SEI’s Second Quarter Review
July 26, 2010 by Tom Licciardello, CFP · Leave a Comment
Where have we been, and where are we headed?
The following Outlook and Positioning presentation highlights issues such as:
- Causes of the second quarter’s market disarray
- Positives in the economic outlook
- Developments to watch in the short and long term
SEI explains their reaction to current economic conditions here.
A Midyear Financial Checkup Can Make For a Smarter Second Half
July 26, 2010 by Tom Licciardello, CFP · Leave a Comment
This is not the time of year when everyone wants to stay indoors with their finances. But a midyear review of your tax situation, retirement and spending issues can be far more valuable than the rushed attempt most people make at the end of the year — or when it’s too late at tax time.
Summer’s actually a good time to do this task because there’s still enough time to correct lapses in savings, spending or tax planning.
Budget: How’s your spending going? It’s a good time to see what’s being spent on non-essentials and whether you can make some cuts and redirect those funds towards bills or savings. A look at the last six months of spending may reveal opportunities to reduce spending and redirect money toward more necessary goals. Also, take a look at such things as gym memberships, magazines that are piled up and coffee expenses. If you’re not using these things, you can probably live without them. Doing this exercise can identify a surprisingly large amount that’s unaccounted for that can be redirected to debt payment, savings and investments.
Taxes: If you got a sizable refund in April or found it necessary to empty savings to pay Uncle Sam, it’s definitely time to reassess what you’ll owe at tax time next year. Also, if you think you’ll have some losing stocks in your taxable investment accounts, keep an eye on those in case you’ll need to offset gains in your portfolio at the end of the year.
Retirement savings: If you are on schedule to max out your contributions to your company retirement plan this year, great. But don’t forget to check your existing IRAs and other retirement accounts to see if you’ll have enough cash on hand to contribute the maximum in each account by their respective deadlines next year.
Health and health insurance: Increasingly, what we pay for health insurance will be tied to the state of our health. While the weather is good, commit to a plan to walk or hit the gym a specific number of hours a week.
Emergency fund: We encourage you to have between three to six months of living expenses in an emergency fund. If you don’t have that minimum, go back to your spending review and see where you can start socking money away.
College savings: If you are saving for your child’s education or your own, check to see if you’re on track with the goals you made for the year. It’s also a good idea to read the latest news on financial aid since schools change their financial aid policies annually. Even if your kid’s still in grade school, it’s a good idea to learn as much about college financial aid while you’ve got plenty of time to learn.
Special goals: If your car is suddenly looking like it will need to be replaced or if this might be the last year for your furnace, see if you can direct more money into a reserve fund to cover replacement costs or at least a heavy down payment. If there’s a vacation you want to take by the end of the year or a special household purchase you want to make, focus on the cash you’ll set aside to make that happen. Of course, if you have credit card debt rolling over from one month to the next, maybe that should be your initial focus.
Credit: If you haven’t set a schedule for receiving your three credit reports throughout the year, do it now. You have the right to get all three of your credit reports – from Experian, TransUnion and Equifax – once a year for free. You can do so by ordering them at http://www.annualcreditreport.com. By staggering each receipt of your credit reports at different points in the year, you’ll get a continuous picture of how your credit picture looks. Also, you’ll have the opportunity to focus on possible errors in a single report, which will give the other two credit agencies time to update their files.
Harvard Pilgrim Health Care settles rate dispute with Massachusetts Division of Insurance
July 6, 2010 by Tom Licciardello, CFP · Leave a Comment
FOR IMMEDIATE RELEASE
Health Care settles rate dispute with Massachusetts Division of Insurance
(Wellesley, MA) – Harvard Pilgrim Health Care and the Massachusetts Division of Insurance (DOI) have reached agreement on small business and individual premium rates for the remainder of 2010. This settlement comes on the heels of Harvard Pilgrim winning its administrative appeal with the DOI on the amount it can charge small businesses and individuals for the second quarter of 2010. In recognition of its commitment to its customers, Harvard Pilgrim voluntarily agreed not to ‘retro-bill’ for the months of April, May, June and July.
“It was important for Harvard Pilgrim to work with the Commonwealth to settle this dispute so that we can bring savings, stability and predictability to our customers. We agree that businesses and individuals need premium rate relief, but arbitrarily capping rates treats the symptom, not the disease. We can’t achieve long term relief for those we serve when medical inflation is growing at a higher and faster pace than the market can sustain,” said Eric Schultz, President and CEO of Harvard Pilgrim. “It is time to focus on what is truly driving health care expense, and that is the cost of care. We must address the prices charged by hospitals and physicians as they are the primary driver of the growth in health insurance premiums and, together, we must find creative solutions to bring to the marketplace.”
The Harvard Pilgrim/DOI settlement means that:
- Base rate premiums for small businesses and individuals will increase by 7-11% from 2009 levels to fund the benefits given to members but are lower than the 2010 rates originally submitted,
- Thousands of small businesses and individuals will see single digit increases in 2010,
- Harvard Pilgrim has removed the 1.3% operating margin built into its original rate request to fund its reserves,
- Harvard Pilgrim will not ‘retro-bill’ its customers to recover millions lost in the months of April, May, June and July of this year when the DOI mandated that the health plan use 2009 rates, and
- Harvard Pilgrim will continue to tightly manage its medical costs, which represent 90 cents of every health care dollar, and its administrative costs, which represent 10 cents of every health care dollar.
Schultz also noted that Harvard Pilgrim will continue rate negotiations with providers on behalf of its employer customers and members. “Providers need to be part of the solution for individuals and small businesses, and we are in the process of negotiating with many of them now.” Harvard Pilgrim recently contacted its high-cost, high-volume providers informing them that it will reopen contract negotiations, despite the fact that these contracts are currently in-force and would not ordinarily be ready for renegotiation.
Reports recently issued by the Massachusetts Attorney General and Massachusetts Division of Health Care Finance and Policy (DHCFP) clearly show that prices charged by some hospitals and physicians for medical services are the primary drivers of medical costs. The Attorney General’s report shows that increasing prices charged by providers for medical services are the primary drivers of health care costs, accounting for as much as seventy-five percent of the increase in recent years.
Harvard Pilgrim is a not-for-profit health plan that provides a variety of health benefit options and funding arrangements to more than one million members in Massachusetts, New Hampshire and Maine. For the second year in a row, Harvard Pilgrim Health Care is the highest-ranked health insurance plan in the New England region in the J.D. Power and Associates 2010 National Health Insurance Plan Study.SM Harvard Pilgrim received the highest ranking for overall member satisfaction in the New England region. The study looked at key factors in delivering satisfaction to health plan members including customer service, coverage and benefits , provider choice, information and communication and claims processing. In addition, Harvard Pilgrim, for the fifth consecutive year, was named the #1 commercial health plan in America according to a joint ranking by U.S.News & World Report and the National Committee for Quality Assurance (NCQA)*.
For more information, please visit www.harvardpilgrim.org.
-end-
* *“U.S.News/NCQA America’s Best Health Insurance Plans 2009-10.” “America’s Best Health Plans” is a trademark of U.S.News & World Report.