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Today’s News: More Medicaid Patients Using ER, NFIP in the Red and Teen Drivers Vulnerable to Deadly Crashes

Posted in Auto Insurance , Health Insurance , Home Insurance , Medicaid

August 25th, 2010
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A new report has found that more Medicaid patients are using the ER, the National Flood Insurance Program has run into problems that have put it in the red and the NHTSA has revealed that teen drivers are more vulnerable to deadly crashes.

More Medicaid Patients Using ER

Researchers from the University of California, San Francisco, say that an increasing number Americans, especially adults on Medicaid, are using the emergency room as their “safety net” for health care; the reason being that they must treat all patients regardless of health insurance coverage or ability to pay.

According to their report, five times the number of adults with Medicaid visited the emergency department than those with private insurance in 2007, as compared to only three and a half times the number in 1999. Researchers said many of these visits could have been handled by a primary care clinic, but the patients preferred the speed of the ER (Business Week).

National Flood Insurance Program in the Red

The National Flood Insurance Program (NFIP) is in the red, and “repeat offender,” flooded homes, seems to be the culprit for the massive payouts that have left the program struggling for money.

A new report from the Houston Chronicle found that between 1977 and 1995, the NFIP paid out $806,591 for repeated storm damage to one suburban Houston home that was valued at $114,480. In the report, it was revealed that roughly 1 percent of properties typically account for between 25 and 30 percent of the claims it pays and these “repetitive loss” homes have more than doubled in the past 15 years.

Currently, NFIP owes the Department of Treasury more than $18 billion and is unlikely to be able to pay it back (Houston Chronicle).

Teen Drivers Vulnerable to Deadly Crashes

A recent report from the National Highway Traffic Safety Administration (NHTSA) revealed that teen drivers are especially vulnerable to deadly crashes.

In the report, it was revealed that mile for mile, teenagers are involved in three times as many fatal crashes as other drivers. Even more, motor vehicle accidents account for more deaths than both suicide and homicide combined. It’s for this reason that the NHTSA encourages parents to not only teach safe driving but also purchase quality auto insurance for teen drivers (NHTSA).

Today’s News: Medicare Funds to Exhaust in 2029, Higher Mortgage Insurance Fees Approved and Auto Insurance Customer Satisfaction Declines

Posted in Auto Insurance , Health Insurance , Home Insurance , Medicare

August 23rd, 2010
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A new government estimate shows that Medicare will run out of funds by 2029, 12 years later than originally expected. In other insurance news, higher mortgage insurance fees have been approved by Senate and a report from JD Power and Associates shows that auto insurance customer satisfaction has declined.

Medicare Funds to Exhaust in 2029

The Obama administration has released a new report showing that Medicare will exhaust its funds by 2029. While this sounds bad, it is actually 12 years later than a previous report. The administration credits the 12-year extension to the health care reform law and cuts in payments to medical providers that could raise money for the program.

However, Medicare’s chief actuary, Rich Foster, says the numbers are a bit rosier than they should be since cuts aren’t likely to stand—doctors will probably drop out of the program to save their practices instead of accepting the cuts (Wall Street Journal).

Higher Mortgage Insurance Fees Approved

Recently, we reported that mortgage insurance fees were likely to increase in the near future. Now it seems that Congress is taking steps to make this official.

In early August, Senate unanimously approved legislation that would give the Federal Housing Administration (FHA) the power to hike the monthly premiums it charges to consumers. Currently, borrowers who take out loans through FHA to cover the 20 percent down payment on a home loan (also known as mortgage insurance) pay an annual fee of 0.55 percent of the total loan.

Now, FHA has been given the power to increase the rate to 1.55 percent with President Barack Obama left to give final approval (Associated Press).

Auto Insurance Customer Satisfaction Declines

A study released by JD Power and Associates found that there has been a decline in auto insurance customer satisfaction so far in 2010. According to the study, satisfaction declined 10 points from 2009′s numbers to 777 on a 1,000-point scale.

The decline in satisfaction was largely attributed to the cost of coverage, which by itself declined 30 index points from 2009. However, other factors that attributed to overall dissatisfaction included interaction, billing and payment, policy offerings and claims (PR Newswire).

Today’s News: AIG Reports $2.66 Billion Loss, Missouri Refuses Health Care Reform Law and Questionable Auto Insurance Claims Increase

Posted in AIG , Auto Insurance , Health Insurance , Life Insurance

August 20th, 2010
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AIG reported a $2.66 billion loss in the second quarter, Missouri voters shot down one aspect of the federal health care reform law and a new report has found that questionable auto insurance claims have increased.

AIG Reports $2.66 Billion Loss

Life insurer AIG has reported a second quarter net loss of $2.66 billion, which is a considerable drop from its $1.82 billion loss posted in the first quarter. However, the loss is not from a drop in earnings. It’s instead a result of the loss after selling some of its life insurance divisions to help repay the government bailouts it received in 2008 and 2009.

Aside from the losses posted from selling its companies, AIG’s core insurance companies were able to nearly double their earnings in the second quarter, showing an adjusted net income of $1.34 billion (CNN Money).

Missouri Refuses Health Care Reform Law

Recently, 71 percent of Missouri voters were asked to decide whether they wanted the federal government to require them to purchase health insurance, and they responded with a resounding “No.”

Their votes in opposition to the portion of health care reform law that will require nearly all Americans to purchase coverage or face penalties has set no legally binding precedent. However, the opposition could result in fewer people voting for Democrats in the fall midterm elections, which could shift the balance of power in Congress and impede President Barack Obama’s health care agenda in the long-term (FreeP.com).

Smashed Car Windows Increase Questionable Auto Insurance Claims

According to a new report from the National Insurance Crime Bureau (NICB), questionable auto insurance claims increased by 14 percent in the first half of 2010. This increase was largely due to the fivefold increase in claims from car owners who said that their windows had been smashed.

The NICB says that many policyholders deliberately damage their car windows or stage phony accidents to receive a payout. On a larger scale, almost half of the 7,993 cases of suspected fraud were related to vehicles (Bloomberg).

Today’s News: States Push for $16 Billion for Medicaid, Mortgage Insurance Claims Down and You May Own One of the Most Stolen Cars

Posted in Auto Insurance , Health Insurance , Home Insurance , Home Insurance Claims , Medicaid

August 18th, 2010
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State officials are looking to pass a measure that would offer much needed money for Medicaid, mortgage insurance claims have dropped and according to a new list, you may own one of the most stolen cars in the United States.

States Push for $16 Billion for Medicaid

Democrats in Senate are trying to push through a bill that would offer states $27 billion in needed funds, $16 billion of which would be used for Medicaid needs. With health insurance still unavailable to a large number of Americans, the need for Medicaid is still prevalent.

Many states are running out of money to fund the program. As a result, Democrats and President Barack Obama are pushing to pass legislation soon. In order for it to pass, however, it would have to be approved by some Republicans as well (CNN Money).

Mortgage Insurance Claims Have Dropped

Mortgage insurance—which is offered by the Federal Housing Administration (FHA) for homeowners who can’t come up with their 20 percent mortgage down payment and are in danger of defaulting—has performed better than expected this fiscal year.

However, a recent audit of the FHA has found that if housing prices continue to drop and more people take out mortgage loans and then default on them, the administration may be on the hook for more insurance claims. More claims could result in depleted funds, which could result in taxpayers having to foot the bill to cover the losses (Washington Post).

You May Own One of the Most Stolen Cars

If you’re worried about increasing your auto insurance rates then you may want to avoid some cars that the Highway Loss Data Institute has pinpointed as being the most stolen. At the top of the list was the Cadillac Escalade, which had an annual claim frequency of 10.8 out of every one thousand.

Other vehicles that topped the institute’s list include the Chevrolet Silverado, which had an annual claim frequency of 8 out of every one thousand, as well as the Dodge Charger (7.4 out of every thousand), Chevrolet Avalanche (7.4 out of every thousand) and Infiniti G37 Coupe (7.1 out of every thousand) (CNN Money).

Today’s News: More Life Insurers Subpoenaed, Young Drivers Have Higher Crash Rates and 1 in 5 Californians Uninsured

Posted in Auto Insurance , Health Insurance , Life Insurance , Met Life , Prudential

August 16th, 2010
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Today’s News: Fed Moving to Improve Health Insurance Appeals, Life Settlements Have High Fees and Nationwide Insurance Surprises Thieves with Bait Vehicles

Posted in Auto Insurance , Health Insurance , Health Insurance Claims , Life Insurance , Nationwide

August 16th, 2010
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The Fed took its first step on July 22 to ensure consumers who want to file a health insurance appeal have a neutral party to speak with. In other insurance news, research shows that life insurance settlements have high fees and Nationwide Insurance has been surprising auto thieves with their new bait vehicles.

Fed Works to Improve Health Insurance Appeals

The Obama administration has taken the first step necessary to make sure consumers are treated fairly if they are denied a medical claim by their health insurance company. The regulations will be spelled out in a two-step process.

First, consumers will appeal directly to their insurers. Two, if they are denied a second time, they will work with an independent reviewer for which health plans must pay the costs. Unfortunately, the new federal safeguards won’t be immediately available to most Americans with private coverage since the overhaul law is so much more complicated than previous health insurance laws (Associated Press).

Life Settlements Have High Fees

Cashing out on life insurance policies, also known as taking out a life settlement, has become very popular over the years because it allows senior citizens to sell their policies to investors for thousands of dollars, while the investors receive the full payout after the original policyholder dies.

However, according to the Government Accountability Office, taking part in this practice may be risky for both sellers and buyers due to inconsistent regulation and excessive fees. In particular, senior citizens could get less than they should for their policies (Bloomberg).

Nationwide Insurance Surprises Thieves with Bait Vehicles

Houston law enforcement has partnered with Nationwide Insurance to keep residents safe from the increase of auto theft in the area. To assist with the goals of various policy and sheriff departments, Nationwide has presented bait vehicles (unmarked cars outfitted with special GPS tracking and remote-control immobilizing equipment) that allow officers to monitor cars that have been seized by thieves without the need for a vehicle pursuit.

According to Nationwide, vehicle theft rates have dropped in almost every region where the auto insurance company has placed vehicles. So far, over 55 bait vehicles are in service or in progress in 17 states (Business Wire).

Today’s News: Digital Medical Records on 5-Year Deadline, AG Probes Life Insurance Industry and Policyholders Choose Not to Sue Auto Insurance Companies

Posted in Auto Insurance , Health Insurance , Life Insurance , Life Insurance Companies , Medicare , Met Life

August 11th, 2010
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The Obama administration has given the medical world five years to figure out how to move all medical records to a digital format, the New York attorney general is pushing for a probe into the life insurance industry and individuals recently surveyed revealed that if given the opportunity, they would not be interested in suing their auto insurance companies.

Digital Medical Records Get 5-Year Deadline

In mid-July, President Barack Obama dished out an ambitious five-year plan that would require doctors and hospitals to move all medical records to a digital format. This, according to his administration, would offer greater safety for patients, as well as lower costs for health care and health insurance.

As soon as 2011, the medical world will have access to federal money that could use to help lower the costs of the systems, as well as train workers for their use. Those who don’t comply with these guidelines by 2015 will face Medicare payment cuts (MSNBC).

AG Probes Life Insurance Industry

New York State Attorney General, Andrew Cuomo, recently stated he plans to open a fraud investigation into how life insurance companies pay out benefits after their policyholders die. Cuomo said that he believes some insurers are retaining life insurance beneficiaries’ funds in company-controlled accounts, rather than paying out lump sums because they earn higher rates of interest by holding on to the money. So far, his office has already subpoenaed Prudential Financial, Inc. and MetLife, Inc. in hopes of learning more about their use of life insurance policies (Associated Press).

Policyholders Choose Not to Sue Auto Insurance Companies

A new survey released by the Insurance Research Council (IRC) revealed that most Americans don’t believe that adopting new laws allowing people to sue their own auto insurance company for punitive damages is a good idea. The law relates to a first-party bad-faith lawsuit that allows one person to sue their own insurance company because they feel that the company acted in “bad faith” in the settlement of their claim.

So far, only a few states allow policyholders to sue their companies for this reason. However, according to the survey, 57 percent of respondents think the ability to do this is either a poor or only fair idea (PR Web).

Today’s News: States Struggle to Cover Medicaid, Employers Want Proof of Kinship to Insure and Auto Insurer Agrees to Rate Cut

Posted in Auto Insurance , Farmers Insurance , Health Insurance , Medicaid , Save on Auto Insurance

August 11th, 2010
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If Congress fails to cover Medicaid costs this fiscal year, states could face a massive budget hole they will be forced to fill on their own. In other news, employers plan to toughen their health insurance guidelines to require employees to prove the kinship of their adult children and an auto insurance company has agreed to a rate cut that could benefit policyholders.

States Struggle to Cover Medicaid

States have already been forced to fill an $84 billion gap in order to balance their 2011 fiscal year budgets, but it appears that they may have to come up with even more money if Congress is unable to cover the growing costs associated with Medicaid soon. Specifically, states nationwide could face a $12 billion hole that they will be required to fill, with California, Texas, North Carolina and New York each facing upwards of $1 billion on their own.

Congress lawmakers have stalled with any passage of Medicaid assistance due to fears of a national deficit increase. Unfortunately, states may have to bear the brunt of these fears for another year (CNN Money).

Employers Want Proof of Kin to Insure

Now that health care reform is requiring plans to cover dependents until the age of 26, many employers are expecting to pay an increase of up to 9 percent to cover the costs. These costs will trickle down to employees, resulting in an increase in premiums on health insurance.

However, premiums will also be raised in order to weed out ineligible dependents, something companies are expected to formally announce soon as they begin to require proof that your dependents are actually yours. Whether through marriage certificates, birth or adoption certificates or proof of legal guardianship, you will have to do more work to prove a dependent is legit in the near future (CNN Money).

Auto Insurer Agrees to Rate Cut

Some lucky California Farmers Insurance customers will receive a 10-percent break on their auto insurance as a part of an agreement reached by the California Department of Insurance and the insurance giant. The rebate will only be offered to customers with policies that renew between July 15 and Jan. 15 and it is only offered one time.

For most, the rebate will average about $50 per policy; however, if you’re planning on spending your money anytime soon, you’d better make other plans since it won’t be mailed to customers until February 2011 (Sacramento Business Journal).

Today’s News: Nonprofit Health Insurers Hoard Cash, State Farm Sheds Home Insurance Customers and Ohio Auto Insurance Stays the Same for 40 Years

Posted in Auto Insurance , Blue Cross Blue Shield , Health Insurance , Home Insurance , State Farm

August 9th, 2010
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Reports show that many nonprofit health insurers have been hoarding cash, State Farm Insurance plans to drop home insurance customers and liability auto insurance in the state of Ohio has remained unchanged for 40 years.

Nonprofit Health Insurers Hoard Billions in Cash

According to a new study from the independent group, Consumer Union, many nonprofit Blue Cross Blue Shield health insurance companies have hoarded $9.1 billion dollars (or $855 per member per year) in extra cash over the last decade. What’s worse, the companies have held on to this money even after proposing double-digit premium rate hikes.

Seven out of 10 nonprofit Blue Cross Blue Shield companies held at least three times the amount that regulators required of them to maintain minimal solvency. With these reserves held, staff attorney from Consumer Union said the nonprofit should be able to reduce prices for consumers (Wall Street Journal).

State Farm Sheds 125,000 Home Insurance Customers

Recently, State Farm announced that it would be shedding 125,000 Florida home insurance customers due to the increased risk of hurricane damage in the state. This news comes only weeks after the company announced that it would be dropping its flood insurance customers nationwide and leaving the National Flood Insurance Program.

What’s unfortunate for the disbanded customers is that their home insurance options are not plentiful with other companies, and many of those who are offering don’t have the same financial backing as State Farm, therefore resulting in them charging more (Naples News).

Ohio Auto Insurance Unchanged for 40 Years

The lucky residents of Ohio have benefited from minimum liability auto insurance limits that haven’t changed since 1970. However, according to the Daytona Daily News, the low minimum limits have not been totally beneficial as they have created gaps between coverage payout and repair costs.

Why such a big gap? Because in 1969, a V-6 Chevy Impala four-door sedan sold for $2,894 while they currently sell for $24,290. With the cost of the car (and hence the cost to repair the car) being significantly higher, the coverage costs would need to increase above the current minimums of $12,500 one bodily injury/$25,000 all injuries/$7,500 property to be useful (Daytona Daily News).

Today’s News: Health Care Overhaul Receives High Marks, Louisianans Don’t Fully Understand Flood Insurance and Young Drivers Make Insurance Claims Most

Posted in Auto Insurance , Auto Insurance Claims , Health Care , Health Insurance , Home Insurance

August 6th, 2010
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The health care overhaul has received some high marks from a surprising party, a study found that Louisiana residents don’t fully understand home insurance and new data has revealed that young drivers have the highest frequency of claims.

Health Care Overhaul Receives High Marks

Democrats and even some Republicans have given President Barack Obama high marks for the way his been able to carry out the new health care law. A new poll suggests that many people are very pleased with the way he’s pushed for health insurance and executed it, especially within the law’s first 100 days of being signed. Since May, favorable reviews have increased; however, since there are still months and years to go, views could change. Most say the November elections will be the real indicator of how the masses feel (NY Times).

Louisianans Don’t Fully Understand Flood Insurance

The Insurance Information Institute recently released a study revealing that people in Louisiana — homeowners in the epicenter of Hurricane Katrina’s destruction — are less likely than others around the country to understand that a home insurance policy doesn’t cover flooding. Specifically, 16 percent of Louisiana homeowners mistakenly believe that a homeowners policy covers flooding, having no idea that a flood insurance policy from the National Flood Insurance Program is how floods are covered (NOLA).

Young Drivers Make Insurance Claims Most

A report from the Highway Loss Data Institute revealed that drivers ages 16-19 have the highest frequency of auto insurance claims, as well as the highest average loss per claim. The types of claims this age group has the highest claims for include collision, property damage liability and bodily injury coverage. On the other end of the spectrum are 30-59 year olds who have three times fewer average claims than the teenage group. However, the drivers with the fewest auto insurance claims, according to the study, are those over the age of 70 due to their increased concern about their own driving skills (Auto Quote Now).