Thursday, September 22, 2016

New Federal Law Requires Banks to Lend to All Borrowers

In addition, borrowers whose incomes are below 400% of the federal poverty level will have their loan repayments subsidized (reduced) by advanced loan payment tax credits granted by the federal government. These tax credits will be paid directly by the federal government to the lenders and the borrowers will simply be responsible for paying the difference between their actual loan payment amount and the amount paid by the federal government.

Also, those borrowers whose income is below 250% of the federal poverty level will receive reduced lending fees and interest rates on all loans that fall into the “Silver” category, one of four categories of loans defined by the government, each of which is designated by a different metal name (bronze, silver, gold, and platinum). Silver level loans are those loans whose payments are approximately 30% of the borrower’s monthly take-home pay.

The new law requires that loans may be taken in any amount that the borrower chooses, without limit. A new government website for the loans has been created. The website address is Borrowers may complete their loan applications online or by telephone, 24 hours a day, by calling 1-(800)-446-8968 or 1-800-IGO-TYOU. Once the application has been completed the borrower will be provided with a list of local banks from which to select their loan. Funds will be released by the bank to the borrower approximately one week after the loan has been approved.

A government official who requested anonymity was quoted as saying, “Yes, it’s possible that interest rates for these loans may be a bit higher than today’s prevailing rates. It is possible that we could see rates of 15% - 25% due to the fact that the most credit-worthy borrowers will be subsidizing those borrowers with a history of bankruptcy, foreclosure, repossession, slow payments, and default. However, in the long run this act will assure that all borrowers receive the funds that they need in order to get new homes, pay off student loans and other forms of debt, get new cars and trucks, , or start a new business.” A banking industry official who also requested anonymity stated, “We are fairly confident that the higher interest rates that we may now charge to all borrowers will offset the losses that we will probably experience from loan defaults. If that does not occur we will simply request higher interest rates and/or more government intervention.”


It did happen in health care. It’s called the Patient Protection and Affordable Care Act or the ACA or Obamacare. We are just approaching the conclusion of three years into the implementation of mandatory insurance, guaranteed acceptance, and insurance premiums that, for many, are subsidized by the federal government.

When put into banking terms it sounds pretty ridiculous, doesn’t it? Loans for everyone regardless of, well, anything. Everyone pays the same interest rates, except those who earn less money, and they pay lower interest rates. Unlimited loans that are not tied to anything resembling the borrower’s ability to re-pay. Hey, we had something almost like this and it was called the “Housing Bubble”. When it burst it almost brought down the whole world’s economy. But that’s another story.

It was pretty clear to anyone in the health insurance industry that the ACA was doomed from the very start. By its very nature it can’t really even be called insurance. That’s because insurance allows insurance companies to evaluate risk, price accordingly, and even reject some applicants so that the other policy owners do not wind up with sky high rates. Think about that in terms of your car insurance. Would you want to pay the same rates as the driver who has five DUI’s? There is no such thing as risk evaluation when it comes to the ACA. Everybody’s covered and everybody of the same age pays the same rates (except those who pay less because they earn less). One thing that the regulators and the insurance companies didn’t anticipate was the high number of previously uninsured people who came into the system, qualified for reduced rates, got medical treatment, and then dropped their insurance. For them this was never insurance, just a free, or cheap visit to the hospital and then back to business as usual.

Now, I’m the first one to admit that the old system needed fixing but this law went way too far in all the wrong ways. That’s why the insurance companies are dropping out of the market left and right. And yes, for you skeptics out there, the insurance companies and the insurance co-ops that were created by the ACA are losing hundreds of millions in their on-exchange businesses and many are going, or already did, go out of business.

We are about to begin the fourth annual Open Enrollment for the ACA and many areas of the country will have only one or two insurance companies available to them. One county in Arizona may have none. That’s not all. Rates will be much higher in 2017, networks will be smaller, out-of-pocket costs will be higher, and the penalties for not having insurance will increase…again.

I imagine that if the fake loan law above really tried to pass through Congress that the banking industry would not stop until the law was killed or drastically changed. Why the insurance industry didn’t do the same for health insurance is anyone’s guess. As a frontline broker for thirty years it is hard for me to imagine that the insurance carriers really thought that the ACA would be a windfall.

Regardless of who becomes our new president next year, one thing is certain. With the ACA imploding, a radical change in health insurance for individuals and families is needed as soon as possible.

Thanks for reading.

Alan Leafman, President
847-559-9699 x 222
480-654-1200 x 222

Friday, September 16, 2016

Is Your Dental Plan Worth More than You Pay for It?

We get asked a lot of questions about dental coverage.

  • Is it worth it? 
  • How much does it cost?I
  • Is there a waiting period before certain work is covered? 
  •  Is there a limit to how much it will pay? 
  •  What about deductibles? How much are they?

The answers to all of these questions are, “It all depends on whether you have traditional dental insurance or a dental savings plan.” Many of the traditional dental plans that we see cost more for coverage than they provide in benefits in a year in which your plan is only used for preventive or minor services. Does it make sense to pay more for your plan than you receive in benefits? We don’t think so.

Below is a quick comparison between traditional dental insurance and dental savings plans to help you make an informed decision:

*not applicable in California

Referring back to the table above, it is possible to pay between $290 and $700 per year for traditional dental insurance before you’ve even sat down in the dentist’s chair! Those totals represent the annual cost of coverage plus the annual plan deductible.

Our dental savings plans are an affordable (plans start at just $79.95 per year), easy-to-use and a no hassle solution for anyone looking for dental care savings. They are a great alternative to expensive and restrictive dental insurance plans.

What are the restrictions?
There is a simple, straightforward answer to this question. Our dental savings plans can only be used with participating dentists. You are not required to pre-select a dentist, nor are you locked in to any dentist, but in order to receive benefits you must use dentists that participate in our plans’ networks. With more than 130,000 participating dentists across the country that shouldn’t be hard. Very often we have found that our clients’ existing dentists participate in one or more of our dental savings plans. In fact, we will be glad to check our database for you to see if your dentist is already a participant in any of our plans.

Our plans are already an outstanding value, starting at just $79.95 per year. However, as a national distributor for :DentalPlans we offer a 10% savings AND 1 month of extra coverage with a membership in any plan. That’s right, for a single, low payment you’ll be entitled to 13 months of high quality dental coverage*.
*not applicable in California

Cover all of your other family members for less than $5.00/month more!
For less than $5.00/month (billed annually) you can add any number of family members to your plan. Unlike many competing plans, older children (18 and above) are not required to be full-time students. In fact, our dental plans allow you to cover all family members in your household (children, parents, in-laws; if they’re under your roof they’re covered) for a single, low price.

Enhance your existing dental insurance with dental savings plans
Already have dental insurance? If you’ve ever used your plan then you know that many procedures, particularly the most expensive ones like root canals and crowns are only covered at 50%. That leaves you with half the bill! Combining a low cost dental savings plan with your existing insurance can result in costs that are  hundreds less when major dental work is required. Here’s an example:

Don’t wait. Start saving right away.

All of our dental plans are available online at our dental savings plan enrollment website. Enter WCDP10 on your enrollment form or call us at 800-955-0418 to apply by phone or to request information by mail. Coverage usually begins in just 2-3 working days. Employers wishing to cover employees can also take advantage of these great savings. Monthly billing is available to groups enrolling five or more employees.

Thanks for reading


Alan Leafman, President