Gas Senior Staff Association of Nigeria, which represents about 20,000 workers, said it would be forced to "apply the bitter option" of closing down all oil and gas production if the government refused to reinstate the gasoline subsidies.

Union president Babatunde Ogun said if fields are shut down, it could take six months to a year to restart them.

"We ... believe that if everything comes to a standstill, the government will budge," Ogun told reporters in Lagos. Petrol dollars dominate Nigeria's economy and represent the majority of its government revenues.

Ogun also said a natural gas shutdown would turn off the nation's power grid, which is already in shambles.

Negotiations between labor and the government ended Thursday night without any announcement. Officials said they would resume Saturday.

So far, Nigeria's oil industry hasn't felt the effects of the national strike. Many of its operations are automated, both for efficiency and to avoid having staff work in the Niger Delta's maze of creeks, where criminal gangs and militants target workers for high-dollar kidnappings.

Foreign companies also run large offshore fields, far from the chaos of growing demonstrations across the country. Shipments from offshore platforms move immediately to market.

But if something breaks, if the pressure in the wells fluctuate, or if countless other problems occur that cause an automatic system shutdown, there wouldn't be anyone there to get production running again.

When pressed about how the threatened shutdown could affect the automated parts of the industry, Ogun did not offer an answer.

Most oil firms, including the dominant Royal Dutch Shell PLC, say they are monitoring the situation.

Kenneth Arnold, an independent petroleum consultant and former Shell engineer, said it "would be very easy to shut down" Nigeria's oil fields. Bringing in replacement workers to run the fields raises dangers, he said.

"It may not be safe to stay there," Arnold said. "In Nigeria, people get killed in the oil fields. There are local bad guys who want a share of the action."

Other companies with subsidiaries in Nigeria include Chevron Corp., Exxon Mobil Corp., Italy's Eni SpA and French firm Total SA, which operate in tandem with the state-run Nigerian National Petroleum Corp.

Levi Ajuonoma, a spokesman for the state-run oil firm, said it had not adjusted its production and shipping forecasts over the strike. It will take time for Nigeria's government coffers to feel the impact of the lost revenue, as oil and natural gas cargoes go out months ahead. That means, at least in the short term, supply to the U.S. would not be affected.

However, a shutdown could impact futures oil prices on global stock markets ? potentially raising the cost of gasoline for U.S. consumers. Global oil prices rose when militants began several years of attacks on oil companies and crude oil pipelines in 2006.

Oil prices were up much of the day Thursday over concerns about the impact of a Nigerian shutdown on global supplies, with benchmark crude rising by as much as $1.38 to $102.25 per barrel in New York. Prices retreated later in the day on rumors that Europe would delay an embargo of Iranian oil, to end the day down at $99.10.

"As long as Nigeria's government is selling crude ... the impact to them will not be that significant," University of Ibadan economics professor Adeola Adenikinju said. "The fiscal nerve center of the economy has not really been touched."

The growing protests and attacks from a radical Islamist sect have also put additional pressure on a government already facing popular dissent following the removal of the fuel subsidies. Analysts warn that could raise political risks in a nation with a young democracy and a history of military rulers.

"The subsidy issue provokes such strong emotions because it is viewed as one of the few benefits that Nigerians receive from living in an oil-producing nation," Barclays Capital said. "If the protests continue or gain momentum, they will pose a major challenge to the Jonathan government and potentially exhaust the capacity of an administration already facing a sustained security threat."

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AP Energy Writer Chris Kahn in New York contributed to this report.

___

Jon Gambrell can be reached at http://www.twitter.com/jongambrellAP.

Source: http://us.rd.yahoo.com/dailynews/rss/africa/*http%3A//news.yahoo.com/s/ap/20120112/ap_on_bi_ge/af_nigeria_fuel_subsidy_oil

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Saturday, January 14, 2012

Hawks C Horford out 3-4 months with shoulder

Atlanta Hawks center Al Horford grimaces in pain after he was injured in the first half of an NBA basketball game against the Indiana Pacers in Indianapolis, Wednesday, Jan. 11, 2012. (AP Photo/Michael Conroy)

Indiana Pacers center Roy Hibbert, right, blocks the shot of Atlanta Hawks center Al Horford during the first half of an NBA basketball game in Indianapolis, Wednesday, Jan. 11, 2012. Horford was injured on the play and left the game. (AP Photo/Michael Conroy)

ATLANTA (AP) ? Atlanta Hawks All-Star center Al Horford will miss at least three months with a shoulder injury, a major blow to a playoff contender in the Eastern Conference.

The team announced Thursday that Horford tore his left pectoral muscle in the first quarter of Wednesday night's game at Indiana. The injury will likely require surgery, stunning a team that has made the playoffs four years in a row and is off to a solid start with wins over Miami and Chicago in the early going.

"I did hear something kind of pop a little bit, so I thought it was something different," said Horford, who wrenched his shoulder while battling for a rebound with Roy Hibbert. "I'm still surprised. I thought I was going to be able to rehab it for a couple of weeks and come back."

Horford, a two-time All-Star, could be out as long as four months, which would take his rehab deep into the playoffs ? should the Hawks make it that far. He will get a second opinion before making the final decision to undergo surgery, but even the most optimistic projection would keep him out until mid-April.

The Hawks final regular-season game is April 26.

"He's going to certainly be missed," coach Larry Drew said. "We were starting to mesh. We were starting to jell. I'm hoping our guys will rally around one another."

Horford was injured with 6:08 remaining in the first quarter of Wednesday's game. He was averaging 12.4 points, 7.0 rebounds, 2.3 assists and 1.3 blocks to go along with the NBA's eighth-best shooting percentage (.553).

The 25-year-old is a bit undersized for the center position (6-foot-10, 245 pounds) but he quickly emerged as perhaps the most valuable Atlanta player after being picked third overall in the 2007 draft. His loss leaves the Hawks with a huge hole on the inside, plus some much-needed leadership in the locker room. Zaza Pachulia and Jason Collins are the other centers on the roster, neither of whom is likely to come close to matching Horford's production.

"The talent is huge," Drew said. "But the leadership and the presence, he's the glue for us."

Horford isn't the only injured player on the banged-up Hawks, just the most serious. Marvin Williams (ankle) and Tracy McGrady (back) didn't dress for Thursday night's game against Charlotte.

Now, the focus is clearly on Joe Johnson and Josh Smith to carry the Hawks.

"Guys are going to have to pick up the slack," Horford said. "The guys are going to have to raise their games. It starts with Josh and Joe."

Johnson, who is leading the Hawks with 16.7 points a game, is ready to take on more of a load but said he can't do it himself.

"We can't worry about who we have out on the court, we've just got to go out there and play," Johnson said. "Not only I have to step up, but the whole locker room. Our big guys have to step up to fill that void of losing Al."

Smith said he'll miss working with Horford on the inside.

"That's a big void," Smith said. "Me and him are like the bash brothers down there in the paint. It definitely, definitely, definitely was very disappointing."

But no one is giving up on making the playoffs. When Smith was asked if the Hawks were capable of making another trip to the postseason without their All-Star center, he quickly replied:

"Yeah. Most definitely."

___

Associated Press freelance writer Amy Jinkner-Lloyd contributed to this report.

___

Follow Paul Newberry on Twitter at www.twitter.com/pnewberry1963

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/347875155d53465d95cec892aeb06419/Article_2012-01-12-Hawks-Horford/id-0fd407a9baf246c8b5efbda8d79eb7d9

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Prepaid college plans: shrinking options, rising risks (Reuters)

(Reuters) ? Jim and Celeste Durkin thought when they began investing six years ago in Illinois state's prepaid college savings plan that they were locking in a bargain price if their daughter Caroline, who is now 10, eventually attended the University of Illinois.

That might not be the case. The plan took some risky bets on private equity and hedge funds and is now 30 percent underfunded and temporarily closed to new investments.

"It was highly recommended by investment professionals and people we knew, and with all of the uncertainty in the markets we thought it was a safe investment," Durkin said.

An Illinois state representative, Durkin is determined to do something about it: He expects to introduce legislation this month to make the plans more transparent.

The Illinois plan is in worse shape than most prepaid plans, but it isn't unusual in facing problems. Prepaid plans, popular college savings vehicles offered at one time in about 20 U.S. states, are increasingly running on empty.

About half of them have stopped taking new money, according to Savingforcollege.com, and many of the rest are struggling. It means that the majority of Americans, including those in places such as Illinois and Tennessee, don't have access to a state plan, and the minority who do need to be very wary.

Declining market returns and rising tuition costs have been creating an unsustainable funding gap for the plans ever since the dotcom bust in 2000-2001. The financial crisis and its aftermath only made it worse.

Since the end of 2000, the S&P 500 stock index dropped 3 percent while tuition and fees at a public four-year school when adjusted for inflation climbed on average 72 percent in the last decade, according to the College Board, and financially strapped states have in many cases reduced or frozen funding for education.

It all means that at a time when families are particularly rattled by the volatility and low returns of financial markets and want the security of a prepaid plan, the college savings vehicles have become more expensive and higher risk than consumers realize.

Many states have significantly raised the amount consumers need to contribute to keep up with potential tuition hikes, and most don't guarantee the money will be available in the plans they oversee when the time comes to send junior to college.

Worst-case scenario - parents think they have paid for future college costs and then are suddenly told the money isn't all there, or even that the plan has collapsed because of investment losses (though that hasn't happened yet), and they have to make up the difference.

"People need to read the fine print and understand what kind of guarantee their plan really offers," said Andrea Feirstein, a consultant to college savings plans.

A HISTORY OF DIFFICULTIES

Almost all U.S. prepaid plans are a type of so-called 529 college savings plan, which allow American parents to save for college costs without paying federal tax on investment returns if the assets are used for higher education expenses. Prepaid plans are professionally managed and allow families to lock in future tuition payments for universities in a particular state.

For example, a family could set a tuition rate for colleges within the state's boundaries at $40,000 for four years when a child is five years old and spend the next 12 years contributing that. If the four-year course costs $60,000 when the child gets to college, the family still only pays $40,000, and will save $20,000.

But while there may have been great bargains like that in the past, they are becoming rare.

Ohio, for example, closed its prepaid plan to new investments at the end of 2003 because actuaries anticipated potential shortfalls as investment returns slipped and tuition at public universities soared after the state lifted a lid on fees.

The decision was extremely difficult, said Jackie Williams, former executive director of the Ohio Tuition Trust Authority and former chair of the College Savings Plans Network. At the time, "We had money rolling in, everyone was looking for a guarantee in a time of uncertainty," she said.

While some states like Texas are putting the onus on state colleges to fund shortfalls, others are making consumers pay significantly more.

"The question for most prepaid plans is that if tuition keeps rising, who is going to pay?" said Betty Lochner, director of Washington state's prepaid plan, the $1.9 billion Guaranteed Education Tuition Program. "Is it going to be the taxpayers, the universities or the consumers?"

In Washington, the answer right now is consumers. When the state legislature agreed to temporarily lift a 7.5 percent tuition cap, tuition immediately soared 19 percent. So the plan had no choice but to increase pricing for a year of tuition to $16,300 from $11,700 if a parent wants to enroll their child now.

Lochner hopes that tuition costs will level off and additional big hikes won't be necessary but the equation is a delicate one. "The question is at what point is your pricing too high and when will people stop paying," she said.

Another issue is that often families are under the impression that they are locking in current tuition prices, which is rarely the case, experts said.

"A surprising number of these plans don't tell you how their pricing compares to current tuition prices," said Joe Hurley, founder of Savingforcollege.com. "Everyone assumes they are getting it at current tuition prices and that's just wrong."

Hurley said most states are charging amounts above current prices. For example, in Washington state, today a parent would be locking in tuition at $16,300, while the current University of Washington rate is $10,346 a year.

To make such payments worthwhile, tuition costs will have to continue to skyrocket. Also a child would need to be ineligible for significant grant and scholarship funds, which could reduce the cost of a year's college for the parents.

DON'T ASSUME IT'S GUARANTEED

Fees aren't the only problem. Even prepaid plans that use "guaranteed" in their names, such as Pennsylvania's "529 Guaranteed Savings Plan," are not always backed by the state, meaning if the investments go sour, investors could potentially lose everything.

So far, that hasn't happened since most plans invest conservatively, but it is a possibility, particularly for families like the Durkins whose child won't be in college for some years. Investors are largely unaware of this risk. "In a prepaid program the only meaningful guarantee is if it is guaranteed by the state," said Len Wiser-Varon, a partner at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo LLP, who advises the Massachusetts Educational Financing Authority.

Massachusetts, Florida, Mississippi and Washington are the only four states that guarantee their plans through full faith and credit of the state, meaning that if the plan goes bust, the state has to pay the promised tuition amount. The Texas plan is guaranteed by the state universities and colleges.

The plans run by Pennsylvania, Nevada and Michigan are "backed" only by the assets in the trust. If those assets are depleted due to risky investing or an "unpredicted" market event, investors may be out of luck, Levin said.

Then there are those plans, like the ones run by Maryland, Virginia and Illinois, which require legislative action for the state to pay back investors in the event of a funding shortfall. But experts said that doesn't necessarily mean funds are guaranteed because in states like Illinois and Maryland, lawmakers are only required to consider passing a law backing an underfunded plan, but not required to pass such a law.

For example, the Illinois plan - which should be able to make tuition payments for the next decade, according to a recent actuarial report - is backed by a "moral obligation." That means if the plan cannot meet its obligations, the governor would need to request funds from the General Assembly. But lawmakers do not have to support the request, said John Samuels, a spokesman for the Illinois Student Assistance Commission, which oversees the plan.

And given the current financial straits of many states, with cuts likely to balance the budgets in the next two years, getting that support won't be easy.

Virginia's plan comes closer to providing a full guarantee in that state law provides a financial guarantee in each year's budget to cover its plan in the event of a shortfall, which can only be changed by the General Assembly. And even that is subject to a veto by the Governor.

Illinois is not the only prepaid savings plan to run into trouble. In Alabama, families brought a class action suit over their plan, which was underfunded after tuition rose faster than expected and market returns plummeted. In July, a judge approved a settlement under which the plan would pay only the 2010 tuition rate, leaving families to make up any shortfall. The state supreme court has yet to rule on an appeal.

Few parents realize that the management of some plans are allowed to invest a big portion of the assets in higher-risk assets, such as hedge funds and private equity vehicles.

According to the Illinois plan's investment policy statement, its target allocation to alternative investments is 47 percent. The current allocation is 48.7 percent, said Samuels. "Anything above 20 percent in alternatives seems high given that these investments are not as liquid as others," said Feirstein, the 529 consultant.

The plan's external investment advisory panel has recently been reorganized and held its first meeting on December 29. "The Commission has made it clear that increasing transparency and developing a new investment policy are top priorities," Samuels wrote in an e-mail.

Kim Godden, a 38 year-old lawyer, started investing in the College Illinois! Plan when her daughter, Hannah, was born in 2007. Having put herself through both college and law school, it was very important to Godden to be able to pay for her daughter's education. "I am paying back my loans now and I didn't want that for my daughter," she said.

The College Illinois! Plan seemed like the perfect way for her to put money aside. "The plan was marketed as a sure thing," Godden said. "Now I am worried that the plan will go broke two years before my child goes to college."

(Reporting by Jessica Toonkel, editing by Jennifer Merritt, Jilian Mincer, Martin Howell)

Source: http://us.rd.yahoo.com/dailynews/rss/education/*http%3A//news.yahoo.com/s/nm/20120111/ts_nm/us_usa_education_prepaid

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