Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

Read More

Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

Read More

Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

Read More

Real reason for electricity blackouts hitting southern US

Real reason for electricity blackouts hitting southern US

“Large oil companies have for a decade artificially shorted the gasoline market to drive up prices,” said FTCR president Jamie Court. “Oil companies know they can make more money by making less gasoline.” The following article was written by Paul Joseph Watson. He is t

Read More

World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

Read More

Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

Read More

US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

Read More

FDIC wants your retirement cash to save banks: Bloomberg

FDIC wants your retirement cash to save banks: Bloomberg

“The FDIC is constantly looking at structures where we can get the greatest opportunity to tap into capital that we have not had the success reaching through previous disposition methods,” FDIC spokeswoman Michele Heller said in an e-mailed statement. “We welcome and work

Read More

Canadian government admits recovery never happened

Canadian government admits recovery never happened

“Not only did their stimulus fail to create the jobs of tomorrow, it also failed to protect the jobs of today,” Scott Brison, the opposition Liberal Party’s spokesman for finance issues, said by telephone. "Most of us were shaking our heads in disbelief early last year w

Read More

How Western society is brainwashed and crumbling

How Western society is brainwashed and crumbling

"The cultural embrace of illusion, and the celebrity culture that has risen up around it, have accompanied a growing system of casino capitalism, with its complicated and unregulated deals of turning debt into magical assets, to create fictional wealth for us, and vast wealth f

Read More

Will we see double digit interest rates from the 1980s?

Will we see double digit interest rates from the 1980s?

"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -- Thomas Jefferson Spending is

Read More

Greenspan: credit crunch “by far the greatest financial crisis”

Greenspan: credit crunch by far the greatest financial crisis

Greenspan said that while the economy was in worse shape in the Great Depression, the recent financial crisis was potentially more harmful than that in the 1930s because “never had short-term credit literally withdrawn.” Greenspan just said that the current credit crunch

Read More

Content By: The Coming Depression Editorial Staff (dates cited below)
Copyright: include link to this article on top of reproduction if you use it.
Bookmark and Share
(No Ratings Yet)
Loading ... Loading ...

cobra insurance

“As part of the federal stimulus package, the nine-month subsidies made available to the unemployed starting in March have run out for those who collected them from the get-go.”

While Cobra is a reasonable solution in the short term, the fact is that the government is covering part of the costs and health insurance so that means they also pay the insurance companies to not lose business due to prices they charge. Insurance companies should recognize that hard times are here, and that they have received grants and must provide some temporary reduction in rates for persons unemployed as a gesture of good faith. Without subsidies, insurers will experience harder times than they have.

It is also important to note that these subsidies have encouraged something that together makes employers and insurance and health companies lose money. This is because those who choose to purchase COBRA generally have a necessity, resulting in adverse selection.

The average income per person costs and claims expenses for anyone on COBRA is 130% of what they put in, where a company can not pay 102% of their expiring premium (plus an administrative fee of 2 %), which means that an average loss of 26% per person on COBRA.

Although the argument can be made to subsidize it means you will reduce the problem of adverse selection, it is much more likely that this will only exacerbate it. This means it will be upward pressure on premiums to employers, bringing to the upward pressure on premiums charged to everyone.

Millions Face Insurance Crisis As COBRA Subsidy Ends
By Scott Hensley December 2 2009 NPR

It’s bad enough losing a job with the economy as bad as it is. But losing affordable health insurance is at least as big a worry for millions of Americans.

Now those worries are likely to worsen. Starting this week, $25 billion in special federal subsidies to defray 65 percent of the costs for people to keep buying health coverage through their ex-employers are expiring.

As part of the federal stimulus package, the nine-month subsidies made available to the unemployed starting in March have run out for those who collected them from the get-go.

Laid-off legal secretary Alida Holmes is one of the people who lost the COBRA subsidy this week and with it her insurance. “The thing that scares me the most is catching a cold and having it turn into bronchitis or pneumonia,” she told Detroit Free Press, “I have had this happen several times and ended up in the hospital. That is no longer an option for me since I have no health care now.”

You can read the rest of this story at NPR

Related posts:

  1. Glitch will cut jobless benefits for millions“It’s a horribly complicated system, and most people didn’t pay attention,” Mr. McDermott said of the need for quick Congressional renewal. Too bad the sheep still “don’t get it” because...
  2. Insurance fraud increases as false recovery crumbles“People are anxious, their finances are in trouble and regrettably they are turning to insurance fraud as a way to shore up their financial difficulties,” said Jim Quiggle, communications director...
  3. Europe H1N1 flu spreads, 'millions' infected in USEurope H1N1 flu spreads, ‘millions’ infected in US GENEVA, SWITZERLAND (AFP) – H1N1 flu is spreading faster and claiming new fatalities in Europe, health officials said, as the global death...
  4. Car insurance hike 19%; HST adds to consumer woes“Middle class families are forced to work longer and harder than ever, just to keep their heads above water.” — PC Leader Hudak Canada’s province of Ontario and British Columbia...
  5. More than 1 Million Jobless lose benefits March 1 2010“Right now, the 1.2 million workers who will lose benefits in March are being held hostage by partisan attempts to delay and block this critical legislation,” said Christine Owens, executive...
  6. Medical, Auto, Real Estate Insurance fraud rising as depression deepens“Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats,” said Nick Starling (1), the ABI’s director of insurance. Many consider it fraud when an insurance...

This entry was posted on Wednesday, December 2nd, 2009 at 3:22 pm and is filed under Poverty. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Comment

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.


Under the 'fair use' rule of copyright law, an author may make limited use of another author's work without asking permission. Fair use is based on the belief that the public is entitled to freely use portions of copyrighted materials for purposes of commentary and criticism. The fair use privilege is perhaps the most significant limitation on a copyright owner's exclusive rights. "