Bamboozled: Smart shopping pays off with less-expensive health coverage

Here’s a health insurance tip, a victory against robo-callers and news about an investment that, at least for now, has a zero-BB brandingpercent return.

Company Health Benefits Update

Earlier this month, Bamboozled told the story of Frank Farbanec, an AT&T retiree who was surprised to find an individual health insurance plan that was cheaper and offered greater benefits than the AT&T-sponsored plan in which he had been enrolled for years.

Reader and Honeywell retiree Gary Main wrote to share his company health insurance experience, which illustrates another reason why it’s vital to shop around.

Main, 68, retired after more than 26 years with Honeywell. He and his wife, 65, both chose insurance coverage through a company plan. For 2009, the Mains learned the plan premiums would rise 51 percent, so they investigated other plans.

The Honeywell plan offered the same coverage for Main and his wife, but as he analyzed individual plans, he realized they didn’t need identical benefits. He founds two different plans that covered each of their needs, and the difference in premiums would save the couple money.

“By going directly to Aetna, my wife could be covered with one program, and myself, with very different medical needs, could be covered with a different program,” Main said. “As it has turned out, my program has no monthly premium.”

It’s another example of why it’s so important to do your research. It’s easy to automatically choose your company plan rather than do the legwork. When open enrollment time nears, remember to compare your company plan offerings to those available from other insurers.

This is your last notice…

The robo-callers have my cell phone number. You know the ones: “This is your last notice. The original factory warranty on your vehicle is about to expire…”

I’ve been inundated with such calls to my cell phone for months, always from a different number. When I request to be placed on the Do Not Call list, mysteriously, the call is disconnected.

Earlier this month, the Federal Trade Commission filed lawsuits against the three companies who are allegedly behind the calls. The firms, Florida-based Voice Touch and Transcontinental Warranty, and Illinois-based Network Foundations, allegedly violated the Do Not Call registry law with more than a billion unwanted calls since 2007. The suit also says the warranties, priced from $2,000 to $3,000 a pop, were fake.

A federal judge issued two temporary restraining orders in an effort to stop the annoying and deceptive calls immediately. It must be working. I haven’t received a robo-call for about two weeks.

Network Foundations denies the charges, saying it’s a computer hosting facility and it doesn’t operate any call centers. “We’re fighting the allegations,” a spokesman said. The other two companies couldn’t be reached for comment.

In a statement, FTC Chairman Jon Leibowitz said the agency intends to shut the companies down.

Bravo!

If a telemarketer calls, be polite, but hang up. While many telemarketers are pushy, they’re often within the law. Others will use creative trickery to get you to part with your money.

Ask to be put on their Do Not Call list, then add your telephone number to the National Do Not Call Registry. Go online to donotcall.gov or call (888) 382-1222.

The downside to low inflation

Homebuyers and mortgage refinancers have been cheering low interest rates and low inflation for months now, but on the flip side, those who rely on fixed income investments aren’t smiling at all.

Same goes for owners of Series I Bonds.

I Bonds are supposed to offer protection against rising inflation. The interest you earn is based on two separate rates. The first is a fixed rate, called the index rate, which is set when the bond is purchased and is paid for the life of the bond.

The second rate is based on the Consumer Price Index (CPI), a measure of inflation. That rate is recalculated every six months, on May 1 and November 1. The idea is that if inflation is on the rise, the interest rate on your bond also will rise, giving some inflation protection to your investment.

But today, inflation is falling rather than rising. For the past six months, the CPI fell 5.56 percent on an annualized basis. That means the May 1 inflation rate recalculation assigned a negative inflation adjustment for I Bonds.

That negative rate cancels out whatever you’re receiving as your index rate on the bond. You won’t get a negative return on your investment, but the interest paid is the same as what you’d get under your mattress: Nada. Nothing. Zip.

Before you start muttering about the government not doing right by bond-buyers, consider this: When inflation starts to rise again — and most market-watchers agree it’s not a question of if, but when — the inflation component of these bonds will be valuable again.

“Historically, inflation has been much higher, averaging roughly 4.6 percent from 1970 to 2008,” said Michael Maye, a certified financial planner with MJM Financial Advisors in Berkeley Heights. “If an investor expects higher future inflation due to the massive government stimulus and spending, an I Bond purchase might make sense.”

If you own I Bonds and you’re not sure of your rate, visit the Savings Bond Wizard tool at the government’s TreasuryDirect.gov website.