Updated Issue Brief Examines the COBRA Subsidy and Health Insurance for the Unemployed
With the nation's unemployment rate rising to its highest levels in decades as a result of the recession, many families have lost their employer-sponsored health coverage or are at risk of doing so. In an effort to help people maintain coverage after a layoff, the stimulus legislation known as the American Recovery and Reinvestment Act of 2009 provides temporary subsidies to some workers so that they can maintain their previous employer-sponsored coverage through COBRA after losing their job. The Foundation's KCMU has an updated issue brief that examines the COBRA provisions of the legislation and answers key questions about how the subsidy works and who might benefit. It also explains how the provisions interact with other laws and programs designed to help people obtain and maintain health coverage, and it discusses other coverage options for the unemployed. In late 2009, subsidies began to expire for those who were among the first to apply for the assistance, forcing them to pay the full cost of their insurance or look elsewhere for help. The issue brief is available online.
Saturday, October 31, 2009
Thursday, October 29, 2009
Still Waiting: ‘Unfair or Deceptive’ Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect
Source: Pew Health Group, Safe Credit Cards Project
This report present the findings of the latest review of consumer credit card product by the Pew Health Group’s Safe Credit Cards Project. We show the interest rates, fees and penalty provisions for credit cards offered by the largest 12 bank issuers based on application disclosures gathered in July of 2009.Where possible, we show how these features have changed since our December 2008 survey or where new trends may be emerging. Also, for the first time, we include an analysis of cards from the largest 12 credit unions. Throughout the report, we provide comparisons between bank card and credit union card data.
Agency's First-Ever Web Site Devoted Exclusively to Investor Education
FOR IMMEDIATE RELEASE
Washington, D.C., Oct. 22, 2009 — The Securities and Exchange Commission today launched its first-ever Web site devoted exclusively to investor education, providing investors with in-depth information and "top tips" on how to invest wisely, plan for the future, and avoid being scammed.
By visiting www.investor.gov, investors can access information in a user-friendly format that is specifically tailored to their needs. The site includes sections specifically for those just getting started investing, for those saving for a child's education, and for those planning for retirement. It also has a detailed "Seniors Care Package" section for senior citizens and caretakers.
Wednesday, October 21, 2009
WASHINGTON, DC – The U.S. Environmental Protection Agency and the Department of Energy today unveiled the 2010 Fuel Economy Guide, which gives consumers important information about estimated fuel costs and mileage standards for model year 2010 vehicles.
The College Board reports that, “Published tuition and fees at public four-year colleges and universities rose at an average annual rate of 4.9% per year beyond general inflation from 1999-2000 to 2009-10, more rapidly than in either of the previous two decades.”
Sunday, October 18, 2009
These online videos and others on economics can be found at 50 Free Ivy-League Lectures on the Economy.
Saturday, October 17, 2009
An Atlanta attorney has sued one of the nation's largest credit card distributors on behalf of a potential class of credit card holders in a complaint that reflects the public frustration with credit card lender practices that have already prompted some congressional reforms.
The suit claims that Capital One -- known for its commercials that feature barbarians garbed in animal skins demanding, "What's in your wallet?" -- doubled, tripled or quadrupled cardholders' annual interest rates without cause and applied the new rates retroactively to existing balances. The cardholders, according to the suit, could avoid the new interest rates only by closing their account
Friday, October 16, 2009
“There ain’t no such thing as a free lunch,” is often stated by economists. This report from America’s Health Insurance Plans/PricewaterhouseCoopers entitled Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage finds that requiring health insurers to take on high risk insured with preexisting conditions will raise premiums.
- Health reform could have a significant impact on the cost of private health insurance
- There are four provisions included in the Senate Finance Committee proposal that could increase private health insurance premiums above the levels projected under current law:
o Insurance market reforms coupled with a weak coverage requirement,
o A new tax on high-cost health care plans,
o Cost-shifting as a result of cuts to Medicare, and
o New taxes on several health care sectors.
- The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families, and businesses above what these costs would be in the absence of reform.
- On average, the cost of private health insurance coverage will increase:
o 26 percent between 2009 and 2013 under the current system and by 40 percent during this same period if these four provisions are implemented.
o 50 percent between 2009 and 2016 under the current system and by 73 percent during this same period if these four provisions are implemented.
o 79 percent between 2009 and 2019 under the current system and by 111 percent during this same period if these four provisions are implemented.
BANKS RUNNING WILD: THE SUBVERSION OF INSURANCE BY “LIFE SETTLEMENTS” AND CREDIT DEFAULT SWAPS by Marshall Aauerback and L. Randall Wray compares the negative impact on financial markets of life settlements with the recent experience from marketing credit default swaps.
Instead of making bets on the “death” of securities, this one will allow “investors” to gamble on the death of human beings. As the New York Times recently highlighted, the banks “plan to market ‘life settlements,’ buying life insurance policies that ill and elderly people sell for cash—$400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to ‘securitize’ these policies, packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die” (Anderson 2009). In effect, just as the sale of a CDS creates a vested interest in financial calamity, here the act of securitizing life insurance policies creates huge financial incentives in favor of personal calamity. In essence, the sooner you die, the bigger the payoff for the investor. And the corollary also applies, as the Times article notes: “If people live longer than expected, investors could get poor returns or even lose money.”
Young might have thought that Payday loans are unfair and unreasonable. Not so, says Ernst & Young. E&Y finds that the cost of making these loans is high, no collateral and high risk.
Source: U.S. Department of Energy
The U.S. Environmental Protection Agency and the Department of Energy today unveiled the 2010 Fuel Economy Guide, which gives consumers important information about estimated fuel costs and mileage standards for model year 2010 vehicles.
Fuel-efficient models come in all types and sizes, so consumers can save thousands of dollars over a vehicle’s lifetime without sacrificing performance. Model year 2010 fuel economy leaders include a wide range of hybrid models, from compact cars to sport-utility vehicles.
Each vehicle listing in the Fuel Economy Guide provides an estimated annual fuel cost. The estimate is calculated based on the vehicle’s miles per gallon (mpg) rating and national estimates for annual mileage and fuel prices. The online version of the guide allows consumers to input their local gasoline prices and typical driving habits to receive a personalized fuel cost estimate.
Wednesday, October 14, 2009
The Center for Responsible Lending reports that overdraft fees have risen 35% over the last two years.
- Finding 1: Over 50 million Americans overdrew their checking account at least once over a
12-month period, with 27 million accountholders incurring five or more overdraft
or non-sufficient funds (NSF) fees.
- Finding 2: Banks and credit unions collected nearly $24 billion in overdraft fees in 2008.
- Finding 3: Overdraft fee income for banks and credit unions rose 35 percent from
2006 to 2008.
This is the conclusion in a recent study published by the American Public Transportation Association. The study uses car costs published by AAA. However, the dramatic savings result from including both the variable and fixed cost of car ownership. It assumes the family can survive with one less car.
Thursday, October 8, 2009
R-2009-88, Oct. 7, 2009
WASHINGTON — With 2010 models arriving in dealer showrooms, the Internal Revenue Service reminds taxpayers that purchasing a new car, light truck, motor home or motorcycle could qualify them for a special deduction for the state and local sales and excise taxes on their 2009 tax returns.
Purchases made before Jan. 1, 2010, will qualify for this deduction under the American Recovery & Reinvestment Act of 2009 (ARRA).
The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.
Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of Worksheet 10 in IRSPublication 919, How Do I Adjust My Withholding? Lines 10a to 10k of the worksheet show how to take into account purchases above the $49,500 limit, as well as the reduced deductions for taxpayers at higher income levels.
The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.
For those that have questions about the deduction for sales tax and other fees, these questions and answers might help. A videovideo on the IRS Youtube.com channel and audio podcasts in English and Spanish are also available to help taxpayers take full advantage of the deduction.
IR-2009-60, Special Tax Break on New Car Purchases Available in States With No Sales Tax
IR-2009-30, Special Tax Break Available for New Car Purchases This Year