Category Archives: Finance

Headline of the day: It was just chump change


From the New York Times:

Treasury Pick Didn’t Disclose $100 Million in Assets to Senate

  • The revelation about Steven Mnuchin, a former Goldman Sachs banker, came hours before he was scheduled to testify Thursday before the Senate Finance Committee.
  • He also did not list his role as a director of an investment fund in the Cayman Islands on a questionnaire.

Healthcare plan deductibles hit chronically ill


The current healthcare regime doesn’t look so grand either, when seen from the perspective of those of hit hit by lingering maladies.

We are in that number, afflicted by rheumatoid arthritis, a heart attack [maybe two], cancer surgery and its lingering health effects [multiple], and another condition or two [the list of long-term ailments on our healthcare record actually totals nine].

So we can couch for the accuracy of the new report

From the University of Michigan Medical School:

For tens of millions of Americans, the start of a new year means the counter has gone back to zero on their health insurance deductible. If they need health care, they’ll pay for some of it out of their own pockets before their insurance takes over.

As insurance plans with deductibles grow in popularity, a new study takes a national look at what those plans mean for people with common chronic health conditions such as diabetes, asthma, joint problems and heart disease.

The short answer: Those who choose plans with a deductible and have such conditions should be prepared to spend hundreds or even thousands of dollars of their own money on their care, beyond what they spend to buy the insurance plan in the first place.

The results, reported in JAMA Internal Medicine by researchers from the VA Ann Arbor Health Care System, University of Michigan Medical School, and Penn State University, especially show the impact of high-deductible health plans – which now cover 40 percent of Americans who buy their own health insurance or get it through an employer.

Using data from a national survey of Americans under age 65, the researchers find that having a high-deductible plan makes it more likely that health-related costs will take up more than 10 percent of a chronically ill person’s total income. They also find huge variation between patients who have the same condition in the amount of out-of-pocket spending they had, even for those in low-deductible plans.

Despite these out-of-pocket costs, the study finds that few people with chronic illnesses said that costs or insurance coverage issues had gotten in the way of getting the care or prescriptions they needed.

“Increasingly, these plans have become woven into fabric of health insurance in America, so it’s important to look at the impact of deductibles on people who need care on an ongoing basis,” says senior author Jeffrey Kullgren, M.D., M.S., M.P.H., a research scientist in the VA Center for Clinical Management Research of the VA Ann Arbor Healthcare System and an assistant professor of general medicine at the U-M Medical School. “Not only on how they spend their money on care for their day in, day out health needs, but also how that affects spending in the rest of their lives.”

Changes to the insurance market

The findings are based on data from 2011 through 2013, during a time when many more employers started offering high-deductible health plans.

It was also before individuals who needed to buy their own insurance could do so on the Healthcare.gov Marketplace. Since the launch of the Marketplace, more than 90 percent of people shopping there have chosen high-deductible plans.

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Headline of the day: Hang on to your hats, folks


From the New York Times:

18 Million May Lose Insurance After Repeal, Study Finds

  • The nonpartisan Congressional Budget Office said that repealing major provisions of the Affordable Care Act would cost 18 million people their insurance in the first year.
  • The number of uninsured Americans would increase to 32 million in 10 years, while causing insurance premiums to double over that time.

From the study, a report on investigations by the Congressional Budget Office [CBO] and the staff of the Joint Committee on Taxation [JCT]:

Estimated Changes Before the Elimination of the Medicaid Expansion and Subsidies

Following enactment but before the Medicaid expansion and subsidies for insurance purchased through the marketplaces were eliminated, the effects of H.R. 3762 on insurance coverage and premiums would stem primarily from repealing the penalties associated with the individual mandate.

Effects on Insurance Coverage. CBO and JCT expect that the number of people without health insurance coverage would increase upon enactment of H.R. 3762 but that the increase would be limited initially, because insurers would have already set their premiums for the current year, and many people would have already made their enrollment decisions for the year. Subsequently, in the first full plan year following enactment, by CBO and JCT’s estimates, about 18 million people would become uninsured. That increase in the uninsured population would consist of about 10 million fewer people with coverage obtained in the nongroup market, roughly 5 million fewer people with coverage under Medicaid, and about 3 million fewer people with employment-based coverage.

Most of those reductions in coverage would stem from repealing the penalties associated with the individual mandate. However, CBO and JCT also expect that insurers in some areas would leave the nongroup market in the first new plan year following enactment. They would be leaving in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the nongroup market.

Effects on Premiums. According to CBO and JCT’s analysis, premiums in the nongroup market would be roughly 20 percent to 25 percent higher than under current law once insurers incorporated the effects of H.R. 3762’s changes into their premium pricing in the first new plan year after enactment. The majority of that increase would stem from repealing the penalties associated with the individual mandate. Doing so would both reduce the number of people purchasing health insurance and change the mix of people with insurance—tending to cause smaller reductions in coverage among older and less healthy people with high health care costs and larger reductions among younger and healthier people with low health care costs. Thus, average health care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the nongroup market to cover those higher costs. Lower participation by insurers in the nongroup market would place further upward pressure on premiums because the market would be less competitive.

Estimated Changes After the Elimination of the Medicaid Expansion and Subsidies

The bill’s effects on insurance coverage and premiums would be greater once the repeal of the Medicaid expansion and the subsidies for insurance purchased through the marketplaces took effect, roughly two years after enactment.

Effects on Insurance Coverage. By CBO and JCT’s estimates, enacting H.R. 3762 would increase the number of people without health insurance coverage by about 27 million in the year following the elimination of the Medicaid expansion and marketplace subsidies and by 32 million in 2026, relative to the number of uninsured people expected under current law. (The number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed. In that case, the increase in the number of uninsured people would be about 21 million in the year following the elimination of the Medicaid expansion and marketplace subsidies; that figure would rise to about 23 million in 2026.)

The estimated increase of 32 million people without coverage in 2026 is the net result of roughly 23 million fewer with coverage in the nongroup market and 19 million fewer with coverage under Medicaid, partially offset by an increase of about 11 million people covered by employment-based insurance. By CBO and JCT’s estimates, 59 million people under age 65 would be uninsured in 2026 (compared with 28 million under current law), representing 21 percent of people under age 65. By 2026, fewer than 2 million people would be enrolled in the nongroup market, CBO and JCT estimate.

According to the agencies’ analysis, eliminating the mandate penalties and the subsidies while retaining the market reforms would destabilize the nongroup market, and the effect would worsen over time. The

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Map of the day: U.S. poor hit as water bills soar


Census tracts where water rates are endangering the poor, From PLOS One.

Census tracts where water rates are endangering the poor, From PLOS One.

While lead-tainted water in some of America’s poorest neighborhoods has garnered a lot of attention in recent months, another water water is plaguing the nation’s poor: Soaring home water bills.

The problem is a direct result of the ruthless waves of government downsizing and privatization of public resources, and it’s bound to get much worse as cash-strapped cities finding themselves unable to repair aging infrastructure.

Consider this from the abstract of a sobering review in the open access scientific journal PLOS One:

If water rates rise at projected amounts over the next five years, conservative projections estimate that the percentage of U.S. households who will find water bills unaffordable could triple from 11.9% to 35.6%. This is a concern due to the cascading economic impacts associated with widespread affordability issues; these issues mean that utility providers could have fewer customers over which to spread the large fixed costs of water service. Unaffordable water bills also impact customers for whom water services are affordable via higher water rates to recover the costs of services that go unpaid by lower income households.

More on the study from Michigan State University:

If water rates continue rising at projected amounts, the number of U.S. households unable to afford water could triple in five years, to nearly 36 percent, finds new research by a Michigan State University scholar.

Elizabeth Mack said a variety of factors, ranging from aging infrastructure to climate change to population decline in urban areas, are making residents’ ability to afford water and wastewater services a burgeoning crisis.

Funded by the National Science Foundation and published online in the journal PLOS ONE, her study is one of the first nationwide investigations of water affordability.

“In cities across the United States, water affordability is becoming an increasingly critical issue,” said Mack, an assistant geography professor who analyzed water consumption, pricing and demographic and socioeconomic data for the study.

Spending on water and wastewater services combined should make up no more than 4.5 percent of household income, the Environmental Protection Agency recommends. Based on that criteria, some 13.8 million U.S. households (or 11.9 percent of all households) may find water bills unaffordable – a hardship that hits poor families particularly hard, Mack said.

Water rates have increased 41 percent since 2010, and if they continue at that pace over the next five years the number of households that cannot afford water and wastewater services could soar to an estimated 40.9 million, or 35.6 percent of all households.

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Headline of the day: They’re coming for your job


From the Mainichi Shimbun:

Insurance firm to replace human workers with AI system

  • Fukoku Mutual Life Insurance Co. is planning to slash nearly 30 percent of its payment assessment department’s human staff after it introduces an artificial intelligence (AI) system in January 2017 to improve operating efficiency.
  • While concrete examples of AI systems making human workers redundant are currently rare, observers have pointed out that such cases are likely to increase.
  • The insurance firm will introduce an AI system based on IBM Japan Ltd.’s Watson, which according to IBM is a “cognitive technology that can think like a human,” and “can analyze and interpret all of your data, including unstructured text, images, audio and video.” The Watson-based system will be tasked with reading medical certificates written by doctors and other documents to collect information necessary for making payouts, such as medical histories, length of hospital stays, and surgical procedure names.
  • In addition to determining payment amounts, the system will also be able to check customers’ cases against their insurance contracts to find any special coverage clauses —a measure expected to prevent payment oversights. The type of payments the AI is expected to oversee at Fukoku Mutual totaled some 132,000 cases in fiscal 2015.

Bubble alert: The housing bubble reinflates again


Cheap adjustable rate loans plus an insane derivates market brought the global economy crashing down nearly a decade ago, and now the housing market is reinflating, fueled in large part by more of those adjustable rate mortgages.

Those cheap loans triggered a massive housing price inflation, as loan officers signed off virtually all buyers, thanks to those robosigning machines [which are still very much in use].

And given that President-elect Trump has stocked his cabinet with Wall Street banksters, an Associated Press news story should send chills down our collective spine:

U.S. home prices rose again in October as buyers bidding for scarce properties drove prices higher.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 5.1% in October from a year earlier after climbing 5% in September. Prices for the 20 cities are still 7.1% below their July 2006 peak.

The broader Case-Shiller national home price index was up 5.6% in October and has fully recovered from the financial crisis.

Prices rose 10.7% annually in Seattle, 10.3% in Portland and 8.3% in Denver. New York registered the smallest year-over-year gain: 1.7%. Los Angeles prices rose 5.7%.

From the Federal Reserve Bank of St. Louis, a look at the course of the housing bubble through the end of July:

blog-housing-homes
And it’s not just home prices that are soaring. Rents are rising dramatically as well, another bad sign of a developing crisis:

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Greek Christmas trees are dying of austerity


If there is one single story that epitomizes neoliberalism and its ruthless agenda, consider this one from the nation hardest hit by the Wall Street-bankster initirated Great Recession and the austerity regime imposed by the International Monetary Fund, European Central Bank, and the European Commission.

From Kathimerini:

Demand for real Christmas trees has been declining steadily since the start of the crisis in Greece, and this year the Environment Ministry has approved the felling of around 17,000 fewer firs than last year, figures show.

Last year, 124,976 fir trees were cut down in the country, and in 2014 the number was 153,728. This shows a marked reduction from before the crisis, when the number of Christmas trees harvested came to above 200,000 a year on average.

The majority of the Christmas trees sold (85,935) last year came from cultivated forests around the country and the remainder from private farms.

And see the comments below for more.