Used Car, New Car, or Same Car?

 

I’m afraid my car is about to go on life support.  Purchased used in 2004 with about 75,000 miles already on it, my 1999 V6 Toyota Solara SLE, made in Georgetown, Kentucky, and with the odometer currently sitting at 325,330, is starting to show its age.  It has the original engine, original exhaust system, original air conditioner compressor, original fuel pump, original just-about-everything-but-tires-and-battery, in fact.  It has been a remarkably trouble-free car.  It has never stranded me.

But last week the “check engine” light lit up—and this time stayed on.  Not coincidentally, I suspect, the air conditioner that had been blowing icy refreshment since the day I rode out of the used car lot was suddenly giving me a face-full of warm air.  And I’ve noticed the gas mileage is dropping.  I have to keep an eye on the tire pressure because the wheels have apparently worn to the point that the tires don’t fit as snugly as they should and lose pressure ever so slowly.  There’s a rattle in the back of the vehicle that no one seems able to diagnose or fix.

Is it the last gasp of a dying car?

That’s a question that plagues lots of people as their automobile starts giving them trouble.  I’m sure I’m not the only one who hates the car-buying experience, so like me they will try to make their car last as long as possible to put off that dreaded day they have to hunt for a new ride.  But how long is too long?  At what point should we stop trying to repair a car and just replace it?

Take my Solara for example.  I put on two new tires a few months back and have sunk about $500 into it over the last six months.  That is a likely a lot cheaper than six months of car payments would have been if I’d bought a replacement used car.  But how long do I do that?  Do I invest another $500 now to fix what’s wrong?  If it’s just the air conditioner, I can survive a few more weeks of hot weather then won’t have to worry about it until spring, thus putting off a car purchase even longer.  But just diagnosing the problem might cost a hundred dollars or more.  And if it’s something other than the air conditioner, do I draw the line now?  Should I have drawn it back in February? 

Here’s what I decided, and how I arrived at the decision.  If you are struggling with a similar dilemma, I hope this helps you.

For now I am going to do…nothing.  The car still drives smoothly, if a little hot and noisy.  It’s a runaround car that I use when the main family vehicle is unavailable or when I just want to get it out for a drive to church or any excursion less than 100 miles round-trip.  Gas mileage is not so critical then, just as long as I’m measuring it by miles per gallon and not gallons per mile.  If the car just suddenly dies on me I will not have lost much; I can’t get much for it in a resale.  And I’ve certainly gotten my money’s worth out of this vehicle.  By not having a car payment, I’ve been able to save up to purchase another runaround car with cash.

But a new car?  Nope.  I’ve been eying a used Solara or two online.  Toyota stopped making them with the 2008 model year, so they are all high-mileage.  But I might consider one with 125,000 to 150,000 miles on it, given how long my Solara lasted.  Moreover, Money reported last week that the average cost of driving a new car is $9666.  That includes depreciation, insurance, gas, maintenance, and finance charges on a loan for the car.  Take a hint from the “666” in that number, because the average price of a new vehicle hit $32,903 last year.

And you?  What about your vehicle?  If your main vehicle is acting like my Solara is now, then you likely do need to repair or replace it.  Selecting between those two options should be guided by the car’s maintenance history, the seriousness and potential repair cost of the current mechanical problems, how many miles it has on it, and your ability to buy a replacement (your cash/savings and budget situation) or pay for a repair.  There may be other factors in your particular case, but try not to let emotions be one of them.  If you have to part ways with the car, take some pictures of it, go on a fun (but short) trip in it—maybe to the ice cream hut—to seal a final good memory, then let it go.

If I can only do that for my Solara.  The places it has been, the people who’ve ridden in it with me….

Until next time,

Roger

“Things that are seen don’t last forever, but things that are not seen are eternal.  That’s why we keep our minds on the things that cannot be seen.”  2 Corinthians 4:18 CEV

"Do You Have a Receipt for That?"

 

I was cutting the grass yesterday when my neighbor motioned me to her deck.  I stopped the mower and went to see what she wanted.  First she told me it was too hot to be outside pushing a lawn mower.  But then she said her freezer wasn’t working.  I probed for more details, and it turned out that it was really just the icemaker; it was producing few, if any, cubes.

That was a problem I knew something about, or at least one with which I had some experience.  A couple of years ago our new refrigerator had the exact same problem, so I told her what I thought she should do.

“Get the owner’s manual and call the manufacturer help line.  You just got the appliance; it will be under warranty.  When I had the same problem the manufacturer sent a local repairman.  He had to make two trips and order a new part, but we didn’t pay a penny.”

I saw her face drop, and I knew it had happened again: she had thrown away all her paperwork, including the owner’s manual.  She is elderly and tends to do that with everything.  She doesn’t want papers lying around.

I relate this story because it illustrates how a little organization can simplify life and save you money.  In her case, if she had kept the papers she could quickly have arranged a repairman to come diagnose and fix the problem.  Now she will have to search for the right number to call.  (It’s only been 24 hours since our conversation, and I’m still expecting her to call me for help with that.)  But manuals can also be a great aid in diagnosing problems and doing your own repairs when the fix is easy.

More than owner’s manuals, though, retaining receipts is a good idea, too.  It facilitates product returns in the short-term and can be proof of warranty coverage in the longer term.  And don’t forget that if you charged the purchase on a credit card, you might qualify for an extended warranty.  Some credit card companies will double the manufacturer’s warranty period up to one or two years. 

I’ve had that conversation with my neighbor, too.  I told her that she could get rebates from the electric company for having installed more energy efficient appliances.   For the multiple kitchen appliances she bought she could get back around $200.   I told her what she needed to do and even offered to help, but she didn’t want to pursue it.  She said she’d already gotten a good buy with the store’s sale/rebate program.  She’s not really rich and could use the rebate from the utility, but I knew the real problem: she didn’t keep the receipts and other information she would have needed to apply for the rebates.

I hope you are better at keeping your paperwork.  It can seem like a small matter—until you need it.  You don’t have to have papers “lying around”.  My wife bought an expandable folder to file all the appliance manuals, and I have a separate folder with all the home improvement receipts (which can come in handy if and when I sell the house).  I looked in the manuals folder the other day and we still had one for a ceiling fan I installed at our previous house.  So it makes sense to go through your folder occasionally to weed it out.

While we’re on the topic of record-keeping, I hope you also have a “grab and go” folder/box for all your other important papers.  Flash floods, wild fires, house fires, tornados, and even domestic violence scenarios…they are all good reasons to have a single place to go to pick up all your important papers and run, in a hurry if needed.  This might include passports, inventory of household goods, credit cards, licenses, etc.  Nowadays, a cell phone can be a great place to store information electronically or have a video record of the contents of your house for insurance replacement purposes.  You could even send all that electronically to a trusted relative that doesn’t live in the same area of the country as a sort of safe deposit box.  The important thing is to get yourself organized.  It can save (or make you) money and certainly make life easier, whether in a crisis or not.

Until next time,

Roger

“That night the king could not sleep, and he had a servant read him the records of what had happened since he had been king.” Esther 6:1 CEV

Appealing an Insurance Claim (Part Three)

 

In the last couple of posts we have been exploring ways to effectively appeal a medical insurance claim that has been denied.  I will offer one more scenario and then some general advice.

Payment of pharmacy benefits—prescription drugs—typically represents the largest benefits expenditure by insurance companies.  So, of course, they will take whatever steps they can to limit their exposure.  This will almost always take two forms: imposition of a formulary (a list of approved drugs they will pay for) and step therapy.

Formularies are not new.  Hospitals use them, too, to limit the drugs stocked in their in-house pharmacy and which doctors may order for inpatients.  The formulary is not arbitrary, being composed by, and subject to review by, a committee of doctors and pharmacists to ensure all therapeutic categories are adequately covered with a range of drugs but without unnecessary duplication or inclusion of unproven medicines.

It can be easy to run afoul of an insurance company’s formulary and have your prescription drug denied (or covered but with a huge co-pay from you) as not being on the formulary; or if it is on the formulary then it may not be covered until you try alternative medications first—the so-called “step therapy” approach.  In this scenario, the insurance company may cover the particular drug your doctor ordered but only after older (and cheaper) alternatives were tried and proved to be ineffective.

If this is the first time you will have used the drug (e.g. for a new diagnosis), you should consult with your doctor about the insurance coverage and see if she will prescribe one of the alternatives that is on the formulary.  This can benefit you since the alternative will not only be cheaper for the insurance company but for you. If the alternative(s) are not acceptable to her, then the burden should shift to her to justify to the insurance company why it should be covered.  This would ordinarily involve providing some clinical documentation to the insurer to demonstrate why the non-formulary drug is superior to the cheaper alternatives.  Don’t expect success here.  That information was likely already reviewed when the formulary was composed and was deemed inadequate to justify inclusion on the formulary.  In that case, you are left with having to try the cheaper drugs first.  It’s not necessarily a bad thing.

But suppose the cheaper drugs don’t work.  Or suppose you have been on this prescribed, non-formulary medicine for years and it’s just that you have a new insurance company you are dealing with that insists you go through step therapy.  Here is where you may have some success.  You need to give the insurer an account of your having tried the cheaper alternatives and their failure to cure or control the condition for which they were prescribed.  Your doctor can assist with this, and it is usually adequate to get the initial rejection from the insurance company overturned. 

I’ve been on the other side of the fence, having worked for an insurance company (although they like to use terms that don’t carry a negative connotation—like “managed care organization”), and despite the perceptions to the contrary, there are people working at these places that really do care about the health of their customers.  Don’t get me wrong; there are “cost containment” people there, too, that are trying to find every reason they can to limit payments or deny claims.  But customer service reps, provider service reps, case managers, and nurses employed by the insurers are of a different mindset and are often frustrated by the cost controls that they see as interfering with care or confusing the customers.  In my experience (on both sides of the fence) they will do whatever they can to assist a customer to get appropriate care and claims paid.

I read an article this week about customer service reps at Cigna protesting their work conditions, lack of training, no raises, etc.  This kind of dissatisfaction and lack of training can come across during their interactions with customers as their not caring about helping resolve complaints.  But believe me, lack of training is a killer of good customer service, even if the employee has the desire to help.  I’ve worked with Cigna as my insurer, and what I had to do is what I recommend YOU do whenever you contact your insurer: take precise notes of when you called, to whom you spoke, what they committed to do, and any case or call reference numbers they give you.  Get a commitment of when the situation will be resolved, and if they miss that deadline, call again and have all those notes handy.

As I’ve said before, one of the keys in appealing is demonstrating how an adverse decision from the insurance company will actually cost them more money in the long-run than just paying the claim, etc.  But an equally important best practice: BE NICE.  I’m afraid civility is becoming a rarer commodity these days; but if you talk calmly and don’t shout, treat the insurance rep respectively, and make a reasonable and coherent case for your request, you will stand out in the crowd, believe me.  And this should make the other party more willing to help.  No guarantee here; some people only respond to threats, unfortunately.  But for the conscientious ones—and they do exist—this is a great tool.  Plus, it keeps your blood pressure down, which might keep you from having to visit the doctor, which in turn keeps you from having to submit another claim to the insurer that might get denied and which you’ll have to appeal.

For help with Medicare claims, you may contact your state health insurance assistance program (find it at www.shiptacenter.org) or Medicare Rights Center, an advocacy group for Medicare beneficiaries, at 800-333-4114.  For commercial insurance, be acquainted with your insurer’s various levels of appeal, but also know that you can take your complaint to the insurance commissioner or other regulatory body in your state.

Until next time,

Roger

“The right word at the right time is like precious gold set in silver.” Proverbs 25:11 CEV

“A kind answer soothes angry feelings, but harsh words stir them up.” Proverbs 15:1 CEV

Appealing an Insurance Claim (Part Two)

 

Given the dollars at stake, correctly appealing the denial of an insurance claim is a valuable skill, especially in light of the figures we quoted last time about the high percentage of Medicare Advantage claim denials that are overturned upon appeal.  It does take a bit of your time to do it right, but I think it’s worth it.  You’ve paid your premiums faithfully and on time; you deserve to get what you paid for.

First, let me say that my own experience comports with the figures I quoted about appeal outcomes.  Whether appealing denial of coverage for a drug or a procedure, I only failed once to get the initial adverse decision reversed.  And on that one occasion where I failed, I was eventually reimbursed $1100 by the insurance company for the claim because of a class action suit filed by another aggrieved party.  Follow these guidelines and you will have a better chance of success.

1.       Denied for provider being out of network.  This is one of the more common denials you are likely to encounter.  Insurance companies contract with hospitals and doctors to treat the people enrolled in their health plan(s).  In exchange for the privilege of being an in-network provider to whom the insurance company directs potential patients, the providers agree to pre-negotiated rates for their services.  That’s why you will see huge sums charged by the provider but be amazed at how little they accept in the end for their payment as they write off the rest.  So if you go outside the network of approved providers, you understand why the insurance company is not going to cover the entire billed amount, and you end up on the hook for much—or all—of the bill.  The best defense against this is to do your homework beforehand.  Make sure before you enroll in an insurance company’s plan that your doctors, the local hospital to which you are likely to be admitted, and the nearest major medical center are all in network with the plan.  (And if you call the doctor’s office to ask if they are in network, talk to the person there who files their claims and ask, “Are you in network with XYZ Insurance”.  Don’t ask if they “accept” the insurance; a provider will bill most any insurance and “accept” whatever payment it sends.  But whether it will cover your bill and not leave you holding the bag for the balance is another matter.  Phrase your question correctly.)  You will also want to ensure there is a robust and varied network of providers near your home, from physical therapists to oncologists, because you never know when you will need their services and you don’t want to have to travel an hour or more to get to a provider.  But sometimes you need emergency care and don’t have time to check whether the facility/doctor to which you are going (or being taken) is in network.  If this leads to a denied claim, appeal on the basis of the circumstances—it was an emergency and if life or limb were endangered if treatment was delayed, say so.  A related “gotcha” from the insurance company is when you have surgery or other treatment by an in network provider at an in network facility, but then get a bill from a radiologist or anesthesiologist that you didn’t know would be involved in your care and he is not in network, leaving you with a rather large bill to pay on your own.  This scenario is becoming less frequent as patient advocacy groups and legislators fight back against it or even make laws against the practice.  If it still happens to you, explain to the insurance company how you carefully picked in network providers for your treatment but had no say in the choice of these other caregivers, sometimes called “blind providers” (a term you can drop on the insurance company to perhaps impress them that you know what you’re talking about).  Encourage the insurer to work with the non-network provider (and vice versa) to come to terms so you are not left with a bill, or at least not a very large one.

 

2.       Denied for not a covered service.  Insurance plans don’t automatically cover every conceivable medical procedure or drug.  They have limits to their coverage like excluding experimental therapies, limiting the number of treatments, putting age restrictions on certain therapies, etc.  Again, researching ahead of time will pay dividends here.  Make sure a planned procedure is actually covered by the insurer.  Enlist the aid of the provider, if needed.  If it appears that it will not be covered, then talk with the provider to understand why the procedure is needed.  If there is a valid clinical reason for the therapy/test/procedure, then compose a letter or have the provider write a letter to the insurer to explain the rationale for it.  A good example might be one in which I played a part, explaining to an insurer that the family medical history of the insured justified waiving the age limit they had imposed on a screening test.  The trick here is to imply or even flatly state that the insurer risks incurring even steeper costs down the road if the insured does not get the test, causing a medical condition to go undiagnosed and leading to expensive treatments that the insurer will have to pay for later.  Of course, if you failed to do this homework first and had the procedure done then received a denied claim, you will have to do all this retroactively, but making the same arguments as above.  It might diminish your chances of success to be doing this after the fact, but it’s not necessarily a lost cause.  No harm in trying.

 

I’ll offer some concluding remarks on this subject in my next post.  Until then,

Roger

“The plans of the diligent lead to profit, as surely as haste leads to poverty.”  Proverbs 21:5