What We Read Today 11 April 2014

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary “reading list” which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for “reading list” items are gratefully reviewed, although sometimes space limits the number included.

• Someone from This Billion-Dollar Fraud Machine Needs To Go To Jail (Shah Gilani, Wall Street Insights & Indictments) Shah Gilani is a seasoned Wall Street veteran who contributes to Global Economic Intersection, most recently yesterday GEI Investing: The Real Reason the Stock Market is Rigged. He summarizes the ridiculousness of a $727 restitution agreement with a $45 million fine for Bank of America who committed outright fraud in misrepresenting customer account protection services which they sold. Shah says that if the right thing were done they’d have to build bigger jails.

• Why the CFPB’s Crackdown on Add-On Products Isn’t Over (Rachel Witkowski, American Banker) In an otherwise factual summary of the BofA fraud story (see previous article) this American Banker article stuck in a little self-serving aside (emphasis:)

Cordray [Consumer Financial Protection Bureau (CFPB) Director Ricard Corday] has also repeatedly cautioned companies that this would be an area the agency would heavily focus on. Most of these companies have since either stopped offering or changed their credit card add-on products. But that has not slowed down the agency.

• The Gloomy Future Of The Tax Preparation Industry (Mark P. Cussan, Investopedia) Taxpayers now have more options than ever when it comes to filing their returns, and preparers have been forced to offer an ever-wider array of products and services in order to maintain their business.

• Future of Education is At Hand: Online, Accredited, Affordable, Useful (Michael Shedlock, MISH’S Global Economic Trend Analysis) Hat tip to John O’Donnell. Mike reviews the deflationary pressures on soaring college costs. There are reasons to think that online education may become a significant factor in bringing college costs down dramatically.

• Off-exchange options flew under enrollment radar (Bruce Shutan, Employee Benefit Advisor) It has been estimated that millions of Americans who aren’t eligible for HIX subsidies chose health insurance options off the exchanges, including young and healthy adults who are most desirable in any insurance risk pool. Only about 25% of those between the ages of 18 and 34 signed up for coverage on public exchanges, according to the federal government’s most recently released enrollment figures. While no one was paying attention about 40% of that same age group bought off-exchange plans in the fourth quarter through the online comparison-shopping site eHealth.

In addition people were getting health insurance the old fashioned way – about 20% of 1 million new customers for WellPoint were completely “off exchange”, public or private. Highpoint reported 30% of new customers enrolled by the middle of last month obtained coverage outside of exchanges.

Another complication: Off-exchange (public HIX) coverage could have been non-ACA compliant in 4Q 2013 but will sunset in the second half of this year. Since 01 January 2014 new policies were required to be ACA compliant no matter where obtained to avoid the tax penalty.

Private exchange options and off-exchange options include ACA compliant insurance but there are no data available to assess how many ACA compliant policies are now in force that are in addition to the public exchange total of 7.1 million. And if a significant number of non-compliant policies are going to sunset in 2014 how will that affect the the number of additional ACA policies for 2015?

And does anybody have any information about how the employer sponsored group insurance space has been changed? We don’t.

Econintersect suggests it will be months, if not years, before we really know how the health insurance marketplace has been changed by the ACA (Affordable Care Act). How many of the previously uninsured now have coverage? How many will have coverage in another 2-3 years? Any number you see today is strictly a SWAG, in our opinion.

• The Richest Rich Are in a Class by Themselves (Peter Coy, Bloomberg Businessweek) Hat tip to Marvin Clark. The bottom 90% of the top 1% are not getting any bigger slice of the wealth pie than a generation ago. The very top, the 1% of the top 1% is where the most rapid wealth growth has occurred; 16,000 households have seen share of wealth quadruple over the past 33 years.  Thomas Piketty’s new book has review article discussed ‘behind the wall’.
  

Today there are 15 more articles discussed ‘behind the wall’. Eight of the articles are on investing topics.

Please support all that we do at Global Economic Intersection with a subscription to our premium content ‘behind the wall’.

You get a full year for only $25.