It would be nice to say “No, the government should not continue to bailout AIG”; however, the US government has no choice but to bail out AIG.  This is because if AIG collapses, it will be a nightmare and would seriously damage the already fragile U.S. economy, and even the world economy. Most experts feel a collapse of General Motors would be a thunderstorm, while a collapse of AIG would be a category 5 hurricane to the U.S. economy.

AIG currently has more than 375 million policies with a face value of $19 trillion.  If the 375 million policyholders lost faith in AIG and rushed to cash in their policies at once, the entire insurance industry would tank.  Simply put, AIG is too big to fail.  There is also the fear that if AIG collapses, many people would be unable to obtain the same insurance from a competitor for the same price, which would cause many people to be shut out.

Unfortunately, no one knows when AIG will turn around and how much more money the U.S. government will have to pump into the company to keep it afloat. The government has rescued AIG four times in the last six months.

Last Monday AIG reported a $61.7 billion quarterly loss, the worst ever for a U.S. company. The US Treasury then announced the same day that it would provide A.I.G another $30 billion loan from the $700 billion financial bailout program, although the company already received more than $170 billion in taxpayer money.

Video: AIG Receives Billions More

How did AIG get into this mess?  Contributing factors were as follows: the company used its triple-A rating from the insurance part of its business to run a risky hedge fund, which wrote hundreds of billions of dollars of credit default swaps without hedging itself, or buying protection against the prospect that it would be forced to pay up.

What’s a credit default swap? Credit default swaps are insurance contracts sold by banks, hedge funds and others that promise to cover losses on various securities in the event of a default. They are usually purchased for mortgage securities (we all know what happened here), corporate debt, and municipal bonds. Buyers of credit default swap insurance policies pay premiums over a period of time in return for peace of mind, knowing that losses will be covered if a default happens. Credit default swaps work similarly to someone taking out home insurance to protect against losses from fire and theft.  

When AIG’s credit ratings were downgraded last September, the insurer’s trading partners demanded more collateral, but AIG didn’t have the cash. The US government, worried by the bankruptcy of brokerage firm Lehman Brothers a day earlier, gave $85 billion to keep AIG afloat which went to satisfy the trading partners’ demands for more cash.  

Video: Credit Default Swaps Explained

Who is AIG? American International Group, Inc., (AIG) via its subsidiaries, provides insurance and financial services in the United States and internationally and has 116,000 employees. It operates in four segments:

1. General Insurance – underwrites various business insurance products, including large commercial or industrial property insurance, excess liability, inland marine, environmental, workers compensation, specialized forms of insurance and excess and umbrella coverages.
2. Life Insurance and Retirement Services – offers individual and group life, payout annuities, endowment, and accident and health policies, as well as retirement savings products consisting of fixed and variable annuities.
3.  Financial Services – provides aircraft and equipment leasing, capital market transactions, consumer finance, and insurance premium financing.
4. Asset Management – investment-related services and investment products, including institutional and retail asset management, broker-dealer services, and spread-based investment products.

I am ecstatic that the new Obama administration is finally going to do something about the American Healthcare System, which is a complete mess.  Over a year ago when I saw the movie “Sicko“, produced by film director Michael Francis Moore, who also produced “Bowling for Columbine” and “Fahrenheit 9/11”, it made me very angry.

If you haven’t seen Sicko, I highly recommend seeing it. Sicko is a documentary that highlights the problems and catastrophes with the American Healthcare system. The film profiles several ordinary Americans whose lives have been disrupted, shattered and in some cases ended because of the healthcare catastrophe.

The film highlights that the crisis doesn’t only affect the 47 million Americans who are uninsured, but the millions of other citizens who pay their premiums only to get strangled by the bureaucratic red tape.

Sicko details how the American healthcare system came to be such a mess and highlights countries around the world where all citizens receive free healthcare, including Canada, Great Britain and France. The film also shows how 9/11 rescue volunteers who now suffer from debilitating illnesses have been denied medical attention, however, the suspected terrorist held at Guantanamo Bay, Cub prison receive free healthcare.

Michael Moore’s healthcare proposal is as follows:

1. Every American must have full, uninterrupted healthcare coverage for life.
2. Private, for-profit health insurance companies must be abolished.
3. Profits of pharmaceutical companies must be strictly regulated like a public utility.

Hopefully, Sicko has awaken the American public as to how terrible our healthcare system is and that change is needed.

Trailer for Sicko

Michael Moore is urging people to videotape and post their healthcare nightmares on YouTube to help convince Congress that radical change is needed.

Resource Links: 
California Nurses Association
http://www.calnurse.org/
The FealGood Foundation
http://www.fealgoodfoundation.com/
Guaranteed Healthcare
http://www.guaranteedhealthcare.org/
Health Care for All
http://www.healthcareforall.org/
HealthCare-NOW!
http://www.healthcare-now.org/
California State Senator Sheila Kuehl
http://www.sen.ca.gov/kuehl
National Health Care for the Homeless Council
http://www.nhchc.org
OneCareNow
http://www.onecarenow.org/
Physicians for a National Health Program
http://www.pnhp.org

A couple of years ago I was unemployed, and my wife was working for herself as a personal trainer.  We purchased our own medical insurance because it was much cheaper than paying the Cobra insurance premiums offered by the company that laid me off.

A few weeks after being laid off, my wife unexpectedly got pregnant.  We were very excited!  I then assumed I could call my insurance company and tell them to add maternity insurance to my policy for an additional few hundred dollars per month.  Boy, was I in for a rude awakening!  My insurance company, Aetna, didn’t offer maternity insurance, so I shopped around and soon learned that you have to purchase maternity insurance before getting pregnant.  Also, many insurance companies require you to pay the premiums for 1 year before becoming pregnant.  If you got pregnant before the 1 year period, the policy may only cover 50% of normal charges.

Being pregnant is considered a pre-existing condition and many insurance companies will not want to cover you.  If they do offer coverage, your premium will be extremely high, possibly over $1,000 per month.  The average delivery of a baby costs about $10,000, assuming there are no complications.  The insurance companies are in business to make money. So charging you a few hundred dollars in premiums makes no sense, when they will be hit with an $8,000 bill, assuming you pay 20% of the cost.

So the advice here is to plan ahead.   Before you become pregnant, make sure you have maternity insurance or it may cause you dearly.  Unfortunately, my wife had a miscarriage very early into that pregnancy.  By the time she got pregnant again, we had maternity insurance with my new employer.  

Related Page: Compare Medical Insurance Quotes

Have you ever loaned or given someone money who you thought really needed help only to find out that soon after they spent the money on something lavish like a big screen TV or vacation without first paying you back?  How did that make you feel?  

Well I hope you are outraged, as I am, about the news of Bank of American paying bonuses of $3.6 billion when they were given $45 billion of taxpayer TARP (Troubled Asset Relief Program) money due to bank’s potential collapse  (see Show me the  TARP Money) .  

As far as I’m concerned, the bonus money needs to return to the government.  That’s our money and the employees of Bank of America didn’t earn or deserve it.  The bank was on the verge of collapse before Merrill Lynch & Co. merged with it.  

Merrill Lynch, a New York-based securities firm, lost a whopping $15.8 billion in the fourth quarter of last year and they are paying out bonuses.  What is wrong with this picture?  Bonuses should be paid when a company meets goals, not when they are on the verge of collapse and the government has to infuse cash just to keep it a float.  Some people really need to go to jail for this.

Yesterday, Kenneth Lewis, C.E.O of Bank of America Corp., flew in on the company’s very expensive jet to testify for four hours at New York Attorney General Andrew Cuomo’s offices about the $3.6 billion in bonuses.  As a result, a subpoena has been issued to Bank of America to produce a list of the individual bonuses.  This is after Bank of America refusing not to turn over the specific information.

The government is investigating whether Merrill Lynch broke securities laws when it paid the bonuses. There is an on-going federal probe of executive pay at banks that received money from TARP. Merrill Lynch and Bank of America have received about $45 billion in TARP money.

I encourage everyone to e-mail, call or write his or her congressman of this outrageous or possible illegal act by Bank of America.  We as taxpayers should want the $3.6 billion returned!  It’s the right thing to do!

I wish I worked for a CEO like Leonard Abess.  After he sold a majority stake in Miami-based City National Bancshares last November to a Spanish bank he gave $60 million of the proceeds, his own money, to 399 employees which included tellers, bookkeepers, clerks, and everyone on the payroll.

Mr. Abess even tracked down 72 former employees to give them a share of the $60 million.  How cool is this guy?  The bonuses were based on years of service and amounted to tens of thousands of dollars to more than $100,000.

Mr. Abess didn’t publicize his generousity and didn’t show up at the bank to get the pleasure of handing out the money.  Of course when people found out he was giving away money, he was inundated with letters soon after.

When asked what motivated him to give away $60 million, he said he has always dreamed of rewarding employees. He added,  ”Those people who joined me and stayed with me at the bank with no promise of equity…I always thought some day I’m going to surprise them…I sure as heck don’t need (the money)”.  Now that’s when you know you are filthy rich; you can easily afford to give away $60 million dollars.

Source: http://www.miamiherald.com

A very good friend and his wife (David & Victoria Williams) recently opened up a franchise called BounceU in Duluth, GA.  (As a matter a fact, David and I were each other’s best man in our weddings.)  BounceU is a franchise where the main idea is to have private parties for your child. However, BounceU also offers other services such as babysitting your kids, field trips, club outings, team parties and various other services.

BounceU Owners in Duluth, GA – David and Vickie Williams

The unique thing about BounceU is that it features a mix of different inflatable equipment in private rooms for the kids to play, in a very clean, safe and climate-controlled environment.

Additionally, while at BounceU, you child can watch Disney movies, play hide and seek sports, play basketball shootout, play balloon football, run through obstacle courses, play Karaoke, compete in spider climb races, win prizes and more!  BounceU makes it really fun for the kids.

BounceU Many Features

For months it was very interesting talking to my friend and his wife about opening their business.  From searching for a franchise, to selecting one, to getting the financing, to finding a good location, to final launch. After months of hard work, he and his wife finally opened the franchise and I had a chance to visit it.

I was very impressed with the facility.  It was clean, very spacious (about 11,000 square feet), and the kids had a blast.  I could see how the parents would like the ease of having a private party at BounceU, while I could see the kids loved the various cool bounce equipment.  They couldn’t stop running around, going from ride to ride.  Kids have so much energy it makes me tired just watching them.

Pictures of BounceU in Duluth, GA

If you live in the Duluth, GA area you can visit BounceU at:

1630 Pleasant Hill Rd
Suite 110
Duluth, GA 30096
(770) 931-6900
Email: duluth.ga~at~bounceu.com
Website: www.bounceu.com

The facility is located in the Pleasant Hill Assi Plaza shopping mall between the Party City and Dollar Tree.

Below is their schedule:

Open Bounce Schedule

Preschool Play dates
Mon – Fri  9:30 -11:30 am
Snacks Provided

Home Schools

Wed 1 pm – 3 pm

After School
Tues & Thurs 5 pm – 7 pm

Family Night Out

Wed 6 pm – 8 pm
Pizza, drinks available

Parents Night Out

Fri 7 pm – 10 pm
Pizza and drinks provided

Weekend Sunrise Bounce

Saturday 10 am – 12 pm
Sunday 12 pm – 2 pm

Like many of us, I used to go to the doctor or dentist and then receive insurance statements and doctor bills.  For the statements, I would quickly scan them and file them away.  I would then pay the bill.  A few years later, I learned the hard way that I should have been paying closer attention because it was costing me money.

I found out by accident that my dentist, who I went to for years, was ripping me off.  As a result, they ended up having to refund me a few hundred dollars.  What my dentist did was bill my insurance company and have me pay the difference.  For example, the dentist would bill the insurance company $200; the insurance company would pay via the contracted rate of $120 and determine my out of pocket cost of $20.

However, the dentist would bill me the difference of the full amount ($200) and the contracted rate ($120) which was $80.  So I ended paying $60 more than I should I have paid.  This went on for a few years until I caught on.  Looking back, I should have reported them because I’m certain they were doing the same to other patients as well.

Below are some other things I’ve learned over the years to keep a close eye on:

Make sure your medical provider is in network. A couple of years ago, I went to a dentist for a cleaning.  When I made the appointment I asked if they took Aetna.  They said yes.  The cleaning was 100% covered by Aetna.  A few weeks later I got a bill from the dentist.  When I called the dentist office I was told they accepted Aetna but they weren’t in Aetna’s network.  I refused to pay the bill because they didn’t tell me they were out of network.  They ended up cancelling the charge.

Make sure you know what’s covered by your insurance company. A few years ago, I went to a dentist for teeth cleaning which was 100% covered by my insurance company.  At the end of the cleaning, I was given a fluoride treatment which I didn’t request.  The fluoride treatment wasn’t covered and as a result I was billed by the dentist.  I felt this was a gimmick by the dentist just to earn more money.  The fluoride treatment wasn’t necessary.  However, in the future I made sure to pay attention to things like this!

Make sure your procedure will be covered by your insurance company. If you are having a medical procedure that’s out of the norm, make sure your insurance company will cover it.  Many doctor offices will do this for you, but some won’t.  You do not want any surprises.  Make sure that when you call the insurance company, you document everything, especially who you spoke to. Also, have them send you documentation.  You may speak to one customer service rep that tells you something is covered and when you call back, the 2nd customer service rep will tell you it’s not covered.  This has happened to me; see below!

Don’t hesitate to dispute a claim in writing. About a year ago my doctor recommended that I have a colonoscopy to check for colon cancer since a close family member had polyps found during their colonoscopy.  I called Aetna to see if the procedure would be covered.  They said yes, it would be 100% covered.  To my surprise, Aetna didn’t cover the procedure.  When I called, the customer service rep said it wasn’t covered.  I explained to her that when I first called I was told it would be covered, but I had no evidence of this.  I didn’t even have the name of the rep I initially spoke to.

I then decided to dispute the claim in writing.  Aetna responded by letter a couple weeks later that the procedure was indeed covered 100%.  However, Aetna ended only paying 1 of the 3 bills.  So I wrote a 2nd dispute letter, which, they never responded to.  A couple months later the 2nd bill was paid and just recently after me calling them again (7 months later), they paid the 3rd bill.  Unbelievable!

Never pay the doctor bill until the claim is processed by the insurance company. Many medical providers will send out bills before the claim is processed.  Sometimes, they’ll send a bill for the entire amount, which makes no sense.  Sometimes, they’ll estimate what the insurance company will pay and your out of pocket cost.  However, you should never pay the bill until the claim is processed because the insurance company will determine the contracted rate and your out of pocket cost.  Always pay by what the insurance company determines and not the medical provider.

Shop around and compare prices. I must admit that I rarely do this; however, I have in the past for dental procedures which saved me hundreds of dollars.  Of course when it comes to your health you want the best care even if you have to pay more for it.  It’s unfortunate that doctors don’t list their prices and most patients never ask.  But shopping around to compare prices is a great way to save money!

If a claim is denied, investigate it. It may be a mistake.  Insurance companies make mistakes, too.