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By Tyler Durden
Submitted by Ali Meyer via FreeBeacon.com,
Ohio’s InHealth Mutual co-op announced last week that it is going out of business, making it the 13th co-op to fail out of the 23 that were created under Obamacare.
The Ohio Department of Insurance asked to liquidate the company, saying that the company was in a “hazardous financial condition.” The co-op served nearly 22,000 consumers who now have 60 days to find another policy offered by another company on the federal exchange.
“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” said Ohio Director of Insurance Lt. Gov. Mary Taylor. “Under Ohio law, we acted with certainty to protect the consumers.”
The company recorded an underwriting loss of $80 million in 2015 despite the $129 million in taxpayer-backed loans granted to the co-op by the federal government. InHealth Mutual was also placed under “enhanced oversight,” one of three tools the Department of Health and Human Services has to monitor co-ops in financial distress. When a co-op is placed under enhanced oversight, it means the company is consistently underperforming and allows the department to give detailed and more frequent reviews of the loan recipient’s operations and financial status.
According to Columbus Business First, medical claims were coming in at a rate of $3 million per week and the company would have had to raise premiums by 60 percent in 2017 to keep up. If InHealth Mutual were to stay in business through the end of 2016, projections show that the company would have posted losses of $20 million.
Ohio’s failed co-op is added to the list of 12 co-ops that have already failed in Arizona, Michigan, Utah, Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina, and a co-op that served both Iowa and Nebraska.
Centers for Medicare and Medicaid Services chief operating officer Mandy Cohen told lawmakers in February that eight of the 11 remaining Obamacare co-ops in operation were selected for “corrective action plans” and “enhanced oversight.” She did not disclose which co-ops were placed on these plans.
A professor who specializes in economics and health insurance told lawmakers in March that closures of the remaining co-ops seem likely.
“The future of the 11 co-ops still providing coverage in 2016 is uncertain, but future closures seem likely,” said Dr. Scott Harrington. “The 10 co-ops still operating with June 30 financials reported a cumulative loss of $202.3 million.”
“Very little, if any, of the $1.24 billion in federal start-up and solvency loans to establish those co-ops will be repaid, and at least several will be unable to meet all of their obligations to policyholders and health care providers,” he said.
The Department of Health and Human Services did not respond to requests for comment by press time.
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Mission Accomplished?
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By Tyler Durden
Via ConvergEx's Nick Colas,
Today we offer up five market counterfactuals – “What ifs” – to both illustrate why large cap U.S. equities just closed near their highest levels of 2016 and consider the conventional wisdom about whether the current rally is sustainable.
Our home base: where asset prices and other trends started the year.
For example, global interest rates began 2016 at much higher levels: the U.S. 10 year at 2.24% (now 1.80%), German Bunds at 0.64% (now 0.11%) and Japanese government bonds at 0.27% (now -0.28%). Where would U.S. equities be if global yields were unchanged this year? (Spoiler alert: lower.) Or consider crude oil prices, up from $37/barrel to $49/barrel, lifting large cap energy stocks by 11% and responsible for 25% of the S&P 500’s gains YTD. Then there is the recent worry over global smartphone sales and what that means for mega-cap Apple (still 3% of the S&P 500), which has clipped market returns by 0.21% (7% of total). The dollar – down 3% in 2016 – is another item on the “what if” list, but the elephant in the room is “What if Donald Trump were not the Republican nominee?” Markets seem to have ignored him for now, but can that continue into the general election season?
What if President John Kennedy had rolled out of Dealey Plaza unharmed? Would he have avoided a larger military entanglement in Vietnam? Or more quickly embraced the civil rights movement than his successor? Would it have been John Jr running for President in 2008, or now? And would Marilyn Monroe ever have become first lady, as she reportedly told Jackie was her goal?
The term for that kind of scenario analysis is “Counterfactual thinking” – considering possible alternative events to those that actually occurred. What if you had majored in Classics instead of Business, or married someone besides your current spouse? How would your life be different? Would you be happier? Poorer, but happier? (Yes, that’s a thing.)
Today we’ll unpack the current U.S. market through the lens of 5 counterfactuals, all anchored in a prior reality: where the world was 155 days ago, at the end of 2015. Our goal is to highlight what has taken the S&P 500 to its highest point in 2016 and assess the sustainability of current valuations and market dynamics.
#1: What if global interest rates were the same as 12/31/2016?
Since the start of the year, global long term interest rates have fallen dramatically:
? US 10 year Treasuries went from a 2.24% yield to 1.80% today.
? German 10 year Bunds yield just 11 basis points now, down from 64% bp on New Year’s.
? Japanese 10 year government bonds now sport a negative 11 basis point yield, down from 27 basis points at the start of 2016.
The reasons for these declines are largely due to punk economic
Source: "What If?"
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Posted June 3rd, 2016 in Uncategorized.
Find The Lowest Price HERE
By Tyler Durden
Submitted by MN Gordon of Economic Prism (annotated by Acting-Man's Pater Tenebrarum),
Seven Year Achievement
“Read the directions and directly you will be directed in the right direction.” — Lewis Carroll
See? It’s easy Janet! Just read the directions!
U.S. consumers are at it again. After a seven year hiatus they’re once again doing what they do best. They’re buying stuff.
According to the Commerce Department, personal consumption expenditures (PCE), which is the primary measure of consumer spending on goods and services in the U.S. economy, increased $119.2 billion in April. That marks an increase of 1 percent, and is the biggest one month increase since August 2009 – nearly seven years ago. Indeed, this is quite an achievement.
The consumer, you know, is the primary engine of U.S. economic growth. Without consumption GDP doesn’t go up; rather, it goes down. Moreover, in a debt based money system, when GDP goes down the whole financial debt structure breaks down.
We don’t condone it. Certainly we’d prefer an honest hard money system where savings and investment drives growth as opposed to borrowing and spending. But our preference has no bearing on reality in this matter.
Still, given the vast array of pretense inherent to a debt based money system, when we hear that PCEs increased by the largest margin in nearly seven years, we take a keen interest. Naturally, we want to know what’s going on. Namely, we ask, where’s the money coming from?
Where’s the Money Coming From?
Middle class incomes, the last we recall, scored a big fat rotten goose egg over the last decade. By this we mean incomes haven’t gone up. To the contrary, they’ve going down.
Our understanding of this unfortunate situation isn’t based on anecdotes we overheard at the corner donut shop. Nor is it based on experiences shared by the crusty fellows casting their lines off Belmont Veterans Memorial Pier. Instead, we have hard evidence and solid proof. Specifically, we point to the distilled findings of Pew Research released earlier this month.
“The American middle class is losing ground in metropolitan areas across the country, affecting communities from Boston to Seattle and from Dallas to Milwaukee. From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. The decrease in the middle-class share was often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.”
Incomes going nowhere but down – one of the many great achievements of monetary central planning, a.k.a. Anglo-Saxon central banking socialism (via Pew Research)
So if it isn’t rising incomes that are propelling the PCE increase then what is it? According to recent findings from the New York Federal Reserve, “total household debt climbed 1.1 percent in the
Source: Guided By Nonsense – The Data Doesn’t Add-Up
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Posted June 3rd, 2016 in Uncategorized.
