• Milliman, our actuarial firm, cites that network discounts are the single most important item in providing lower premums for insurers.
    In order to compete, an insurer has to choose another variable: lowering premiums over time by providing paid-up benefits, and lowering the premiums with the higher funded deductible.
    Don Levit

  • You are right about no incentives for insurers to decrease their prices.
    Due to the anti-trust exemption you pointed out, I anticipate many plans to be priced at the second lowest silver benchmark level in each state.
    This is because at that level, subsidies are maximized and out of pocket premiums are minimized.
    Of course, the higher the benchmark premium, the higher is the subsidy for the insurer.
    At National Prosperity Life and Health, through our innovative, patented product design, we will lower premiums over time, as well as subsidies.
    However, in order to compete on the Exchanges, the lower subsidies must be returned to our policyholders.
    That is an area we will be fighting for in 2014 for policies issued in Texas in 2015.
    For 2014, we will be providing these innovative plans to a few select large employers who self insure.
    Don Levit

  • Don Levit commented on the blog post There Will Be No Insurance Death Spiral

    2013-11-13 07:20:49View | Delete

    Subsidies are whatever percent of the second lowest silver benchmark premium in the state, that nets out to a small percentage of household income, up to 9.5%.
    This incentivizes insurers to increase premiums, so that the second lowest silver plan maxes out subsidies and minimizes net premiums.
    What is needed is subsidies to policyholders, not insurers, for innovative plans that actually lessen the burdens of government, and subsidies, over time.
    Don Levit

  • Don Levit commented on the blog post There Will Be No Insurance Death Spiral

    2013-11-13 07:10:39View | Delete

    Thinking that insurance on the exchanges will be affordable, for there is no cap on the subsidies, other than they cap out at the second lowest silver benchmark plan, may be a short-term view that over the long run comes back to hurt the public.
    While this may continue to make insurance affordable, as many people will be subsidized 70-780% of the premium, how will this impact premiums, over time?
    What incentives do insurers have to maintain lower premiums, particularly premiums below the silver benchmark level? That is the level in which subsidies max out, and premiums are still “affordable.”
    Don Levit

  • You are correct regarding the subsidies which are pegged to household income.
    There are no limits to subsidy increases, so, other than competition, insurers are enabled by law to charge higher premiums.
    There should be written into the law that those insurers providing silver coverage at less than the market’s average subsidies, should receive dividends for lessening the burdens of government.
    Don Levit

  • Don Levit commented on the blog post Konczal, Douthat and Neoliberalism

    2013-10-27 12:13:48View | Delete

    The objective way of lowering insurance premiums is by increasing deductibles.
    We need to find innovative ways for people to fund their underlying deductibles.
    Our patented insurance product should be approved by the Texas Department of Insurance in 3 months.
    A unique way of sharing reserves with our customers will be a realistic, genuine, and refreshing change.
    Don Levit

  • You are correct. What occurs is that intragovernmental debt is converted into debt held by the public. While debt held by the public rises, total debt remains the same. It is just a higher percentage of debt is debt held by the public, and a lower percentage is intragovernmental debt. Debt held by the public [...]

  • Social Security provides no vested rights, other than the current year’s payments. Beyond the current fiscal year, future payments are not considered ,liabilities for they can be amended or even ended, at that time. In regards to current benefits for this year, they must be paid as long as the SS trust fund has a [...]

  • I am not questioning the bonds’ legality or validity. I am simply saying from a cash flow perspective, that the bonds will require new general revenues to fund. Assuming we continue to run deficits, that will mean adding to the deficit and adding to the debt held by the public, to redeem these Treasuries. Don [...]

  • Social Security is a fully funded program that does not require federal funding. The federal government itself has Borrowed monEy from the program. If the federal government HAS BORROWED MONEY FROM THE PROGRAM, HOW IS IT FULLY FUNDED? IF I BORROWED MONEY FROM YOUR RETIREMENT PLAN, IS IT FULLY FUNDED? IF YOU BORROWED MONEY FROM [...]

  • Newcarguy:
    You male a lot of sense, but many people focus on the hole and not the donut: they see what they have to pay out of pocket, not what the insurer has had to pay.
    Don Levit

  • I am with you new car guy.
    For insurance to be effective, it must pay a multiple of dollars in claims for every dollar you paid in that year.
    And, claims should be intermittent, but large enough to set someone back.
    For example, our patented health insurance plan we will be offering to select self insured employers before year end, is designed to pay $25,000-$50,000 of claims every 3-5 years.
    Don Levit

  • Don Levit commented on the blog post The Three Great Premises of Idiot America Take Center Stage

    2013-09-29 07:27:23View | Delete

    One of the most idiotic scenarios I can think of is: Let us assume the government “shuts down.” Assume the stock market takes a significant plunge (downward). The concern is that the U.S. is unable to pay its bills and enough people lose faith in the “full faith and credit of the U.S. dollar.”
    Suddenly, the debt limit is raised, “faith” in the U.S. dollar is restored, and the market lunges (upward).
    Is this what “faith” is built on: a sandpile of the debt limit?
    Don Levit

  • Don Levit commented on the blog post Federal Reserve Program Is Socialism For The Rich

    2013-09-20 16:32:10View | Delete

    Thanks for explaining the mechanisms on how the interest is paid.
    It seems like you have done a lot of research in this area.
    Do you have any idea why the interest is split between the Fed and the Treasury? That handling of interest is a unique form of debt held by the public.
    I understand the interest was handled differently a few years ago.

    Is there a difference between covering revenue deficits and a government overspending its revenue limits?

    By the way, the general idea of this article is valid.
    Ever since the banks were bailed out, that was the eye opener for me that will probably never close: the government favors the rich and the well-connected, and the rest can go to hell.
    The stock market performance in the midst of the widest disparity of income (even wider than the Great Depression) is a very loud warning as to how finances operate in this country… they don’t function properly.
    Don Levit

  • Don Levit commented on the blog post Federal Reserve Program Is Socialism For The Rich

    2013-09-20 15:15:13View | Delete

    The loans are not interest free. They carry the same interest that other debt held by the public with similar maturity holds.
    You are correct that the wealthy do not primarily benefit, in that these loans from the Federal Reserve to the Treasury allows our government to overspend its revenue limitations.
    I assume this overspending is divvied up in proportion to the remaining expenses that need to be paid, which should not be restricted to any income group.
    Don Levit

  • Don Levit commented on the blog post Federal Reserve Program Is Socialism For The Rich

    2013-09-20 15:06:53View | Delete

    When the Fed buys Treasuries, the amount is added to debt held by the public. In that sense, the Fed is a separate entity from the federal government, such as other countries who hold our Treasuries.
    When the Treasury is redeemed, general revenues will be needed to pay back the Fed. If there is no budget surplus, then,apparently, the principal will be rolled over, with no effect on debt held by the public (old debt held by the public is traded for new debt held by the public).
    Don Levit

  • The nation is simply an accumulation of households.
    The full faith and credit of the U.S. Government is based primarily on its power to tax.
    Don’t we tax households?
    Do you believe the full faith and credit of the U.S. is not based on our ability to tax, but our ability to print?
    Don Levit

  • I know that GDP formula is popular. I wonder if there is some other way to get there, other than deficit spending. It sure makes deficit spending seem normal. Interesting how the formula “never” seems to provide for a budget surplus. Is that impossible, or just plain stupid to run a surplus? Or, in other [...]

  • The author writes: “Congress can either provide the Treasury Department with the authority to create whatever money it needs to repay the debt as it falls due and to perform whatever deficit spending it chooses to appropriate.” All federal spending comes from the general funds of the Treasury. That spending is appropriated by Congress, providing [...]

  • Tim:
    Good point. I left out some information.
    The deductible is funded with paid-up insurance. Not paying the claim allows the paid-up insurance to build.
    Paying the claim would come out of the paid-up insurance.
    Don Levit

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