Tales & Trails of a Traveling Wiseguy

A few weeks ago I complained about how my insurance company, Allstate, was dragging its feet on processing a claim I filed. It wasn't even that they were slow in paying the money; they actually did that fast once they started. The problem was that they didn't even start for 10 days. I spent those 10 days without a car getting a runaround from everyone I spoke to at Allstate... and I communicated with several people over multiple calls in those 10 days. "Fuck my insurance company!" I declared.

So, what are the alternatives? Well, there are lots of insurance companies out there. Geico was recommended by a few friends. "Fifteen minutes could save you 15% or more on car insurance," is the slogan their spokes-gecko keeps repeating.

I filled out an application with Geico online (the only choice; they don't do phone anymore) and was given a tentative cost. For coverage comparable to what I have with Allstate it was a smidge less than 10% cheaper. And for condo insurance— which I'd want to bundle with it to save cost— the cost was actually 50% higher. So much for "save 15% or more".

And that was just the tentative estimate. They'd have to get underwriting approval, Geico's website told me. That could take "up to 15 business days".

I checked back yesterday, after not hearing from them since starting my app Aug 3. Still in review for "up to 15 business days", the website said. Note that on Aug 22 it was already 19 days since I started the app. Of course, those are 19 calendar days. Subtract the weekends and there's only 13 business days. 🙄

Then yesterday afternoon I got a letter in the mail from Geico. Yes, a letter in snail-mail. From a company that styles itself as so modern you have to use the website for everything, there's no customer service number to call. The dead-tree letter demanded a raft of paperwork from me to complete my application— by snail mail. There was no number to call for guidance, no website to upload electronic docs to, just a PO box in Virginia (2,500 miles away). And even more absurdly, this letter which arrived on Aug 22 said the paperwork had to be received by Aug 18.

One might look at this absurd process and say it's broken. But one can also look at it and conclude it's working as intended. I've now concluded this bullshit and runaround from Geico is the design. They don't actually want more business in California (it's been in the news that insurers are pulling out due to inflation and consumer-friendly regulation) so they're creating runarounds for anyone trying to do business with them.

I trust Geico considers my decision to ditch them a win.

And I'm still not happy with Allstate but at least they have a phone number I can call.

Things are finally moving forward with my insurance company. After I started my claim last week Tuesday basically nothing happened for ten days. All they did in 10 days was neglect to return my calls (I left several voicemails with modest, pertinent requests), kick my claim from one team to another, and make flimsy excuses about nobody answering my phone or the phone at the repair shop. ...On the "nobody answered the phone" excuse: bullshit. My phone shows missed calls. There were none. I also have voicemail— as does the mechanic. Nobody so much as left either of us a message.

Today the insurance company finally moved off the dime. I noticed by happening to log in to their web portal than a new adjuster had been assigned. The system didn't alert me to that, of course. Nor did she call me. I had to log in, see the information, and call her. Cue latest excuse about calling and getting no answer and voicemail not working— on both my phone and the mechanic's. I asked her to call the mechanic again, gave her the name of the person she'd be speaking too, and encouraged her that he was eager to work with her so they could begin repairs. She did call him— actually call him, not just "Oops a weird thing happened and nobody's there and voicemail isn't a thing anymore" for the nth time— and the process started actually moving forward. On the 10th day.

Once an insurance worker actually started doing work, instead of dodging responsibility or making excuses, the process moved quickly. The adjuster got in touch with the service manager. The SM had plenty of pictures and a full diagnosis of the problem, which he texted over to her. She was able to complete her estimate from his notes and writeup. By the end of the day she had electronically deposited the money for the claim into my account.

All that progress— in one day. Why couldn't that one day have been ten days ago? The fact that everything moved so swiftly today is a positive. But at the same time it actually makes me more angry because it proves my insurance company has the ability to deliver great customer service but chooses not to. 😡

This afternoon I spent 90 minutes sitting at the tire shop to get two tires on our convertible replaced. Just four months after our last visit to the tire shop, here we are again. Two more tires have fallen victim to the pothole riddled roads in the SF Bay Area.

This car's tires are fairly prone to damage from potholes because they're run-flats. By design they remain driveable after minor damage. But the stiffer sidewalls that are part of that design are more susceptible to damage from hitting bumps too hard. And when there's damage on the sidewall it's (a) dangerous and (b) basically unfixable. The tires have to be replaced.

For years we've been buying tires at America's Tire. They're convenient because they have a shop a 10 minute drive away. But the big reason we buy from them is they offer a road-hazard insurance policy. For an extra 15% (roughly) of the cost of a new tire they'll repair or replace it for free. And they're a nationwide chain, so we can get warranty service even if we've driven hundreds of miles from home.

It's not hard to do the math on this. Paying 15% means I'm betting on roughly 1-in-7 odds of a tire needing to be replaced due to damage before old age. With these pothole allergic run-flats and the crumbling state of California roads, it's a bet I'll place. I figure my odds are at least 1-in-3... for a 7-to-1 payoff. See, insurance really is like gambling! And already one of the two tires I bought just four months ago is being replaced today, so I'm beating the house.

I got bad news when I went to refill one of my prescriptions last week. I now have to pay $2,000 for it. Previously my out of pocket cost was zero.

What changed? My company changed insurance carriers effective January 1. Although both my old plan and my new plan are HDHPs/HSAs with similar specs on paper, one of the hard-to-figure-out-in-advance details was that the new insurer, United HealthCare, has far fewer drugs on its maintenance/preventive drug list than my previous insurer, Anthem Blue Cross. With Anthem all the prescriptions I take were covered at no cost to me as part of their preventive care. With United HealthCare seemingly nothing is considered preventive care. One prescription I refilled a few weeks ago was merely $100/year. But this other one is a whopping $2,000.

What am I doing? Well, it's fortunate that this suddenly costly medication isn't life-or-death for me. In fact it's not clear it's even doing much for me. It treats a condition but it only improves it a little. I will make an appointment with my doctor to discuss alternatives that are more effective— and hopefully way less expensive!

My company is switching up its health care plans. The change is unexpected because we're in the middle of a plan year. Yes, our plans have run from July 1 to June 30 so far. That's been annoying because while the plans run on that cycle, certain important things related to them, like say deductibles and tax limits, run on a Jan 1 - Dec 31 cycle. The change brings a mixture of good and bad. Aligning onto the calendar year, at least, is a good change.

What else is good or bad? Bad would be the fact that I don't know how much is good or bad. While our health plans are being replaced with similar options, the insurer offering them is changing. I actually like the health plan I switched onto 6 months ago, mostly because it recently made a large set of preventive prescription drugs free. Will the new plan work the same way? Nobody I can talk to knows. "Check on the website," they all say. But the website shows literally hundreds of plans, and the info I'm looking for is more granular than the level of detail it provides.

So, is anything good? Our life insurance benefit is increasing a bit. I don't care. It's not that I don't intend to die in 2023 (though I totally don't) but because the amount by which it increases is small compared to the financial portfolio my spouse and I have built to support ourselves. Well, some things at least aren't at risk of getting worse. In the health insurance & employee benefits game, "no change" is sadly a win. Our 401(k) match, which only started in late 2021, continues. For the rest... well, I'll see after the new benefits plans start.

Update Jan 2023: ...And the prescriptions I've been getting for free the past 6 months are no longer free. 😡

I filled a prescription at the pharmacy yesterday and it was... free. So was a different prescription I filled several weeks ago. I haven't seen this since... well, ever. Even back in the 1990s there was a $5 co-pay on filling a prescription.

What's changed? Well, it isn't that I've switched to some super platinum-trimmed health insurance. In fact a few months ago I switched from a traditional PPO insurance plan to an HDHP/HSA plan. Long story short, these plans entail reducing costs by shifting more of them onto customers upfront, figuring that customers will consume health care more cost-effectively if they're paying for more of it out of pocket. So I actually expected that, in exchange for lower premiums, my prescription co-pays would go up.

What changed is that, apparently, health insurance companies are seeing the Big Picture. If their customers choose not to treat minor illnesses because the medications cost too much out of pocket, they'll spiral into major illness. And covering treatment for a customer with major illness will cost the insurance company way more than $10, $25, or even $40 on prescription co-pays.

I saw a headline today in the newsfeed, "Record 35 million Americans have health coverage through ACA" (CNN.com, 29 Apr 2022). The article explains how that number is up from 27 million two years ago. And the current figure is actually 35.8 million today— closer to 36 than the 35 in the headline. That represents almost 11% of the US population.

Who are these 11%?

It's Not Just "Poor People"

The article doesn't detail much about who, demographically, the 11% covered by the ACA, including the Medicaid expansion related to it. There's a common knee-jerk reaction in the US that anyone on a such a plan is on a "government handout" and thus is a poor person too lazy to get a job. I know from personal experience, though, that it's a very socioeconomically diverse group. And for many of them it is not a "government handout". It's not a subsidy.

Here are Five Things about the kind of people I know who use the ACA.

❖ Entrepreneurs Health care coverage in the US has, for almost 100 years now, been tied largely to one's employer. Large employers can negotiate group rates that make the cost of insurance affordable. But what about people who work at small employers? What about otherwise well educated, highly skilled people with strong entrepreneurial spirit who want to start their own companies? For decades before the ACA of these people were deterred from doing so by the prohibitive cost of health care insurance on the individual market.

I remember working a job just out of college at a software company started by a former colleague, Jeff. and his best friend, Other Jeff. They hired Also Jeff's grad school wiz programmer classmate Chris then they hired me. The little 4-person company didn't offer insurance. They couldn't afford it. Well, for the founders Jeff and Other Jeff that was okay because they had insurance from other sources. Jeff's wife, Jill, had a job with a big company and got health insurance for both of them. Other Jeff was a trust fund baby and could afford paying insurance premiums on the pre-reform solo market that were the equivalent of $3,000/month (inflation adjusted) today. Chris and I... well, we were young and decided we would take our chances. I lucked out with that; Chris... ate ramen for the rest of the month anytime he had to visit a doctor.

❖ Independent Contractors The thing about health care coverage tied to employers is that it's tied to "permanent" employment status. If you're a part-timer, a temporary employee, or a contractor you're generally not eligible for benefits— even if the company that employs you is a big, wealthy corporation.

Shortly after seeing how Jeff and Other Jeff needed health insurance through other sources to be able to start their own company I met an acquaintance, Carey, who was just a bit old than me and was working as an independent contractor. He was very dialed in to the challenges with health care for professionals like him and the early reform efforts. These efforts, BTW, weren't "Obamacare". This was the mid 1990s, before Barak Obama had even run for his first elected office. Back then the political right was screaming about Hillarycare. Carey pointed out that people like him didn't need socialized medicine as much as "portable" health insurance, i.e., affordable insurance that's not tied to a specific employer and their willingness to provide it to you as a benefit.

❖ Early Retirees Another group of people left out by traditional health insurance tied to employment are those who've retired. Americans 65+, of course, are covered by Medicare. But what about those who retire early? Especially as you get older— 50, 55, 60, 63— health insurance gets even more expensive. The prohibitive cost of buying it on the individual market has kept a lot of people otherwise ready to retire early toiling away in corporate America. The ACA has made that individual market more affordable. ...Note, not by subsidizing it with tax dollars, but by reform rules requiring insurers to offer group rate policies to individuals. My friends Dave and Ella are two people in this category. Hawk and I will likely join them— in being early retirees on ACA plans— in a few years.

❖ The Working Poor Plenty of people out there are working long hours at jobs... but they're not great-paying jobs, and they're classified as part-time so there are no benefits. In the past these folks would fall through the cracks in the system. Too well off for "welfare" and too poor to afford insurance or even regular care, they'd avoid going to clinics until they got really sick. ...And then when they were really sick, they'd rack up huge medical debt.

The ACA benefits people in this category in two ways. First, insurance plans are cheaper. Again, this is not because "government handout"; it's because of reform. But there is also an element of government handout. The ACA provides partial subsidies for people earning up to 4x the federal poverty limit.

❖ Adults 18-25 One of the health care reforms packaged with the ACA is that adult children can stay on their parents' health care plans until they turn 26. This group isn't included in the 35.8 million figure because they're not actually on ACA plans (unless their parents are too) but it's an important change to appreciate. This is enormous for adults just starting out in life as the pressure to find insurance after turning 18 was immense. For those of us who attended university full-time, most of us had coverage through the university's student health program, but we still faced the same pressure upon graduation. Many people I know scrambled for corporate jobs, taking work that paid benefits instead of work they wanted. The extension to age 26 helps people start pursuing they careers they want instead of settling for anything that pays benefits.


Update: Sharp eyed readers may wonder why I'm so positive in this article on the ACA improving health insurance after I blasted insurance as a "racket" just a few days earlier. It turns out health insurance in the US solves a critical major problem in the mess that is US health care. Read about that in a subsequent article.

Insurance is a racket. I say that having just gotten paid on an insurance claim this week. It's not that I'm unhappy with the claims process.... Actually the claims process went faster and smoother than I expected. What I'm unhappy with is that I own this insurance policy at all.

Insurance is a business. Businesses exist to make money off their customers. Insurance companies make money by gauging your risks and charging more in premiums than they expect to pay out in claims. Do you know what business that most closely resembles? Legalized gambling.

Do You Feel Lucky, Punk?

In casinos, oddsmakers know the chances of winning or losing better than you do. In insurance, the oddsmakers are called actuaries. There are two big differences, though.

The first is that in casinos you're almost always betting to win. You're betting on your number in craps and roulette, getting a better hand than the dealer in Blackjack, etc. With insurance you're actually betting to suffer a loss. It's like you're answering the classic Dirty Harry question, "You gotta ask yourself one question, 'Do I feel lucky?'" by betting on "Hell NO!"

Then there's big difference #2. In casinos you can choose not to bet. In fact that's almost always the best choice. Often you're forced to buy insurance. I was forced to buy the insurance policy I used this week as a condition of the mortgage on my house.

Is insurance a good deal, though? For some people and some situations, maybe most people and most situations, it is. But that means for some people and some situations, it isn't.

Don't Buy Insurance if You Can Afford a Loss

The main benefit of insurance (*except health insurance in the US) is it gives you access to a pool of money in the event of a loss. Suppose you're in a car accident and repairs and other costs are $10,000. Most people don't have $10k lying around for an emergency. But most people who can afford a car can afford, say, $100/month in car insurance.

Consider what those insurance oddsmakers actuaries are doing when they price your car insurance. They're figuring that, say, over the course of a year 1 out of 10 people like you will experience a car accident costing an average of $10,000 in covered damages. So they charge each of you $100/month. Do the math.... 10 people x $100 monthly x 12 months = $12,000. They're charging you, their customers, 20% more than the value of what you're getting. That 20% covers their business overhead and profit. That 20% is what you're paying for access to a pool of money.

Is there an alternative to paying someone else for access to a pool of money? Sure; if you have your own pool of money! If you have enough savings to cover an unexpected loss, like paying for repairs after a car accident or buying replacements after a burglary, you don't need insurance. Except that in many cases you're required to buy it.