A new study from the University of Chicago and a university in the Netherlands asked who's more likely to spend a little extra for name brands. The conclusion? Professionals don't seem to care if what they're using is generic.
"More informed consumers are less likely to pay extra to buy national brands," the study says.
For example, pharmacists buy generic asprin 90 percent of the time.
The same's true with salt and sugar. It turns out chefs like to go generic too; they devote 12 percent less of their purchases to national brands than demographically similar non-chefs.
This week the U.S. Department of Health and Human Services announced that nearly 7 million consumers would receive $330 million in refunds from health insurers.
Under the Affordable Care Act, the carriers must spend 80 cents of every dollar in premiums towards medical care or steps to improve healthcare quality.
That leaves 20 cents for things like salaries, bonuses and other administrative costs.
This provision of the ACA is often called the 80/20 rule.
Q. What’s the reason for the 80/20 rule?
Kaiser Family Foundation Senior Vice President Larry Levitt was pretty succinct when he said “this is really a protection against insurers trying to gouge people.”
When Obamacare architects were designing the law, they wanted to make sure most of the money consumers spent on premiums would actually be dedicated to medical care.
While Levitt says 80/20 was a late addition to the legislation, he believes it’s actually changing the nature of the insurance industry.
“It’s in effect putting a cap on overhead and profits and that’s a pretty dramatic step that I don’t think people fully appreciate,” says Levitt.
Q. I’ve paid my premiums and haven’t visited the doctor once this year. Will I see some money in my mailbox soon?
The only way someone qualifies for a rebate is if the particular insurance plan you’ve enrolled in falls short of the 80/20 ratio.
If you’re enrolled in an insurance policy that meets the target, you won’t be getting a check any time soon.
If you get coverage at work, your company gets the refund, or a credit towards next year’s coverage.
Q. How is this rule impacting insurance companies?
When the 80/20 rule began in 2011, insurers paid out more than $1 billion in rebates. This year it’s a third that much.
Matthew Eyles with Avalere Health says the industry has clearly figured out how to calculate their expenses and how money they’ll spend providing medical coverage.
“This is almost pixie dust really if you think about the amount of premiums that insurers collect in hundreds of billions,” he says.
Under this new system there is little incentive for insurers to inflate premium prices, particularly on the health exchanges.
If prices are too high, not only are consumers less likely to buy those plans, insures know they’ll have to return profits at the end of the year.
In that regard, Kaiser’s Larry Levitt says insurers are becoming more like public utilities.
“Insurers still have some flexibility in how they design these products. But an insurance policy is a much more standardized product. And the pricing is much more regimented as well,” he says.
Q. If insurers can’t make as much off of premiums, are they finding new ways to make profits?
HealthLeaders-InterStudy analyst Paula Wade says insurers can make up any lost revenue by increasing deductibles, co-pays and other out-of-pocket expenses consumers face.
“If you look at the how the major insurers are doing, they are doing very well,” she says.
“I wouldn’t lose any sleep worrying about their profits.”
The presidents of Honduras, Guatemala and El Salvador met at the White House to discuss the steep uptick in unaccompanied children crossing the U.S.-Mexico border.
The bill also directs the Librarian of Congress to review whether the exemption should also apply to tablets and other devices.
Some of us now monitor our steps, sleep and calorie intake with wristbands and apps. So why not track blood-alcohol levels? We explore the next frontier in the self-measurement movement.
At his ramen shop in Cambridge, Mass., chef Tsuyoshi Nishioka wants customers to follow their dreams. His philosophy? If you can finish a bowl of his ramen, you can accomplish anything in life.
A husband and wife who are doctors have been working on fact boxes for drugs that, like nutrition labels for foods, would more concisely convey a medicine's benefits and risks.
There has been record low turnout among voters in the 2014 primaries so far. Is it political dysfunction that's made voters lose interest? And what might this mean for November's general elections?
Markets have been setting records pretty much every other week for months, investors are making record money... and Wall Street?
Well, it’s looking a little lean.
"I think it’s really tough, even for people who are really good at it, to be honest," says Jesse Marrus, president of StreetID, a financial careers service. He says jobs on Wall Street have been drying up. "It’s definitely an ‘eat what you kill’ business, so there are people losing their positions in that space."
Why is there less of a killing to be made for Wall Street workers?
"Trading volumes are way lower than they were," explains Max Wolff, chief economist at Citizen VC. Trading volumes - a.k.a. how many trades are done per day - is where Wall Street makes its money. Fewer trades mean a lot fewer commissions. Trading volume has been really low since the financial crisis. Last year, the number of trades was a third lower than it was in 2009.
A big reason for the low trading volume is the low level of investor enthusiasm. "It's no secret that this is one of the world’s most hated rallies," says Wolff. "It’s been pretty clear that the markets got well ahead of the macroeconomic health of the U.S. and they've stayed there. And everyone kept waiting for this correction that didn’t come and slowly, begrudgingly people jumped on board, because they couldn’t afford just to watch other people make money forever. But they didn’t believe in it and they definitely don’t want to catch the elevator ride down that everyone’s afraid may come."
So investors are putting their money in the markets and leaving it there: They’re not buying a hot new stock or selling it off based on a hot tip. Instead, they’re buying and holding. "For there to be trades, there have to be differences of opinion," says Lawrence White, a professor of Economics at the NYU Stern School of Business. "Somebody has to think, 'It’s a good time to buy!' and somebody else has to think, 'It’s a good time to sell!' When trading volumes are lower, it just means there’s less diversity of opinion, more consensus."
All of that consensus has had a very chilling impact on Wall Street. "It’s really alarming for the people who are in the broker/dealer seats that really rely on the trading volumes," says Marrus. "Despite the record highs, it’s still really hard for them to make the commissions that they were making and make the livings that they were making because the volume’s low and the volatilities are so low."
But even if volatility and volume come back, Wall Street workers probably won't be back to the good old days. Electronic trading has replaced brokers and traders to a large extent and the future Wall Street broker will probably look a lot more like Hal than a power player in a pin-striped suit.
Both the government and the people of Israel have been determined to continue the country's ground invasion in Gaza, despite a growing wave of international criticism. Israelis have been shaken by claims that Hamas has a heavily fortified network of tunnels leading from the Gaza Strip into Israel.
Secretary of State John Kerry is trying again to broker a cease-fire between Israel and Hamas, as casualty counts rise inexorably higher. NPR's Emily Harris explains both sides' demands.
The militant group that calls itself the Islamic State have begun a new round of fighting with the Syrian regime, surrounding a base outside its stronghold in Raqqa and launching offensives in Aleppo province and Kurdish regions. The death toll in Syria this week reportedly has reached 1,700, most of whom are combatants of one sort or another.
Central American presidents met with President Obama, discussing the influx of unaccompanied children crossing the border. So far, Obama has not seen eye to eye with Congress on possible solutions.