Category Archives: Finance

Common roles of a successful banker on digital platforms.


Everyone has that one thing that is quite hard to let go. Similarly, when it comes to banking, it is a very big challenge to let go of the old ways of running the bank operations and embracing the future.  The improvement in technology has given rise to so many new competitors in the industry and keeping up with the trend; it seems we might only have digital banking with very few customers left in the physical platforms. Being a successful digital banker needs so much effort especially coming from the physical platform. Despite the challenges posed by the technology, there are also so many opportunities and for you to be a successful digital banker, these are the major traits you need to possess.

  1. You need have a clear vision.

With the changes coming up in the banking industry, there are also new regulations and compliance. Also the client expectations are also changing. To be successful, you need to build fintech-based banking. This will need proper guidance for repositioning of the organizational structure for the sake of the long-term goals. It is important to have a clear and strong vision of the future. It is with this vision that you will be able to invest greatly towards attaining the vision.

  1. You should be a designer.

It is very vital for the digital banker to understand ways of successfully designing digital platforms that will suit both the customers and the overall staff. has seen so much success in the digital platforms because they are concerned about their customers and they want them to experience the best possible experiences. Banking industry has a lot of regulations but despite of these issues, customers will choose financial partners that enable them to have a smooth and easy digital experience. To be successful as a digital banker you need to be at the forefront in leading the process of transformation. It is important to always put the customer –first. Failure to do this will result to loss of customers to competitors.

  1. Be a team player and a team leader.

If you want to go fast, walk alone, but if you want to walk far, walk in the company of the like-minded people. This saying is very applicable in the success of the digital banking.. A successful banker ought to lead his/her team through the transformation process. You ought to have the courage and the vision to break any kind of barrier that may be coming from the internal sources.

It is important for the team leaders to train younger talent in the department thus enabling the empowerment of innovation and it is through tis that more ideas will be discovered.

Why The Financial Services Sector Is Spending Heavily

The financial sector has been the leading contributor among 13 sectors in the previous six presidential elections dating to 1992. The sector tends to favor Republican candidates.

This reflects financial services organizations’ increasing interest in election outcomes and the rippling of the Supreme Court’s controversial 2010 Citizens United decision that sanctioned unlimited political contributions by outside political groups. Regulation of the financial services sector has been a major campaign issue. Republicans tend to favor keeping the status quo or decreasing regulation, including the party’s presidential nominee Donald Trump.

As a result, Republicans have received the lion’s share of the sector’s largesse.

This year, 62% of contributions (excluding outside/soft money) from the financial sector have gone to Republicans compared to just 37.9% to Democrats.  ExceptVenture Capital, every industry in the financial sector including commercial banks, securities/investment, hedge funds and real estate, have contributed more to Republicans than Democrats.

The financial services sector has so far contributed close to $637 million this year, according to the Center for Responsive Politics.

The Citizens United ruling prohibits government from restricting contributions by non-profit groups and by extension for unions and for-profit organizations.

Consider the three observations about political spending below:

1. Financial Sector Contributes to Outside Groups

Since 2010, the bulk of total contributions by the financial sector has been going to outside spending groups. The largest total has been in the 2016 election cycle.

Outside money groups like Super PACs can accept unlimited contributions and are allowed to advocate for or against a candidate, a direct result of the 2010 Citizens United ruling. This year, the contribution by the sector is $309.41 million compared to just $17.9 million in 2010.

Renaissance Technologies gave $30.24 million to outside spending groups. Super-PACs like Priorities USA Action and Keep the Promise II received $9 million and $13.5 million, respectively from the investment management company.

The next biggest contributor in the sector, Elliott Management, gave 98% to Republicans with a sum of $15.25 million to outside spending groups.

100% contributions to Republicans, the contributions to outside spending groups have been around $15.25 million and $15.08 million correspondingly, for Wilks Brother and Starr Companies.

2. Financial Sector Spends Heavily on Lobbying

From 2010 to 2016, the financial sector spent close to $3.17 billion on lobbying. The industries in the financial sector tend to agree on issues like opposing taxes and excessive regulation of financial instruments.

The sector spends more on lobbying than all but two of the other 13 major sectors. Within the sector, the insurance industry spends most heavily on lobbying. Insurance ranked only behind pharmaceuticals and health products among 80 industries in spending on lobbying, according to the Center for Responsive Politics.

Insurance spends more on lobbying than in campaign contributions. The insurance industry contributed about $60 million in political contributions this year (65% to Republicans) and more than $75 million on lobbying.

3. Commercial Banks Quadruple Spending to Outside Groups

Commercial banks have contributed $28.84 million this year to federal candidates, committees, parties and outside money groups that support them.

According to the Center for Responsive Politics, of that amount, the groups spent $4.59 million on outside groups, about four times the amount in 2014.

Commercial Banks ranked among the top five lobbying industries in the financial sector in 2016 with lobbying expenditure of around $31 million. In other words, this industry spends more on lobbying than on campaign contributions.

Toll Brothers Stock

Shares of Toll Bothers (TOL) are down almost 30% in the last year. The company reports fiscal third-quarter earnings for 2016 on Tuesday. I’m cautious on the stock.

Toll reported mixed second-quarter results at the end of May. Earnings of 51 cents per share were ahead of the consensus of 46 cents. Average selling prices of $856,000 were in line. However operating margins of 10.5% were well below Street estimates. Margins were negatively impacted by $6.4 million of write-downs. Total orders were 1,993 homes, which represented just 3% growth, far below the consensus estimate of 8%. In addition, management said the first three weeks of the third quarter were flat.

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Toll Brothers is expected to report third-quarter earnings of 61 cents per share on revenue of $1.25 billion. The company previously forecast a backlog conversion rate of 30% and an average delivery price of $825,000.

For fiscal 2016, the Street is looking for 5,800 to 6,300 home deliveries this year, with an average delivery price in the range of $820,000 to $850,000. The company gave guidance for homebuilding revenue of $4.76 billion to $5.36 billion, and about $117 million in joint-venture revenue. GAAP earnings for the year are at $2.60. Next year, revenue looks like it will be $5.733 billion, up 17%, with earnings of $3.15 per share.

Toll Brothers faces sluggish order growth. This was the third quarter in a row that order growth was below estimates, and it only reinforces the belief that the housing market is still lackluster. Toll Brothers ended fiscal 2015 with total order growth of just 2%. For the past few quarters, analysts have been forecasting order growth in the high single digits (7% to 9%).

Last quarter, Northeast orders were down 14%, and orders for the company’s City Living project were down 14% as well. Given the lack of traction in closing volumes, it’s hard to see any upside in the shares.

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At $28 per share and 11 times fiscal 2016 estimates and only 9 times next year, the stock may seem cheap, but investors are discounting a housing slowdown and are unwilling to grant the shares a higher multiple until order growth picks up.

New homes in the $200,000 price range are selling as fast as builders can put them up, but at Toll’s higher prices, it’s difficult to sell such an expensive product. Some analysts think the shares can get to the $33 to $36 range, but unless order growth picks up dramatically, I don’t think the stock will see much lift.

The Reason of U.S. Housing Market Is Good

unduhan-31Housing is doing better. It’s not doing great but it doesn’t have to be right now, for either investors or the economy.

The National Association of Realtors said today that existing-home sales dropped 3.2% in July to an annual rate of 5.39 million units, with the median price rising 5.3% from a year ago to $244,100. That missed expectations for a 5.5 million-sale annual rate.

New home sales, meanwhile, hit a forecast-busting 654,000 units annually, the best in nine years, according to a Census Bureau report Tuesday.  “[It] turned out to be the forecasting equivalent of Katie Ledecky against the field,” Regions Financial chief economist Richard Moody said afterward.

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The news is pretty good in the short term, but not all that huge in the context of time. New home sales are still weaker than in any year since 1992, as the Wall Street Journal’s Nick Timiraos reported yesterday.

Adjusted for population, they’re at about 63% of their 50-year average level — way better than in 2011, but nowhere near heated, (Z)  economist Ralph McLaughlin said. Existing-home sales are better — they’re right about where they were in the late 1990s amid the Internet boom. They’re consistent with a strong economy, but they haven’t matched the soon-regretted peaks of 2007, or even kept up with the population growth since 1998.

The housing market is, basically, good enough to do the job — if the job is to push unemployment a little lower and demonstrate that consumers are willing to spend a little more each quarter and keep the nation’s third-longest expansion since World War II moving.

And that ought to be at least fairly favorable for home-building stocks like KBHome(KBH)  and Pulte Home Group (PHM) , not least because it gives them room to keep growing steadily for a few years before anything like a housing correction. Indeed, the problem with existing-home sales is that there are too few such homes on the market, said Lawrence Yun, chief economist of the National Association of Realtors.

“Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” Yun said in a statement. “Lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”

That’s especially true in the condo market that serves first-time buyers in high-cost markets like California, he said. The pent-up demand is benefiting home builders, though, as recent earnings reports demonstrate.

Luxury builder Toll Brothers ( TOL) said Tuesday its quarterly earnings jumped 69% to 61 cents per share, while revenue rose 23.5% from a year earlier to $1.27 billion. Analysts had expected $1.25 billion, according to estimates compiled byThomson Reuters.

“Our business is really, really good,” CEO Doug Yearley said Tuesday on CNBC. “The pent-up demand is continuing to build.”

Builder stocks surged after the new-home sales data reported Tuesday, bringing the year-to-date return of the S&P Home Builders Select Industry Index to 5%, lower than the gains of the S&P 500. All of that money has been made in the third quarter, as concerns about a recession have begun to dissipate.

Tips to Win Travel Rewards With Hotel Loyalty Programs

images-44The quiet word among savvy frequent travelers is that lately many have shifted their focus from airline rewards programs to hotel programs.

Surprised? Understandably. For decades hotel programs have been the ugly duckling of rewards for travelers. But things are changing. “People usually can use hotel rewards with no problems. With airlines, it’s a different story,” said Jason Steele, a travel rewards journalist based in Denver.

Bluntly put: it just has become very hard to cash in airline miles for free flights, certainly not to desirable locations. Go ahead: try to book a free flight to Hawaii during Christmas. It just is about as likely as winning Mega Millions.

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But what many travelers are finding is that – in an era of full flights – it has gotten difficult to cash in miles for free trips even to less desirable locations, over less desirable dates.

With hotels, it’s totally different. Joe Brancatelli, who blogs at, said, “Here’s the main difference between airline and hotel programs for the average traveler: hotel chains are running at 60 to 65% occupancy. So there’s almost always a room to be had free. Availability of awards is generally wonderful.”

That’s key. You may have 50,000 miles in your United kitty, but you may not be able to spend them on a free flight. On magazines, sure. Maybe seat upgrades. Flights, not so much.

Brancatelli added: “Travelers just do not understand how valuable hotel programs are. The chains are in intense competition all around the world. Plus elite status is easy to get and is useful — free Wifi, some upgrades, late checkout, etc.”

The Global Housing Market

The U.K. is not the only destination of the Chinese buyers. U.S. homes are sought after, too. According to the latest data from the National Association of Realtors, Chinese buyers made up 26.3% of total foreign buyers of residential U.S. property between April 2015 and March 2016, when they bought houses worth $27 billion.

The Chinese were followed at great distance by Canadians, who bought residential property worth $8.9 billion in the period, Indians with $6.1 billion, the British with $5.5 billion and Mexicans with $4.8 billion. Such a big difference in amounts suggests the Chinese buyers are perhaps more than just rich individuals.

Looking at imports of building materials from China, they have increased in the U.S. too in recent years, data from the U.S. Census Bureau show. Between 2013 and 2014, imports of stone, sand, cement, etc. increased by more than 9% and jumped by 19% between 2014 and 2015.

Of course, there is no actual proof that the Chinese buyers gobbling up properties around the world — so eagerly that Vancouver had to impose a hefty tax on foreign buyers to cool off its red-hot real estate market — are one and the same as the Chinese companies that are awash in state stimulus cash.

And yet, going back to 2013, recall that the People’s Bank of China allowed Chinese companies to lend money in renminbi to their offshore branches without any limit and without any requirement for them to first notify regulators.

That essentially meant that companies could transfer money out of China without having to worry about capital controls. Home prices started increasing strongly around the world since around that year.

Of course, this could be a coincidence, and probably is. But still, it makes one wonder.

Know more about the mortgages

Your Money, Your Retirement, and the 2016 Presidential Election – What changes will you need to make to your portfolio should Hillary R. Clinton become president? What happens to your investments should Donald Trump become president? Join us on September 12 as our panel of the world’s top financial experts provide trusted information on the investment risks and opportunities that arise with the upcoming presidential election in November. [Learn more about the event and RSVP.]

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CORRECTIONS AND CLARIFICATIONS: Originally, the article below stated, “Under the arrangement, investors offer homeowners annuity-type payments for their homes, in exchange for the title of the home after the owner dies.” But in reverse mortgages, a homeowner does not relinquish title to the home. In addition, a reverse mortgage becomes payable in circumstances other than the owner’s death. Changes have been made to paragraph four to reflect this change. It also stated, “Reverse mortgage homeowners are allowed to retain homeownership, with no mortgage payments.” But homeowners do not relinquish title of their homes, as the sentence implies. Changes have been made to paragraph seven. It also stated, “Through a HECM, you can buy your primary residence if you’re able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you’re buying.” Homeowners do not use reverse mortgages to finance the purchase of their primary residences, as the sentence implies. Changes have been made to paragraph eight. It also stated, “As for those costs, they can add up. Costs such as closing fees, lender fees, and insurance tend to be high for reverse mortgages. What’s more, they aren’t paid up front: they’re represented in the offer for a reverse mortgage as reduction in the net amount to which you’re entitled. Not surprisingly, many seniors are getting gouged.” But homeowners have the option of considering different lenders, and fees may vary. The U.S. Department of Housing and Urban Development regulates fees. In addition, homeowners are protected by mortgage insurance premiums. Changes were made to paragraphs 10 through 13.

It’s been a soul-degrading presidential election year, but it won’t end after Nov. 8. Expect to see at least a few failed politicians touting the benefits of reverse mortgages on late-night TV.

Under the arrangement, homeowners borrow against the value of their homes. The loan comes due when the home is sold or no longer used as a primary residence. It may also come due when homeowners don’t meet property or insurance payments.

Borrowers or their estates must not pay more than the loan balance or home’s value. A reverse mortgage can be a good financial decision in the right circumstances.

The home is still the biggest asset owned by most Americans. The Commission on Retirement Security and Personal Savings recently reported that there’s $12.5 trillion in home equity in the U.S. as compared to $14 trillion in retirement assets. It’s likely that retirees will increasingly tap their home equity to make ends meet.

Under a reverse mortgage, homeowners 62 and older leverage their home equity to extract cash from their homes without having to make a mortgage payment. Reverse mortgage lenders take over the payments and recoup their investment once the home is sold, typically after the homeowner or a surviving spouse moves out of the home or passes away.

Seniors rely on reverse mortgages to supplement Social Security and other existing income sources, cope with unexpected medical expenses, pay the college costs of grandchildren, take a long vacation, even purchase a new home. From an investment standpoint, the cash infusion of a reverse mortgage also can be used to buy stocks, bonds, mutual funds or insurance policies.

Homeowners never relinquish title to their homes. The reverse mortgage enables seniors with insufficient income to tap their home equity without selling their domicile. Moreover, the income can make it possible for a retiree to delay taking Social Security payments in favor of larger payments down the road.

Homes To Stay At During The National Parks Centennial

The National Parks Service turns 100 this year, but you don’t have to sleep on the ground to celebrate that fact.

Though Yellowstone and other national parks and monuments were established earlier and President Theodore Roosevelt and Sierra Club founder John Muir championed conservation well before, the National Parks Service’s establishment by President Woodrow Wilson on August 25, 1916, eventually preserved more than 450 sites for future generations. While the service is celebrating this year with commemorative coins, stamps and other detritus that grandparents will give to kids, the best way to take in the parks system is to visit on your own.

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Unfortunately, the timing of this anniversary isn’t great. By August 25, many college kids are back at school, already and many families have used up their vacation days visiting places that their tax dollars aren’t paying for and handing over exorbitant sums to visit attractions nowhere near as impressive as the Sawtooth Mountains or the view from Hurricane Ridge in the Olympics. The nation is just about burned out on vacations and ready for fall, school and football season.

It’s also a time when folks trying out camping for the first time have decided they either love it and want to spend more of their off hours sleeping beneath stars and canopies of trees, or absolutely hate it. They’ve been eaten alive by mosquitos, drenched in sweat after sleeping in tents-turned-greenhouses and have had just about enough of washing the scent of campfire out of their clothes each weekend. The latter group has decided that their favorite campsite is somewhere with air conditioning and their favorite tent is better known as a hotel.

These folks aren’t left out of the national parks experience entirely: they just need to be gently introduced to it. Fortunately the National Park System and its surrounding communities are dotted with surprisingly plush accommodations for a service built on roughing it. With help from TripAdvisor Vacation Rentals, we found five properties that allow travelers to celebrate the gift the nation was given 100 years ago, but still show an appreciation for more modern amenities like private showers, hot tubs and entrances that don’t open and close with a zipper…

The million-acre Glacier National Park along the Canadian border predates the National Parks Service by six years, but is one of its system’s crown jewels.

Bearhat Mountain reflecting into Hidden Lake, Grinnell Glacier still carving its way into the terrain, the surrounding mountains that dwarf you as you drive in on Going-To-The-Sun road: all of it remains impressive more than a century later. All of it is much easier to traverse on a good night’s sleep in a warm bed with clean clothing available.

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The cabins at The Ridge at Glacier were hand built by one man who had specific ideas about how Glacier should be enjoyed. In this case, it’s from an 880-square-foot, two-bedrooms, one bathroom cabin with room for six people, views of the ridgeline, a stackable washer-dryer and a full kitchen with full-size refrigerator, dishwasher, disposal, microwave, oven, stove top, spices and more. The guy behind this cabins roughed it so you wouldn’t have to. The least you can do is reward him for his efforts by taking a shower, warming up a Hot Pocket and sleeping in.

Yosemite dates back to a decree from Abraham Lincoln, but it didn’t come under full federal control until 1906. That’s still a decade before the National Parks Service was established, which means Yosemite has had time to acclimate to the needs of its visitors.

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This newly constructed three-bedroom, two-bathroom home, for example, sleeps ten within its surprisingly plush lodge surroundings. All the nature is safely behind large picture windows in the sprawling great room. You can take in the forest and mountain views from leather sofas around the stone fireplace, or you can ignore it altogether and watch preseason football on a 65-inch 4K television.

A kitchen filled with stainless steel appliances, granite counters and a “rustic” table for eight is straight out of an HGTV remodeling show, as are the king-sized bed, walk in closet and travertine shower in the master suite. There’s a queen-sized bed in the second bedroom and bunk beds and wall beds throughout the rest of the house. There’s even a loft with yet another 65-inch 4K TV, complete with satellite television and a Blu-ray player. A washer-dryer and a gas grill round out the perks and help make this cabin a nice little refuge when the Civil War-era landscape gets a little too rough for your liking.


All about the investments

One of the strongest sectors of the U.S. economy is housing, and the economy appears to be in the middle of an extended recovery. Investors can find many ways to participate in this trend, but one not frequently considered is timber real estate investment trusts.

Consolidation in the domestic lumber industry has led to a reduction in investment choices. The two you might want to consider are Weyerhaeuser  (WY)  andRayonier (RYN) .

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Weyerhaeuser is the behemoth in the sector. It has been around since 1900 and now owns or controls more than 13 million acres of forest lands. Weyerhaeuser shares have a market capitalization of $24.12 billion, following its acquisition of Plum Creek Timber in February 2016.

Rayonier is a smaller operator, with 2.7 million acres of working forests and a market capitalization of $3.39 billion. It has been around for 90 years.

It’s important for timber to be as close as possible to end markets and transportation. Both of these companies primarily produce lumber in the U.S., although Weyerhaeuser is also in Canada and Rayonier operates in New Zealand (close to China, a very important end market).

The beauty of timber as a resource is that it grows! Each and every year a tree enlarges its circumference. If sustainably harvested, timberlands can become an increasingly valuable commodity. Demand for pulpwood (converted into items such as paper towels and toilet paper) and logs (for lumber) rises and falls depending on economic conditions around the globe. Consider that China’s slowdown over the past couple of years reduced its need for imported logs, causing prices to weaken for exporters in New Zealand and the U.S. Pacific Northwest.

The current health of the housing industry seems to be setting up for better conditions domestically and potential improvement in China. Prices are gradually rising.

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When you own millions of acres of forest land, what do you also own? Real estate with the potential to be developed. Rayonier analyzes property in the southeastern U.S. for its greatest potential and highest business use. When it determines that forest land is valuable for residential, commercial or industrial use, it sells or develops the land for a higher profit. You can imagine that some lands in northeast Florida might be extremely valuable for development. This is another profit center for Rayonier. (And, as a company, it generates more than $500 million in revenue from only about 325 employees!)

What does it mean that these companies operate as REITs? As an investment vehicle, REITs were created by Congress in 1960 to allow investors to commit funds efficiently to income-producing real estate. REITs legally avoid paying federal income tax by distributing at least 90% of their taxable income to shareholders as dividends. (A portion of the payout may be classified as a return of capital, generating modest tax benefits and extra record-keeping for taxable investment accounts.)

Weyerhaueser and Rayonier are strong domestic operators with dividend yields in the 3.5% to 4% range. If you’re looking for solid investment income, likely asset growth and the potential for equity appreciation, you might want to take a chip out of these companies. After all, the housing industry likely will always need timber.

Medicare Cover You for Illnesses

Retirees love to travel. Just about all say that travel is high on their to-do lists. Word of advice: don’t set foot out of the country unless you know how you will deal with illness or injury outside U.S. borders.

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That’s because Medicare generally does not cover care overseas for illnesses and only a handful of plans offer partial coverage for emergencies. “Medicare covers nothing outside of the U.S. and U.S. territories, like Guam, Puerto Rico, etc.,” said Christopher Grimmond, a Medicare specialist with Omaha Insurance Solutions. “That’s it. End of story.”  He noted that there are some narrow exceptions – more on them momentarily – but for the most part basic Medicare covers zip and even the Medigap plans, intended to fill coverage holes, can’t be counted on by foreign travelers.

With AARP, for instance, none of the Medicare Supplement plans it sells cover treatment overseas for illnesses. About half the plans do cover foreign emergency care – but only up to 80%. Have a heart attack in London, and you could be whacked for maybe $10,000 (roughly 20% of the typical $50,000 for treating a simple heart attack). There’s also a $250 deductible.

Maybe you won’t be charged a penny – the British National Health is widely said to be lax about dunning U.S. travelers. But maybe you will be billed and what then? Similar is said about many European Union countries. They often do not bill for medical services rendered to U.S. travelers. But they could.

Hospitals in some countries – travelers fingered India and Russia as cases in point – insist on cash on the barrelhead before providing care.

What about those exceptions where Medicare will pick up foreign bills? Grimmond said that in cases where an emergency room is closer in Canada or Mexico than in the U.S., basic Medicare may cover the costs.

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Basic Medicare also will – sometimes – cover care rendered on a cruise ship. Said lawyer Yulian Shtern with Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf in New York: “Medicare will pay for medically necessary services received on a cruise ship when the doctor is allowed under certain laws to provide medical services on the cruise ship and if the ship is in a U.S. port or no more than six hours away from a U.S. port when the services are rendered, regardless of whether it is an emergency.”

But even when Medicare provides coverage, it comes with a caveat, said Dr. Joel Shalowitz, a Northwestern University professor of medicine. “In all cases, the care must be for Medicare covered services and Medicare payment rates apply,” he said. Medicare rates, by the way, usually are a fraction of the sticker price charged by hospitals, but U.S. hospitals understand the rules and they also know Medicare’s playbook for what is covered. Foreign hospitals don’t typically deal with any of this – so confusions are possible.