how to beat overdraft fees

Another way we can help the underserved – reversing overdraft fees. Many folks who are at the margin run their bank accounts close to overdraft. And many big banks (not so much Community Banks or Credit Unions) will charge a separate $30 overdraft fee for every transaction. So heaven forbid you go run some errands when your balance is close to zero, because you’ll go to say three stores, buy a handful of things, and find out they cost you $90 more than you thought.

What can you do? Take your bank (even Wells Fargo/Wachovia) to small claims court. In almost all cases, they will refund the fees rather than fight you. But note ahead of time, they will also want to close your account, so be ready to switch. This is probably intimidating for many people but it’s not that hard. And the more people do it, the more likely banks will change their policies.

HT: Felix.

setting the stage for Obama’s talk next week

So, what will the next phase of the Health Care debate look like? Megan McArdle breaks it down:

At this point, all the remaining items on the table:  mandate, guaranteed issue, community rating, subsidies–are pretty much a package deal.  If you take out the mandate, guaranteed issue and community rating will make insurance very expensive, driving all but the very sick, and relatively affluent, out of the market.  If you take out guaranteed issue, the mandate is nonsensical.  Take out community rating, and you lose the main point, which is to have young healthy people pool their premiums with those of the old and sick.  And if you lose the subsidies, you will be in effect commanding people to buy something they can’t afford.

We’ve not discussed the current legislation on the table, so I’ll break down some of the terms:

Mandate: pretty obvious, the requirement that everyone purchase health insurance. This is to get the young healthy to participate to help subsidize the older and sicker.

Community Rating: This is what makes insurance companies treat everyone the same, i.e. can’t charge different premiums to people who are sick.

Guaranteed Issue: This means that if a person wants to purchase insurance, the insurance company has to sell to them.

Subsidies: This means the government will give money to lower/middle class folks who can’t afford the cost of health insurance.

I’m also quite interested to see what Obama has to say next week. The joint session of Congress is pretty rare (GWB and WJC only used it twice each in 8 years) and so everyone will be watching.

Crisis of Abundance

…is the title of a book by Arnold Kling. It is available at Davis Library at UNC, but only costs $9.95 on Amazon.

He maintains that there is a trade-off among the following:

1. insulating consumers from costs
2. giving them free choice of medical services
3. holding down costs

meaning that you can’t have all three. I think he is basically correct though I don’t think each is a boolean choice; there are shades of grey.

Virtually every society on earth has chosen #1, including the US. The US has also chosen #2 in spades, and thus is completely missing #3.

Most government run plans provide #1 and #3. Sometimes you can change the structure of the cost from a dollar outlay to a time outlay (i.e. waiting in line) which makes dollar cost seem lower. Google the “NICE” outfit in the UK. I forget what the acronym stands for, but they are basically the group that chooses what is covered and what isn’t. Massachusetts is trying to cap prices.

While I am hoping for a solution to loosen #1 to allow us to get much more of #2 and #3, I’m having some doubts about our ability culturally to change that much. And when I speak of “insulation” I primarily mean seeing the cost – i.e. these high deductible plans with cash provided by employer or governemnt to cover it with incentive to spend less and therefore price compare/shop around.

But I think, culturally, we have an aversion to “paying” directly for health care. It seems ugly or something. So, I am perhaps growing more resigned to a ‘public school’ type of model where there is relative security of borderline crappy coverage for all with its own new set of problems, while those that can afford it do and get better private coverage.