Insurance Quotes & Advice

At the start of this year, Massachusetts became the first state in the nation to install a universal healthcare system.  State laws now mandate that all residents must purchase health coverage or face penalties.

Before the new system was put in place it was estimated that as many as 600,000 of the state’s residents were without healthcare insurance.  The plan has met with remarkable success as nearly 350,000 residents now have health coverage that weren’t insured before the law took effect.

Success however comes with a price.  While the number of insured has increased, the number of doctors in the state hasn’t risen appreciably.  The health care system is becoming strained in trying to meet the increased demand.

Enrollment for the state’s subsidized health plan has also far outstripped estimates.  The initial plan was to reallocate money the state spent for healthcare on the uninsured but that now seems woefully inadequate.

State lawmakers are now scrambling for ways to pay for the unanticipated costs.  As well as asking for federal assistance, the legislature has also proposed an increase to the state’s cigarette tax.

A major flaw in the ambitious plan is that it did nothing to combat ever rising insurance premiums and healthcare costs.  So while universal healthcare is a lofty goal, it is looking increasingly likely that taxpayers will have to shoulder the extra burden if the plan is to succeed.

The trouble with the bond insurance industry has raised the cost for issuing debt for many local and state governments.  Municipal bond yields have been climbing recently as bonds backed by troubled insurers face the lingering threat of a ratings downgrade.

What was once a stable and profitable niche in the financial sector, the bond insurance industry has been hit hard by the sub prime collapse.  With defaults expected to continue in the foreseeable future, the decision to insure mortgage backed debt has left them exposed to losses many analysts fear they will be unable to meet. 

Many states are now railing against the double standards for credit ratings between corporate and municipal debt that force them to purchase bond insurance or pay higher interest rates even though historically they have a much lower default rate.  The nation’s largest issuer of municipal debt, California, has decided to stop purchasing bond insurance all together and is considering forming their own bond insurer backed by the state’s pension fund.

A coalition of state treasurers have started putting pressure on ratings agencies to use a single scale system.  If that were to happen, every state except for Louisiana whose economy was devastated by Hurricane Katrina would most likely receive a “AAA” rating and obviate the need for bond insurance.

Researchers at the Department of Atmospheric Studies at Colorado State University have revised their earlier forecasts for the upcoming hurricane season.  The researchers are now predicting a “well above average” hurricane season for the eastern United States.

The team’s forecast now anticipates 15 named storms forming in the Atlantic basin between June 1 and Nov. 30.  Eight of the storms are predicted to become hurricanes, and of those eight, four are expected to develop into intense or major hurricanes (Saffir/Simpson category 3-4-5) with sustained winds of 111 mph or greater.

Hurricane predictions can be a very inexact science, the forecasts for the last two years have also produced above normal predictions, when in fact they were very mild.  The researchers themselves acknowledge this, saying that the Atlantic basin has the largest year to year variability of any of the world’s tropical cyclone basins.

This year’s forecast is based on a statistical model that uses weather data collected over the last 58 years.  Using the model for each year’s weather data, it accurately predicted an above or below normal forecast for 45 out of the 58 years.

While this is a forecast for overall hurricane activity, we also need to keep in mind that it does not predict how many of these storms will actually make land fall.