Tag Archives: Perverse Incentives

Not All Insurers Game for State Exchanges: The Consumer Impact

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“As more insurers decide to pack up and leave certain states as health exchanges start to take form, experts say consumers are going to be left feeling the pain. Over the last few weeks, several departure announcements have sent a ripple through the health insurance industry, as companies weigh whether or not they want to play ball under Obamacare. So far, California has experienced the biggest migration  with Aetna (AET), UnitedHealthcare (UNH) and Cigna (CI) leaving the state’s exchange, Covered California.  Fifteen states and D.C. are in the process of creating their insurance exchanges before the 2014 deadline; when individuals must purchase insurance or face a fine.”

http://www.foxbusiness.com/personal-finance/2013/07/11/not-all-insurers-game-for-state-exchanges-consumer-impact/

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Senators push bill to replace Fannie, Freddie with national mortgage insurance

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“The two firms, which back nearly half of all new U.S. home loans, were chartered by Congress to expand mortgage finance but operated as private, profit-making companies. Given the central role they played in the financial system, the government felt compelled to bail them out when they ran into trouble. The bill would require private entities to buy mortgages from lenders and issue them to investors as securities. Private equity would be required to absorb a 10 percent loss of the principal underlying those new mortgage-backed securities if the loans went bad. A new guarantor, called the Federal Mortgage Insurance Corp., would replace Fannie Mae and Freddie Mac.”

http://www.reuters.com/article/2013/06/25/us-usa-housing-reform-idUSBRE95O0WI20130625

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58,000 Californians Will Lose Health Care Insurance in 2014.

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“Two insurance companies have announced that they will no longer offer health care insurance to individuals in California next year. They will sell policies only to group insurance policies.  Obama promised this: ‘If you like your health insurance, keep it.’ He and Pelosi forget this: ‘Of course, your existing company may decide not to sell it to you after we’re finished with the health insurance system.’ Nobody says that companies have to sell policies that are money-losers. So, the way for companies to protect themselves against rising claims is to pull out of the market. If other firms think they want the risk, they can keep selling these individual policies.”

http://teapartyeconomist.com/2013/07/05/58000-californians-will-lose-health-care-insurance-in-2014/

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Washington state pot regulators favor outdoor growth for environmental reasons

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“The regulatory board overseeing marijuana legalization in Washington State is leaning toward allowing licensed growers to raise the drug outdoors, citing the much higher carbon footprint of indoor and greenhouse cultivation, board members said. The shift on cultivation rules underscores the degree to which the Washington State board is taking public feedback to heart, Chairwoman Sharon Foster said, and comes after the Seattle Times cited a 2012 study published in the journal Energy Policy saying that a kilogram of cannabis grown indoors requires the same amount of energy as 11 cross-country car trips.”

http://www.rawstory.com/rs/2013/06/20/washington-state-pot-regulators-favor-outdoor-growth-for-environmental-reasons/

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The Bennett Hypothesis: Why College Tuitions Are Out of Control

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EPJ13

“Some researchers argue that government subsidies have had the perverse effect of encouraging colleges to increase tuition so as to capture more federal dollars, an effect known in the literature as the ‘Bennett hypothesis’. To see how this could work, imagine a school that charged $0 in tuition and fees. Suppose that the federal government then offered $5,000 vouchers to pay for college tuition, but only at schools that charge tuition. Obviously, our hypothetical free school is going to increase tuition to $5,000 a year to take advantage of that money. That’s just money on the table.”

http://www.economicpolicyjournal.com/2013/05/the-bennett-hypothesis-why-college.html

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The enduring mystery of U.S. offshore cash

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“The U.S. Internal Revenue Service lumps in the foreign dividend with corporate income. While the U.S. offers a credit for foreign taxes paid, U.S. multinationals typically face an extra tax bill when the foreign earnings come home for a number of reasons, including the higher U.S. corporate income tax rates.  So when Apple says it intends to give $100-billion back to shareholders by the end of 2015, it’s all well and good. It’s got just $45-billion in the U.S., however, and that’s what leads to a cash-rich company borrowing more cash, just to give it away.”

https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20130509/GIVOX0508ATL

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Obamacare Putting Millions Of Part-Time Workers At Risk Of Seeing Cut Hours

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“Ken Jacobs, chair of the labor center at UC Berkeley, told the Huffington Post that employers are not likely to force all full-time employees into part-time work due to factors that include additional administrative costs and productivity decreases. Instead, those at highest risk are workers in predominately low-wage industries that are right on the cusp of what is considered full-time work under the law.  The industries with the highest concentration of Jacobs’ at-risk workers are restaurants, accommodation and building services. The 3.6 million workers who report that their ‘work hours vary’ could have their hours jeopardized as well, according to the study.”

http://www.huffingtonpost.com/2013/05/07/part-time-workers-obamacare_n_3210321.html?ncid=edlinkusaolp00000003

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New York City bike-share program bans riders who weigh more than 260 pounds

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“It is ‘prohibited’ for any rider who weighs more than 260 pounds to sign up for the soon-to-launch initiative — prompting backlash from riders who say the fat-shaming rule is enough to make them fly off the handle. Everyone who signs up for the program has to agree to a contract, which states users ‘must not exceed maximum weight limit (260 pounds)’ because the bikes can’t hold that much heft. Would-be riders called the rule unfair, saying the 40-pound cruisers are plenty sturdy. Others claimed the rule makes no sense — especially at the height of the city’s obesity problem.  Several bike-shop owners agreed that the weight limit was bogus.”

http://www.nypost.com/p/news/local/apple_snubs_chubs_wPsjx5Q7LjJICDn4j0oOLI

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The hidden dangers of legal highs

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“In comparison with regular drugs, there is hardly any data on the harm these new drugs do. Manufacturers in the UK, China and eastern Europe take any of these chemicals or dozens more, blending them with inert substances into uncontrolled, unstated doses, and selling them online.  These products, with names such as Barry White and Dutchy, are the most concerning: customers are very often young people, some of whom find it hard to buy drugs anywhere else, or prefer to stay on the right side of the law. Manufacturers do not list their contents, or give any dosage instructions, since to do so would render them liable for prosecution.”

http://www.rawstory.com/rs/2013/04/27/the-hidden-dangers-of-legal-highs/

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Boston Bombers’ Family Received $100,000 in Government Welfare

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“We know that this sort of thing goes on. We know that the welfare state is now basic to American life. But bombers or not, this family has been openly ungrateful. They have had nothing good to say about America. But America is an equal opportunity welfare state. Those who hate the country are given the same handouts as those who love the country.  What did the handouts buy the voters? Resentment.  The younger brother was a stoner. He spent the taxpayers’ hard-earned money on marijuana.  His older brother used the money to fly to Russia and then, somehow, get to Chechnya. How the Russian authorities missed that excursion remains an unanswered question.”

http://teapartyeconomist.com/2013/05/01/pr-bombshell-in-boston-bombers-family-received-100000-in-government-welfare/

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