Posts Tagged ‘insurance’

FDIC Insurance Coverage Permanently Increased

September 21, 2010

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permanently raises the current standard maximum deposit insurance amount to $250,000. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.

The standard maximum insurance amount had been temporarily raised from $100,000 to $250,000, effective from October 3, 2008, through December 31, 2013. This permanent increase of deposit insurance coverage means depositors with CDs worth more than $100,000 but less than $250,000 will no longer have to worry about losing coverage on those CDs maturing beyond 2013.

Insured deposits provide peace of mind to depositors that their money is 100 percent safe – provided they keep their deposit balances within the insurance limits. The FDIC encourages all bank depositors who have questions about their insurance coverage to visit their website or call 1-877-ASK-FDIC.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,932 banks and savings associations and promotes the safety and soundness of these institutions by identifying, monitoring the addressing risks to which they are exposed. The FDIC receives no federal tax dollars. Insured financial institutions fund its operations.

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More Changes to Medicare

June 30, 2010

As of June 1, people shopping for Medicare supplement insurance, or Medigap coverage, have some new options. Insurers have started selling two new lower-cost Medigap policies and stopped offering four others. At the same time the federal government, which regulates Medigap benefits, started requiring plans to cover at least a portion of hospice costs. Changes in Medicare

Medicare doesn’t pay for everything. Because patients are required to pay a portion of some of their bills, about 89% of the 47 million people with Medicare have some form of supplemental health insurance. Many opt for a federally subsidized private Medicare Advantage plan or they receive supplemental coverage from a former employer. Close to one-fifth purchase a Medigap policy.

These plans are sold by private insurers and offer standardized menus of benefits. As with most insurance policies, the more benefits you want, the higher the premium.

Whether the recent changes to these plans have an impact on you depends, in part, on when you purchased your Medigap policy. If you enrolled before June 1, you can hold onto your policy – even if it’s no longer being sold – and your benefits won’t change. Consumers are not required to purchase a new plan.

The changes apply only to Medigap plans sold after June 1. On that date, insurers stopped selling some of the plans partly because those plans offered some benefits now covered under original Medicare or Part D prescription-drug plans.

The new options charge lower premiums than most Medigap plans, but consumers must pay a higher share of the cost for various services, such as paying half of the $1,100 deductible for hospitalizations, or paying $20 for each doctor’s visit and $50 for emergency services.

Regardless of which Medigap policy you choose, if you are buying now, you will receive a new benefit covering some portion of the cost of drugs and respite care that are part of hospice care. The hospice benefit isn’t available to people who keep their existing plans, so some consumers may be tempted to switch plans. But there are potential downsides to doing so.

In many states, insurers are required to issue Medigap policies only under certain circumstances, such as when someone age 65 or older applies for coverage within six months of enrolling in Medicare Part B, which covers doctors’ visits. So someone who tries to switch plans at a later point may be denied coverage or charged a higher premium due to existing health problems or advancing age.

For more information on Medigap plans, visit medicare.gov and the Medicare Rights Center’s site (medicareinteractive.org). You can also contact your State Health Insurance Assistance Program or your state Department of Insurance.

When the Insurer Doesn’t Pay

June 25, 2010

The New York Times has been running a series on how the healthcare overhaul will affect peoples’ everyday lives. The most recent article addresses the issue of denied claims. It opens by stating that, “Fighting with a health plan over a denied claim can leave people feeling they’ve been injured all over again.”

The options for challenging an insurance company’s denial are limited. Appeals can be slow and cumbersome, if they are available at all, and most patients are barred from suing for damages resulting from denials and delayed treatments.

The new health law makes the system somewhat more consumer-friendly. Starting this fall, patients in all health plans can contest claim denials in an independent state-level review procedure. This recourse has not generally been available to employees of companies that pay their employees’ health claims directly.

Unfortunately, the provision does not apply to plans that were in existence on March 23 when the health law was enacted. Nor does the new law make it any easier for consumers to sue for punitive damages or for pain and suffering. People covered by employer health plans can sue in federal court only for the cost of the benefit that was denied them. Some state courts provide stronger remedies, but only to people with individual health insurance policies.

Some experts say that those who hoped for more powerful weapons to fight claim denials are likely to be disappointed. The new provisions do not significantly change existing law. They simply solidify where things are. Under the current system, health plans must have an internal appeals process. The process usually has more than one level of appeals, and the original denial is typically upheld.

Most states already offer an independent review of denials. The new law will extend that option to every state, as well as to the self-funded plans.

External reviewers rule in favor of consumers about half the time, but few people take advantage of them. A lot of people don’t know the external review process exists, or that they may have to exhaust multiple levels of internal appeals first.

Some states also require consumers to pay up to half the cost of an external review, and some allow the insurer to refuse to maintain insurance coverage during the appeals process. Consumer advocates hope that additional rules governing changes to the appeals process under the new health law, to be issued shortly by the Department of Health and Human Services, will address these and other concerns.

Finding an attorney to take the case can also being challenging. Because no damages are permitted, lawyers have no financial incentive to take them. And the same lack of financial incentive applies to the insurer, who has little to lose except the cost of the treatment denied.

The full article can be found here.

Not Paying for Insurance Could Cost You

June 4, 2010

Wisconsin’s mandatory auto insurance law took effect June 1. All motorists operating vehicles in the state must carry proof of insurance, which police can ask for during any traffic stop. Failure to carry proof of insurance, usually in the form of a card from the insurer, means a $10 fine. Failure to have vehicle insurance carries a fine of up to $500. Offering proof of insurance that is found to be fraudulent may result in a fine of up to $5,000.

According to police estimates, the state has about 14% uninsured motorists.

According to an article on jsonline.com, the new rules and confusion over them have caused customers to flock to insurance offices statewide. Several agents said they’ve had double or triple the normal number of calls and visits about auto insurance this week.

Agents also have to explain the terminology of auto insurance and the types of coverage to customers who have never had it before. To add to the potential confusion, agents in some cases are telling drivers that the new state minimum coverage rules don’t really do enough to protect them. You may want to protect your assets by purchasing more coverage than what is provided in the minimum policy required in Wisconsin. Higher limits are available for an additional premium.
Your automobile insurance policy must provide the following minimum liability coverage:
•    $50,000 for injury or death of one person;
•    $100,000 for injury or death of two or more people; and
•    $15,000 for property damage.

The law also requires uninsured and underinsured motorist coverage each with minimum limits of $100,000/$300,000 for bodily injury coverage.

There is no requirement that you provide proof of insurance when you obtain your driver license or are registering a vehicle, unless that information is requested by DMV and is a requirement before reinstatement of a driver license after a suspension or revocation.
Insurance agents acknowledge that the new insurance rules have customers complaining about prices. Advocates for the poor say people who now are driving without insurance will be even less able to afford it because changes in the law make minimum coverage more expensive. But 48 other states already had mandatory auto insurance. As of June 1, New Hampshire is the only state not mandating coverage.

Health Insurance for Adult Children? Not so fast…

May 18, 2010

In late April I blogged about the new health reform law that goes into effect Sept. 23 allowing parents to keep an adult child on their health plan until age 26. But, what many people – my wife and me included – did not realize is that the new rules allow employers to wait until the start of the next plan year (typically January 1) before allowing parents to add adult children to their coverage.

We discovered this while looking into a short-term insurance policy for our 24-year-old son who is impacted by this law. We were quite surprised to learn the law is different than we first thought.

The period of time during which the new graduate will not have health insurance could be longer than first anticipated. Check with your insurance company or the administrator of your insurance plan to see if they are offering coverage during this gap. Even before the new rules kick in, many insurers are allowing graduating students to remain on their parents’ policy, but if your graduate will be dropped upon graduation, be sure to get a short-term insurance policy for them to cover the gap. Health insurance for young adults is relatively inexpensive. A policy with a high deductible for someone in their 20s can cost less than $100 a month in Wisconsin.

Health Care Reform: Health Insurance for Adult Children to Age 26

April 23, 2010

Effective September 23, 2010, the Patient Protection and Affordable Care Act requires group health plans and health insurers (who offer group or individual policies which cover dependents) to cover adult children on a parent’s plan until the child’s 26th birthday.   This has been trumpeted recently in the press, but there are a couple of things you need to know.

The child does not have to be a student or a dependent for tax purposes.  The insurance is not taxable to the child.  The term “adult child” for purposes of this requirement means a son, daughter, stepson, stepdaughter, or legally adopted or eligible foster child of the employee or insured. If your adult child has a child, there is no requirement to make coverage available to your grandchild.  Until 2014, this is only applicable to children who are not otherwise eligible to enroll in an employer-sponsored health plan.  If they are eligible, then they must use that insurance plan.

That it doesn’t go into effect until September presents problems for families with spring graduates.  There will be a period of time during which the new graduate will not have health insurance (between graduation and September 23rd).  Check with your insurance company or the administrator of your insurance plan to see if they are offering coverage during this gap.  Some insurance companies and plans are offering coverage because they are realizing the hassle and cost of dropping the new graduate and then re-enrolling them on September 23.  If your graduate will be dropped upon graduation, then be sure to get a short-term insurance policy for them to cover the gap.  Don’t take the risk.

Many states have existing laws which require insured plans to provide similar or more expansive coverage of dependents.  This new federal law will not change them and they will continue to apply.  Wisconsin is not one of those states.

Enroll for Medicare Online

April 20, 2010

The Social Security Administration (SSA) has just launched a new service that allows people to enroll online for their Medicare benefits even if they are not yet ready to file for Social Security benefits. About a half million Americans enroll in Medicare each year without applying for Social Security benefits.

The new online Medicare application makes it easier for people to enroll in Medicare. It saves a trip to the Social Security office, and you can complete the application at your own pace at home. The SSA says it takes less than 10 minutes to complete.

You can use the online Medicare application if you are at least 64 years and 8 months old, do not want to start receiving Social Security benefits in the next four months, and live in the U.S. or one of its territories or commonwealths. The application guides you through a brief set of questions that will help you consider either filing for Social Security and Medicare benefits, or filing only for Medicare. There are links to more information for people who have questions.

To use the new online application, click here.

Statistics – Long-term Care Insurance

February 12, 2010

I have discovered that getting good statistics on long-term care is equally as difficult as getting them for disability. After reading the New York Times article on disability statistics, I couldn’t help thinking that there might be the same problems with what was being said to encourage people to buy long-term care insurance. I made some inquiries and today I got a 137-page report on the subject from the Society of Actuaries.

I intend to read it this weekend. I’ll report back next week with my conclusions.

This is especially important to me because I am in the process of buying long-term care insurance for my wife and myself. As many of you may know, I have been an advocate of this insurance. Now I’ll be forced to reexamine my thoughts on the matter.

There are Statistics, and then there are Statistics

February 8, 2010

On Saturday, February 6, the New York Times had a great article about disability insurance. As a lawyer dedicated to helping people protect their families and businesses, the article shed light where there had been little in the past.

My experience is that disability planning tends to be neglected. Few do it, but nearly everyone should. In an earlier blog entry, I discussed one element of disability; setting aside cash equal to six months to two years of gross income. The New York Times article discusses disability insurance as a legitimate planning tool. The article points out that insurance companies and planners have been overstating the odds of being disabled. For years we have been hearing that a 25-year-old has an 80 percent chance of suffering a disability before age 65 that would result in being out of work for at least 90 days.

As it turns out, for a variety of reasons, this was not accurate. An analysis by the Disability Experience Committee of the Society of Actuaries shows that a 25-year-old actually has a 30 percent chance. Actuaries are high-power mathematicians trained to do these studies.

Personal factors can make your chance even less. White collar workers have less chance. If you have no chronic conditions, eat healthy, and avoid cigarettes, your odds may drop to 10 percent.

Even then, disability planning is important. You may get little or no disability pay from your employer. Social Security may not provide help. It can take more than a year for your claim to be processed. If you have to appeal, it will be much longer. Besides, Social Security disability payments may be too small to cover your needs.

If you are interested in more information on this subject, you can find the original article and additional details here.

Continued Travails of a Baby Boomer

January 13, 2010

Like many, I get my health insurance through my spouse’s employer. It’s great coverage, but things really change when I turn 65 and am eligible for Medicare. I will no longer get coverage. That is not necessarily the result for all employer plans. You need to check the actual policy to be sure.

In any event, I have to make sure I have alternative insurance in place when I turn 65. I don’t want to be like a client I once had who also lost coverage at 65 and assumed that he was automatically enrolled in Medicare. He continued to work and did not apply for Social Security. About three months after turning 65, he had a major medical problem that cost tens of thousands of dollars. That’s when he found out that he did not have insurance and did not have Medicare. He was on the hook for all of it. Needless to say, it put a dent in his retirement plans.

Medicare has four components: Part A is hospital insurance, Part B is medical insurance (physicians, outpatient services, medical supplies and home health care), Part C is the alternative option of managed care, and Part D is the prescription drug benefit.

People are automatically enrolled in Part A when they apply for Social Security. For people like me who are not going to apply for Social Security until later, there is a separate Medicare application. I intend to get started on that application at least 90 days before I turn 65.

I am also going to get Part B. It’s not hard because everyone who gets Part A is automatically enrolled in Part B. You have to decline enrollment if you don’t want it. I am going to enroll in Part B (regardless of whether or not there is coverage under my wife’s insurance at that time) because there is a 10 percent penalty tacked on to the premiums for each 12 months of delay after age 65. I don’t want that additional cost later.

Besides Medicare, I am going to get long-term care insurance and a medigap policy. A medigap policy is health insurance sold by private insurance companies to fill the gaps in Medicare plan coverage. Medicare does not have any really effective benefits for long-term care, whether in the home, assisted living, or a nursing home. Medicare has gaps in coverage (some great names for them… donut holes). These policies will address those gaps.

We are all waiting anxiously for the outcome of the continuing healthcare debate in this country. It’s likely to go on for quite some time. But these are my conclusions for handling the baby boom problem, especially if you are not retiring at 65.

“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt