Surgery Discounts with Insurance

Weeks after my surgery, the bills are starting to arrive. What has amazed me is the incredible discounts (60-80%) my health insurer was able to negotiate with the providers. Even if I had a 100% of the adjusted balance, my health insurance appears to have saved me thousands of dollars.

While I am glad I received the discount, it is unconscionable that the uninsured get hit with inflated charges. In today's WSJ, they have a story on how cancer centers are charging the uninsured thousands of dollars more than the insured. http://online.wsj.com/article/SB120934207044648511.html?mod=hps_us_pageone

Job Hunting after Huge Failure

Ok, everyone has had some bad moments at work. But to losing billions of dollars in a rogue trading scheme shouldn't prevent you for getting a new job. According to the WSJ, Jerome Kerviel of Soc Gen infamy managed to land a job in computer services. Let look at key resume points he had going for him:

1. Lost Billions in Rouge Trading Scheme
   
2. Spent a month in prison
   
3. Picture on front page of most of the business pages in the world.
   

This guy should set up a company for helping people find jobs.

Health Insurance – Ordering to save Money

Because different services have different co-insurance percentages, you can often save a few dollars by ordering the submission of claims to your health insurer.

Example: You have a $1,000 with 20% co-insurance for medical care and 30% for prescriptions. You incur $1,000 in medical expenses and $1,000 in prescription bills.

Example 1: Submit medical expenses before the prescriptions. You pay $1,000 towards your deductible and $300 towards your prescriptions.

Example 2: Submit the prescriptions first. You pay $1,000 towards your deductible and $200 towards your medical expenses. In this case, ordering saves you $100 in after tax dollars.

General Rule of Thumb: Any Non-Generic, Non-Formulary drug expenses should be submitted first. Although you will get stuck paying 100% of the charges, you avoid paying the typical 40-50% co-pay they have.

12mo IRA Performance Report

One year after transferring my 401k (from my prior employer) to a self directed IRA, my IRA has declined in value by 0.88%. While certainly not a great performance, it beats the minus 5.3% it would have declined had I not moved to a defensive posture in August, 2007. In a down market, avoiding a big loss can be a big win.

Current Asset Allocation:

Cash         = 63%

ST Treas Fund    = 7%

Index Fund     = 10%

International     = 10%

Ind Stocks    = Remaining Amount

 

Goal for the next 12 months: plus 5% as I move cash back into the market.

Credit Card Arbitrage

As an experiment, I tried executing a 0% balance transfer arbitrage using a Discover Card. In 12 months, I made $75 in miles rewards + approximately $300 in interest. While the experiment worked, I didn't find the after-tax profit worth the time to manage the process or the worry it caused me. I won't be doing it again.

Cell Phones for Couples

For couples, a family plan is a great way to save money on cell phone services. Last month, my fiancé cancelled her account with Sprint and got a phone through Verizon. Since most of our calls are to each other (and the minutes don't count), we share a 700 minute plan for a total of $100 per month with unlimited texting. Over the course of a year, we will save about $240 in after tax dollars with this arrangement.

BTW – Verizon has been very easy to work with.

Heloc Borrowers – Libor Shooting Up

According to the WSJ. the LIBOR is likely to shoot up in relation to other money rates. Apparently, there is some concern banks were lying about their rates causing the LIBOR to be artificially low. Now, my HELOC rate is likely to go up again.

PS – I wonder how long it will take Class Action attorneys to file lawsuits on behalf of borrows getting the shaft.

Risk Premium - Investment Losses

Let's say you have a choice of buying a FDIC insured CD paying 4% and an Auction Rate Security paying 4.25%, you must understand the 25 basis points premium is to compensate you for taking some risk. If you are unwilling to take that risk, you must give up the 25 basis points.

Now that the bubble is bursting, we are seeing more and more companies going under and investors are losing money on investments in everything from SIVs, Auction Rate Securities, MBS, or even uninsured investments in banks. Although there were certainly instances of fraud, many lawsuits/complaints involve people who fail to accept the fact they were compensated for additional risk.

Rules to Live By:

1. There is no such thing as a free lunch, especially on Wall Street. Any increase in expected return means you are accepting additional risk.
   
2. Do not take risks you do not understand. If you don't understand the risk you are taking, you cannot possibly determine if you are getting paid a fair return for the risk.
   
3. If an income investment (bonds, CD's, or other savings vehicle) pays a significantly higher rate of interest than "comparable investments," it is not really comparable. No bank is going to pay 6% on a CD when other banks pay 3% unless there is an enormous CATCH.

$100 T-Bill from Treasury Direct

Last week, I placed an order for a $100 4-week T-bill as an experiment. The only problem I have had with the site is trying to swap out my local bank for ING Direct. According to the Treasury Department, a notarized change of bank form is not good enough. For some reason, they want a bank official to witness my signature. At this point, I am waiting for them to respond to my inquiry on how to make that happen.

My Identity Stolen!

While checking with American Express about another matter, the representative mentioned there were two accounts using my SSN open with different names. Needless to say, it was disturbing. A few days earlier, HR informed some of us that a laptop with our personal data had gone missing. PANIC!!!

My Strategy:

1. My company is offering credit repair through Kroll Associates. They are now working with Amex to investigate the incident.
   
2. Although probably overkill, I purchased a year of credit monitoring for Equifax. Probably overkill, however, I want to be sure of where I stand.
   

   
    

Based upon my review of my credit reports, things are not out of control; however, I will be vigilant until I am sure.

CitiCard Hybrid Sweepstakes – No Purchase Necessary

Visiting my Citi to check an online balance, I noticed an offer to enter a sweepstakes for a hybrid vehicle by doing a balance transfer. If you are interested in the sweepstakes, check out the rules because they offer other ways to participate.

By Mail: To enter without engaging in any of the above banking actions, hand print your name, address, day and evening phone numbers, email address (if any), and age on a 3" x 5" piece of paper and mail it with proper postage to: "Citi EcoSweepstakes," c/o ePrize, LLC, P.O. Box 8070, Royal Oak, MI 48068-8070. You will earn three (3) entries into the Sweepstakes per 3" x 5" piece of paper. Limit: One (1) 3" x 5" piece of paper per envelope. Nine (9) entries total. All mail-in entries must be handwritten. All mail-in entries must be postmarked by May 16, 2008 and received by May 23, 2008. All entries become the exclusive property of Sponsor, and none will be acknowledged or returned. Proof of sending or submission will not be deemed to be proof of receipt by Sponsor. Sponsor is not responsible for lost, late, incomplete, invalid, unintelligible, illegible, misdirected or postage-due entries, which will be disqualified. Use of any automated system to participate is prohibited and will result in disqualification.

Altima Hybrid Review

My company allows us to rent vehicles for business trips. Much to my surprise, today's vehicle was a new Altima Hybrid. What did I think? As per my prior posts, I don't think hybrids are a good economic or environmental choice. Today, I covered 270 miles including a significant amount of time stuck in Manhattan traffic. Gallons used = 9.02. Although pretty good, my fiancé's 3 year old Toyota Corolla would have had similar results over the same course. Economically, the Corolla is a no brains winner over the Altima.

What about size? In a pinch, the Altima could probably seat 5 while the Corolla can only seat 4 (with less overall room). With respect to trunk space, the Corolla probably has 75-100% more space than the Altima. IMHO – a hybrid with reasonable trunk space would likely need to be a wagon or hatchback.

Below: I have posted a link to a review by Car and Driver. For some reason, they got horrible mileage with the Altima.

http://www.caranddriver.com/reviews/hot_lists/car_shopping/green_machines/2007_nissan_altima_hybrid_short_take_road_test

Free HD – Saved $15mo on Cable

After the upstairs TV finally kicked the bucket, we bought a nice 32" HDTV on sale. After CrapCast Cable said it would be an additional $15 per month to get a HDTV cable box, I decided to do a little research. From the web, I learned my TV should be able to pick up network HD signals for network programming without a box. Sure enough, I can get all four networks in HD.

Although I don't get some of my favorite channels in HD upstairs, I get enough channels to enjoy saving $180 per year.

$6 Billion Gift to Homebuilders – Congress!!

If you have not heard, the idiots in Congress are looking to pass a bill giving homebuilders over $6 Billion (yes, BILLION) of our hard earned tax dollars as a bailout. If we want housing prices to go back up, the best idea would be to stop increasing supply. Bankrupt homebuilders would lead to less supply and higher prices on existing housing stock.

Please call you congressman and complain!!