Errors in Medical Bills Are Rife

Chart: Medical Debt ComplaintsEver try to make sense of a medical bill, with its co-payments, cost-sharing, and government or insurance-company reimbursements that haven’t been paid yet?  Hospital stays with multiple doctors and lab tests make billing even messier.

These layers of complexity contribute to errors and confusion that can damage Americans’ credit ratings.  Consumers “incur medical debts in collection without certainty about what they owe, to whom, when, or for what,” the federal Consumer Financial Protection Bureau (CFPB) reports.

When a hospital or physician hasn’t been paid, they may, after trying to resolve the issue in-house, pass the unpaid bill to one or a series of collection agencies.  Yet nearly one in four of the complaints consumers have made to CFPB about medical bills in collection said the debt “is not mine.” One in five said they’ve paid the bill being reported as past due.

There’s new evidence that the number of people reporting medical debt issues is declining, and new federal rules are aimed at curbing aggressive collection practices for low-income patients. But medical debt still accounts for half of the collections posted on credit reports and is the largest source of complaints about credit reports, exceeding complaints about utility and cable bills and retail and financial transactions. …Learn More

Americans Cope with Income Swings

A full-time job that delivers a steady paycheck, week in and week out, is a luxury for many working people.

Low- and middle-income adults are instead often whipsawed by wild swings in their incomes, finds a U.S. Financial Diaries project, based on detailed biweekly or monthly financial interviews with 235 urban and rural U.S. households nationwide. During the course of the year these interviews were conducted, the average household experienced four spikes or dips, defined as a change of at least 25 percent in their incomes.

The Bloomberg video above explains that even when workers’ annual incomes are sufficient to cover annual expenses, these month-to-month fluctuations complicate how – or whether – they can save for their future.

The income swings have many causes primarily stemming from the labor market, including unpredictable work schedules, unsteady part-time or self-employment, and a patchwork of multiple jobs, as well as a reliance on intermittent payments such as tax refunds.  More than half of the adults interviewed – retail and construction workers, waitresses, check cashers, hotel workers, taxi drivers – held down more than two jobs. …Learn More

Photo of a widow

Widows Face More Financial Adversity

Two times more widows than widowers say their spouse’s death carried significant negative financial consequences during the first year after their loss.

This sharp contrast recurred in numerous financial questions recently posed to widows and widowers by New York Life.  The contrast also seemed to persist across various income levels, in questions revolving around both essential needs and luxuries.  Here’s a sampling of answers given by nearly 900 Americans whose spouses have died sometime in the past decade:

Their answers beg the question: Why the divergence?

One reason is certainly that two-thirds of the widows surveyed reported their income was under $35,000, while a majority of the widowers earned more than that. Adults over age 18 were canvassed, so working women’s lower earnings no doubt contributed to the income and lifestyle disparities.

Pension survivor policies also play a role, since two out of three of the people surveyed were over age 65. …Learn More

Photos of parents with sick children

Paid Sick Time Wins on Ballots

In last Tuesday’s election, voters in Massachusetts and three cities – Oakland, California, and Montclair and Trenton, New Jersey – approved paid sick time initiatives that benefit working mothers in particular.

These election results come on the heels of a slew of similar initiatives approved in the past year covering all or certain groups of workers in California and in San Diego, Washington, DC; Eugene, Oregon; several New Jersey municipalities; and the Tacoma suburb of SeaTac, according to an inventory of sick time laws compiled by the advocacy group, A Better Balance.

Mandated paid sick time for employees is growing in popularity but is still unavailable to significant numbers of working mothers, who, the data show, are more often responsible for children’s health than fathers. This issue is one more thing that – like lower pay – can disadvantage single women struggling to secure their personal finances today or save for retirement in the future, especially low-income women.

Research by Usha Ranji, associate director of women’s health policy for the health care non-profit organization, the Kaiser Family Foundation, found that 39 percent of working moms are forced to miss work when a child is sick, because they don’t have back-up child care; of them, 60 percent do not get paid for that time  – a decade ago, fewer than half of this group were in this position. …Learn More

apartments

U.S. Renters “Financially Fragile”

A new report by the FINRA Investor Education Foundation finds “a financially fragile renter population relative to homeowners.”

It’s hardly surprising that apartment dwellers who rent are worse off financially than homeowners. It takes money to buy a house.  But things got markedly worse for renters after the Great Recession. Millions of homeowners, foreclosed on by their lenders, were thrown back into the market for apartments, driving up rental rates and squeezing all renters.

A new FINRA Foundation report, “American Renters and Financial Fragility,” dramatizes the growing rift between the nation’s haves and have-nots through a comparison of owners and renters.

Click on “Learn More” below to see a FINRA Foundation chart contrasting the personal financial situation for renters versus homeowners, based on a 2012 survey.  The jobless rate has declined since then, but the rental market has only tightened. Rents have continually increased in recent years, reports Reis, a real estate tracking firm. And 85 percent of property managers nationwide reported they raised rents over the past year to capitalize on a decline in the number of vacant rental units, which continues in 2014, according to Rent.com. Housing costs in particular are becoming a burden for a growing numbers of older Americans. …Learn More

chinatown

A Thriving Underground Money Culture

Recent immigrants – whether from Mexico, Africa or China – often form groups that regularly contribute to a pool of money. Group members then take turns pulling out $500 or $1,000 in accumulated cash.

These savings groups are one aspect of a pervasive underground money culture bustling beneath the surface in U.S. communities of immigrants and other low-income workers.

Savings groups are one of four types of “informal” financial arrangements identified in a new report, “An Invisible Finance Sector: How Households Use Financial Tools of Their Own Making.” These arrangements create a strong social commitment to saving typically absent in the formal U.S. banking system.

The four arrangements discussed in the report are:

  • Savings groups, also known as lending circles, which are primarily found in immigrant communities.
  • Interpersonal loans.
  • Storing more than $100 in cash at home.
  • Money guards who safeguard someone else’s savings. …

Learn More

Seniors’ Housing Cost Burden on Rise

For a growing share of older Americans, housing expenses have become an increasingly large financial burden.

Chart: Housing burdenOne in three Americans over age 50 were carrying a severe or moderate housing cost burden in 2012, up from one in four in 2000, according to a new study by Harvard’s Joint Center for Housing Studies and AARP. The Center defined a severe burden as housing costs that consume more than half of household income; a moderate housing burden takes between 30 percent and 50 percent of income.

The Center’s report, Housing America’s Older Adults – Meeting the Needs of An Aging Population,” warns that the nation is unprepared for both the financial and non-financial housing challenges that will accompany the coming explosion in the elderly population. Aging baby boomers will require better access to public transit, handicap access, assisted living facilities and other special services and amenities, and many will need subsidized housing.

Housing is often an older person’s largest single expense. And because housing costs are largely fixed (think mortgage payment, taxes, insurance, upkeep and utilities), they can become a growing burden for people as they age and become more vulnerable to reductions in income. Incomes often decline toward the end of their working years and decline again when they enter retirement. Pensions and Social Security benefits fall again when one spouse dies.

The report finds that: …Learn More

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