Tropical Storm Irene recently stormed across the northeastern United States, leaving somewhere billions of dollars in damages in its wake. But it won't be insurance companies footing the bill — most likely, it'll be taxpayers. This is partly due to the fact that most people that the storm affected don't have insurance that covers floods, but the federal government's insurance program is also billions of dollars in debt. 

Insurance companies have traditionally set up subsidiaries in off-shore tax havens like Bermuda and the Cayman Islands in part to get around strict state regulations regarding their investment strategies. But according to a report by our partner, The New York Times, a number of states have begun luring insurance giants back by allowing them to establish "captive" subsidiaries — risk management systems that allow companies to invest and reinsure without as much capital backing. Now some state insurance commissioners are warning that captives could put insurance policy holders at risk in the same way that the housing market was endangered by mortgage-backed securities.

Insurance companies used to treat many women-specific health concerns as a liability. The health care reform bill aims to improve coverage parity with men. Before reform, it was legal for insurance companies to charge women more than men for the same coverage. Private providers routinely charged women 20, 40 even 80 percent more than their male counterparts. Some insurance providers listed pregnancy and being a victim of domestic violence as pre-existing conditions, allowing them to deny women coverage.

President Obama signed his historic health care reform bill into law back in March, and now, six months later, three key provisions in the bill take effect: 

• There will no longer be a lifetime cap on health insurance.
• Parents can now keep their child under their plan until they are 26 years old.
• Insurance companies can no longer refuse coverage for children with pre-existing conditions.

As the economic climate continues to suffer, the number of former workers seeking Social Security disability benefits has spiked.

Ten years ago, roughly five million disabled workers collected Social Security Disability Insurance (SSDI). Today, more than eight million ex-workers do. And as the economic climate of America continues to suffer, the number of SSDI applications continues to rise. This year, they’re up 21 percent over last year.

Around 1.3 million people in the U.S. have lost their unemployment benefits since the beginning of 2010.

Yesterday, we talked with two people who have recently lost their benefits: Donovan Marsden in New York and Michelle Ives in Texas. And we asked: does the extension of unemployment benefits provide a disincentive to finding a job? We got an overwhelming number of responses on both sides of that argument. Some listeners thought it was callous even to suggest that people receiving unemployment benefits don't want jobs. A few listeners actually admitted that receiving benefits has made them lazy. Today, we get an economic perspective.

It's week eight of The Takeaway's Do It Yourself Bailout with our friend Beth Kobliner, author of "Get a Financial Life", and we're taking a good long look in the mirror at our spending habits: where we're saving, if we're saving enough and whether we can do more to bail ourselves out of the financial mess that many of us are in.  This week's question to ask yourself: are you spending too much on insurance? Or not enough?

If you’re looking to tighten your belt, you may be eying your various insurance policies and wondering if you’re just throwing money down the drain. The answer is: You might be! There’s insurance you may have too much of, and insurance you don’t have enough of. Here’s how to sort it out:

Employer-sponsored insurance (ESI) has long been the mainstay of health coverage for most middle class American families. But a new report from the nonpartisan Robert Wood Johnson Foundation has found that this class of Americans is losing its health coverage faster than any other income group. Unlike low-income earners, middle class Americans don't have the safety net of a government program like Medicaid. Secondly, the cost of an independent policy is just too high; and in some states, people are denied coverage because of pre-existing ailments.

Later this afternoon, the Department of Health and Human Services is expected to release a report criticizing insurance companies for their dramatically increasing insurance premiums.

Advertisements for extended auto warranties are everywhere on television and in mailboxes, but some customers have been complaining that when the repair bills come due, the warranty guarantors are nowhere to be found. Consumer watchdogs are looking sharply at some of the warranty companies, and reporter Scott Graf, from WFAE in Charlotte, NC, says it looks like the boom times for bogus insurance may be ending. 

• Washington Takeout: Todd Zwillich joins us to describe efforts by Congress to finish the year's work, including raising the nation's debt "ceiling" by a mere $300 billion. (To put the debt ceiling into context, see our previous Debtor Nation numbers segment.)
• Business Takeout: LeConte Moore, managing director at DeWitt Stern Group, is about to offer a new type of insurance to companies who want to protect themselves from a Tiger Woodstype backlash.

President Barack Obama's stimulus plan cut the price tag for COBRA, the federal program that allows workers to keep their healthcare benefits for 18 months after they leave a job. Under the bill, laid-off workers pay only 35% of the actual cost of COBRA benefits. That provision expires this month, meaning many unemployed workers will face suddenly higher healthcare premiums. We speak with Jody Dietel, chief compliance officer for WageWorks, a company that administers COBRA and other benefits programs. We also speak with Cheryl Fish-Parcham, deputy director of health policy at Families USA.

In the high-volume debate about heath care reform, one major player has been notably quiet: the health insurance industry. For the most part, the industry has given faint support to reform, but that changed this week. Health insurance companies are buying up ad time in a number of key states as part of a coordinated push to make sure their concerns remain part of the reform debate. We speak to Brad Fluegel, executive vice president and chief strategy and external affairs officer for the health insurer WellPoint. We hear also from Robert Zirkelbach, a spokesperson for America’s Health Insurance Plans (AHIP), a trade group for insurance companies; and Jon Gruber, a health care economist at MIT who helped Massachusetts develop its universal health insurance plan.

EDITOR'S NOTE: After our segment aired, Jon Gruber disclosed that he has been paid at least $297,600 by the Department of Health and Human Services to model costs and effects of health care reform for the Obama Administration.  We did not discover or disclose that in our interview.

 

• Washington Takeout: Congresssional Democrats are attacking an antitrust exemption that lets insurance companies avoid federal oversight. Washington Examiner White House correspondent Julie Mason explains why.
• Sports Takeout: The Takeaway's sports contributor, Ibrahim Abdul-Matin, has the latest on sports, including his thoughts on why conservative and controversial talk show host Rush Limbaugh has been dropped from the group trying to buy the St. Louis Rams football team. Was it something we said?
  
• Listener Takeout: We hear our listeners' reactions to our health care coverage and our conversation on women in the military.

The Congressional Budget Office signed off on the math in the Senate Finance Committee's health care overhaul bill, saying the legislation will reduce the deficit and save taxpayer money overall. But not so fast: The insurance industry did its own calculations and says consumers will be hit with a whopper of a pricetag. So who do consumers believe? And how do you figure out the cost of health care ten years from now? As the Senate Finance Committee prepares to vote on its bill today, we look at the science and politics of calculating the cost, with former CBO director Alice Rivlin and New York Times reporter David Herszenhorn.

Feeling wonky? Read the CBO's analysis of the Finance Committee's bill and compare it to the analysis from America's Health Insurance Plans, which says the Senate Finance bill will rack up extra costs for consumers. [PDF, 592k]

The salaries of sports players have for many decades caused non-athletes' jaws to drop, but owners have always justified the expense as an investment. Way back in 1869, for example, members of the Cincinnati Red Stockings were payed $11,000: around $175,000 in today's dollars and many times more than the average income at the time. So how much would you invest in a fantasy sports league? Some insiders estimate fantasy sports attracts close to $800 million annually. With all that money floating around, it seems natural that people would want to protect their assets. Fantasy Sports Insurance is a new company dedicated to insuring the top players on your fantasy team in case of injury. Real money, real players, real injuries: still a fantasy.

To find out more about the money and the fans behind this we talk to Paul Charchian, president of the Fantasy Sports Trade Association and the host of Fantasy Football Weekly, a radio show on KFAN in the Twin Cities; and to Anthony Giaccone, president of Intermarket Insurance and the inventor of Fantasy Sports Insurance. 

As President Obama and Congress work to reform health care, The Takeaway has been looking at possible models, at home and abroad, that could inform the debate. One possibility is the Massachusetts model for universal care. In April 2006, the Massachusetts legislature approved a bill that required all residents to purchase health insurance or face legal penalties, which made it the first state to tackle the problem of incomplete medical coverage by treating patients the same way it does car owners. Joining us to explain how this plan works, and how it would fare nationwide, is Trudy Lieberman. She directs the health and medicine reporting program at the City University of New York. She is also a longtime contributing editor to the Columbia Journalism Review, and has been following Massachusetts closely since 2006 when the sweeping reform was enacted.

For more of Trudy Lieberman's reporting on health care reform, check out her archive at Columbia Journalism Review.

With the healthcare reform debate heating up on Capitol Hill, many politicians and doctors are jumping in to have their say. But what if you're both a doctor and a representative? Joining The Takeaway to discuss his vision for better health care is Congressman Steven Kagen, a Democrat representing Wisconsin and a former practicing physician. In an effort to underscore how broken the U.S. health care system is, Kagen has refused to be insured until there is affordable health care for all.

Outrage over the news that AIG employees will receive their enormous bonuses is widespread. Even President Obama suggested we simply tear up the bonus contracts and Iowa Senator Chuck Grassley suggested that the executives should consider doing the honorable thing a la seppuku. But not everyone thinks these bonuses are evil. One of those minority voices is Andrew Ross Sorkin, chief acquisitions and mergers correspondent for our partner, the New York Times, and he is here to make the case for the AIG bonuses.

For more, read Andrew Ross Sorkin's article, The Case for Paying Out Bonuses at A.I.G. in today's New York Times.