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Today’s News: Doctor’s Face Medicare Payout Cut, IRS Announces Health Insurance Tax Credit and Health Insurers Fight Regulations

Posted in Health Insurance , Medicare , Small Business Health Insurance

May 18th, 2010
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The health care industry has undergone a number of changes in the past few days. Doctors, health insurance companies and even the IRS are making or seeing drastic adjustments – let’s take a closer look.

Doctor’s Face another Medicare Payout Cut

In March, we reported that doctors were ditching their patients because their Medicare payments had been cut by 21 percent. Now it appears that doctors could face yet another 21 percent payment cut in Medicare reimbursement on June 1. In 1997, a Medicare formula was established that said rates should be cut every year, but Congress has blocked the cut seven out of eight years.

In order to block the cut for June, Congress would need to vote within the next two weeks. (CNNMoney.com)

IRS Announces Health Insurance Tax Credit

As a part of the health care overhaul law, the IRS is planning to announce the ground rules for small firms that want to claim the new federal tax for health insurance. The tax credit would cover up to 35 percent of the premiums that some small businesses pay on behalf of their workers. However, the credit will only be applied toward dental and vision benefits – not medical.

In the meantime, small business lobbying groups have filed a lawsuit against the law, stating Congress doesn’t have authority to mandate coverage. (Associated Press)

Health Insurers Fight Regulations

Health insurance companies are lobbying to fight what they consider to be strict regulation of premiums and profits under health care reform. The companies’ lobbyists are trying to shape regulations so that there are better definitions of what “unreasonable” premium increases are – and to avoid having to pay consumers rebates if the companies do not spend enough on patient care.

Senator John D. Rockefeller IV (D-WV) said companies now want to control how laws are implemented since they couldn’t control health care reform’s passage. (New York Times)

MetLife Says Less Than Half of People on Disability Have Income Coverage

Posted in Life Insurance , Life Insurance Companies , Met Life

May 14th, 2010
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A new study from MetLife revealed that three in five individuals who were out of work for at least six months as a result of a disability did not have disability insurance. The study, known as the MetLife Study of the Emotional and Financial Impact of Disability, also found that among the individuals who did have disability coverage, about one-third of their income was protected on average.

Workers Have Insufficient Disability Coverage

The disability insurance coverage amounts that the study shows most American workers have is undoubtedly insufficient for true protection in the event that an injury or illness were to turn into a full-on disability. In fact, according to the study, only 17 percent of those studied felt that that they have been completely covered financially if there became disabled at least a year ago.

The impact of a lack of disability insurance coverage can be devastating to a household. Here are stats from the study that show just that:

• 54 percent of those who did not have adequate coverage felt that their disability had a major or devastating impact on their relationships.
• 77 percent of those who did not have adequate coverage experienced feelings of depression and anxiety during their disability.
• 88 percent of those who did not have adequate coverage said their disability had a major or devastating impact on their feelings of financial security.
• 77 percent who didn’t have adequate coverage said they had to withdraw money from savings, investments or retirement accounts.
• 50 percent with inadequate coverage said they borrowed money from friends or family as a result of their disability.
• 62 percent without adequate coverage said they are currently living paycheck-to-paycheck.

The stats from the study show that those who must go without disability insurance or have inadequate coverage suffer in a number of financial and emotional ways. It is for this reason that experts suggest taking on quality coverage that adequately protects the income.

Do You Have Disability Insurance?

The study showing the lack of disability insurance coverage came at a perfect time since May is Disability Insurance Awareness Month (DAIM). During this month, insurance companies are promoting the purchase of this type of coverage to ensure you and your family members are protected adequately in the event that the breadwinner(s) are injured.

Some tips for ensuring you have the right disability life insurance coverage include:

• Calculating how much income you need to cover your expenses each month to determine the amount of coverage you need.
• Finding several experienced brokers who specializes in this type of coverage.
• Comparison shopping to make sure the broker you choose and the coverage they offer are both a match for you.

While you may not want to take on disability insurance as an extra expense, as you can see from the MetLife study, the repercussions of not doing so could be significant. So take time to shop for coverage in your area to find the most affordable and comprehensive option for you.

NICB Says Suspicious Auto Insurance Claims Have Skyrocketed Along with Premiums

Posted in Auto Insurance , Auto Insurance Claims

May 14th, 2010
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The National Insurance Crime Bureau (NICB) has released a study revealing that elaborate auto insurance scams have led to a 46 percent increase in the number of suspicious claims submitted to insurers over the last two years.

Some think that the increase in auto insurance rates of 4.3 percent since the beginning of 2010 and the 24 percent increase seen over the past three years may have something to do with these scams.

Various Auto Insurance Scams Becoming Popular

According to NICM, staged accidents are just one of the many forms of auto insurance fraud that are gaining popularity among scammers. With this form of fraud, innocent drivers are lured into crashes or scammers are crashing their own cars into each other. Some are even fabricating fictitious “paper” accidents.

Another big scam on the forefront nowadays is coming from medical providers who prescribe expensive treatments for non-existent injuries.

Unfortunately, scammers on both ends of the spectrum have become very elaborate in their techniques and are no longer amateurs. This means the acts are more difficult to catch and have a greater impact on the auto insurance industry.

Avoid Being a Victim of a Scam

NICM has noted that Florida, New York, California, Texas and Illinois are the top five states that have generated the most bogus claims related to staged accidents; however, anyone in any state could become a victim.

To avoid inadvertently contributing to scammers’ goals and increasing auto insurance rates, here are some tips from NICB to stop scammers in their tracks:

• Maintain a good driving distance: NICB suggests maintaining a good distance between your vehicle and the one in front of you to avoid the “sudden stop” maneuver that could cause you to rear-end them.
• Get the details of a crash: If a scammer is able to make you rear-end them, be sure to call the police, get a report, keep the officer’s name and get a description of the damages to ensure that the scammer is unable to magnify the damage later and try to claim a large payoff.
• Take pictures: Use your cell phone camera or keep a disposable one handy to properly document the scene, especially if someone out of the blue materializes suddenly to try to direct you immediately to a doctor or attorney before you have a chance to think about what happened.

The NICB and local law enforcement around the country are cracking down on auto insurance fraud, but in the meantime, careful driving and sharp mind could stop a scammer from making the most of their scam.

What is SR-22 Insurance?

Posted in Auto Insurance , Special Vehicle Insurance

May 13th, 2010
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Nobody is perfect, but some mistakes are more costly than others. That is certainly true when it comes to the act of driving while intoxicated. Not only are you risking the lives of everyone surrounding you and your vehicle, you may experience extremely costly auto insurance because of your indiscretion.

If you have already gotten a DUI, then you have probably experienced first hand the effects of the moving violation and your insurance. If not, brace yourself for high DUI insurance rates and needing to carry a SR-22 with you at all times.

What is SR-22?

A SR-22 is a proof of insurance form specifically created to prove adequate auto insurance coverage for those convicted of moving violations. People who have been found guilty of DUI, DWI, at-fault accidents with no proof of insurance, serious moving violations, repeat offenders or those driving without a proper license may be required to get the paperwork.

SR-22 forms are state specific and may require a filing fee to process. Currently, Delaware, Kentucky, Minnesota, New Mexico, Oklahoma and Pennsylvania don’t require an SR-22 form for convicted drivers. However, if you move into any of these states with a SR-22 to your name, you will be required to carry the document and adhere to your original court orders. New York and North Carolina do not require any type of SR-22 filings at all, but the state in which you were convicted may still require you to carry the paperwork.

There is no quick fix for those wanting to shed the stigma of being a drunk driver or having to carry a SR-22 insurance form. Expect to have a blemish on your record for 3-10 years, however this is based on the laws of your state and the court’s discretion.

Ultimately, you will end up struggling to find cheap SR-22 insurance coverage for many years to come.

Allstate Adds 100 Auto Insurance Jobs with Unique Requirements

Posted in Allstate , Auto Insurance , Auto Insurance Companies

May 13th, 2010
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Allstate Insurance hopes to boost the economy and its auto insurance business by adding more than 100 agents in Florida this year. The job creation project is a part of a program that targets mid-career and mid-level managers with a financial and sales background; however, there is an interesting price to pay to be considered for one of the positions.

Candidates Need Money to Make Money?

According to recent reports, Allstate Insurance hopes to bring in new candidates to fill in one of more than 100 positions available throughout Florida. However, in order to qualify for a position, the candidate needs a minimum of $50,000 of liquid capital to invest in their new auto insurance agency.

This will help Allstate bolster its auto line and boost its coverage of boats, recreational all-terrain vehicles and motorcycles.

New Capital Equals New Business

By requiring that new job candidates bring money to invest, the Florida-area Allstate hopes to eventually become a one-stop shop insurance provider to its customers. The hope is that its new candidates can help make this dream a reality.

The benefits for the candidates would include profits coming from investing premiums that are paid by customers before the company pays out a claim. For those who are able to invest, they could end up seeing some significant profits throughout their time with the auto insurance company.

If you live in the Florida area and are interested in this employment/investment opportunity, Allstate asks that you visit its website or call toll-free 1-877-711-1006.

AIG Posts $1.45 Billion Profit for First Quarter

Posted in AIG , Life Insurance , Life Insurance Companies

May 13th, 2010
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After raking in an impressive $1.45 billion quarterly profit, AIG says it is on its way to repaying the $182 billion government bailout it received in 2008 and 2009. The company already laid out a bailout repayment plan in April in hopes of showing how serious it is in paying back its debts to taxpayers. Now the life insurance company says that its recent profit could make its goal a greater reality.

First Quarter a Good One for AIG

AIG saw a first quarter income of $1.45 billion ($2.16 per share), which compares to a loss of $4.35 billion a year earlier, the company said on Friday. This is good news for the company but is not its first profit.

In fact, AIG has been able to post several profits since it received bailouts in 2008. This recent profit is the third in the past four quarters for the life insurance company.

The Company is on Track for Repayment

In addition to this quarterly profit, AIG has been selling its units in order to raise capital for repayment. In March, it agreed to sell American Life Insurance Company (ALICO) to Metlife for $15.5 billion. In the same month, the company sold its Asian life insurance to Britain’s Prudential PLC for $35.5 billion.

The company believes the sell-offs and profits show that it is stabilizing and essentially on the right track. However, it is still cautious about generating new business in various sectors, including its Chartis insurance unit, due to challenging economic conditions.

Since much of the life insurance company’s profit is coming from investments, some wonder how it will grow profit through internal business. Some say that investors are looking to see this growth or they may not continue to stay on board.

Why California’s Proposition 17 Matters

Posted in Auto Insurance , Auto Insurance Companies , Save on Auto Insurance

May 11th, 2010
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Coming up on next month’s ballot in California is a major auto insurance initiative that could have a huge effect on how drivers are charged for their coverage. The initiative is known as Prop 17 and has been making a lot of noise in recent months due to the continuous auto insurance discount.

Some say that the new proposition will be beneficial to customers because it offers a discount to individuals who are able to maintain their coverage continuously, even if they switch auto insurers. However, others say that those who are not able to maintain continuous coverage at no fault of their own could suffer from it immensely due to excessive surcharges.

Thanks to this bill, advocates and opponents have been fighting tirelessly for months to push their own agendas. Now, it will be up to voters to decide their fates.

The Fight Over Prop 17

If you’re not familiar with Prop 17, also known as the Continuous Coverage Auto Insurance Discount Act, then now’s the time to get up to speed. This proposition was introduced last year and heavily promoted by now troubled auto insurer Mercury Insurance. However, the proposition also received a lot of opposition, especially from Consumer Watchdog’s campaign affiliate, Campaign for Consumer Rights.

The organization believed that the proposition would unfairly punish individuals who were unable to maintain their continuous auto insurance coverage by charging them a major surcharge to re-establish their coverage. It felt that these heavily-promoted persistency discounts would only work for individuals under specific circumstances and would not help senior citizens, injured or disabled individuals and military personnel.

How Prop 17 Could Benefit Customers

Despite the fact that those who struggle to maintain their coverage could be hit with a surcharge if they want to reinstate their coverage, there are some benefits to this California persistency discount:

• Discount for continuous coverage: If you maintain your coverage continuously, you will be rewarded a discount on future auto insurance.
• Switch auto insurers without penalty: If you want to switch to a new auto insurance company, you can simply roll over your coverage credit like a 401(k) plan and still be considered a person with continuous coverage.
• 90-day grace period for insurance cancellations: If you do cancel your auto insurance for some reason, you have 90 days to reinstate it before you’re no longer eligible for the discount.
• Increased competition: With more auto insurance companies realizing that customers can switch companies and keep their discount, some predict that the industry will become more competitive in order to keep and lure in customers.
• The roads may be safer: If more people are able to take advantage of the persistency discount term simply for keeping their insurance, some think more will obtain and keep their insurance, which in turn helps keep the roads safer.

The Persistency Discount Isn’t New

While California is trying to make the persistency discount a law, the concept is actually not new for auto insurance companies. For instance, some are already able to take advantage of the AAA persistency discount and the Geico persistency discount if they are long-term customers.

However, the major difference between the discounts offered by these companies and the discount California is trying to implement is that you don’t have to stay with the same company to receive the discount.

California’s proposed insurance discount could possibly encourage other states to follow its lead if it is successful. This, in turn, could encourage more drivers to purchase auto insurance, which is something that benefits everyone.

How to Raise Your Insurance IQ

Posted in Insurance Rates

May 11th, 2010
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On a typical day, the average person makes hundreds of decisions and many of them occur without having the full grasp of the situation.

This is especially true when it comes to making choices regarding insurance coverage. According to a recent press release by the National Association of Insurance Commissioners (NAIC), their research has shown “…only 45% of Americans feel confident making insurance decisions and 86% do not fully understand terms used in current health care reform discussions.”

If your insurance IQ is a little lacking, you should take proactive measures to educate yourself on the subject. Luckily, there are plenty of steps you can take to educate yourself on insurance terms, insurance basics and gain the upper hand when it comes to managing your personal level of coverage.

• Baby Steps: Educating yourself on the variety of insurance coverage is a predecessor to all. Not sure where to start? Visiting the NAIC’s consumer education website, www.InsureUonline.org, is the first step.
• Read All About It: Next time an insurance story hits the news, take the time to read it. Only by facing your demons of insurance FAQ ignorance, will you be able to take the next steps.
• Dig Deeper: Informational overload can be especially dangerous to the naive. Next time you spot a story regarding insurance companies or any insurance term you may not be familiar with, write it down. Later, refer to your list and conduct your due diligence online.
• Open Your Mind: Depending on what news you watch, you may not be getting the full story regarding health insurance reform or any policy changes affecting the insurance industry. Going out of your way to seek conflicting views will provide you with the fodder required to make your own decisions.
• Ask Questions: Taking what you have heard about insurance coverage at face value can be a costly mistake. Regardless of whether you have health insurance, life insurance, auto insurance or even homeowners insurance, you need to review your policies and ask about lapses in coverage. In this case, go to the darkest recesses of your mind and ask if your coverage extends to any situation in the worst, case scenario.
• Shop Around: Comparison-shopping is not only a great way to save money, but a way to open your mind to new insurance terms. The more you research, the more exposure you will have to the secret language of insurance companies.

Honestly, no one is born insurance savvy. Luckily, we all have the brain capacity to learn new things over the course of our lifetime. Making the efforts to educate yourself on the nuances of the industry will enhance your confidence level and prepare you for handling insurance coverage for your family.

Autism Insurance Mandate Passes in Missouri

Posted in Health Insurance

May 11th, 2010
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An autism insurance mandate that would require health insurers to cover up to $45,000 annually of intensive therapy for autistic children passed Thursday by the Missouri Senate. Senators and parents of autistic children have been pushing for the legislation to pass for some time and now hope that a final version this health insurance bill can reach the governor’s desk by the May 14 end of the legislative session.

Specifics of the Autism Bill

The autism bill will cover a wide spectrum of neurological disorders that affect about one out of 110 children in the United States. The bill would be effective by the Missouri legislation on Jan. 1, 2011 and cover children through 18 years old for “applied behavioral analysis, which is an intensive therapy said to produce dramatic improvements in autistic children.

Legislation Applies to Employees of Small- and Medium-Sized Businesses

The victory for parents of autistic children is one that is designated for employees of small- to medium-sized businesses and only if their group health insurance policies are regulated by the state (employers with 50 or more employees would be exempt if they could prove that their premiums by 2.5 percent over the previous year). It would not apply to large employers that insure themselves and are regulated by the federal government. Also, Missourians who have individual insurance policies would be able to purchase autism coverage.

Bill Must Return to the House First

The bill needs to reach the governor’s desk by May 14; however, it’ must go back to the House first for final approval. The House passed a version of the bill earlier this year, but with lower coverage caps. If they pass the bill then this will mark a historic moment in health insurance where autistic children can receive funding for this expensive therapy.

Other states have pushed for their own autism legislation that would require health insurance companies to cover a portion of the therapy. Utah has been pushing for legislation for well over a year and hopes to pass its own bill that would be effective Oct. 1, 2010.

Senators Seek National Standards for Teen Drivers

Posted in Auto Insurance

May 11th, 2010
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Three Democratic senators are pushing legislation that would create a national graduated driver licensing (GDL) law. If successful, it would replace the various state laws around the country and create a single national standard that would encompass proven safety policies for teen drivers. Who knows, it could possibly even give parents a little help with improving their auto insurance rates.

Restrictions Proposed for National GDL Law

The Senate legislation is known as the Safe Teen and Novice Driver Uniform Protection (STAND UP) act. It is designated for new drivers under the age of 21 and would:

• Establish a three-stage process that would include a learner’s permit, intermediate state then unrestricted driver’s license.
• Prohibit unsupervised nighttime driving during the first two stages.
• Prohibit non-emergency use of cellphones and other mobile devices during the first two phases.

While some approve of the proposal, there is a bit of controversy associated with it as well. One reason is because of the age restriction portion of the proposal.

Right now, the age for many drivers to receive their permits is 14 or 15; however, with the new proposal, the permit could not be acquired until the age of 16 with unrestricted driving rights at 18. Some think this is simply too late an age to allow teens to drive unrestricted, while others praise the idea.

Another cause for controversy in the bill is the state compliance guideline. If states were to fail to comply with STAND UP’s minimum requirements after three years, they would lose some federal highway construction money. Many governors are not happy with this idea.

GDL Programs Reduce Car Crashes

While the proposal is meeting mixed reviews, there is no doubt that increased restrictions have made a difference in safety, and possibly even auto insurance premiums.

According to the Insurance Institute for Highway Safety, states that impose major restrictions like GDL programs see crash reductions of 10-30 percent. In Massachusetts alone, fatal crashes involving drivers under the age of 18 dropped 75 percent in the three years following tougher restrictions for younger drivers.

Some other states that have already taken steps to strengthen their state-wide GDL laws include:

• New Jersey: New Jersey strengthened its GDL law by adding a provision requiring teens with a driver’s permit or probationary license to display a special decal on their license plates. This is the first law of its kind in the nation.
• Illinois: In Illinois, lawmakers are considering reducing the amount of time that teens can drive on the weekend nights.

To date, every state except North Dakota has a licensing program for teens that includes three phases. Some programs go further to include restrictions on nighttime driving, limits on the number of teen passengers allowed in one vehicle and disallowing teens to get their learner’s permit before the age of 16.

The debate on whether to allow the federal government to get involved in GDL laws or keep it at the state level is sure to be a major one. But hopefully, whatever does occur will help to improve teen driving behavior and increase safety on the roads, which could in turn help create an environment for affordable auto insurance.