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October 29, 2018

This Trick Could Save You $4,000 on Health Insurance

Filed under: Health — Edgar (aka MrConsumer) @ 5:54 am

Health plan costs have so skyrocketed that even a plan for a single individual can now exceed $1,000 a month. But a new trick, described here for the first time, could save you a bundle.

MrConsumer has long believed that pricing of health insurance is a mathematical game. If a plan has a seemingly low monthly premium, the insurer makes it back by imposing a deductible and higher copays. But a plan with lower copays and no deductible certainly comes with a higher monthly price tag. I am sure the insurers’ actuaries and accountants stay up late at night juggling these variables so that the house wins most of the time.

But it may be possible, though rare, to save thousands of dollars by doing a calculation no one ever suggested you do — find a plan where the health insurance bean counters messed up the mathematical structure of the plan.

So how can you save money when choosing among plans? It certainly helps if you have a crystal ball and know whether you are likely to have a lot or very few medical expenses in the coming year. A less expensive plan may be best for a healthy individual, while a more expensive plan might better protect a person who is likely to need more medical care. That is the traditional advice.

I discovered, however, while doing some extra number crunching to help a friend pick a plan from the New York marketplace-exchange (“Obamacare”) that the cheapest plan at least in his particular instance could be the best option by far even for someone likely to need a lot of medical care. This turns conventional wisdom on its head for some people.

Definitions:

First, here are some simple definitions to get out of the way:

Deductible: an amount of money you have to pay for medical services first before your insurance kicks in.

Copay: a fixed amount you pay out-of-pocket for a doctor’s visit or service.

Co-insurance: is similar to a copay, but it is typically a percentage of the total cost of a medical service that you have to pay out-of-pocket.

Out-of-pocket maximum: the maximum amount of money during the year that you have to lay out for covered services, not including premiums. Once the total of your deductible, co-insurance payments, and copays reaches the policy’s stated out-of-pocket maximum, the insurer pays for your covered benefits in full for the rest of the year.

Background:

In the past, MrConsumer has recommended the high-end “platinum” plan to his friend because it had no deductible and the out-of-pocket maximum was only $2,000. This means he only paid modest copays for covered services starting on day one, had no co-insurance, and once he met the $2,000 out-of-pocket maximum, he would not have to lay out a penny more for covered services for the rest of the year. He paid royally for this coverage: over $1,200 a month in 2018. But by summer, he reached his out-of-pocket maximum making all further services free.

In a million years, I would never have considered a low-end “bronze” plan with a $5,500 deductible, a $6,550 out-of-pocket maximum, and co-insurance on most services of 50% (meaning he would have to pay half the cost of medical procedures). The worry was that if he had a bad health year, this plan could have been so inadequate that it could have cost him a fortune. Or so I thought.

The New Calculations:

For 2019, however, MrConsumer pushed some new numbers, comparing the actual total costs of the four plans offered taking into account not just the premiums, but the out-of-pocket maximum as well. And a big surprise became evident.

*MOUSE PRINT:

Empire Blue comparison

This example compares Empire Blue’s four “metal” policy choices in New York for 2019 for an individual. These plans all cover the exact same medical conditions, services, and drugs, and use the same network of providers. The only differences are the amounts of the deductible, copays, co-insurance, and out-of-pocket maximums.

Compare the total annual premium of the bronze plan ($8,043) to the platinum plan ($16,520). Assuming my friend had no need for any medical services during the entire year of 2019 — the best (but unlikely) case scenario — he would save $8,000 by choosing the bronze plan. And now take the worst case scenario (the far right column in the chart above), where he had so many medical expenses that he hit the out-of-pocket maximum in both plans early in the year. In that case, the bronze plan would have cost him “only” $14,593 versus $18,520 for the platinum one — still an amazing savings of $4,000. (Note: there is a scenario where the minimum savings could drop to between $2000 and $4,000, but your head will explode if I try to explain it.)

If my friend needed a family plan, the total savings by choosing the bronze 2019 Empire Blue plan over the platinum one could be even more dramatic — between $15,000 and $24,000.

Where one might have expected the total cost figures in the right column above to be roughly equal (given the games the insurer’s accountants play of charging less in one area, but making it up in another), this was a big surprise to see the variation and potential savings.

The out-of-pocket maximum is a magical number that when combined with the annual premium can give you a truer picture of the real maximum costs of the plan, and help you spot a plan that is a mathematical anomaly in an insurer’s offerings. Such is the case here.

Warnings and Limitations:

A few words of caution. Besides the assumptions and facts mentioned above which might not hold true for other plans at other companies or in other states, if you choose a cheap plan and have an urgent and expensive medical need, you may have to come up with a large deductible and co-insurance right away.

Remember, this new calculation is most beneficial for people who expect to have substantial medical needs in the coming year. It is a treasure hunt of sorts to find the rare cases where the insurers’ accountants goofed up the mathematical structure of their plans making one plan’s total costs significantly lower than the others.

Before selecting a new plan, do a lot of comparisons, find plans with a large network, check to see that all your providers and drugs are included, make sure all the plans compared have identical benefits, crunch the numbers looking for a mathematical anomaly, ask a lot of questions to be sure your understanding of the plans is sound, read the actual policies carefully, and cross your fingers.




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October 22, 2018

Thanks for Nothing, Sears and Kmart

Filed under: Food/Groceries,Humor,Internet,Retail,Thanks for Nothing — Edgar (aka MrConsumer) @ 6:06 am

It is with a tinge of sadness that we lament the passing of hundreds more Sears and Kmart stores following their filing for bankruptcy last week. However, some of the dumb things that they have done can turn off consumers. For example, when retailers advertise a sale or reduced prices, shoppers expect to save money and be offered a good price. Sometimes, however, that wasn’t always the case at Sears and Kmart.

Example 1:

Just when Sears announced they were filing for bankruptcy last week, the local Sears in Cambridge, MA which had just started its own store closing sale, was adding an extra incentive — an extra 10% off your total purchase.

Sears 10% off

Great, except for one thing — the fine print on the coupon.

*MOUSE PRINT:

not at the register

What, you can’t use the coupon in the store and this is a store only coupon?

As it turns out, who knows what that really means because the Sears in Cambridge was automatically giving folks the extra 10% at the register, even without the coupon.


Example 2:

A couple of months ago, Sears MasterCard offered an unbelievable “month long” deal — get 20% back in points if you use the card at gas stations.

*MOUSE PRINT:

month long promotion

Apparently February has been displaced by August as the shortest month of the year.


Example 3:

People think that shopping online will generally save you money. These items at Kmart.com from marketplace sellers, however, challenge that assumption big time.

bread

.

matzo

.

Tide

Thanks for nothing, Sears and Kmart, for all these “deals.”


If you spot an outrageous or funny offer, please submit it to edgar (at symbol) mouseprint.org .




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October 15, 2018

Before Eating at KFC in the UK, You Must Sign a Disclaimer!

Filed under: Humor,Retail — Edgar (aka MrConsumer) @ 5:34 am

Well, that is a bit of exaggeration, just the way KFC’s tongue-in-cheek advertising is promoting the re-introduction of its notoriously messy sandwich called the Dirty Louisiana burger.

It has three sauces that tend to ooze out when eating, so KFC in the UK is warning customers who order the “dirty” burger that they will be responsible for any splatter on their face or clothing.

*MOUSE PRINT:

KFC Dirty Disclaimer

The notice is designed to poke fun at all the privacy disclaimers that folks are receiving throughout Europe.

In addition to the “Dirty Disclaimer,” diners are also a given a bib that looks like Colonel Sanders’ white suit and black tie.




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October 8, 2018

Is Sprint Misleading Customers or the FCC?

Filed under: Internet,Telephone — Edgar (aka MrConsumer) @ 5:43 am

Sprint and T-Mobile are seeking to merge. As part of that process, they have to convince the FCC that the merger will not harm competition and would be good for customers.

To this end, Sprint submitted a filing to the FCC on September 25 claiming that its LTE data network was inferior to the other major carriers and they needed a partner to compete better.

Sprint Network Click Chart to Enlarge

Sprint’s coverage is depicted in yellow. You can see, for example, on the map of the U.S. on the right, that Sprint has a much more limited network than Verizon (in red). In fact, the company tells the FCC that its network covers “a much smaller geography” than the other carriers and therefore it needs to merge.

However, if you compare the coverage map from the Sprint website below directed toward customers with the ones above, Sprint makes it appear that its network coverage is very robust and broad.

Sprint network

*MOUSE PRINT:

Only in the tiniest fine print footnote does Sprint disclose that the above map includes roaming coverage, meaning areas where other companies have coverage and share it with Sprint customers. The map also includes non-LTE data coverage that they cleverly omitted from the FCC map.

footnote

In addition, the company tells the FCC it has problems with its network:

“Poor network experience is a leading cause of Sprint’s subscriber churn.”

“…consistency challenges impact both network performance and customer perception”

“Sprint has not been able to invest sufficient capital to achieve network performance necessary to attract and retain enough subscribers to improve its scale.”

Funny thing, Sprint has advertised for years on television that there is only a 1% difference in its network reliability compared to the competition.



2016 Commercial


2018 Commercial

Noting these contradictions, we asked the PR folks at Sprint some very pointed questions:

(1) Which is more accurate — what Sprint presented to the FCC or what they advertise to customers?

(2) If the FCC coverage map is more accurate, how does Sprint respond to customers who feel the company exaggerated its coverage area?

(3) Which is correct — Sprint’s network performance is lacking or it’s 99% that of competitors?

A Sprint spokesperson tersely responded:

“Thanks for reaching out. I don’t have anything to add to the filings. If that changes, I’ll let you know.”




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October 1, 2018

Staples.com Quietly Drops Price Matching

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:08 am

A little over a year ago, Staples was sold to a private equity firm. And since then, shoppers have been treated to some unpleasant new policies.

For years and years, consumers could buy reams of paper for a dollar or a full case for $9.99 after rebate. No more. Rebates have been discontinued and paper is no longer a giveaway item there.

Consumers have also complained that they can no longer earn rewards for online purchases at Staples.com.

And in mid-September, Staples.com implemented another anti-consumer change — it will no longer match prices. There was no big announcement of the change, but rather just a subtle change to the fine print on its website, noticed by reader David B.

*MOUSE PRINT:

Staples NO match policy

Ten days earlier, however, Staples.com did match prices, as it has done for years.

Staples matches prices

We asked the PR folks at the company why Staples.com no longer matches prices, why they don’t publish the store price matching policy on their website so shoppers can see it before going to the store, and what are the full details of their in-store price matching policy.

This was their entire barebones answer:

Thanks for reaching out. We are still price matching, 110% in- store at Staples retail locations.

Come on, Staples, you owe customers a better explanation than that.




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