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Texas’ winter storm fiasco shows why some homeowners should rethink their own coverage

If all else fails, bringing up ‘bad faith’ can get an insurance adjuster's attention

The winter storm that recently shook Texas may be an aberration for the Lone Star State's typically mild winter, but it put both homeowners and insurers in a tough spot when it came to resolving the damage. The Insurance Council of Texas said it anticipated that hundreds of thousands of claims for water damage, leaking roofs, fallen trees, and auto accidents would be filed, and that one single week was the costliest in the state's history.

But a more profound pain may be...

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    Walmart goes all in on Medicare health plans

    Instead of going head-to-head, it’s cutting deals with major Medicare providers to offer consumers more options

    If you’re a senior citizen and Medicare insurance subscriber, you probably know that open enrollment is nearly upon us. This year, Walmart has decided to enter the Medicare insurance arena.

    During the annual enrollment period (AEP) beginning October 15 and running through December 7, Walmart’s new licensed insurance brokerage -- Insurance Services, LLC -- will help interested parties enroll in insurance plans. While it’s not calling out its competitors, Walmart is posturing itself by saying it’s simplifying what has historically been a “cumbersome, confusing process.” 

    “Health care can be complicated. But we think quality health care should be within reach of everyone, and pricing should be transparent and affordable,” said Lori Flees, SVP and COO, Walmart U.S. Health & Wellness, in the company’s announcement.

    “Our money-saving $4 generic prescription program and, more recently, Walmart Health locations are helping customers save money and live healthier. Similarly, our Healthcare Begins Here program has helped customers navigate the very complex health insurance system for years.”

    Ready for competition

    Walmart has its geographic ducks in a row and is licensed in all 50 U.S. states and Washington, D.C., but its move into Medicare insurance won’t be a cakewalk. There are beaucoup insurance brands offering direct-to-consumer Medicare plans already. However, Walmart thinks it has a way to circumnavigate all those issues. 

    At launch, Walmart Insurance Services will provide Medicare plans (Part D, Medicare Advantage and Medicare Supplement plans) offered by many of the larger insurers: Humana, UnitedHealthcare, Anthem Blue Cross Blue Shield, Amerigroup, Simply Health, Wellcare (Centene), Clover Health and Arkansas Blue Cross and Blue Shield. 

    And that’s just the starting point. Flees said that more carriers may be added in the future. 

    If you’re a senior citizen and Medicare insurance subscriber, you probably know that open enrollment is nearly upon us. This year, Walmart has decided to e...
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    State Farm and Nationwide join other auto insurers in giving coronavirus relief to customers

    Local communities will also take part in $5 million contributions to help their efforts

    Auto insurance customers have a couple more insurance company jingles to sing out loud. State Farm and Nationwide have joined Allstate, Geico, and American Family in announcing dividends that will go directly back to its customers. 

    State Farm’s Good Neighbor Relief Program

    The total program:  $2 billion

    The amount of credit per customer: On average, State Farm Mutual auto customers can expect to receive a credit of about 25 percent of premium on their coverage. The percentage will vary state-to-state.

    Dates the credit applies toward: The credit applies to coverage from March 20 through May 31 

    When the credit will go out: State Farm says that every single auto insurance customer will receive credits applied against bills, beginning as early as June.

    Could this continue if COVID continues: The company didn’t say if it would extend the program should COVID-19’s rampage continue, but it did say that it would “continue to monitor our loss experience and respond appropriately.”

    Nationwide’s premium refund

    Nationwide also announced that it is offering a one-time premium refund on top of existing discounts that customers may have already earned.

    Here are the program’s particulars:

    Who will receive the refund? Anyone who has a personal auto policy active as of March 31, 2020. PowerSports and motorcycle policies are excluded.

    The amount per policy: A one-time payment of $50 -- equivalent to about 15 percent in Nationwide’s estimation.

    Dates the credit applies toward: Nationwide said the refund is for two months worth of premiums, but it did not specify exact dates. 

    What customers have to do: “You don't need to do anything,” Nationwide wrote in an email to its customers. 

    How it will show up:  It will be returned to customers in the last form of payment they have made, whether electronic or paper. The refund will arrive in the next 30 days and is subject to individual state regulatory approval.

    When will customers see theirs? “Refunds will automatically be credited to your most recent method of payment (for example, automatic withdrawal, credit card, personal check) within the next 30 days, subject to regulatory approval,” Nationwide said. 

    Could this continue if COVID-19 continues: The company didn’t say if it would extend the program should COVID-19’s rampage continue.

    As a side note, Nationwide is also offering extended payment terms for customers who might be experiencing hardship due to the pandemic. 

    Giving back to the communities

    State Farm and Nationwide are both taking a chunk of what they’ve saved in out-of-pocket costs during COVID-19’s impact on traffic.

    State Farm is taking its good neighbor mantra past the customer level by providing $5 million in donations across the country. Nationwide is matching that with a $5 million contribution from its  Nationwide Foundation. The company said those funds will be directed toward local and national charities to support pandemic response efforts.

    Questions?

    As it typically goes with things like this, consumers are going to have questions that State Farm or Nationwide didn’t cover in their announcements. 

    If that’s the case, State Farm and Nationwide both have FAQ pages that might answer any additional questions. State Farm’s can be accessed here, and Nationwide’s can be found here.

    Auto insurance customers have a couple more insurance company jingles to sing out loud. State Farm and Nationwide have joined Allstate, Geico, and American...
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    Understanding health insurance could affect other financial decisions for cancer survivors

    Researchers have discovered an added financial burden linked to the disease

    A new study conducted by researchers from the American Cancer Society explored the financial implications that cancer survivors need to contend with and how health insurance plays a role. 

    According to the researchers, struggling to understand health insurance policies or medical bills is rather common. In these instances, that stress can spill out into financial decisions that aren’t medical, as well as into other areas of life. 

    “Growing evidence suggests that health insurance literacy is a nationwide problem in the United States, and is associated with adverse effects,” the researchers explained. 

    Health insurance literacy

    To better understand how health insurance literacy plays a role in cancer survivors’ day-to-day lives, the researchers conducted a survey of over 900 adult cancer survivors. 

    The survey covered a wide variety of questions designed to gauge participants’ current financial status, including how confident they feel reading and understanding medical bills and other medical documents, to what extent their medical care has been compromised by that lack of knowledge, and how their daily habits are affected or have changed following treatment. 

    Overall, nearly 19 percent of survivors under the age of 65 and over 14 percent of survivors over the age of 65 reported problems with health insurance literacy. The researchers learned that when survivors struggled to understand their medical bills, or had questions regarding their health insurance policies, they felt it in other areas of their lives. 

    Survivors were more likely to make financial sacrifices in other areas of their lives -- such as dipping into their savings earlier than planned or changing their living situation -- when they struggled with understanding the full spectrum of their health insurance. 

    The study also revealed that health insurance literacy problems contributed to higher instances of mental health concerns for cancer survivors. The researchers suggest that work be done in this area to help ease the financial burden associated with medical care. 

    “Interventions such as financial and health insurance navigation, decision aids, and more user-friendly and easier-to-read medical bills, which improve patients’ understanding of health insurance and medical costs, could potentially be applied to improve health insurance literacy and benefit cancer survivors,” the researchers wrote. 

    A new study conducted by researchers from the American Cancer Society explored the financial implications that cancer survivors need to contend with and ho...
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    Buying minimum car insurance coverage can be costly later on

    An analysis shows that consumers with basic insurance pay higher rates when they upgrade

    Car insurance customers who purchase the bare minimum coverage required by their state pay a higher rate when they upgrade insurance policies.

    That’s the conclusion of a Consumer Federation of America (CFA) analysis that compared  premium quotes from six companies in several cities for consumers who bought the least coverage and those who purchased more extensive coverage.

    “Auto insurance is not just mandatory in most states, it is an important asset protection tool,” said J. Robert Hunter, CFA Director of Insurance and a former Texas Insurance Commissioner. “As folks’ financial situations improve and they opt to buy more coverage, they should expect equal access to the products and services available to others. Pricing auto insurance based on drivers’ prior purchases is both actuarially unwarranted and an entirely unfair tax for being poor.”

    A la carte

    Getting the best rate on car insurance, it seems, is based on a lot more than just a driving record. In all but a handful of states, carriers often use a consumers’ zip code or credit score to assign risk. Fabio Faschi,  Property and Casualty Team Lead at Policygenius, says that’s why consumers need to understand how car insurance works and what it is they’re buying.

    “Auto insurance, compared to some other types of insurance, is very ala carte in terms of choosing the types of coverages you might or might not want, and how much of that coverage you want,” Faschi told ConsumerAffairs.

    And that, unfortunately, leaves a lot of room for confusion. Auto insurance has two functions: it protects a consumer’s property and it also protects them from being held responsible for the damage they cause to other people’s property.

    Liability coverage

    The minimum coverage states require drivers to have is liability insurance. It pays the other driver if you cause an accident. 

    “This is what most consumers should be most concerned about because liability coverage is what’s going to protect you if you cause damage to others,” Faschi said.

    Collision insurance pays you if you damage your car in a single-vehicle accident. If you’re financing your vehicle, the lender will likely require some collision coverage, as well as what’s known as comprehensive insurance.

    “Comprehensive is essentially going to protect your car from other types of damage, such as weather-related damage,” Faschi said.

    All three types of coverage add to the cost of the monthly premium. If you have all three, your cost will be higher than if you only have liability coverage.

    Deductibles

    Deductibles are another feature that can add to or reduce the cost of insurance. In the event of a claim, the deductible is the amount you have agreed to pay out-of-pocket before the insurance company starts to pay. 

    Deductibles generally range from a low of $100 to a high of $1,000 or $1,500. The higher your deductible, the lower your premium because the insurance company is shifting more of the risk to you.

    “Insurance is generally all about risk tolerance and the trade off between what you would be guaranteed to pay (through higher premiums) or between what you might potentially have to pay (out of pocket) in the event of an incident,” Faschi said.

    But the best way to make sure you are getting the best car insurance rate is to shop your policy around to other companies. And Faschi says, it’s a good idea to do that often -- even once a year.

    “The market does shift, though it’s not going to shift drastically from year to year. It’s really just a matter of covering your bases and making sure there weren’t any shifts that create a better deal.”

    Car insurance customers who purchase the bare minimum coverage required by their state pay a higher rate when they upgrade insurance policies.That’s th...
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    Hospitals charge privately insured more than double what Medicare would pay

    Researchers say driving down high prices should be a focus going forward

    Major discrepancies are present between the prices paid to hospitals for privately insured patients and what the federal Medicare program pays, according to a RAND analysis of hospital prices in 25 states.

    Overall, hospitals treating patients with private health insurance were paid 2.4 times the Medicare rates in 2017. RAND researchers found that the difference was most significant for outpatient care. In those cases, private prices were nearly triple what Medicare would have paid.

    "The widely varying prices among hospitals suggests that employers have opportunities to redesign their health plans to better align hospital prices with the value of care provided," said lead author Chapin White in a statement. "Employers can exert pressure on their health plans and hospitals to shift from current pricing system to one that is based on a multiple of Medicare or another similar benchmark."

    Suggested interventions

    The researchers say changes are needed to drive down hospital prices in the private sector, whether they be in the form of federal intervention or a shift in industry behavior.

    The study authors recommend that private insurers switch from discounted charge contracts for hospital services and to contracts “based on a percent of Medicare or another similar fixed-price arrangement.”

    "Employers can also encourage expanded price transparency by participating in existing state-based all payer claims databases and promoting the development of such tools," White said. "Transparency by itself is likely to be insufficient to control costs so employers may need state or federal policy changes to rebalance negotiating leverage between hospitals and their health plans."

    Legislative interventions might include placing limits on payments for out-of-network hospital care or allowing employers to buy into Medicare or another public option that pays providers based on Medicare rates.

    Hospitals raise concerns

    After the study was published, the American Hospital Association said it had a “number of concerns” about the results of the analysis.

    In addition to pointing out the limitations of the small sample size, the group argued that paying hospitals at Medicare rates would have a huge impact on the industry and could cause many hospitals to close.

    “Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices,” the AHA said in a statement. “In 2017, hospitals received payment of only 87 cents for every dollar spent caring for Medicare patients.”  

    “Simply shifting to prices based on artificially low Medicare payment rates would strip vital resources from already strapped communities, seriously impeding access to care. Hospitals would not have the resources needed to keep our doors open, innovate to adapt to a rapidly changing field and maintain the services communities need and expect,” the AHA said.

    Major discrepancies are present between the prices paid to hospitals for privately insured patients and what the federal Medicare program pays, according t...
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    Affordable Care Act enrollment season begins

    The sixth sign-up season brings several changes, including the availability of short-term plans

    The six-week-long Affordable Care Act enrollment season kicked off on Thursday, and this year consumers will find more choices and stabilizing premiums.

    “From a consumer perspective, the experience should be pretty good,” Kelley Turek, a policy specialist at America’s Health Insurance Plans, told Axios.

    Here’s what’s new in the ACA’s sixth signup season:

    • Short-term plans, which are typically cheaper, will be available for consumers to purchase as an alternative to comprehensive ACA plans;

    • Nationally, average premiums are going up only by low single-digit percentages for 2019;

    • Insurance brokers are expanding their participation this year because President Trump has cut funding for healthcare navigators -- people who get federal money to help customers compare their options and sign up for health coverage; and

    • There won’t be a penalty for not buying health insurance, a change that takes effect in January.

    Alternative coverage

    Administration officials view the availability of short-term health plans and “association health plans” as a means of expanding lower-cost options for consumers. Premiums for short-term plans are around 54 percent lower than they are for comprehensive policies, according to a new study from the Henry J. Kaiser Family Foundation.

    However, some say the additional options could lead to consumers buying less coverage than they need. Turek noted that they could also be a practical option for individuals who can’t afford ACA coverage, but consumers should be sure they know what they’re signing up for because short-term plans can have big gaps in coverage.

    Consumers can enroll for health care coverage under the ACA by visiting www.HealthCare.gov. Enrollment for 2019 ends on December 15.

    The six-week-long Affordable Care Act enrollment season kicked off on Thursday, and this year consumers will find more choices and stabilizing premiums....
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