You might have thought that efforts to unravel the Affordable Care Act (ACA) were over, but newly proposed regulations and legislation are once again threatening to have similar harmful effects for older adults ages 50-64 who rely on individual market coverage. On February 21, 2018, the Trump Administration proposed new federal rules calling for significant expansion of a category of insurance products known as “short-term limited duration” insurance plans. More recently, Congress is considering legislation that would block states, who typically regulate these plans, from taking steps to protect consumers from the harms of these proposed federal rules once they are finalized. Unfortunately, these changes would result in much higher premiums for older adults and people with preexisting health conditions buying individual policies through the ACA Marketplace.
Source: S&P Global Ratings, March 12, 2018
S&P Global Ratings is publishing its methodology for assigning ratings and related credit products to U.S. and Canadian not-for-profit airports, ports, toll facilities, or parking systems (transportation infrastructure enterprises, enterprises, or entities), and for debt secured by specific revenue streams tied to special facility projects or by demand tied to transportation infrastructure.
Criteria FAQ: An Overview Of Criteria For Rating U.S. And Canadian Not-For-Profit Transportation Infrastructure Enterprises
Source: S&P Global Ratings, March 12, 2018
Source: Jennifer J. Soule, S&P Global Ratings, March 19, 2018
S&P Global Ratings is publishing its methodology for assigning ratings to U.S. and Canadian not-for-profit acute care stand-alone hospitals and health care systems. Our methodology classifies the primary credit factors that we review as part of either the enterprise profile or the financial profile. While many of an organization’s activities affect both profiles, we believe our approach clearly identifies the various ways that strategic and operational activities affect an organization.
From the summary:
Among the more ambitious policies that have been proposed to address the problem of escalating student loan debt are various forms of debt cancellation. In this report, Scott Fullwiler, Research Associate Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum examine the likely macroeconomic impacts of a one-time, federally funded cancellation of all outstanding student debt.
The report analyzes households’ mounting reliance on debt to finance higher education, including the distributive implications of student debt and debt cancellation; describes the financial mechanics required to carry out the cancellation of debt held by the Department of Education (which makes up the vast majority of student loans outstanding) as well as privately owned student debt; and uses two macroeconometric models to provide a plausible range for the likely impacts of student debt cancellation on key economic variables over a 10-year horizon.
The authors find that cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates, and inflation (while state budgets improve). These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of US higher education policy.
From the abstract:
This paper investigates the effects of the Medicaid expansion provision of the Affordable Care Act (ACA) on households’ financial health. Our findings indicate that, in addition to reducing the incidence of unpaid medical bills, the reform provided substantial indirect financial benefits to households. Using a nationally representative panel of 5 million credit records, we find that the expansion reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores. Using data on credit offers and pricing, we document that improvements in households’ financial health led to better terms for available credit valued at $520 million per year. We calculate that the financial benefits of Medicaid double when considering these indirect benefits in addition to the direct reduction in out-of-pocket expenditures.
Source: Yang Li, Jeffrey A Burr, Edward Alan Miller, The Gerontologist, Advance Articles, September 9, 2017
From the abstract:
Background and Objectives:
The ongoing shift from defined benefit (DB) to defined contribution (DC) pension plans means that middle-aged and older adults are increasingly being called upon to manage their own fiscal security in retirement. Yet, half of older Americans are financially illiterate, lacking the knowledge and skills to manage financial resources. This study investigates whether pension plan types are associated with varying levels of financial literacy among older Americans.
Research Design and Methods:
Cross-sectional analyses of the 2010 Health and Retirement Study (HRS) (n = 1,281) using logistic and linear regression models were employed to investigate the association between different pension plans and multiple indicators of financial literacy. The potential moderating effect of gender was also examined.
Respondents with DC plans, with or without additional DB plans, were more likely to correctly answer various financial literacy questions, in comparison with respondents with DB plans only. Men with both DC and DB plans scored significantly higher on the financial literacy index than women with both types of plans, relative to respondents with DB plans only.
Discussion and Implications:
Middle-aged and older adults, who are incentivized by participation in DC plans to manage financial resources and decide where to invest pension funds, tend to self-educate to improve financial knowledge and skills, thereby resulting in greater financial literacy. This finding suggests that traditional financial education programs may not be the only means of achieving financial literacy. Further consideration should be given to providing older adults with continued, long-term exposure to financial decision-making opportunities.
From the summary:
Social scientists have traditionally struggled to identify clear links between political spending and congressional voting, and many journalists have embraced their skepticism. A giant stumbling block has been the challenge of measuring the labyrinthine ways money flows from investors, firms, and industries to particular candidates. Ferguson, Jorgensen, and Chen directly tackle that classic problem in this paper. Constructing new data sets that capture much larger swaths of political spending, they show direct links between political contributions to individual members of Congress and key floor votes.
Their study builds on two earlier studies published by the Roosevelt Institute. Gerald Epstein and Juan Antonio Montecino’s “Overcharged: The High Cost of High Finance” assesses the staggering costs imposed on the U.S. economy by deregulated, out-of-control finance. Mark Cooper’s “Overcharged and Underserved” analyzes the charges telecommunications oligopolies levy on Americans and their disastrous impacts on services and economic growth.
The message of Ferguson, Jorgensen, and Chen’s study is simple: Money influences key congressional floor votes on both finance and telecommunication issues. Americans may not have the “best Congress money can buy”—after all, as they note, their results could be even bleaker—but there is no point in pretending that what appears to be the voice of the people is really often the sound of money talking.
The brief’s key findings are:
• While nearly 60 percent of new 401(k) participants have savings in target date funds (TDFs), little research has looked under the hood of this investment vehicle.
• This analysis uses a unique dataset with extensive information on the underlying mutual funds that TDFs hold.
• The results show that TDFs:
• often invest in specialized assets (e.g., emerging markets and real estate);
• charge fees that are only modestly higher than if an individual investor assembled a similar portfolio on his own; and
• earn returns that are broadly in line with other mutual funds.
The Payless shoe company was already on its way to becoming another retail victim of the internet when the private equity guys showed up.
That the firms — Golden Gate Capital Inc. and Blum Capital Partners — weren’t able to turn Payless around after acquiring them in 2012 isn’t so surprising. That they’ve still made out so handsomely is.
As Payless shutters hundreds of stores and struggles to repay $665 million of debt, Golden Gate and Blum turned a profit on the deal. How? By having Payless borrow millions in the financial markets, a move that’s pushing the company to the brink. The firms have collected $350 million from Payless through debt-funded special dividends. Golden Gate and Payless declined to comment and Blum didn’t respond to requests.
Private equity firms have always borrowed to buy companies. But now, with debt so cheap, they’re layering on subsequent borrowing at an unprecedented clip to pay themselves, putting an additional, and at times fatal, financial strain on their newly acquired companies. From the start of 2013, private equity owners have taken out more than $90 billion in debt-funded payouts, according to data compiled by LCD, part of S&P Global Market Intelligence…..