Personal Finance News

UCLA's Center for Health Policy Research surprised everyone when they reported on March 16 that nearly one in four Californians, or 8 million, lacked health insurance during 2008 and 2009. That represents an increase of nearly 2 million in just one year because of the deep recession and mass layoffs.

But California isn't alone in those dismal statistics. Based on data from The Kaiser Commission on Medicaid and the Uninsured, 19 states reported uninsured rates among non-elderly adults above 20%, and four states -- Florida (26%), Louisiana (26.5%), New Mexico (30.5%) and Texas (31.5%) -- reported results above California's 25%. The Kaiser study is based on 2007-2008 data. The 2008-2009 data won't be available until October 2010. So with the deep recession and mass layoffs, we can expect these numbers to be much higher.

If you've shopped for health insurance as an individual, you've likely found it very difficult, if not impossible, to get that insurance unless you are in perfect health. Or once you're over the age of 50, you may find that even if you can get insurance, you won't be able to afford it.

I'm going to take a look at key provisions in the proposed health care reform that will be particularly helpful to those of us who shop in the individual health care marketplace. I've used the comparison tool on health care reform at The Henry J. Kaiser Family Foundation for this story. Even if the bill passes these provisions will not be available until January 1, 2014.

Senator Chris Dodd (D-Conn.) gave up trying to find a bipartisan compromise on the bill to overhaul the financial regulatory system and plans to introduce a new version of the bill on Monday. The House of Representatives passed a financial reform bill in December with a separate agency for consumer financial protection to be known as the Consumer Financial Protection Agency (CFPA).

Unfortunately Dodd does not think he can get a bill that includes a separate consumer financial agency passed in the Senate, especially now that the Democrats no longer have a 60-vote majority. So he's backing away from his earlier stance to weaken the Federal Reserve and plans to put a new division inside the Federal Reserve, which he says will have autonomy -- but will it be enough?

If you think the deficit should be closed in 2010, be ready to pay more than twice what your currently pay in taxes. That's what the nonpartisan Tax Foundation found in its new report. In order to close the 2010 deficit, joint filers would need to pay at tax rates of 24.3% to 84.9% versus the current 10% to 35% we actually pay.

"Assuming deductions, exemptions and credits were kept the same as they are now, Congress would have to raise each personal income tax rate by a factor of almost two and a half to erase the 2010 deficit," William Ahern, Tax Foundation director of policy and communications, wrote in his report titled, "Can Income Tax Hikes Close the Deficit."

If you're due a state tax refund this year, you should probably prepare to wait awhile for that check to arrive. Four cash-strapped states, including Alabama, Hawaii, New York and North Carolina are planning to delay refund payments this year in order to cover budgetary shortfalls. And it's possible that more states may follow suit, in particular Idaho and Kansas.

The problem? Many states are simply struggling to stay afloat. A recent report from the Center on Budget and Policy Priorities says the recession has "caused the steepest decline in state tax receipts on record." The organization found that at least 41 states face budget shortfalls for fiscal 2010, which in most states ends June 30. Nine states have budget gaps that are more than 10% of their 2010 budget, including Arizona, Hawaii, Illinois, Kentucky, Nevada, New Mexico, Oklahoma, Rhode Island and Virginia.

Following the devastating earthquakes that hit Chile and Haiti, some insurance companies are hiking rates on earthquake insurance by as much as 200%. A recent Los Angeles Times article reported that California-based GeoVera Insurance Company nearly tripled one customer's premium, from $2,500 to $7,100 a year.

The question is: Are insurers playing on homeowner's fears that an earthquake may devastate their lives, too? Or are they trying to prevent their own financial disaster from occurring?

Consumers who must buy insurance are getting less comprehensive coverage and paying more for the insurance. That's the conclusion of a new study by The Henry J. Kaiser Family Foundation.

The foundation found this phenomenon is not only true in the individual health insurance marketplace, but also in the small business marketplace, where more employers are offering very high deductible plans. The foundation found that high deductible plans increased from 16% in 2006 to 40% in 2009.

People with individual health insurance not only pay higher premiums, but they also pay a larger share of their total medical costs. Based on the study, people who had individual insurance between 2004 and 2007 paid 52% of their health expenses. Those with employer-based coverage only paid 30% of their health expenses.

We've been hearing for the past 16 months that consumer debt is going down. Well, it's not because people are paying off their debt more aggressively.

Instead, we've learned it's because credit card companies wrote down $83 billion of the $93 billion in credit card reductions. Consumer credit card debt declined by just $10 billion with most of that pay down in the first quarter of 2009.

That's what Odysseas Papadimitriou, CEO and founder of CardHub.com, concluded after he took a closer look at the data from the Federal Reserve. Papadimitriou worked for eight years at Capital One's credit card division before starting CardHub.com. He has his MBA from Duke University.

Have you ever placed an order with a company and then discovered a monthly charge was being made to your credit card? Or do you have such a long list of charges on your statement that you might not even notice you've been a victim of "negative option marketing?"

With this type of marketing, you accept a merchant's offer for a free product or service and then your billing information is used to enroll you in a subscription or membership offer you never signed up for.

Why do companies use this sleazy tactic? Because it's the most effective way to bring new customers on board. According to testimony by Michigan Attorney General Mike Cox, fewer than 15% of consumers will sign up for a service if they get a solicitation, but that number jumps to 80% if they're recruited using negative option marketing.

As you read more stories about doctors profiting from the medical devices they use or about noninvasive medical treatments that can be used effectively as alternatives to surgery, you may wonder how you can be fully informed before making a major medical decision. Luckily, today there are many excellent Web sites available developed by respected medical organizations to help you sort through the issues and develop your own set of questions for your doctor.

While I'm by no means suggesting you should disregard your doctors, I am suggesting that you can become a true partner in your medical care. Any time a doctor has said to me after I ask a question about a particular treatment recommendation that either I trust him or go elsewhere, I've always decided to walk.

If my doctor won't answer my concerns during a regular visit and explain his choices, then I find a doctor who has more respect for me and my body and will discuss treatment options.