Tag: insurance

What Is Long-Term Care Insurance?

  • 30/04/2023
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According to the US Department of Health and Human Services, the typical person who turned 65 in 2020 has about a 70% chance of needing some sort of long-term care or assistance during their older years. And the costs of this type of care are high — the average person needing care at home will spend about $54,000 per year or $4,500 per month, and a person who needs a room in a care facility will pay an average of about $96,000 per year or $8,000 per month according to 2022 data from HCG Secure.

With costs so high, paying for long-term care can quickly drain your savings and limit your options for higher-quality care. Long-term care insurance can play an important role in ensuring you or a loved one spends the last chapters of life in comfort, but you need to know the ins and outs of this product before deciding if it’s right for you.

What is long-term care insurance?

Long-term care insurance can help you cover the expenses associated with getting skilled care for an extended amount of time for chronic health conditions. “What long-term care insurance does is it provides more day-to-day things,” says Peggy Haslach, a certified financial planner at Finity Group.

It’s separate from health insurance, including Medicare, which generally doesn’t cover these costs. While Medicaid can cover costs, not all facilities accept Medicaid payments.

You don’t have to move to a facility to gain the benefits of long-term care insurance — it can also cover the cost of care at home, including training for family members and in-home assistance. Long-term care insurance may also cover home modifications that make your living space more accessible and comfortable, such as ramps and shower handles.

How does long-term care insurance work?

Long-term care insurance kicks in when you’re experiencing difficulties living life on your own. Generally, insurance companies classify this according to the six activities of daily living, or ADLs:

  • Bathing
  • Continence
  • dressings
  • eating
  • Transferring (getting from a bed to a chair)
  • Toileting

When someone loses two of these six ADLs, they may be able to trigger their long-term care insurance benefits. In addition, certain cognitive issues associated with Alzheimer’s and dementia can automatically put your policy’s benefits into effect (although this usually requires a doctor’s evaluation).

After the benefits are triggered, you’ll still spend a certain amount of time (called the elimination period) paying out of pocket. The elimination period varies from policy to policy but is usually either 30, 60, or 90 days. After that period, your insurance will cover the rest of the costs up to a daily limit.

However, many policies have lifetime maximums on how long they will pay out — generally, two to four years of care, though unlimited policies do exist. If there’s a limit on your policy and you exceed it, you’ll need to dip back into your savings to cover costs. A high-yield savings account, such as UFB Premier Savings or Marcus by Goldman Sachs High Yield

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The insurance limit on your savings has become a hot global debate

  • 29/04/2023
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London
CNN
—

If my bank fails, how much of my savings will I get back?

It’s a scenario no one likes to think about. But in the past 15 years, it has unfolded with particular drama on several occasions — during the 2008 global financial crisis and again since mid-March, as turmoil has gripped the banking sector.

The US Federal Deposit Insurance Corporation insures deposits up to $250,000 per person, per account, using a fund that banks pay into. But last month, when Silicon Valley Bank and Signature Bank failed in rapid succession, the FDIC, backed by Treasury Secretary Janet Yellen, stepped in to insure all deposits. It could do so again if the ailing First Republic Bank implodes despite multiple bailout measures.

That would be controversial. A fierce global debate has erupted over whether regulators should have agreed to reimburse everyone, including those with millions of dollars in their accounts.

The decision has also raised questions about whether current banking rules are sufficient protect individuals, businesses and the broader financial system.

“We have a long history now of protecting all depositors every time a bank gets in trouble,” said William Isaac, who managed hundreds of bank failures as head of the FDIC during the cumulative period in the early 1980s. “I don’t think that’s served us well.”

Some argue the US deposit insurance limit should be 100 times higher. Others claim increasing the cap would lead to much riskier behavior among lenders.

Lawmakers in Washington are discussing reforms, although no clear proposals have emerged so far. The FDIC, which is undertaking a “comprehensive review,” will release policy recommendations by May 1.

Across the Atlantic, Bank of England Governor Andrew Bailey has said regulators are considering changes to the UK deposit insurance program, which protects holdings up to £85,000 ($105,995).

Here’s what you need to know.

Deposit insurance exists to protect individuals and small businesses from bank failures and to help shield the economy from nasty aftershocks when a lender collapses.

How it works is straightforward: If your bank goes under, you’re guaranteed to get your money back, up to a certain limit.

The system is also designed to avert bank runs. Banks make money by taking in deposits and charging interest to lend them out. However, that means they never have enough cash on hand to pay all depositors at once. When such simultaneous demands come in, the lender is in trouble.

Deposit insurance is aimed at calming fears, giving customers less reason to withdraw their cash out in a hurry. It’s intended to make the entire banking system more stable.

Regulators aren’t sticking to their own rules.

The FDIC insured all deposits at Silicon Valley Bank and Signature Bank last month using a Treasury exemption. FDIC Chair Martin Gruenberg told Congress this step was necessary to stop the alarm spreading across the financial system, and to ensure affected companies could pay staff and honor deals with suppliers.

At both Silicon Valley Bank and Signature Bank, more than

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BofA CEO Says Deposit Insurance ‘Worked Pretty Well’

  • 27/04/2023
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The deposit insurance system “works pretty well,” said Bank of America CEO Brian Moynihan.

Speaking Thursday (April 20) at a Bloomberg event, Moynihan said deposit insurance funded by banks succeeded in protecting customers during the “fair amount of disruption” recently seen among regional banks, Bloomberg reported Thursday.

“The industry pays for the deposit premiums. We insure ourselves,” Moynihan said, according to the report. “The government is the go-between to make sure people believe it’s there. And they get the money back from us.”

Any changes to the current deposit insurance process “ought to be carefully dealt with only because it’s been in place since the ’30s and it’s worked pretty well,” Moynihan said.

At the end of a quarter in which the collapses of three banks led investors to closely watch the deposit flows at other smaller banks, several regional banks reported their deposits were stable.

Regional banks were disproportionately affected by the collapse of Silicon Valley Bank that touched off a deposit flight to the presumed safety of financial giants thought to be “too big to fail.”

As PYMNTS reported in March, the recent turmoil around Silicon Valley Bank and Signature Bank touched off a larger debate over how to stop contagion in the banking sector, who’s protected and who’s not.

The current $250,000 cap on deposit insurance is not set in stone — regulators can make what is known as a “systemic risk exception” where the Federal Deposit Insurance Corp. (FDIC) lifts the ceiling — but the cap is still in place and at least some deposits are not safe.

So, the debate rages on about how to protect bank customers — and how much protection they need.

Meanwhile, chief financial officers (CFOs) are pursuing cash diversification strategies to ensure stability and reassure their boards.

Karbon CFO Frank Colich told PYMNTS in early April, “Clearly, a microscope is now turned on treasury management. It creates a little bit more effort on our end to make sure we’re diversifying our risk as much as possible on how we’re managing our cash.”

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Auto Insurance Shopping Rises as Consumers Seek Better Rate

  • 26/04/2023
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New You can now listen to Insurance Journal articles!

Auto insurers have been forthcoming in their desire to achieve rates to match increases in claims costs and, so far in 2023, consumers are not standing by.

According to a quarterly report from JD Power, in collaboration with TransUnion, the quote rate for auto insurance in the first quarter of 2023 was 12.4% and the switch rate was 3.9%. The quote rate is a new high in the three-year history of JD Power’s quarterly loyalty indicator and shopping trends (LIST) report.

“A new record in our data series was seen in March as 13.1% of consumers reported shopping for auto insurance in the 30 days prior to responding to our survey,” said JD Power.

TransUnion data showed Gen X and Gen Z led the way in price shopping, and Western US was the most active for auto insurance shoppers.

JD Power noted that Progressive surpassed GEICO in 2022 to now hold the largest market share among personal auto insurers, and this latest quarterly report was the first to find that GEICO did not capture the largest share of any large competitor’s defectors.

“GEICO is struggling to maintain its share of customers in response to closing down sales channels in states where they were rate-inadequate,” said JD Power. “Progressive has benefited and is seeing increases in the number of customers who select the brand as their auto insurance carrier when they make a switch.”

Related: Rising Auto Rates Affecting ‘Bundle’ Strategy: JD Power

Among the top insurers, consumer loyalty was strongest for Erie, Amica, USAA, New Jersey Manufacturers (NJM), and MAPFRE. It was lowest for COUNTRY, National General, GEICO, Progressive, and Kemper, according to the report.

Topics
Trends Auto Pricing Trends

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Surgeons, Intensivists Earn the Most From Private Insurance

  • 23/04/2023
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General and orthopedic surgeons and intensivists earn the highest net reimbursement from private US insurers, a new report estimates.



On average in 2021, they were paid $5.8 million, $4.9 million, and $3.3 million, respectively, according to figures compiled by AMN Healthcare, a Dallas-based health staffing company.

None of 15 other physician specialties topped $3 million in net reimbursement on average, and three — dermatology, pediatrics, and family medicine — didn’t reach $1 million.

The report doesn’t include data about reimbursement from Medicare and Medicaid, and its numbers assume that 50% of insurance claims are denied. Denial rates differ from practice to practice.

Still, the findings offer a “benchmark tool” to help clinicians understand how they rank against their peers, said Linda Murphy, president of AMN Healthcare’s Revenue Cycle Solutions division, in an interview.

This is the first year that the company has calculated physician reimbursement levels by using claims and clearinghouse data, Murphy said. Previously, a division of the firm compiled data by surveying chief financial officers from hospitals.

The report’s estimate that insurers denying 50% of claims is “conservative,” Murphy said. Miscoding is a significant factor behind that number, she said.

Here are the estimated 2021 net private insurance reimbursement by specialty for direct services, assuming a 50% denial rate:

Anesthesiology: $1,665,510
Cardiology: $1,703,013
Critical Care (intensivist): $3,338,656
Dermatology: $729,107
Family medicine: $697,094
Gastroenterology: $2,765,110
Internal medicine: $1,297,200
Neurology: $1,390,181
Obstetrician/gynecologist: $1,880,888
Otolaryngology: $2,095,277
Pediatrics: $661,552
Psychiatry: $1,348,730
Pulmonology: $1,561,617
Radiology: $1,015,750
Rheumatology: $1,705,140
General surgery: $5,834,508
Orthopedic surgery: $4,904,757
Urology: $2,943,381

Among 18 physician specialties overall, the report estimated that the average net reimbursement in 2021 was $1.9 million.

The report also estimates that the net reimbursement amounts at $875,140 for certified registered nurse anesthetists and $388,696 for nurse practitioners.

Surprisingly, Murphy said, there’s a “really big swing” among reimbursement levels for individual specialties. The quartile of cardiologists with the lowest level of reimbursement, for example, submitted $2.1 million in claims in 2021, netting about $1 million at a 50% denial rate vs the $7.3 million made by those in the highest quartile, netting about $3.6 million.

The gap seems to be due to regional variations, she said, adding that a rural cardiologist will have different billing practices than does one practicing in New York City.

The quartile of general surgeons with the highest reimbursement levels billed for $21.1 million on average in 2021, making about $10.5 million at a 50% denial rate. The lowest quartile billed for $5.5 million, making about $2.7 million at a 50% denial rate.

The report notes that primary care physicians, that is, family medicine, internal medicine, and pediatrics specialists, have much lower levels of reimbursement compared to most other specialties. But the work of primary care physicians “may lead to considerable ‘downstream revenue’ through the hospital admissions, tests and treatment they order,” the report noted.

A previous analysis by a division of AMN Healthcare found that primary care physicians, on average, generate $2,113,273 a year in net annual revenue for their affiliated

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