Tuesday, January 22, 2008

Today's GRR award winner

I occasionally get unsolicited emails from people wanting to advertise on Birds & Bills. The site doesn't accept advertising, so while these emails are fruitless, they're generally slight mood-lifters -- it's reassuring to find out the site is on the radar and people read it, despite my woefully sporadic update schedule.

This week, though, I got an unsolicited pitch that had me reaching for the big spiky GRR bat. It's from a website called www.AboutYourMoney.co.uk. Let me let them speak for themselves.

We are currently seeking to put "sponsored reviews" of our website on the best financial blogs out there. We absolutely loved your blog so we wondered if we could write a feature review for it?

We would be doing the writing of course, so all you need to do is post it and get paid!

We'll pay you $65 for the privilege (paid by Paypal, straight after the blog post is up). This is dependent on the condition that the blog is not identified as a paid for review on your blog. We do not want you to disclose that in any way.

Blogs are not (generally; there are exceptions) journalism. Blogs are not and probably should not be held to the same standard as journalistic reports penned by staff writers. To my mind, they're more akin to piece written by topical freelancers, where conflicts-of-interest run rampant and all you can do is rely on everyone involved to exercise good judgment and be transparent about anything that should be disclosed.

But there is still a line between gray areas and straight-up unethical behavior. Undisclosed, paid commercial content masquerading as unbiased commentary is flat-out and unequivocally on the wrong side of it. Sadly, I see a few bloggers have taken the $65 bait. I'm putting this up in hopes it'll be found by anyone who comes across a post about
www.AboutYourMoney.co.uk and goes looking for info. Reputable sites don't need to resort to this kind of trickery.

(I might need to make GRR awards a tag. I see I have handed them out before.)

Never mind the deductible -- watch the back-end cap

This came in on the comments on my last HSA post:

One question: were there any hidden surprises? It always seems there's some hang-up with health insurance...

Don't I know it.

My year of HSAing was remarkably smooth, though it's hard to say whether that's because everything worked well or simply because I had no unexpected medical situations. Unlike 2006, 2007 was a totally routine year for me and my spouse: nothing but the usual doctors calls, our standard prescriptions, and an annual checkup. There wasn't (thank goodness) much opportunity for me to test out the insurance and trip over hidden catches.

The only surprise was how unexpectedly easy it was to push through the one claim I had. One of my HSA's little carrots was that it reimbursed 60 percent of the cost of my out-of-network annual physical -- before setting the deductible. No, I'm pretty sure this isn't common. It wasn't even something the PPO insurance with the same carrier offered. It was pretty clearly a "come try this nice HSA!" bribe.

So when I had my physical, I paid out of pocket, downloaded the "reimburse me" form, sent it off with the receipt ...and a few weeks later, received a check in the mail for the $160 I'd put in the claim for. It was startling. I don't recall ever actually getting a claim processed without some kind of catch and extended wrangle.

Overall, though, I think the best thing to keep in mind with an HSA and avoiding surprises is: watch the back-end costs, not the front-end ones. As I wrote when I first opted into the HSA:

The articles I've found about HSAs tend to focus on the up-front deductible when emphasizing how HSAs can end up costing you more. To me, the far more important number is on the back end: the annual out-of-pocket max. What's the most I might be out, if very bad things happened?

An HSA is, pretty much by definition, a low-premium, high-deductible option. If you have a medical situation, you will almost always pay more upfront than someone with traditional insurance would: You might be liable for $1,000 or so in costs before the insurance kicks in anything at all. That's a serious issue to consider when opting for an HSA: can you come up with the money, if you need to? Are you better off paying higher monthly premiums to avoid the potential shock of a big hit all at once, if something dire happens?

Frustrating as a sudden hit for $1,000 or more would be, few people would be catastrophically devastated by that. What would be devastating is a high out-of-pocket max payment: At what point does your insurance foot the whole bill?

My HSA had an out-of-pocket max of around $4,000/year, about the same as the carrier's traditional insurance carried. If I got hit by a bus and rang up $250,000 in hospital bills, I'd still be capped at $4k. I could live with that.

But if my HSA's out-of-pocket max had been an order of magnitude more than the traditional insurance's? Say, $40,000? I would never have done it.

Insurance companies can always argue the fine print, and you never really know how effective your coverage is until you have the unhappy situation of having to test it out. But you can minimize the chances of devastation by paying as much attention to the potential back-end costs as you do to the front-end deductible.

Tuesday, January 01, 2008

The gifting quandary

When I was a kid, Christmas was all about the presents. I mean, yes, the tree and decorations and family time were fun, but -- PRESENTS. I can still clearly remember the Christmas Eve I spent all night awake (I think I was eight or so? Maybe 10?) hoping like crazy that my parents had listened to my entreaties that I would be the most blissed-out kid in the universe if Santa coughed up a Petster robot cat. Happily, Santa did! Which only ramped up my campaign for a real kitty, but that's another story ...

The presents side of Christmas was still quite exciting when I was older but broke. In college and for my first few years out, I relied on Christmas to snag the kinds of indulgences I couldn't afford to buy myself and which my frugal Dad saved for the year's big holiday. My first digital camera was a Christmas gift, as was my iPod. I was always very grateful to be treated to such luxuries, and it made drafting Christmas lists (which my Dad always requests) easy.

But about four or five years ago, I stopped being broke. I'm hardly rolling in money, but I have enough cash flow now that if there's something I really want -- a book, a DVD, a not-stratospherically-priced electronic gizmo -- I just go get it.

This has rather complicated Christmas. There's very little in the way of material goods I actually want that I don't already have or can't easily get myself. (Within reason, I mean. The Big Purchase David and I really need to get organized about saving for, an apartment, is a bit out of Christmas list territory.)

More problematically, almost everyone I know is in the same boat.

Shopping for my Dad is the trickiest. He's the worst combination of traits, from a gift-giving perspective: well-off enough to procure anything gift-sized that he would want for himself, and a total minimalist. I clutter; I collect things. Dad does not. Extra things around my house are generally absorbed into the usual chaos. Extra things around Dad's house fester, drive him nuts, and eventually fall victim to a cleaning purge.

So what in the hell do you get for people who really don't need anything?

For most of my friends, I've taken the popular route through this problem: food or donations. There are very few people who won't appreciate interesting snacks or a meal out; buying birthday dinner has become a standard gift I give when the opportunity arises. I go the charity route for the holidays: I have a list of about 10 friends I make holiday donations on behalf of each year, and follow up with e-cards. (This year, my organizations were Heifer International, Donors Choose and Doctors Without Borders.) My favourite thing about doing donations is that it's a low-pressure gift, avoiding the awkward dance of "uh oh what if they get me something and I don't get them something or vice versa and ..." A charity donation is low-key and guaranteed to be useful.

But there will always be some people you have to get a physical thing for -- very close friends or family, spouse, and so on. And that is just tricky when people don't really need or want things.

I've basically resorted to three categories here: 1) things the person will love and didn't know existed; 2) things that are hard to find; and 3) art.

Category One is the obvious perfect thing for gifts. My sister managed to nail this one this year for me: she got me an AeroGrow indoor garden. I didn't know there was something that would let me grow herbs in a lightless NYC apartment. There is! I had no idea! Hooray!

Category Two is the tactic I usually take for David, who is a mediaphile who quests after all sorts of obscure things. One of my best holiday scores was probably the least expensive gift I've ever bought him: A D-Generation album he'd had when he was younger and never been able to find again. It took eight months of monitoring eBay Australia, but I found one -- for about $5.

Category Three is one I'm taking advantage of more and more frequently. Art is hard to buy for others -- tastes are tricky things to nail, and I only have about three people I'm confident enough of their likes and dislikes to chance it with. But it's also one of the surest ways to get something someone isn't expecting and will (hopefully) find intriguing. Etsy is fast becoming one of my go-to gift-shopping stops.

The only trouble with this approach is that it takes time. Which is why unexpected, hard-to-find or unique items make such great gifts -- they clearly illustrated that you thought ahead, considered your recipient's personality, and devoted time to the hunt. Knowing someone cares enough to do that is the best part.

But this year, sigh. My November and December vanished to job craziness; I literally had to schedule shopping windows weeks in advance. It was not one of my finest holiday gifting seasons.

But David seems happy with his wooden tennis racquet, my sister likes her autographed horse-race photo (the only gift I did manage a head-start on, and thank God the framer could do an incredibly quick turnaround), and my Dad liked the restaurant my sister found for his birthday (which falls the week before Christmas). Whew!