No one likes deductibles and premiums going up, but the Blue Cross Blue Shield model is flat out wrong.

Before I get to the stunt BCBS is pulling, let me say that I have defended insurance companies in the past just to be fair; therefore, check out “Why This Health Care Video Is Wrong” – as much of the hype presented in the video debate is doesn’t hold water.

Now, back to BCBS. We (policyholders at work) new changes would be coming September 1, so no big deal. We make adjustments to what we want to include, discontinue or change in our plan once per year and then the changes a happen later.

What happens is the plan will change, but benefits are on a calendar year – January 1 through December 31 – as stated by the specialist for our company’s policy. BTW, the company is a huge customer of BCBS, so many people are affected. The difference this time in deductibles is that BDBC is only honoring the deductibles for nine months – not the whole year.

Here’s how the deductible works for 2010 and 2011, and their practice is outrageous.

The deductible for 2010 for me is $1,000 per person in my plan and will change to $2,000 for the next year. However, I was told by the Blue Cross Blue Shield specialist that BCBS is no longer using the $1,000 deductible and an extra $1,000 is required for the remainder of the year. Okay, I’m not real happy with this, so I asked if the extra $1,000 goes towards the 2011 policy and now we are on a fiscal year. Here’s the kicker…

Effective January 1, all new deductibles go into effect; therefore, a new $2,000 deductible starts again.

Having described the events, here’s what can happen to me.

In August, I had knee surgery which cost me an out of pocket amount of $1,000 cumulative. However, I may still need a follow up surgery that could happen by the end of the year, costing me another $1,000 when it shouldn’t. As a result my, $1,000 surgery would be $2,000 and if I wait until January, then the surgery would cost $3,000. In addition, right now my therapy is no longer under the fully paid deductible and I am out money for the rehab as well, when I shouldn’t be. Worst case, I could be out as much as $4,000 in just a few months depending on what transpires this fall and early next year.

Even if you do not have BCBS, check your company. If so, check it out. They will be hearing more from me and the State may too.

A friend of mine who is not a banker, yet has been involved in the financial world and is an educator made this comment to me. I think it’s great and worth sharing.

The quote has to do with predatory practices, and with the financial reform taking place, predatory lending is a focal point.

‘I hate the word “predatory” with anything related to economics, as it sort of absolves the “victimized individual” of responsibility for being stupid…’ MW

Predatory lending has a hype factor built into it as well. Lack of knowledge though is the real culprit; that’s why I’ve written “Barking With The Big Dogs”.

One of the biggest complaints about health care is costs. With the new health care bill, the talking points from the ones who want it are about lower costs. Talking points coming from the side that does not want the health care bill are about higher costs the new laws will create. In the end, all consumers want lower costs.

From business practices and seeing how competition works, competition leads to lower costs and innovation, which from a practical side won’t happen with the bill since competition, limited services, etc. are lacking and the government wants control.

In reality, efficiency is will lead to lower costs and can be done by both large and small businesses. I’ll get back to efficiency in just a minute, but for now. Let’s address something not in the health care reform. Lawsuits. (If we are going to fix the system, fix it all.)

No one wants to be sued, but apparently there is no such thing as an accident and everyone is to blame; at least that is a big perception of lawyers. Pharmaceutical and doctor practices are being reformed, but not the legal profession. Therefore, to go see a doctor, a referral must be given and endless forms to sign are necessary to “CYA” (for both liability and benefits purposes for instance).

However, when discussing referrals, this has happened to me twice!

First, when I had symptoms, I got all over the internet and discovered what I needed surgery for last year.

When I went to the doctor to describe the problem and what needed to be done, the doctor told me I had self-diagnosed myself very well. Okay, I don’t really have a problem getting a referral in this case, because I did want the doctor’s opinion to make sure what I had was right and was going to see the correct surgeon.

Next, a few weeks ago, I blew out my knee. Immediately I knew what happened. My knee was hurt in a big way. However, because I was out of town, my only choice was go to the emergency room and the time was during the evening or after hours. I didn’t mind going there, because I needed some help quickly.

This time, after X-rays, the doctor told my I had a knee strain, and my ligaments were strong, but gave me a referral to a specialist as well.

Once, again I got on the computer and did my research. I was positive the ACL was gone and maybe another ligament too. (Ligaments do not show up on X-rays.)

When I got home, I called my doctor, but couldn’t get in so I used the referral from the emergency room to schedule an appointment with a specialist. I also had to go get a referral from my GP doctor anyway for insurance purposes too.

After having all of the steps approved, I got to proceed. Then, after having a MRI, the ACL was torn and so was a meniscus.

Here’s the deal though and the point of the story.

I had to get a referral from a doctor to see a knee specialist when I knew I had a knee problem in the first place!

Without every looking at the internet, I knew the problem was in my knee, not my stomach, heart, head, ears, throat, etc. However, regarding my knee, the GP could only speculate since he couldn’t do the MRI anyway and the emergency room doctor was flat out wrong.

When I’ve had a blowout on my car, I didn’t have to go to the car dealer to get a referral to buy a new tire at the tire store, I knew what was wrong. The tire was gone. Therefore, when something is so obvious, why would I not be allowed to go to the source to fix the problem?

When I knew the knee was damaged, why not go directly to a knee and joint specialist?

With the first surgery, there were more possibilities and going to the doctor for confirmation is a wise thing to do. And sure, there are times when steps need to be followed, such as fraud and wasted time, but doctors are not infallible and all knowing, they are human too.

Speaking of wasting time, is a runny nose really an emergency worth wasting the doctors and nurse’s time and other people’s money just to avoid the GP?

The bottom line is efficiency will lower cost. Government bureaucracy sure won’t. Going to the doctor should eliminate steps and can do so, but when the obvious is at hand, why not get there the quickest way and save everyone money?

And one last thought on referrals; if I have to go see a doctor in my network, I know which knee doctors are available – they are on the list. I’m not generally going to get a referral outside my network. When having repairs done to the car, the insurance company says which auto body shops are on the list too. No referrals are necessary.

A little consistency and efficiency can make a huge financial difference; and referrals from customers (patients) who have had medical issues worked on would seem to carry more weight from a consumer standpoint. After all, when people recommend or do not recommend a business, the company can improve or someone else will.

From my posts on “GM: Buy The IPO, Not The Car“, I explained why I won’t buy a GM even though I have owned some of their vehicles in the past. This also reminds me of a line from the movie Wall Street (1987) where Gordon Gekko “has mixed emotions, like Larry Wildman driving off a cliff in his [GG's] Maserati.”

In addition, in Part 2, Mark Modica explained how the labor union came out on top and bondholders took the hit.

With Government Motors, I mean, General Motors’ S-1 filing this week, I was reading an article on Yahoo about the fears and hopes for the company. (Here’s the article.)

What I read and thought to be interesting is that a big portion of the manufacturing has been moved to places like Mexico, East Europe, Russia and India for cheaper labor.  I remember this topic about a year ago as well, dealing with China.  But, with the UAW sitting on the Board of GM, how does this shift happen?

The locals are being cut out and jobs moved out of the country by their own people? Ownership by the unions and board members, is this a conflict of interest?

Having worked for UPS in a contract year, I got exposure to union members and management during a difficult time. I just wonder how GM’s company picnic and softball game will turnout.  It might be like the Dodgers and the Giants!

In my previous post on GM, I explained why I would buy the IPO, or stock in GM, but not not the car.

Check out the following Fox Business video interview of a Saturn dealer business manager and bondholder Mark Modica. See what he had to say about the rewards the United Auto Workers Union received versus the bondholders and the status after the change in ownership of GM.