Will Auto Insurance pay for Police runs?

Police look to program
for recovering tax dollars

by CHRIS GRAY
Observer Staff Writer

      The Romeo Police Department will attempt to recoup costs for time spent at accident scenes.
       With more than 90 percent of traffic crashes in the Romeo area caused by non-taxpaying residents, the department hopes to establish a fund recovery program this summer to restore taxpayer money spent on officers responding to motor vehicle accidents.
       Currently, Romeo residents pay a total of 12.0 general operating millage, part of which pays for basic fire and police services like criminal protection and investigation. The majority of services rendered at a motor vehicle crash, though, are outside the scope of these basic provisions.
       Last year, the Romeo Police Department responded to almost 180 motor vehicle accidents. Police Chief Greg Paduch said close to 97 percent of accidents are caused by non-taxpayers, forcing those that do pay taxes in the community to shoulder the burden of motor vehicle responses without gaining any benefits.
       "Village taxpayers pay for police patrol and enforcement of criminal activity," Paduch said. "The amount of minutes we use at a scene and writing that report takes us away from patrol duties or protecting taxpayers."
       To relieve residents and recycle funding back to the village, Paduch said the department will pursue a partnership with the Cost Recovery Corporation (CRC) based in Dayton, Ohio.
       CRC's program for police agencies has existed since 2004, though the corporation itself has served other emergency services since 1999. The program works by having officers log the time spent at accident scenes. This is collected at the end of a month, and when CRC receives the amount, it bills the at-fault driver's insurance company for that time. If a driver is uninsured, they are directly billed.
       "The money recovered goes back into the village's general fund," Paduch said.
       He said this will not cause an increase to taxes for the village, and there are no out-of-pocket costs from local residents for the program. Any fees CRC requests are billed to the insurance companies, not the police department.
       "This isn't double taxation, and taxes will not be raised because of this," he said.
       Accident victims will not see an increase in their premiums due to the implementation of the program, according to CRC's Web site. Insurance rates are controlled by the State Insurance Commissioner, who adjusts premiums based on a driver's risk factor regardless of the program.
       As of now, 56 percent of insurance companies participate in CRC's program. Paduch said there weren't any specific figures, but the money recovered from these accidents would be in the thousands.
       "It's enough to make it worthwhile," he said.
       Before any recovery can begin, the Village Council must review and approve an ordinance that would allow the program to take place. Paduch estimates a contract between the department and CRC could be signed and implemented a month after an ordinance is improved. The ordinance could be reviewed as early as the Village Council's regular May meeting.
       The village has a similar ordinance in place now, as the Bruce-Romeo Fire Department uses a different company to recover costs in the same fashion.

Government Health Insurance?

Pro-Con: Should health-care reform include a government insurance program that competes with the private sector? No

Proponents want to create a government health insurance program that
would be available to working Americans and their families, arguing it
would be more efficient than private insurance.
Opponents fear
that it is a straight line to a government-run health system by putting
private insurers out of business. Congress would give the government
plan the power to dictate prices so it could artificially under-price
private plans and drive them out of this “marketplace.”
Many people then would be left with little or no choice, as employers
would drop their coverage and send their workers into the public plan.
This massive crowding out of private insurance would undermine the employment-based coverage of most Americans under age 65.
Once
private plans have been driven out, people will realize that the
government plan will not be able to sustain the quality and quantity of
benefits promised. Government will begin to ration care and services,
driving out innovation.

Grace-Marie Turner, the Galen Institute

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Should You Tune Up Your Auto Insurance Policy?

By BankingMyWay.com Staff
Your car gets regular maintenance … oil changes, tire rotation and engine checks, but what about your auto insurance policy?

Once you buy an auto insurance policy,
you may feel like you’ve done your due diligence, but your
insurance coverage needs regular maintenance just like your car. As the
circumstances in your life change, so too should your level of
coverage. Additionally, you may now qualify for discount programs that
you didn’t before. In order to make sure you get the appropriate
level of coverage at the best price, you should “tune up” your policy once a year.

Here are some things you should consider when updating your auto insurance:

Has your family makeup changed?

If you have gotten married since you bought your policy, you’ll need
to add another driver. Conversely, if you got divorced, you can take
your ex-spouse off your policy. If you have had children, you’ll
need to update your number of dependents for personal injury protection
purposes.

Is your teen driving?

If your teenage child got his/her license and will be driving your car, you need to
adjust your policy accordingly. This can increase your premiums
significantly, but failing to do so can cost you dearly if your child
has an accident, especially if someone gets hurt. On the other hand, if
your child goes to college or leaves your house, you can save on your premiums by removing him/her from your policy.

Has your work situation changed?

If you started your own business and are now using your car for business
purposes, your policy needs to reflect that. Additionally, if you move
closer to work or started using public transportation, you may be able
to get any surcharges for daily commuting taken off.

Has your economic status changed?

If you’ve gone up on the financial ladder, that means you now have
more assets to protect. You may want to look at increasing your
liability coverage or adding an umbrella policy to your insurance.
Alternatively, if you find yourself with less money to pay your
insurance premiums, you might want to lower your coverage level.
It’s wise to buy as much car insurance as you can afford and as is appropriate for your needs, but if your premiums are causing you financial difficulty, temporarily scaling your coverage
back to legal minimums may help ease some of the hardship.

Do you need comprehensive and collision coverage?

If your car is old and is no longer worth a lot of money, you may want to
drop your comprehensive and collision coverage. These features cover
damage to your car, but they may not be worth their cost if your car is
not worth much.

Are you getting all the discounts you can?

Most car insurers will discount your premium for having multiple cars or
other policies with the company. If you consolidate all of your
insurance coverage at one company, you can probably save. Additionally,
if you have been with a company for a long time and/or have a good
driving record, you may be able to get more discounts. Find out all the
programs your insurer offers to see if you can qualify for any.

Finally, ask yourself if your auto insurance company is the best one for you or if you can save by switching to another company.

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How Do We Pay for Health Care?

Taxing Those With Insurance to Pay for Those Without

By REED ABELSON

Published: May 7, 2009

It is an alluring way to pay for the ambitious plan to expand health coverage to the nearly 50 million people who are now uninsured. Simply put, the government would tax the people who already have the most expensive health benefits, as provided by their employers.

By one Congressional estimate, taxing this “Cadillac coverage,” as some call it, could yield $100 billion in revenue over five years. No wonder Senator Max Baucus, the Montana Democrat who is a leader of the health reform effort, seems keen on the idea. And although the candidate Barack Obama criticized the notion last year when Senator John McCain promoted it, the concept now has some support in his administration as part of an overhaul of the health care system.

“There aren’t that many pots of gold to pay for health reform,” said Jonathan Oberlander, a health policy expert at the University of North Carolina. But Mr. Oberlander and some other experts say Congress may have a difficult time devising a new tax on health benefits that does not threaten to do more harm than good.

If the plan is not designed carefully, they say, the additional taxes could affect many workers who are far from affluent and put the cost of adequate coverage further beyond the reach of many Americans. Some critics also warn that the taxes could undermine the employer-based coverage that is the bedrock of the nation’s health insurance system.

The details have not yet been worked out. But critics say a tax could add to the burden of many employees, who already pay a hefty portion of their own insurance premiums and have additional out-of-pocket costs in the form of deductibles and annual co-payments.

And many people have high-priced insurance that is expensive for reasons unrelated to the quality of the coverage because they live in a high-cost city or work for a small business with old or sick employees.

“We too often equate expensive health insurance with generous health insurance, and they’re not the same,” Mr. Oberlander said. “It’s not clear that you are going after ‘Cadillac’ health plans at all.”

Right now, the amount that an employer spends on a worker’s health insurance is not taxed as income, and employees can pay their share of premiums with before-tax earnings. The proposals being debated in Congress would start considering some part of the value of the health benefit as income and tax it accordingly.

Representative Charles B. Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, which presides over tax legislation, made clear on Wednesday that he opposed a change in the tax treatment of health benefits.

And employer groups and labor officials have also come out against the idea. They say taxing benefits could endanger the current system of employer-based coverage, which now is responsible for insuring nearly two-thirds of Americans who are under 65 years old and have coverage.

“If we began to tax employee benefits, there would be mutiny at the gate,” said J. Randall MacDonald, an I.B.M. executive who is chairman of the HR Policy Association, which represents corporate human resource professionals. “It’s just counterintuitive to the problem we’re trying to solve.”

The challenge for Congress, aside from the political battles already stirring, is whether policy makers can come up with a proposal that addresses opponents’ concerns, by limiting the tax to the wealthy, or otherwise fine-tuning it.

Proponents argue that the revenue could be raised by taxing only the most expensive policies for those people who can afford the few hundred or thousand dollars at stake — money they say is essential to government’s ability to provide basic coverage to more people.

“We need the money,” said Len Nichols, a health economist at the New America Foundation, which supports overhauling the current insurance system to give more people access.

Some supporters of these plans say the current system gives an advantage to people who get coverage from their employer and to people with high incomes.

“There is a huge consensus that this is inequitable and unfair tax treatment,” said Robert E. Moffitt, a policy analyst with the Heritage Foundation, which has long supported changing the tax laws and contends this is an area that might have significant bipartisan support.

What is more, some economists and policy analysts say the current system encourages overly generous coverage, which they say helps drive up the cost of medical care by keeping patients insulated from the true costs.

“One of the arguments for doing it is trying to achieve higher value through the health care system,” said Katherine Baicker, a health economist at the Harvard School of Public Health.

But the political opposition remains fierce.

Union officials, for example, say that the proposed policy could translate into higher taxes for some of its members, many of whose contracts call for generous health benefits. “Capping the tax exclusion would undermine the place where most Americans now get their coverage, before we have built a proven effective, sustainable alternative to employer-based plans,” said Gerald M. Shea, an official with the A.F.L.-C.I.O. in recent testimony before Congress.

And there is little doubt that more expensive coverage does not always mean more generous coverage. Small companies, for example, typically pay more for the same benefits than large employers do. And some companies pay more in premiums because more of their employees are older or sicker.

Moreover, the cost of insurance varies in different parts of the country, so that someone with the same plan in New York or California will pay more than someone in North Dakota.

Congress may be able to balance these issues. But the problem, some policy analysts say, is that if a grand compromise ends up too narrowly defining the group of people who will end up paying the new tax, the amount of money raised might not be enough to make a difference in paying for health reform.

“I think it’s got some traction, but what happens when push comes to shove?” asked Paul
Fronstin, an analyst for the Employee Benefit Research Institute, who recently completed a lengthy analysis of changing tax policy.

“If it’s not going to buy them much, why do it?” he asked.

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A version of this article appeared in print on May 8, 2009, on page B1 of the New York edition.

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Possible Public Health insurance Options

Sources: Senators weigh 3 government health plans

By RICARDO ALONSO-ZALDIVAR – 12 hours ago

WASHINGTON (AP) — Senators are considering three different designs for a new government health insurance plan that middle-income Americans could buy into for the first time, congressional officials said Friday. Officials familiar with the proposals said senators plan to debate them in a closed meeting next week. The officials spoke on condition of anonymity because details of the controversial plans have not been released.

Creating a public plan is one of the most contentious ideas in the debate over how to overhaul the nation's health care system to cover the uninsured and try to restrain costs.

President Barack Obama and many Democrats say a government option would serve as a check to keep the private insurance industry honest.

Insurers fear the government would use its power to drive them out of business. And Republicans call a public plan in the legislation a dealbreaker, dashing hopes for bipartisan legislation for overhauling the health insurance system. Employer groups are also opposed.

The three approaches being discussed are:

_Create a plan that resembles Medicare, administered by the Health and Human Services department.

_Adopt a Medicare-like plan, but pick an outside party to run it. That way government officials would not directly control the day-to-day operations.

_Leave it up to individual states to set up a public insurance plan for their residents.

But many key details would still have to be fleshed out.

Among them is whether the public plan would be open to everyone, or be limited to small businesses and individuals purchasing coverage on their own.

Also, would the plan reimburse medical providers at discounted Medicare rates or the higher fees that private insurers pay? And would it be financed by tax dollars, or entirely from premiums?

Senators on the Finance Committee will consider the proposals during a closed-door session scheduled for late next week. Committee leaders want to bring a bill to the Senate floor this summer. It's unclear whether a public plan in any form will emerge from Congress.

Citing surveys that show most seniors are happy with Medicare, Democrats say they believe that a public plan would be a political winner. But Republicans counter that it would be a step toward a government-run system in which medical services sooner or later would be rationed.

The majority of Americans now get health insurance through private insurers, about 170 million people in all. Most of them are enrolled in employer-sponsored plans.

A recent report by the Lewin Group, a numbers-crunching firm that serves government and private clients, found that a new government plan could radically alter that landscape — or maybe not.

It depends on the design.

If the public plan were open to all employers and individuals — and if it paid doctors and hospitals the same as Medicare — it would quickly grow to 131 million members, while enrollment in private insurance plans would plummet, the study found.

By paying Medicare rates the government plan would be able to set premiums well below what private plans charge. Employers and individuals would rush to sign up.

But the results would be far different if the government plan was limited to small employers, individuals and the self-employed.

In that smaller-scale scenario, the public plan would get from 17 million to 43 million members, the study said. It found that a government plan could be effective in reducing number of uninsured.

Lewin is a subsidiary of UnitedHealthcare, the nation's largest health insurer. The consulting firm says it makes its own judgments, however. Its work is used by groups on all sides of the health care debate, including supporters of a public plan.

Copyright © 2009 The Associated Press. All rights reserved.

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Property Premiums increasing?

Allstate Has ‘Work to Do’ at Homeowner Unit, CEO Says (Update1)

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By Erik Holm

May 8 (Bloomberg) -- Allstate Corp., the largest publicly traded U.S. home insurer, may raise prices after a first-quarter underwriting loss on residential coverage.

“We have work to do,” in the unit that protects homes and apartments, Chief Executive Officer Tom Wilson said in a conference call with analysts today. “Our homeowners business is not performing the way we’d like it to be.”

The insurer spent about $1.07 for every dollar it collected in residential premiums for its Allstate-branded home coverage in the first quarter because of an increase in claims costs tied to storms on the East Coast, the company said yesterday.

Wilson is seeking to improve results at Northbrook, Illinois-based Allstate’s home and life businesses and reverse investment losses to match results at the profitable auto insurance operation, which provides about two-thirds of revenue. The auto unit is facing pressure amid the recession as drivers pare back coverage and the firm pays claims for clients involved in accidents with the growing number of uninsured motorists.

“We’re not happy with the performance that we have with the homeowner line,” said George Ruebenson, the president of Allstate’s property and casualty business. “We’re taking a harder look,” he said. “Which, as you could probably read between the lines, means more rates in that line.”

Allstate fell $2.65, or 9.6 percent, to $24.95 at 11:36 a.m. in New York Stock Exchange composite trading. The company has dropped 24 percent this year, compared with the 6.7 percent decline in the 21-stock Standard & Poor’s 500 Insurance Index.

Life Insurance

The insurer yesterday posted its third-straight loss on investment writedowns and declines in private equity and hedge fund holdings. Allstate set aside $224 million at its life insurance unit after stock declines raised the cost of meeting obligations to customers that have been promised minimum returns on retirement products.

First-quarter profit before investment losses was 84 cents a share, missing the $1.25 estimate of 14 analysts surveyed by Bloomberg.

To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.

Last Updated: May 8, 2009 11:47 EDT

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More people driving uninsured?

Drivers drop insurance

Updated: Tuesday, 05 May 2009, 10:50 AM EDT
Published : Monday, 04 May 2009, 5:48 PM EDT

• Jane Santucci

TERRE HAUTE, Ind (WTHI) - More drivers are letting their car insurance lapse because of the sour economy putting themselves and others at risk. If someone cuts coverage and then can't pay the damages, you are left with a much more costly situation.

One car insurance agent said you should make sure you have extra coverage that compensates you if you are hit by an uninsured motorist.

"I see some of my clients dropping full coverage on some of their vehicles. I see them taking that car of the policy that they don't drive very often to reduce the cost. A lot of people are having hard times," John Heaton with Heaton Insurance said.