Obama Administration Opposes Dem Plan for Wind Coverage
July 22, 2010 – A plan by House Democrats to add wind coverage to an already heavily indebted National Flood Insurance Program would not be a good idea, officials representing President Barack Obama’s Administration said today.
House Resolution 1264 would add coverage for wind damages to the National Flood Insurance Program’s list of perils covered. But with the program already dealing with deep debt, officials for the Office of Management and Budget today issued a statement saying the additional coverage isn’t warranted or legal. Federal law requires a wind insurance program be fundamentally sound and adhere to actuarial principles.
“Although the Administration believes in strengthening the National Flood Insurance Program (NFIP) for the benefit of policyholders and taxpayers, the central rationale for the program – the difficulty of obtaining flood insurance through either the private market or state programs – simply does not apply to windstorm insurance in most markets,” the statement said. “As a result, expanding NFIP to cover windstorm insurance would unnecessarily duplicate available insurance products and could ‘crowd out’ such products where they are offered, while offering little to no savings to the American public. At a time when the NFIP is already facing serious challenges, the Administration cannot support such an expansion.”
If approved, House Resolution 1264 would add “multi-peril” and wind damages to the perils covered by the National Flood Insurance Program, which is about $19 billion in debt. But lawmakers are divided on whether or not to add additional coverages to an already failing federal program.
The National Flood Insurance Program was established in 1968 to provide flood insurance protection for homes and properties located in federally designated flood zones, where purchasing flood insurance from private insurers can be difficult. The program sustained itself with insurance premiums and deductibles until 2005, when Hurricanes Katrina and Rita struck the Gulf Coast and inflicted some $17 billion in National Flood Insurance Program claims.
Another major problem afflicting the National Flood Insurance Program is the number of homes repeatedly flooded and covered. About 40 percent of all claims filed with the National Flood Insurance Program are for repeated damages to only 1 percent of properties insured, according to federal officials. That means about $7.5 billion of the current $19 billion in current program debt was caused by only about 1 percent of homes – many of which have received multiple claims payouts totaling much more than the properties are worth.
House to Consider Long-Term Fix to Flood Insurance Program
July 15, 2010 – The heavily indebted and oft-expired National Flood Insurance Program might get a long-term lease on life if the House of Representatives approve a measure extending it five years.
House Resolution 5114 is scheduled for a floor vote today and would extend the National Flood Insurance Program through 2015. The federal program has been reauthorized for short periods of time since officially expiring in 2008. Members of Congress have been divided on how to make the program financially viable while also adding wind coverage protection. The program currently is about $19 billion in debt.
Federal lawmakers on June 30 unanimously approved extending the expired National Flood Insurance Program through September. With Hurricane Alex dumping rain on parts of southern Texas at the time and the Atlantic storm season more than a month old, federal lawmakers were under great pressure to at least temporarily extend the financially troubled National Flood Insurance Program. The program officially expired on June 1, making it impossible to purchase flood insurance on homes or to renew flood insurance policies.
While stalled, claims continued to be processed and paid through the National Flood Insurance Program, but new policies could not be issued, causing problems for people trying to renew flood insurance policies are trying to close on a home in need of flood insurance protection. The halt in the National Flood Insurance Program delayed closings on about 1,200 home sales each day and 180,000 across the United States, according to the National Association of Realtors.
The National Flood Insurance Program provides up to $250,000 in flood insurance coverage for homes and other properties located in federally designated flood plains and is administered by private insurers. The federal program insures about 5.6 million homes in the United States. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Federal lawmakers have been divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
Flood Insurance Program Expiration Imperils Home Sales
June 29, 2010 – The recent expiration of the National Flood Insurance Program has put on hold the finalization of nearly 180,000 homes across the United States as the federal tax credit for homebuyers expires tomorrow.
If the tax credit expires before home sales are closed, homebuyers no longer would qualify for the $8,000 and $6,500 federal tax credits on home sales closed before July 1. But homebuyers can’t close on homes located in federally designated flood zones without purchasing flood insurance protection – available only through the expired National Flood Insurance Program in many areas. The “Catch 22” has potential homebuyers frustrated, and several recent news reports indicate many will back out of home sales if they no longer qualify for the federal homebuyer tax credits expiring this month.
About 180,000 potential home sales in the United States would be affected by the National Flood Insurance Program expiring, preventing buyers from closing on homes before the federal tax credits expire this month, according to the National Association of Realtors. The House of Representatives earlier approved a measure extending the National Flood Insurance Program through September and is scheduled to debate a measure tied to “homebuyer assistance” sometime this week. But the Senate twice this month defeated measure extending the National Flood Insurance Program and might not try again until after the weeklong July 4th legislative recess scheduled next week.
U.S. Senator Ben Nelson (D – Nebraska) last week announced he would co-sponsor a stand-alone bill extending the National Flood Insurance Program through 2010. The measure bypasses an earlier jobs bill, House Resolution 4213, which seeks to authorize the program’s renewal along with several other spending measures, including extending unemployment benefits. The Senate failed to pass the resolution twice in two days earlier this month due to disagreement over the cost. The new measure isn’t tied to any other appropriations and stands a better chance of rapid Senate approval, possibly this week.
Insurance companies continue selling flood insurance protection through the National Flood Insurance Program, but the policies won’t be effective until Congress renews the ailing program. Once enacted, the policies will provide retroactive coverage for properties, and claims will continue being handled on current policies still in effect.
The continued program interruptions recently caused State Farm officials to end the insurer’s participation. The National Flood Insurance Program has expired several times during the past two years, including its most recent expiration on June 1, along with the COBRA health insurance subsidy enabling unemployed Americans to maintain their group health insurance benefits after losing their jobs.
The National Flood Insurance Program provides up to $250,000 in flood insurance coverage for homes and other properties located in federally designated flood plains and is administered by private insurers. The federal program insures about 5.6 million homes in the United States. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
Federal Lawmakers Trying to Renew Flood Insurance Program
June 23, 2010 – Frustrated in attempts to renew the National Flood Insurance Program as part of a larger package, the U.S. House of Representatives today unanimously approved a separate measure extending the program through September.
The measure bypasses an earlier jobs bill, House Resolution 4213, which seeks to authorize the program’s renewal along with several other spending measures, including extending unemployment benefits. The Senate failed to pass the resolution twice last week due to disagreement over the cost. The new measure isn’t tied to any other appropriations and stands a better chance of rapid Senate approval.
Growing public concern over the federal spending combined with 2010 being an election year last week prevented Senate Democrats from extending the financially strapped National Flood Insurance Program, which expired on June 1 as the Atlantic hurricane season began and just before deadly flash floods killed 20 in Arkansas. Democrats twice last week failed to muster the 60 votes needed to pass the funding measure, which would add some $55 billion to the federal deficit over the next decade. Opponents prefer the funding come from existing stimulus funds yet to be allocated.
In addition to extending the National Flood Insurance Program, House Resolution 4213 would extend federal unemployment benefits and eliminate a 20 percent reduction in payments to doctors participating in the federal Medicare program for the elderly. But the measure’s defeat Thursday was the second in two days. The Senate’s continued inaction has forced the nation’s largest home insurer to cease participation in the flood insurance program and drew sharp criticism from insurance groups. The latest effort by federal lawmakers is designed to break the impasse.
Not only has the National Flood Insurance Program lapsed as the traditional hurricane season starts, but recent flash floods have inflicted a great deal of damage during the past week, including deadly flash floods that killed 20 and injured dozens more in Arkansas on June 11. Although the expiration of the National Flood Insurance Program doesn’t prevent policyholders from filing claims or being compensated for damages, new policies cannot be written or renewed until the program is reauthorized. The program’s expiration also means homebuyers cannot close on their homes until they obtain flood insurance protection.
The continued program interruptions recently caused State Farm officials to end the insurer’s participation. The National Flood Insurance Program has expired several times during the past two years, including its most recent expiration on June 1, along with the COBRA health insurance subsidy enabling unemployed Americans to maintain their group health insurance benefits after losing their jobs.
The National Flood Insurance Program provides up to $250,000 in flood insurance coverage for homes and other properties located in federally designated flood plains and is administered by private insurers, like State Farm. The federal program insures about 5.6 million homes in the United States. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
State Farm currently provides flood insurance coverage for nearly 800,000 of the 5.6 million properties insured through the federal program across the nation. But its many expirations have exacerbated an already flawed federal program and left State Farm officials frustrated. State Farm will cease writing new policies through the National Flood Insurance Program on Oct. 1 but will continue servicing existing flood insurance policies until April 2012.
National Flood Insurance Program to Expire – Again
March 26, 2010 – Yet another halt in the federal National Flood Insurance Program might occur this weekend as federal lawmakers drag their heels on enacting permanent changes to the national program insuring more than 5.5 million homes in the United States.
Unless federal lawmakers approve at least another temporary extension of the flood insurance program, the program will expire at 11:59 p.m. on March 28. Lawmakers in the U.S. House of Representatives want to extend the program another month to provide time to enact permanent changes, but members of the U.S. Senate earlier voted to extend it until the end of 2010. Instead of taking up the already-approved Senate bill, the House of Representatives instead approved their own measure extending the program only another month and referred it to the Senate for consideration.
The Senate now must concur with the House timeline to prevent the National Flood Insurance Program from expiring for the second time this year. The flood insurance program expired briefly on Feb. 28 when the Senate became bogged down in debate over funding for other federal programs. The current extension was approved on March 2, but the extended debate on national health care legislation kept the Senate preoccupied and as of today has been unable to concur with the House of Representatives on extending the program another month.
Even a temporary suspension in the National Health Insurance Program is problematic for many homeowners. When the federal program expired briefly earlier this month, it delayed the closing of the sale of homes located in federally designated flood areas. Homes in federally designated flood areas must be protected with flood insurance. No new flood insurance policies can be issued while the federal program is expired, but current policies remain in force until their expiration, and policyholders can file claims arising from flood insurance damage.
The National Flood Insurance Program initially expired a year ago, but instead of enacting permanent changes, Congressional leaders several times have chosen to simply temporarily extend the program in its current form while debating national health care reform that would not take effect for several years. The National Flood Insurance Program provides flood insurance protection for homes located in designated flood plains across the country.
Extending the National Flood Insurance Program until May 31, 2009, originally was part of the latest “stimulus” effort but was nixed as part of Senate Democrats’ cost-cutting efforts. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
The National Flood Insurance Program’s expiration would leave more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. The National Flood Insurance Program covers homes located in high-risk flood areas across the United States and is the insurer-of-last-resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection.
The flood insurance program’s expiration date already was extended several times over the past year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage.
The National Flood Insurance Program originally was to expire on March 6 of last year, but federal lawmakers have delayed enacting permanent changes to the National flood Insurance Program while debating highly controversial national health care legislation.
Reports: Dems Need Votes for Health Care; Deficit Increase Likely
March 19, 2010 – With President Barack Obama having postponed his planned trip to Asia to focus on a planned Sunday vote on changing the nation’s health care system, several news reports indicate Democrats need six more votes to approve a controversial Senate health care bill but might be dishonest about alleged cost savings.
Obama today announced Democrats don’t have the 216 votes necessary to approve the Senate health care bill and subject it to the reconciliation process as of this morning, but Obama and leading Democrats are attempting to gain the necessary votes from more than a dozen House Democrats yet to decide how they would vote, Bloomberg News reported today. Several Democrats oppose federal funding for abortion provided in the Senate health care bill; others oppose a proposed tax on high-end health insurance plans. And some members of the Hispanic caucus have said they might not support the measure due to its banning illegal immigrants from purchasing health insurance through proposed health insurance exchanges.
If the Senate bill is approved, Democrats want to use a rare reconciliation process to iron out fiscal differences between the House and Senate versions, but some pundits suggest Democrats are planning to do so illegally. Reconciliation only can be used for reducing federal deficits, and an unofficial Congressional Budget Office report announced yesterday suggests proposed changes might save the federal government some $138 billion over 10 years while extending health insurance coverage to an estimated 32 million people currently without health insurance. But Congressional Budget Office officials cautioned the analysis was only a preliminary one and needed additional analysis before an official report can be issued.
Leading Democrats in the U.S. House of Representatives and Senate publicly are using the unofficial Congressional Budget Office analysis as leverage to continue with the reconciliation process, but a controversial March 18 internal memorandum allegedly circulated among House Democrats and obtained by Capitol Hill reporters suggests Democrats are misleading the public about reducing by some $371 payments to doctors participating in federal Medicaid and Medicare programs proposed in the Senate bill upon which leading Democrats want to hold a vote this Sunday.
“With many Americans nervous about the debt and deficit, we cannot stress enough that this bill is the key to getting costs under control. As the President has stressed repeatedly, health reform is deficit reduction,” the alleged memo reads. And the reduction in federal payments to doctors involved in federal health care programs is the source of the preliminary $138 billion deficit reduction mentioned in the unofficial Congressional Budget Office report leaked this week. But that $138 billion in “savings” over 10 years is based on reduced payments to doctors.
But instead of actually reducing payments to doctors through a “Sustainable Growth Rate” mechanism included in the Senate bill, the internal memo allegedly shows Democrats have included the cost-saving measure only long enough to get the Senate health care bill approved and plan to repeal after the Senate bill is passed.
“The inclusion of a full [Sustainable Growth Rate] repeal would undermine reform’s budget neutrality. So again, do not allow yourself (or your boss) to get into a discussion of the details of [Congressional Budget Office] scores and textual narrative. Instead, focus only on the deficit reduction and number of Americans covered,” the suspect memo reads. But, later, the alleged memo reveals the White House and leading Congressional Democrats already are negotiating support among doctors to repeal the cost saving mechanism if they succeed in enacting changes to the $2.5 trillion-a-year U.S. health care system.
“As most [House Democrat] health staff knows, Leadership and the White House are working with the AMA to rally physicians support for a full [Sustainable Growth Rate] repeal later this spring. However, both health and communications staff should understand we do not want that policy discussion discussed at this time, lest [it] complicate that last critical push to pass health reform,” the alleged memo reads. “When media raise the issue of the [Sustainable Growth Rate], only say that Congressional leaders are working with the physician community on this issue.”
Several leading Democrats have claimed the alleged memorandum is a hoax. Several news sources that have used the information say it comes from a reputable source, but they cannot confirm its authenticity. House Democrats have scheduled debate on the Senate health care bill to begin at 1 p.m. Sunday with a vote planned afterward.