Ryan, Debi, and Toren Cragun's Blog

Not sure if anyone will be interested in this, but I occasionally talk about this issue in my classes and finally found a document to illustrate my point.

Our health care system in the US makes little to no sense, in large part due to health insurance companies.  From what I understand, health insurance companies negotiate prices with health insurance providers for pretty much every service they cover (when they cover services).  Thus, the health care provider (your doctor) charges some price for a service but the insurance company pays a different price.

So, an example:  Let’s say you go to a doctor for a visit.  The doctor charges you $100 for the visit.  The bill goes to your insurance provider, who has negotiated ahead of time to only pay $50 for a doctor’s visit.  So, your insurance company pays it’s percent of the negotiated amount – 80% or $40 -  and you pay your percent – 20% or $10.

Here’s the kicker: If you don’t have health insurance, you still get charged the full amount by your doctor – $100, no discount applied (some times they do, but often they don’t).  Now, this may not be a big deal if you’re only talking about a doctor’s visit for $100.  But what if it’s a $1000 charge, or $10,000?  Now it’s an issue of really screwing over the uninsured.

Additionally, insurance companies increasingly want all expenses to go through them – you don’t even pay co-pays anymore.  This makes it so individuals have no idea how much their health care actually costs.  I don’t remember the last time I went to a doctor’s office and the doctor actually told me the up front cost of a procedure or visit.  This way, the insurance companies are like a big black box – health care providers submit charges, the insurance companies pay whatever they pay, and they pass on a certain percent to the consumer.  This puts the insurance companies in almost complete control of health care in the US.  Consider what life would be like if all of your purchases worked this way:

You walk into Best Buy to buy a TV.  When you walk in, you have to sit down and fill out a form that asks about your purchasing history to make sure you will have no complications purchasing anything at Best Buy.  There are no prices on any TVs, but you talk to someone in the store who tells you that you “need” the 46 inch flat panel TV.  You agree and tell him you’ll take it.  You pull out your “merchandise insurance card” and hand it over.  He photocopies it, tells you to sign a piece of paper, then sets up a follow up visit to consider universal remotes.  They load the TV into your vehicle and you drive it home.  Several weeks later your “merchandise insurance company” sends you a bill.  Best Buy charged them $10,000 for the TV, but they have a discount negotiated with them of $8,000, so the TV is only $2,000.  You pay 20%, so you owe $400.  Of course, to use this “merchandise insurance company” you also pay them about $500 per month for a family plan and your employer pays an additional $1,000 per month.  So, your insurance company makes $1,500 per month and doesn’t pay full price for services.  If you don’t have “merchandise insurance,” you pay the full price at Best Buy.  Who would buy anything this way if you have no idea how much it will eventually cost you?

So, I was getting rid of 2007′s financial records when I came across a bunch of notices from our old health insurance company.  The one I scanned is great.  I won’t say what it is for, but the charge from the health care service provider was $965.  The discount for the insurance provider: $885.  That’s a 92% discount.  That leaves $80 to be paid.  Our co-pay at the time was $15.  Which means the health insurance company paid $65 out of $965 charged to it, or 7% of what it was charged.

How many times have you heard someone say, “Thank god we have insurance”?  Are we really lucky to have health insurance? Health insurance seems like a good idea when it is used to spread out the cost of major healthcare expenses.  But today it is generally used just to enrich people: catostrophic health care is passed on to the government because the health care companies either drop them or won’t take them for pre-existing conditions.  They also try to find as many things as possible to not cover.  That leaves health insurance companies providing insurance just for the healthy, who have lower costs.  Then they get discounts and pass some of the cost on to you.  You pay for the privilege to not know how much you have to pay.  It’s time for a new system…

A friend gave us a gift card to Carrabba’s Italian Grill a little while back.  We used it on November 10th (it took me almost a month to remember to get the picture off my phone).  We had never been to Carrabba’s, so we were excited to try it out.  But, we’re also cheap.  So, we tried to make sure we could cover our entire meal with the gift card (that’s how we roll!).  Also, we know servings at most restaurants are big enough for the two of us, so we usually split one, especially when we are on vacation.

With all this in mind, we decided on the following: I would order an entree we would both like – the Manicotti.  Debi would order a bowl of soup.  The entree came with a cup of soup or salad.  We’d split the entree; I’d get the cup of soup, and Debi would get the bowl of soup and we would be good to go.  The soup of the day was an awesome tomato soup.  We thought this would fill us up, so we went ahead and ordered it, oblivious to what we had just done…

A few minutes later out comes the waitress carrying these:

I actually said as she delivered these “bowls” to our table, “You have to be kidding.  That’s not a bowl, it’s a pot of soup!”  The waitress seemed surprised by our surprise.

I know the picture isn’t great quality (taken with my phone), but hopefully you get the point.  The small bowl fathest away from Debi was the “cup” of soup.  That “cup” is as big as the bowls we have at home.  It was easily a bowl of soup.  The enormous vat closest to Debi is what qualifies as a bowl at Carrabba’s.  I know it’s a little difficult to get a good reference to illustrate the size of this bowl, but think about it this way: Debi is 5’4″.  While her waist is quite narrow and she’s very thin, the “bowl” of soup was actually larger than her waist.  There was enough soup in the “bowl” to feed a family of 4.

They served both the “cup” and the “bowl” with a side of bread.  They also brought us half a loaf of bread with olive oil and pesto dipping sauce.

I ate my bowl and bread and was pretty full.  Debi ate about half her bowl and her bread and was stuffed.  I finished off her bowl and was ready to pop.  When the waitress brought out the entree we just laughed.  We told her to just put it into a to-go box. I skipped breakfast the next morning – too full from the night before.

Certainly you don’t have to eat what they bring you at Carrabba’s.  And, just so I’m clear, I thought the soup was great.  But I don’t really wonder why 34% of Americans are obese… If people don’t bat an eye at a vat of soup that is called a “bowl,” people have a serious issue understanding portion sizes.  We estimated that we were served somewhere between 14 and 16 servings of food (1 cup of soup is usually a serving).  We were easily served 8 servings of soup alone.  Add the half loaf of bread, the other bread, and the entree, and we were served enough calories for three people for one day (about 6,000).  I’m sure Carrabba’s is just catering to customer wants, but when will the over-sizing end?

…before a Wal-Mart Employee was trampled to death in the mad rush of consumerism on Black Friday.  When shopping deals are based on a first-come, first-served basis, you can only expect people to trample each other.  The structure of the situation facilitates misbehavior.  It could be solved with a lottery system.

This doesn’t absolve the people, of course.  How despicable do you have to be to be willing to sacrifice the safety and even lives of others in the interest of saving a couple hundred dollars?  The worst part about this is that the people felt no remorse even after they found out an employee had been killed.

Happy holidays… :(

I’ve been wanting to write this for a while but am just now getting around to it. When we moved to Cincinnati we bought a very modest condo in a working class condominium complex. We liked the area and even though we didn’t know most of our neighbors, we were mostly content. At least, that was true initially. Over time little things about the complex started to add up and turn into big things. One of the things that really got on our nerves over time was the fact that there was a manager of the complex who made a lot of money for basically doing nothing. I wouldn’t go so far as to describe my graduate school work experience as slave labor (20 to 25 hours per week at roughly $10k per year – though that doesn’t factor in my tuition), but I know I worked a lot more hours per week than the manager of our complex did and she made $18,000 per year. Here’s a scan of the yearly budget as evidence:

In addition to the purely gratuitous wages of the complex manager, there were a lot of other things that eventually really upset us. For instance, on the rare occasion that it snowed enough to be an issue with driving, the complex would plow the main parking areas, but not the back lots, which is where our assigned parking was. I shoveled most of our back lot twice while we lived there – spending almost the entire day each time. The complex also had the power to levy sudden, emergency fees whenever it felt like it and you had to pay them or else. This happened about three times while we were there, and we can only imagine the hardship it must have caused to some people in the complex who lived on fixed incomes. Finally, the complex had a pool and club house. The pool was a decent size, but a bit old and regularly needed repairs. Additionally, it was seldom used during the summer but cost thousands of dollars in upkeep. Given all of the financial problems of the complex, Debi suggested that they not open the pool one year to save money. This was met with a stunned silence and then an outcry, “How dare you suggest…” As for the club house, while it was supposed to be a common area, it was basically treated as an addition to the club manager’s condo. This was most evident in the fact that it was not smoke free (the complex manager smoked) and always smelled heavily of stale tobacco. To hold an event there you had to pay a fee, even if you lived in the complex. I never really understood that either.

Never having owned a condo before (nor really knowing many people who do), we were really disappointed with the whole experience. Maybe others have had better experiences living in condos, and I certainly hope that is true, but our experience soured us to owning a condo ever again… (Of course, with the housing market currently tanking, we’re beginning to wonder if we wouldn’t just be better off renting the rest of our lives.)

On a brighter note, we are now officially Floridians (okay, that’s probably only true in the technical sense – not sure when we’ll start feeling like we are “from” Florida): we have Florida Driver’s Licenses. We had to get them in order to get the strange “Homeowner’s Exemption” here in Florida (which is a tax break for people who actually live here year round). I was a little sad to see this beauty go:

Also, we received a copy of a photo taken at our University’s holiday party. One of the perks, I guess, of working at a smaller university (that probably also has a little more free cash than most public universities) is that there is a yearly holiday party. It’s a rather posh affair with chocolate fountains, decadent food, live music, and even an open bar (which we will, unfortunately, never really take advantage of). Anyway, we liked our picture from the event:

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Now playing: Dave Matthews Band – Jimi Thing
via FoxyTunes

When I moved to Florida in June I knew that I was going to need a new bank for my local banking as our bank in Cincinnati was a local credit union. I didn’t think banks were that different as I’d never had a bad experience with one. So, I chose our new bank based on proximity and the fact that we had a credit card with them. I ended up choosing Bank of America. They have a branch 2 blocks from our house and we already had a credit card with them (which was originally with someone else but BofA bought the other company). When I originally went in to set up a checking account with them is when I should have realized this was all a big mistake and that I should take my money and run. But, the proximity argument won me over and I decided to go ahead with setting up an account.

The first problem – they don’t have free checking. The only way you can ensure that it is free is if you set up direct deposit. Otherwise, they charge you a monthly fee. They do have savings accounts, but the interest yield on them is like .2% (not 2%, .2%). And, having a savings account actually costs money – more than you would make on it. They also don’t give you free checks – you have to pay for them. And, one of our favorite savings approaches, CDs, was basically a no go at BofA as well – their interest yields were about the same as you might get if you hid your money under a mattress. Even so, I figured we could simply put our retirement savings in our old bank from Utah, which has great interest yields on CDs and just manage our checking out of Bank of America. I even had a solution for our savings – Paypal. It isn’t FDIC insured, but if you sign up for their money market account you can make about 4.5% on the balance in your account and you can transfer funds for free to any checking account. So, I figured it may not be the best bank but it shouldn’t cost me any money and I won’t use it much. In fact, I even had a good experience when I set up the account (though it took about 2 hours): I showed them my old Ohio’s license which is a picture of me with long hair. Most people in Ohio said I looked like Jesus. The account manager at BofA said I looked like a killer vampire. Who wouldn’t chose killer vampire over Jesus?!? Maybe this was foreshadowing :|

Well, things seemed fine initially, until I decided I wanted to change the automatic payment of my credit card balance to my new checking account. Let me be clear here: We have a Bank of America Visa card. We don’t carry credit card balances so I set up on Bank of America’s website 4 or 5 years ago to have the balance on my card paid every month from my Cincinnati credit union’s checking account. It worked fine for years. Now that I was switching banks I wanted to switch the automatic payment option from my old Cincinnati credit union account to my new Bank of America checking account. Now, you might think this would be very simple considering I had a credit card with Bank of America and now a checking account with Bank of America, but you would be wrong. You see, that belief rests on the assumption that Bank of America is a good bank, not Satan’s bank.

Once I set up the new checking account, the web interface for my credit card changed completely. The option to pay off my balance every month was no longer available. Instead I had to use Bank of America’s highly touted and completely useless online bill payment system to pay my balance. Annoyed, I called customer service to see if someone could help me set it up. No luck. There were actually two problems here. First, no one at Bank of America could figure out that I was actually paying my balance every month out of my Cincinnati credit union checking account and that I had set that up through Bank of America’s website. They all insisted that I had to have set that up through my credit union. Hmmm… Let’s think about that notion for a minute and see if it makes any sense. How would my credit union know my credit card balance every month in order to pay it off? That seems like a particularly intrusive credit union. The only company that would and could know my credit card balance every month is my credit card company – Bank of America. But I could not, for the life of me, convince them that they were the ones taking money out of my checking account every month – they insisted my credit union was sending it to them. So, no one at BofA could figure out how to stop the payments, though one person eventually claimed to have figured it out.

The second problem was that they couldn’t let me set up an automatic balance payment option on their website, over the phone, or even in person. I had to go into my local branch, explain in detail what I wanted to do to an account manager, and then sit around for about an hour while he tried to find someone at Bank of America who could do it. They then had to fax him some paperwork that he had to fill out and have me sign in order to have my balance paid in full every month. I understand the logic of this, actually. It makes perfect sense if you hate your customers. Why make it easy to pay their balance and lose the chance to make money on finance charges?

So, come mid-September, 4 months after I initially set up the account, I now had everything worked out, or so I thought… According to Bank of America my balance would not be paid from my Cincinnati credit union account anymore and instead would be paid through my shiny new BofA checking account. Relieved, I figured the nightmare was over… Then came October.

I received my regular credit card statement in October then waited for everything to be magically paid. After the due date, I opened my accounts up to find that my card had been paid – twice! They had set up the new auto payment with the BofA checking account but they had not stopped the other one from my Cincinnati credit union. Luckily the bill was for a very small amount and I still had that in my Cincinnati account. But I was in the process of closing the Cincinnati account and taking all of that money out to move to my new bank, so I wasn’t going to have money in there for much longer. I figured that this wasn’t a big problem and that maybe it just took some time for the changes to register in the system. I called customer service and they assured me that the problem was solved and that it wouldn’t happen again.

Then came November… and the exact same thing happened – a double payment. Except this time my bill was for a lot more and my Cincinnati account had $5.00 in, the minimum amount I could have until my letter to close the account got there. Well, my dutiful Cincinnati bank did what it was supposed to do, it charged me an overdraft fee of $27.50 for not having sufficient funds. And, of course, it didn’t pay BofA – it just charged me. As a big time penny pincher who had been having problems anyway, I checked my account that very day and saw the overdraft fee. I then checked my BofA account and found an overpayment for the statement balance (which was over $1,000). BofA thought it had the money from my credit union… kind of. Furious, I got on the phone with BofA to get them to stop the charge. I spent over two hours on the phone that night and they swore the problem would be fixed. The next day I checked my accounts again. Nothing had changed with BofA, they still thought they had the money. But they had tried to charge my Cincinnati account a second time (this is because they didn’t, in fact, get my money – there was no money there to get). I now had another overdraft fee of $27.50. I tore out my hair, kicked things, then picked up my phone and screamed at people. I had one person at BofA hang up on for saying their customer service was shit! My Cincinnati credit union was somewhat helpful – they agreed to close my checking account so even if BofA tried to charge it again they couldn’t. But they still made me pay the overdraft fees (because it was not their fault). BofA on the other hand said that it was my fault and insisted that I was going to have to pay the overdraft fees. I stormed into my local branch and told them I wasn’t leaving until they paid me back the $55.00 Bank of America owed me for screwing up. They were accommodating and eventually found someone at BofA who could take care of the problem – after 2 hours. I was reimbursed for the charges.

By this point I decided that short of giving me either the head of the president of Bank of America (a.k.a. Satan) on a platter or $100 million there was nothing anyone at BofA could do to keep me a customer of Satan’s bank. But the story doesn’t end there. Two days after I was reimbursed for the bank’s obvious mistake, they charged me $39.00 for having a payment not go through. Yes, you read that right, BofA actually charged me on their end for their screwup even after I had spent by this time at least 15 hours trying to get the problem solved. Another trip into the same branch, where they all knew me quite well by this point, and I was able to get that charged reversed.

So, at this point, I had spent 16 hours of my time fixing screw ups by Bank of America and all I had to show for it was the same amount of money I started with. I opened a new Visa account that night with a different bank. I was going to cancel the card as soon as my next statement balance came through, which would be mid-December-ish. I had a couple of bills that were automatically paid on that card so I switched them to the new card as soon as I got it and waited for my opportunity to cancel the account.

Today is the day before my new statement comes out on my Bank of America account. I knew there were no more potential charges so I decided I’d just pay the balance and close the account. I called customer service to cancel the account. When I told them what I wanted to do they said that to pay the balance over the phone would cost me $15.00. Plus, they said that even though the website said my balance was $69.48, in order to pay off the account I would have to pay $72.00, an additional $2.52. I didn’t understand and asked the first person why I would have to pay an additional $2.52 just to pay off my balance. She said that was the finance charge on my balance. I told her that I never carried a balance on my card and that I hadn’t financed anything. She insisted that it didn’t matter and that I somehow owed Bank of America $2.52 in order to pay off my balance. I said that was the dumbest thing I had ever heard, but before I could add that it wasn’t surprising coming from Bank of America she hung up on me. I called back and talked to another person who told me the same thing. Her explanation was that it was my finance charge, which I tried to tell her can’t be possible since I pay my balance every month. She pulled a Bank of America on me and pretended to be a voice recording, parroting back what she had said verbatim. At this point, I was so frustrated I told her it was worth it to pay the $2.52 just to get Bank of America out of my life then hung up.

I haven’t closed my checking account yet, but I will as soon as my direct deposit switches to my new bank – Washington Mutual. I set up my WaMu account online in about 20 minutes and have yet to talk to an actual person; I haven’t needed to – their website works flawlessly. They have an online savings account with a percentage yield of 4.65%, which is better than basically any savings plan you can get at BofA. I am in awe at how simple and nice a good bank is. It is such a breath of fresh air…

If I believed in a Satan or devil, a supernatural, fully evil character that spent all of its time bugging people, it would basically be Bank of America. I am convinced at this point that it’s sole purpose for existing is to make its customers’ lives miserable. I don’t think I can say this strongly enough – DO NOT BANK WITH BANK OF AMERICA. They are the world’s worst bank.

(Note: I don’t believe there is a Satan; I just want make that clear.)