Calvin Explains Detroit

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Merry Christmas!

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BREAKING NEWS

Richmond, VA: Santa and friends had a little too much fun at the annual Holiday Party. Kmart authorities have locked them up for lewd behavior. Bail is set between $19.95 and $59.95. Mrs. Claus is thinking if she lets them sit and think about what they have done, they may think twice next time. Bail may be lowered closer to the big day.

Thanks to Kelly Stern at Special Service Agency
for letting us use this picture and story

The Mother Of All Bailouts?

700 billion here, $150 billion there, $17.4 billion for the auto makers. After a while they almost seem to not be numbers and be just words. That is the scary part. $700 billion = $700,000,000,000 = a 7 with ELEVEN ZEROES!

In an attempt to make you feel better about all of the NEW money the US government is tossing around, let me talk to you about some current obligations they have on the books - namely Social Security and Medicare.

• If the federal government ended Social Security and Medicare, it would still owe $52 trillion dollars in payments.
• $9.5 trillion is owed to current retirees.
• Those nearing retirement are owed approximately $11 trillion.
• Younger workers, those between 22 and 55, can expect more than $31 trillion in payments from Social Security and Medicare.

Source: National Center for Policy Analysis

Another way to put this in perspective - the 2008 U. S. Federal budget was between $2.7 trillion and $3 trillion.

Almost makes the bank bailout seem like spare change. Almost

Irony

i⋅ro⋅ny - /ˈaɪrəni, ˈaɪər-/ Show Spelled Pronunciation [ahy-ruh-nee] –noun, plural -nies. : an outcome of events contrary to what was, or might have been, expected.

After several emails back and forth, I had a phone appointment set up for 9.00 am. Just before the appointed time, I received an email asking if we could move the call to 1:30. "Sure, no problem" was my reply. That was two days ago and I am still waiting for the call. At this point I am going to wait and see if they ever pick this ball back up.

Here is the ironic part - the call was to be from the manager of customer service for one of the insurance companies. We were going to discuss my complaint to him about the lack of response from the service representative who handles our accounts.

Let The Public Flogging Begin

I have mixed emotions about insurance companies. They are often portrayed as a pubic nemesis (or worse), and some of their reputation is well-deserved. But like most things in life, there are always more sides to the story.

With that in mind, I was taken aback by a headline and news blurb from a wire report:

“GAO report shows Medicare insurers' profits are higher than expected.”

"Health insurance companies that serve the elderly and disabled in Medicare are realizing significantly higher profits than they anticipated, resulting in the companies getting $1.3 billion more than projected," according to a report from the Government Accountability Office. … The report said that "if the companies had been more accurate, they could have spent much of that $1.3 billion on enhanced health benefits or lower monthly premiums, and they still would have maintained their expected profit margin."

What got me was the typical comment from a bureaucrat official, who has probably never run a company in his life: "if the companies had been more accurate, they could have spent much of that $1.3 billion on enhanced health benefits or lower monthly premiums, and they still would have maintained their expected profit margin."

Some people are thinking, "Those profit-mongering insurance companies made an extra $1.3 billion off the poor in this country!" Really? Ok, on the surface I can see why someone would have that mindset. But I began to wonder what kind of revenues produce a $1.3 billion dollar 'error'. We did some research and found out that in 2005, Americans spent $330 billion on Medicare. I am assuming we spent more in 2006, but we will stick with the 2005 number for now. That puts the $1.3 billion in a little different perspective. Out of $330 billion in revenue, they were off in their profit projections by $1.3 billion. I was not a math major in college, but I think $1.3 billion is less than half of one percent of $330 billion. They want them to be more accurate?

Let's take some of the zeros off of the numbers and get them down to a size we can get our arms around:

• Suppose you own a company with projected revenues of $3.3 million this year. Would you be happy if your revenue and expense projections were only off by $13,000 for the year?
• Or suppose you are going to earn $33,000 next year in your job. Do you think you can project your expenses for 2009 to within $130?
• Or suppose you set aside $330 for a weekend get-away or a shopping budget. Would you consider it a good budget if you came within $1.30 of your goal? To make this example more like the story above, you need to plan your trip or shopping budget at least a year before you actually spend the money!

See my point? They sensationalize the number because it is so big, but in reality, I bet the people in charge are just happy they got as close as they did.

But it makes for a great headline...

Consider This

Americans spend $1.9 trillion each year on health care and

• 50 percent of health care costs and ultimately health insurance, is related to lifestyle choices
• 60 percent of Americans are overweight and companies pay more than $13 billion in related costs
• 15 percent of our children are obese
• 20 percent of our workers smoke
• 50 percent of adults have no idea what their blood pressure, cholesterol, or blood sugar levels are

And we wonder why employers receive double digit rate increases on medical insurance?

Source: Alt Benefits Consultants

REAL Heroes

One of our clients has a son in the Army and he sends out updates on his son's deployment on occasion. I really enjoy getting them. His son is currently stationed in Iraq, but is going to be home in time for Christmas! As the dad puts it, "They have worked themselves out of a job... and they have all performed magnificently." I asked for permission to post the letter from his son so you could hear first hand from someone who is on the front lines. I was particularly struck by everything the army does to help make sure the transition back home goes well.

We have included some pictures at the end of Carl's letter (including one with some of the kids wearing the Richmond soccer jerseys they passed out!)

Personally, I cannot say 'thank you' adequately enough to all those who serve (or have served) in our armed forces. But we all should try.

Here is the letter...

I know that everyone is aware, but I just wanted to remind you that we (6-8 CAV) have our marching redeployment orders for the end of NOV / early DEC. We really lucked out; we will be the first Squadron/Battalion in the Brigade (there are six) to be home! There is a torch flight that will be leaving on 18NOV08, the advanced party will leave on 28NOV08, main body one will leave on 29NOV08, and main body two will leave on 30NOV08. There is a very small element that will leave on 06DEC08 and an even smaller element that will leave on 30DEC08, but 95% of the Squadron will be home before 08DEC08! As you can imagine, we are all very excited.

When we return home, I will have a 48 hour pass. It looks like I will be getting back around 05DEC08 (a Friday) so I will have the entire weekend to relax and spend time with Marianne and family. From what the plan states, everyone will have to go through ten days of "re-integration" training at Fort Stewart. This training is held in the morning and usually ends before lunch - the last three are "commanders time" so I would imagine we will not even have to come in. As the Troop Executive Officer, I am sure that I will be able to bypass a lot of the bureaucracy. All the same, the training will last ten days. This training sounds a bit lame, but it is very important to the majority of the guys who had a rough time over here - the guys who were in heavy combat, lost buddies, coming home to an empty house, etc. The desired effect is to identify Troopers who may need additional help.

After the ten days of training, we will be on four day weekends and half days. The half days are really just a function of checking up on Soldiers as many of the Soldiers identify more with their fellow Troopers more than their own families. Block leave is scheduled to start on 24DEC08. With that being said, I don't know exactly how things are going to work as far as travel time, etc. Marianne and I will figure all of that out over a glass of wine when I get home. I will just be happy to be home and to be with family.

Today I took one of the Scout Platoons with me and visited a local school as the Squadron representative. I met with the headmaster and some Ministry of Education official to talk about future goals and security. The folks down here are far more advanced and self sufficient than those in our previous area of operations. I took with me some of the Richmond Soccer Jerseys that mom sent me and I passed them out to the kids; they loved them (I attached some pictures to this e-mail). The SCO (Squadron Commander) told me to wear my Stetson so that the locals can rest assure that someone has already "called on the Cavalry to save the day" (one of his timeless jokes that never seems to get old).

Thanks so much for all the support and love. I'll see everyone soon!

V/R

CARL A. SUNDIN
1LT, AR
6-8 CAV
Angry Troop XO

(click on the picture to see a larger version)

When A Check-Up Is Not A Check-Up - Part 2

Previously, we talked about the problems some people encounter when they have a check-up that is not covered by their insurance. Let’s talk about some of the reasons why check-ups are not considered check-ups by the insurance carrier.

First, let's consider billing codes. In most cases, this is the root of the problem. There are thousands of billing codes. Each procedure and each diagnosis has its own code. There are even different codes depending on the severity or complexity of the condition or procedure. These billing codes are what insurance carriers use to determine, among other things; 1) if a visit covered, 2) if it is a preventive visit, and 3) how much they reimburse the provider.

Now that we have billing codes as a background, let's look at some scenarios where we have seen conflict between what a client thought was a covered visit and what the insurance carrier said.

A visit is more than a check up: Frequently we get calls from clients who have been for a check-up recently, and they get a bill for the visit. The visit is for an 'allowable' preventive care visit, but the insurance company sends a bill regardless. In most cases, it turns out that the client is asking the physician about a specific condition during the visit. The annual well-visit to your child's pediatrician turns into something else when you ask them about the wart on your son's finger. That simple question about the wart causes another billing code to show up on the form sent to the insurance carrier. To make matters worse, insurance carriers are not consistent in how they treat this. Some carriers will consider the visit in the example above to be considered 'preventive' if the check-up code is listed first. Others will not pay if there is any other code on the form.

A visit is too soon: Your plan allows a certain type of visit once a year. You go for the same visit 364 days since the last one. Guess what, Sparky? It will probably be denied. The computer sees two visits in a 365 day period, and it denies the second one. This is nothing personal. In fact, that is the problem. There is nothing personal about it.

A visit is exactly what it is supposed to be: This particular incident is usually the result of a billing code error. The wrong box was checked, or the wrong code was listed. I worked on an incident where a man was billed for a 'female-only' procedure. When we started researching it, it was apparent to everyone what happened. The claim was re-filed, and everything was corrected. But once the wrong code was put on the form and it was transmitted electronically to the carrier, it was not really looked at by anyone until you receive the EOB (Explanation of Benefits) and see that the claim was denied.

Before we wrap up, let me give you an example of where the insurance carrier just plain had it wrong. A client had a new insurance carrier and went to have his annual eye exam. After the exam, he received the EOB saying the visit was not covered as 'preventive.' Then he received the bill for the exam. We looked into it and found out the billing code was for near-sightedness. That made sense since the patient had been wearing glasses for 30 years. Nothing was new here. We contacted the carrier, and they said the claim was denied because the billing code was for a diagnosis of near-sightedness, not a check-up. Huh? The conversation went something like this,

"You are telling me you cannot classify the claim as 'preventive' because he was diagnosed as being near-sighted."
"Correct."
"Even though he has been wearing glasses all of his adult life?"
"Yes sir."
"If he were not near-sighted and did not need glasses after the check-up, would you have paid the claim?"
"Yes sir."
"Does that make sense to you?"
"No sir."

In the end, the claim was paid. The insurance carrier changed their system to pay these claims.

Ultimately, the problem had as much to do with legislation as anything. In most of these instances, the individuals involved have and HRA or HSA. These high deductible plans are relatively new and are still evolving. The legislation covering these programs was put through pretty quickly and is evolving, too. To the carriers' credit, they offer to cover preventive visits in an attempt to get people to avoid skipping them because of the cost (since the individual would normally be responsible for the cost because of the high deductible). Until recently, there was no need to segment out these preventive visits. So now the carriers are trying to play catch-up to some degree in getting their systems to adapt to these new plan designs.

So if you have a claim and you wonder why it was not paid, call the carrier and ask questions. If you are still not satisfied with the answer, contact your broker and ask them to help you. (And if your broker says he does not do that, call us. We will be happy to help you).

2009 Cost-of-Living Adjusted Pension Limits

IRS and SSA Announce New Contribution, Benefit, and Compensation Limits. The Internal Revenue Service and the Social Security Administration have announced 2009 cost-of-­living adjustments to limitations applicable to qualified retirement plans. Here is a summary of the new 2009 limitations:

• The social security taxable wage base is increased from $102,000 to $106,800.
• The limitation for defined contribution plans under Section 415(c)(1)(A) is increased from $46,000 to $49,000.
• The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $185,000 to $195,000
• The annual compensation limit under Sections 401(a)(17) for qualified plans, 404(l) for deduction purposes, 408(k)(3)(C) for SEPs, and 408(k)(6)(D)(ii) for SARSEPs is increased from $230,000 to $245,000.
• The threshold used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $105,000 to $110,000.
• The threshold used in the definition of “Key Employee” in a top-heavy plan under Section 416(i)(1)(A)(i) is increased from $150,000 to $160,000.

2009 year limitations mandated by the provisions of EGTRRA.

• The limitation under Sections 402(g) for 401(k) plans, SARSEPs, and 403(b) plans, and 457(e) for 457 plans, for elective salary deferrals increased from $15,500 to $16,500.
• The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $10,500 to $11,500.
• The dollar limitation on catch-up contributions for individuals age 50 or over under Section 414(v)(2)(B) for 401(k) plans, SARSEPs, 403(b) contracts, and 457 plans increases from $5,000 to $5,500. For SIMPLE plans (including IRAs), it remains unchanged $2,500.