Collapse of the Housing Market Essay Example | Topics and Well Written Essays - 500 words

Collapse of the Housing Market - Essay Example The cracks appeared in the banking system three years later. Housing prices started falling in the year 2005. Initial symptom appeared in the market for sub prime residential mortgage-supported securities as investment demand shrank in 2006. Cracks in financial market became wide open in June 2007 with the failure to meet the lenders’ call on Collateralised Debt Obligations (CDOs) by hedge funds for subprime loans. In a way, it was the overconfidence of the mortgage brokers who went on selling loans to home buyers in the sub prime sector of the housing market due to market hype (Financial World 26-28). The recessionary trends appeared with the sub prime lending to home borrowers. The crisis started from Cleveland where loans in huge amount were cleared without verifying income and documents by the mortgage brokers. Refinancing was allowed on the condition that new sub prime mortgage would start after two years at double the prevailing interest rates. The crisis deepened when t he whole of America came under its influence as property prices touched a new height; as a result, demand for owning property increased because of mortgage brokers and refinancing. When the interest reset period ended after two years, interest rates went higher because Fed interest rates also increased on which sub prime mortgage interests were based (BBC News 9-13).

Affordable Care Act Essay Example | Topics and Well Written Essays - 750 words

Affordable Care Act - Essay Example This memo will investigate the impact of ACA on Employer-Sponsored Insurance (ESI) and will specifically examine various aspects of the Act that can discourage large employers’ to offer healthcare coverage to their employees. This can ultimately result in reduced access and quality of the healthcare services and increased costs. ACA is a law of primary importance for the people of United States because it aims to address many long standing issues with our health insurance policies including the coverage of children on parental policy, cessation of ‘donut hole’ for seniors, elimination of lifetime dollar limit on coverage, free preventive care and many other provisions with an aim to cover every segment of the society to maximum possible limit of coverage, even the uninsured people with a program to extend access to insurance and more funds to states to help them in extending Medicare facilities to low-income seniors. In essence, the program is a tremendous effort to fill the gaps of insurance coverage while safeguarding the rights of stakeholders. Still, there are areas which required attention of the legislators to device some amendments in the program in order to ensure and extend its impact on access, cost and quality of health care services. The employer sponsored insurance coverage is the hottest among the controversial issues associated with provisions of ACA that are supposed to be in effect by 2014. There are two major aspects of the ACA provisions, firstly the impact of Tax Credits to small businesses and its impact on coverage offers by the employer to low and medium salaried employees and secondly the impact on large employers after 2014 when the law will be in effect with all its provisions. The employer-sponsored insurance (ESI) is of immense importance to the American people because larger employers plays an important role in overall health insurance coverage and if these firms decided to drop the coverage its impact will certa inly deplore the positivity of the ACA. However, there is a clear divide among the experts and analyst over the estimates of large firms’ response in 2014. Some forecast a big drop in ESI and other estimate it to be stable. â€Å" While the overall ESI market is likely to remain fairly stable, modelers and other experts agree that some firm types and covered subgroups are likely to experience changes in coverage soon after 2014.† (Avalere, 2011). Although most of the surveys and analysis project a stable ESI market in post-2014 scenario, there are experts, firms and analyst who oppose with some valuable reasoning and proclaim that ACA provisions can cause a major shift in employers’ policy of health insurance offerings. â€Å"Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.† (Singhal, Jeris, & Drew, 2011). This is certainly an alarming statement because of heavy reliance of nonelderly Americans on emp loyer-sponsored health services and no real solution of increased healthcare access and quality can prove beneficial unless it addresses this sector correctly and U.S. Department of Healthcare and Human Services is aware of the fact, â€Å"The U.S. employer-based health insurance market provides insurance coverage to nearly two-thirds of the population under 65. In addition, nearly 80 percent of the uninsured live in a family where at least one adult is employed. Therefore, building on these programs might be an attractive component of any