March 24, 1991

Business World/Magazine Part 2

Private insurers, which once spread the cost of health insurance equally across all groups, are increasingly charging different rates for different kinds of people. The young, single, healthy employee and the couple who both work are benefiting at the expense of the older worker whose spouse does not work and who has illness in the family. All told, the difference between the highest and lowest rate paid by employees at the same company for health insurance can now exceed $2,000 a year, and is expected to widen sharply in coming years.

About 70 percent of Americans over the age of 62 own their own homes, and 85 percent of those homes have been paid off, leaving millions of Americans with billions of dollars worth of equity that, for many of them, would come in very handy in their old age. It is for these that the concept of the reverse mortgage was developed about a decade ago, said Doris Schear, program director for Westchester Residential Opportunities, a nonprofit group that advises the elderly on housing issues. At first available at only a few banks, a new program by the Federal Housing Administration to insure reverse mortgages of up to $124,875 means that people over 62 with paid-off mortgages can borrow against their houses from any bank that makes F.H.A. loans and not have the loans fall due until they die or sell their homes. Many people use the money to pay taxes or maintain their houses; others need money to live on. All have the option of getting monthly checks or a lump sum. Some, Ms. Schear said, borrow simply to "travel and have a good time!" The F.H.A. progam, begun in January, insures life-time tenancy for elderly borrowers. Without the program, lenders usually put 10-year limits on reverse mortgages, meaning that borrowers could be forced to sell at the end of the term.

The unbeaten Nevada-Las Vegas Runnin' Rebels put on a stunning exhibition of transition basketball here this afternoon, pulverizing Seton Hall by 77-65 in the West Regional final to reach the Final Four of the National Collegiate Athletic Association tournament for a second year in a row. Larry Johnson scored 30 points, and Stacey Augmon and Anderson Hunt added 13 apiece for the Rebels (34-0), the defending national champions, who turned what had been a close game in the first half into a rout with relentless defense and numerous fast-break baskets.

The Peninsula Group, a Hong Kong hotel company known for its Old World-style luxury properties in the Far East, will open a new hotel in Beverly Hills this summer, its second in the United States. The cost of the hotel, the 200-room Peninsula Beverly Hills, including land, will be more than $100 million, said Robert Zarnegin, president of the Probity International Corporation of Los Angeles, the developer. Rates are expected to range from $265 a night to $2,500 for a two-bedroom, separate villa on the grounds.