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NY Gov. Signs Ian’s Law to Limit Health Insurers’ Ability to Drop Patients

Posted in Health Insurance , Health Insurance Companies

August 20th, 2010
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New York Governor, David Paterson, recently signed a new law that will improve health insurance protections for patients. According to the signed legislation, also known as “Ian’s Law,” health insurance companies will not be able to suddenly drop a patient or cut their benefits without following specific guidelines.

The Inspiration Behind Ian’s Law

Ian’s Law is named after Ian Pearl, a 37-year-old man suffering from muscular dystrophy, whose health insurance coverage was terminated without an option for replacement coverage that would cover his treatments. While his treatments were intense (24-hour nursing care) and expensive, his family felt that the sudden termination of coverage was unlawful, resulting in a lawsuit against his insurer, Guardian Life Insurance Company of America.

Initially, the lawsuit upheld his coverage discontinuance. However, a separate lawsuit revealed company documents showing the insured had compiled a list of its costliest members (calling them names like “dogs” and “train wrecks”) and planned to get rid of them.

How “Ian’s Law” Will Protect Patients

After realizing that the company had bad intentions for high-cost policyholders, the governor decided to take action. On Thursday, he signed the new law that would protect patients in the following ways:

• Insurers must notify of discontinuation: The new legislation amends the states current law by requiring insurance companies to give written notice of pending discontinuation at least 90 days prior to the date of discontinuation of coverage.
• Insurers must offer alternatives: If a policyholder’s plan will be discontinued, the insurer must provide that policyholder with options to purchase alternative, replacement health insurance that is already offered by the insurer.
• Policyholders can’t be dropped due to high costs: The law also mandates that a policyholder cannot be dropped from a group plan just because the individual is high-cost.

In addition, policyholders with serious medical conditions who have had related insurance benefits in the 12-month period preceding the discontinuation will be able to keep their present coverage if similar coverage cannot be made available.

The law benefits policyholders because it holds the insurance industry accountable for the coverage it provides. In addition to protections offered by health care reform, this law should protect individuals from being dropped who have played by the rules with their insurance companies.

How To Insure Your Kid’s Health For Less

Posted in Health Insurance , Low Income Health Insurance , Medicaid

August 19th, 2010
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Finding affordable health insurance for a person of any age can be difficult if you’re not already covered by your employer. For those who seek private insurance for their children and don’t qualify for Medicaid, finding low cost health insurance options could be even more difficult.

Luckily, the health reform law has made some improvements to the options available to children. Let’s take a look at what you may be able to take advantage of as a parent trying to insure your child.

Insure Kids Now

InsureKidsNow.gov is a website created by the federal government and states to offer cheap health insurance coverage for children. If you are not able to afford private health insurance or don’t have coverage available to you, you may find through this website that you qualify for some.

According to the site, you may be approved for insurance for your child if your income is no more than $44,100 per year for a family of four.

In order to determine what options are available in your area, you must search the site by state to find a provider. The various listings you pull up with offer information on the program of choice, services available and eligibility requirements.

What is CHIP?

The Children’s Health Insurance Program (CHIP) is a program that was signed by President Barack Obama under the Children’s Health Insurance Program Reauthorization Act (CHIPRA). With his signature, he renewed the program, which was originally created in 1997. Currently, it helps to provide insurance coverage to 7-11 million children.

As a part of the renewal, he increased the income requirements for families looking for assistance so that now more than low-income families and pregnant women are eligible for assistance. Currently, InsureKidsNow.gov offers listings for various CHIP programs around the country, so if you’re interested in learning more, visit the site for additional information.

High-Risk Pools

Unfortunately, health insurance companies have a bad reputation when it comes to insuring kids, especially those with preexisting conditions. In 2009, several insurers were put in the hot seat for denying children for seemingly trivial issues like being underweight.

However, under the new health care reform law, insurance companies will no longer be able to decline children due to preexisting conditions. The only problem is this portion of the law has yet to take effect, which is why states will be obligated to create high-risk pools so everyone with preexisting conditions will be able to get insured.

If you’re looking for more information, check with your state’s Department of Health.

Keep Kids on Your Insurance Longer

Another piece of health care reform that helps parents with older offspring keep insurance is the portion that requires children to stay on their parents’ policies until the age of 26. According to the law, all insurers will have to abide by this rule by Sept. 23, 2010, which means you won’t have to worry about helping your adult child find insurance if under this age.

If you are in need of free health insurance, you may have some options available to you as well. A great resource to take advantage of is Covering Kids and Families, which is a site that offers information on Medicaid, CHIP and other low-cost and free services.

The good news is that it isn’t impossible to get your hands on the affordable family health insurance you need for your children. By using the options above, you could increase your chances of getting your child insured under any condition.

Health Insurance Funds Granted to 45 States to Protect Premium Increases

Posted in Health Insurance , Save on Health Insurance

August 18th, 2010
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To get a handle on insurance company abuses, the government has issued grants that will hold these companies accountable for any unjustified premium increases. These grants have been issued to most states so far, and as hoped by Congress, will help protect consumers and give them fair treatment when acquiring health insurance.

How the Grants Benefit States

One of the original versions of the health care reform law would have given full rate review authority to states; however, this provision was excluded from the final version of the bill. To make up for this exclusion, lawmakers included in the reforms more than $250 million in grants that would let states closely review proposed increases in insurance rates.

The first round of grants, $1 million per state, was handed out on Monday to 45 states and the District of Columbia. The states that have so far not applied for funding are Alaska, Georgia, Iowa, Minnesota and Wyoming.

How the Grants Benefit You and How to Find Affordable Coverage

Of course, you may not see an immediate change in the way the health insurance process is handled, but the idea of offering the grants to states is to find ways of opening dialogue and allowing for states to have a voice when it comes to premium increases.

Secretary of Health and Human Services, Kathleen Sebelius, said that health insurance should eventually become more affordable as a result of careful use of the grants. However, if you’re looking for ways to find affordable health insurance now, here are a few ideas:

• Shop around: One of the best ways to find affordable health insurance is to shop around for coverage until you find what works for you.
• Find a health insurance exchange: While health insurance exchanges are not required by law until 2014, some states are offering their own exchanges now that offer access to affordable coverage.
• Get a job with benefits: While there aren’t as many around as in the past, look for an employer that is offering quality health insurance benefits to help reduce the price some.
• Live a healthier lifestyle: The healthier your lifestyle is, the less you will need to make visits to the doctor or emergency room, which require you to pay co-insurance, a co-pay or a deductible.

Hopefully, the grants will be able to provide states with the authority they need to keep health insurance rates affordable. But until then, it’s good to know that there are some options out there to find affordable rates on your own.

Switching Homeowner’s Insurance Can End Up Costing You Big

Posted in Home Insurance , Save on Home Insurance

August 17th, 2010
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There is no shortage of home insurance commercials on television screaming the virtues of switching insurance policies to a new company for large savings on your insurance premiums. However, it may not be as easy as the commercial spokesman makes it out to be. There are a few hidden pitfalls that you need to be careful to avoid in order to make switching beneficial to you and your wallet.

The following are three ways switching homeowner’s insurance can end up costing you more than you save:

Missing The Fine Print

If you change homeowner’s insurance, be sure to read the fine print of your new policy. Does it require you to get a home inspection and new improvements made before your policy takes effect?

One North Carolina woman recently switched her homeowner’s policy to a new insurance carrier only to find out that she needed to make over $4,000 worth of repairs to her aging home to begin her new coverage. It would not have been a major issue except for the fact that she had already canceled her original homeowner’s insurance before finding out about the expensive upgrades she had to make to her home.

The upgrades now have all but negated the cost savings she would have enjoyed by switching insurance companies for years to come. You should never cancel your current insurance policy before you have the new one in place which includes any required home inspections the new insurer requires.

Losing Discounts By Jumping Around

One of the biggest discounts that policy holders enjoy is a discount for having multiple policies with the same insurance company. If you begin to chase better insurance rates around the internet and through other companies that have strong advertising campaigns, you could possibly run the risk of missing out on discounts that you used to enjoy from your previous insurance company.

It can really exacerbate the situation if you are moving automotive and homeowners to another insurer. You receive sizable discounts on your insurance policy for having them all in one place.

Different Requirements Between Insurers

Does your current insurer require you to have a permanent fence surrounding your swimming pool? Did your pit bull mix pass the dangerous dog screening from your previous insurance company?

The same might not be true of your new homeowner’s insurance company. You may find yourself on the wrong end of a cancellation letter in a few months if your insurer decides to audit your account and finds you outside of their guidelines.

You can never be too careful when you decide to switch insurance companies. The lure of a cheaper premium may not be as wonderful as you initially thought. Many insurance companies may not even want you back as a customer if you decide to abandon them in search of a cheaper deal elsewhere.

You have to double check the fine print and have your ducks in a row before you cancel your current policy. With a little prior planning and some research, you should be able to steer yourself away from a cheaper insurance policy that will cost you dearly in the end.

Hank Coleman is a personal finance writer and all around money and investing junkie who is currently studying for his CFP credentials. He received his B.S in Business Administration from the Presbyterian College in South Carolina in 2002 and went on to receive an M.S. in Transportation and Logistics from the North Dakota State University in 2007 and an M.S. in Finance from the University of Maryland in 2008. You can read more of Hanks writings on his website HankColeman.net and can also follow him on Twitter.

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).

Consumers May Mistakenly Believe Life Insurance Accounts Are FDIC-Insured

Posted in Life Insurance , Met Life , Prudential

August 13th, 2010
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The Federal Deposit Insurance Corporation (FDIC) recently revealed concerns that consumers may mistakenly believe their life insurance accounts are FDIC-insured. This concern came in the wake of recent media reports that the life insurance industry may be holding onto money due to beneficiaries rather than issuing them lump sum checks because the interest rates they earn are higher.

Life Insurance Companies Subpoenaed Over Beneficiary Accounts

Recently, New York Attorney General Andrew Cuomo subpoenaed a number of life insurance companies, including Prudential Financial Inc., MetLife, Guardian Life Insurance, New York Life Insurance Co., Genworth Financial Inc., Unum Group and Northwestern Mutual Life Insurance in order to investigate their life insurance policy records.

The normal practice after a policyholder dies is for a life insurer to place money into a retained-asset account, which earns interest that can be withdrawn at any time. Some of the interest is to be paid to the beneficiary and the insurance company keeps the rest.

Cuomo is investigating companies under the suspicion that they are holding the money longer to draw more interest.

Is Your Beneficiary Account FDIC Insured?

As the reports of subpoenas have circulated through various media outlets, the FDIC has become concerned that consumers believe these accounts are FDIC-insured. The corporation says this is not the case.

Instead, in the event that a life insurance company was to collapse, the accounts will be covered by a state guaranty. This guaranty would cover as much as $300,000 per account in 49 states as well as up to $500,000 per account in Connecticut.

The attorney general is in the process of looking into the accounts to determine if the lump sum payments are being held too long. While this all gets straightened out, the FDIC wants to make sure beneficiaries understand their accounts are not insured by the corporation and should look to the state guaranty for collapsed-fund answers.

What’s In the New Flood Insurance Bill?

Posted in Home Insurance

August 12th, 2010
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There’s no doubt that the National Flood Insurance Program has had its share of ups and downs. Over the course of the last year, the program has expired and been extended numerous times. After its last extension, lawmakers decided that it was time to create legislation that would last for years and put an end to policyholders continuously losing their coverage.

The result was HR5114, also known as the Flood Insurance Reform Priorities Act of 2010. This bill is hopefully Congress’ last ditch effort to get the NFIP under control. To understand more about how HR5114 could affect those currently holding flood insurance policies, let’s take a closer look at what’s inside the bill.

A Look Inside HR5114

So what changes could take place as a result of the new bill? Well first, the bill would reauthorize the program, which is now set to expire September 30, so it would not require any new renewals for five years—or the end of 2015. This would be a great help to current policyholders who saw their coverage lapse repeatedly, only to be unable to make claims when flood damage affected their homes.

Here are some other adjustments the bill would make:

• Increased NFIP limits: The bill proposes that coverage limits for both residential and commercial properties be increased from its current limits, which is something that hasn’t changed since 1994.
• Premium increases limited: The bill would limit the premium increases of non-residential, non-primary residences to 20 percent annually until the risk-based, actuarially sound rate is reached.
• Gett rid of premium subsidies: Currently, there are subsidies available for properties built prior to 1974. Those would be phased out in the bill.
• Additional living coverage limited: Language has been included in the bill that would limit coverage to $1,000 for additional living expenses on residential properties. However, you would be able to purchase additional amounts.

A major aspect of the bill that affects those who have recently found that the new flood map created after the Federal Emergency Management Agency (FEMA) developed new flood zones would require them to purchase flood insurance, is purchasing coverage won’t be mandatory for five years.

Adding Wind Coverage to NFIP

In addition to making significant adjustments to NFIP, some lawmakers have considered adding windstorm coverage to the program. This addition was authored by Rep. Gene Taylor (D-Miss.) and would work to remove pressure from state wind insurance pools that have trouble dishing out money to cover claims.

However, there have been many opponents to this bill, including environmental groups, taxpayer watchdogs, consumer advocates, the business community and even the Obama administration who all say that the addition has only been authored to give more money to specific insurers while taking away from those that already offer coverage.

As of August 3, 2010, the House had managed to avoid voting on the addition to the bill before they left for their month-long August break. At the time, there was also a separate bill introduced in the Senate that would seek to address the wind coverage issue by having the wind insurance company and flood insurance program each pay the policyholder 50 percent of a claim.

There is no set deadline as to when the new bill will make its way through Congress. However, everyone hopes that this will occur before NFIP expires at the end of September.

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).

Don’t Accept a Job Without Health Care Coverage

Posted in Group Health Insurance , Health Insurance , Medicaid

August 10th, 2010
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Getting your hands on affordable health insurance is not an easy feat these days. Between the rising cost of health care and the increases in health insurance premiums, the ability to purchase coverage that doesn’t cost an arm and two legs is nearly impossible.

It’s for this reason that many experts suggest looking for a job that offers health insurance coverage. However, it’s not always easy to know what to do when you have more than one great job offer; one that pays more but offers no coverage and the other paying less but providing good insurance.

What do you think you should do in this situation? Do you think that health care coverage should be a big factor in your next job?

Why Health Insurance Matters on the Job Front

It’s no secret that many companies have stopped offering employer health insurance to save money. This has a lot to do with the increase in health care costs. A recent report from the Bureau of Labor Statistics found that the average cost for health insurance benefits was $2.08 per hour worked in March 2010.

This means for one employee working year-round, the employer must dish out $4,326.40. Of course, the costs quickly add up when you factor in more employees.

Not to mention, according to a recently published report from PriceWaterHouseCoopers, medical costs for employers is expected to increase 9 percent in 2011. For some employers, this means the increased costs will trickle down to employees. For others, eliminating health benefits altogether will likely be the plan.

Luckily, many employers have tried to hold on to their employer health benefits for the sake of their employees. For instance, a recent online survey conducted by Crain Communications Inc. found that out of 3,700 executives, 52.5 percent strongly disagreed with the idea of discontinuing health care benefits. An additional 15.3 percent somewhat disagreed.

According to this survey, most employers would rather continue to offer benefits to their employees. This doesn’t mean that having access to an affordable employer health plan isn’t a hot commodity, however.

Financial Benefits of Employer Health Insurance

As you can probably imagine, the cost of providing health insurance to employers is quite costly. Luckily, many employers belong to health insurance pools that help to lower the costs by offering group rates.

As an individual or head of household, paying for health coverage without employer assistance can be incredibly expensive. According to a 2009 Kaiser Family Foundation study, the average cost of an employer-provided family plan is $13,375 annually. According to a 2009 report from America’s Health Insurance Plans, the cost of some premiums for individually-purchased family plans averaged $6,328 in addition to up to $10,000 paid in additional out-of-pocket expenses.

In the example, the average cost of employer-provided coverage is roughly $3,000 cheaper annually for the employee, which is why many workers hope to have an employer cover some of the costs for them.

How Could Health Care Reform Make a Difference?

The passage of health care reform is something that lawmakers hope will once and for all help all Americans pay for health insurance.

With the creation of health insurance exchanges, high-risk pools and expanding Medicaid to more people, they hope the wall between affordable employer coverage and individually-purchased coverage will begin to crumble.

There’s no doubt that we’re ready for affordable health insurance across the board. Since it’s not here yet, if you’re offered a job with health insurance that pays $33,000 a year or one that offers no coverage and pays $35,000, which should you take? Considering the example above, it looks as though it’s more cost effective to take the job that offers health insurance.

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).