Harriet Tubman on the $20 bill

Libertarians are thrilled that someone they can admire will appear on the future $20 Federal Reserve Note. Back in May, Lawrence Reed presented the case for Tubman on the FEE website. The whole piece is worth reading, but here’s just a bit:
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How not to get screwed by Harvard Pilgrim

Here’s the tl;dr version: If you need to terminate health insurance which you’re buying yourself, first stop any payment, then talk to the insurance company. You’re in a much better position if they don’t already have your money.

Here’s the story: In late July I started a new job. Its benefits include health insurance through Harvard Pilgrim. Before this I’d had been paying for my own insurance in a COBRA arrangement from my earlier employer, Harvard University, also with Harvard Pilgrim. Crosby Benefit Systems administers it.

My new insurance card was slow in coming, and I didn’t feel safe cancelling my old insurance until I had the new card in hand. That was a mistake. By the time I had it, the August payment had been deducted from my checking account. Crosby told me, after I provided the needed information, that my insurance would be cancelled. What they didn’t tell me was that it wouldn’t be cancelled till the end of the month; I only found that out when I got a letter over a week later. This means that for five weeks, I’m paying two premiums to the same insurance company for the same coverage. Harvard Pilgrim has hundreds of dollars from me that pay for nothing.

I contacted Crosby. They told me they couldn’t do anything about it because those are the terms that Harvard puts on its insurance. I contacted Harvard Pilgrim. They told me that the money is collected by Harvard, not them (they just happen to get it from Harvard), so they can’t (read: don’t have to) do anything either. There may be someone at Harvard I can talk to, but I doubt it will do any good.

What I should have done was to stop the payments from my bank account as soon as I knew I had new insurance. Then I could cancel the old policy and have the leverage of still having the money. What’s the worst Harvard Pilgrim could do to me? Cancel the policy I was trying to cancel?

Payment plans where the money is deducted from your bank account are a dangerous thing in general. They have the advantage that you don’t risk missing a payment as long as you keep your balance up, but you’re giving away the key to your cash box. You don’t have much recourse once they have the money.

As Arlo Guthrie said, you may know someone who’s in a similar situation, or you may be in a similar situation, now or in the future. Pass this advice along as you see fit. With Obamacare forcing people to deal with insurance companies and taking away the option of high-deductible, low-premium insurance, we can only expect health insurance companies to get more arrogant. (Massachusetts already has forced insurance thanks to Romneycare, so Harvard Pilgrim is ahead of the curve.) Assume they will try to screw you and do whatever you can to prevent it.

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Guessing Social Security

Which way will Social Security go? Will it run dry if it follows its present course, or is it in fine shape? You can find predictions for both, backed up by figures. While I’m more inclined to believe the pessimistic prognoses, I really don’t have the knowledge to pick one with confidence.

It really doesn’t matter, anyway. Social Security isn’t a business that will go broke if it can’t meet its obligations. Its “trust fund” is an accounting fiction consisting of the government’s obligations to itself. The real bottom line is that the ratio of people collecting to people paying increases with people’s longevity. This means that recipients will get less or people being taxed will pay more. If the trust fund goes broke, Congress will abandon the model, converting Social Security from a nominal Ponzi scheme to an overt welfare program. For most purposes, it’s already the latter.

This means that barring a major economic collapse or political shift, we can expect to get back some of our money if we live long enough. We shouldn’t count on those numbers which the government sends us in the mail, though. Congress can change things according to the political winds.

It would be logical to increase the age at which people start collecting; when Social Security started, people at age 65 were mostly within a few years of death, but now people often live to 80 and beyond. The AARP, however, has put its lobbying muscle behind keeping the age the same, and most political decisions follow the logic of getting re-elected, not the logic of economics. Maybe it will remain possible to start collecting at age 65 but will be a really bad idea. This is already true to a degree.

I’m not counting on Social Security in my retirement plans. If I manage to get back some of my money, that’s an extra. I’ve made sure to save enough that I won’t starve without it.

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