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