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Your Bottom Line

Health Insurance Secrets; Kida and Money

Aired September 05, 2009 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hello. I'm Gerri Willis and this is "Your Bottom Line," the show that saves you money.

Health insurance secrets, we'll tell you what your provider doesn't want you to know and how it could be costing you big time.

Then, do your kids know how to manage money when you're not around? What to teach them before they head to school every day.

And I've got a special guest, Elmo is here to talk about helping your children understand these tough economic times. Elmo, take it away.

ELMO: All right. Ahem, "Your Bottom Line" starts right now!

WILLIS: Well the health care reform debate goes on and on in Washington. We want to tell you what you can do right now to get the best care possible. Our next guest is here to tell you secrets your insurance company doesn't want you to know. Frances Largeman Roth is a senior editor with "Health" magazine.

Frances, great to see you.

FRANCES LARGEMAN-ROTH, HEALTH MAGAZINE: Great to see you, Gerri.

WILLIS: All right, the first thing you say is "don't pay if you don't have a say." Now, what does that mean?

LARGEMAN-ROTH: Well, you know if you choose to go to see a doctor who is out of network you're going to pay more. But sometimes you don't have the choice, if you are in an emergency room situation, or if you're at the hospital and they use an anesthesiologist who is out of network, you didn't get to pick that doctor so you shouldn't have to pay. You absolutely can. You send a letter to the insurance company and it actually is one of the ways you can get good results.

WILLIS: And you always say use a letter, that's the best way to make your point, make your case.

LARGEMAN-ROTH: Absolutely.

WILLIS: Let's talk a little bit about the kinds of things that state law might require that you be covered for, that you may not know about.

LARGEMAN-ROTH: In vitro fertilization treatments, those vary state to state and that's something that, who would know that you get that you get that coverage mandated by your state, but there's a great Web site called FamiliesUSA.org and you can go there and find out what it is actually covered by your state. Because of course your insurance company is not going to advertise the fact that you get that coverage

WILLIS: Bottom line here, you may not know what you're covered for.

LARGEMAN-ROTH: That's right.

WILLIS: It pays to really look around and make sure that you know everything you're covered for. Let's talk about maybe the test I want that I can get, that my insurer doesn't want to pay for, you say you can kind of put the screws to them, how do you do that?

LARGEMAN-ROTH: Well, you know, that's something that you really do want to discuss with your doctor, but certain people have a health background or a family history of a disease, and so maybe you are not 50 yet, but you feel like you have symptoms.

WILLIS: Like an example?

LARGEMAN-ROTH: Example, colon cancer, you want to get checked for that or you want a colonoscopy or sigmoidoscopy, you have to talk up your complaints, talk up your symptoms.

WILLIS: So talk up your symptoms, maybe a little white lie how bad it is?

LARGEMAN-ROTH: I'm not saying white lie, but you should know exactly what kind of things they're looking for to get that test. So, you can go online and get a lot of information

WILLIS: And a lot of people get turned down willy-nilly because the tests are expensive and it's a good way to think about getting help. And of course, you're saying it really pays to write letters instead of sending e-mails, making phone calls. That's really the way to get action.

LARGEMAN-ROTH: If you have ever called your insurance company before, you know you could waste hours being passed around from person to person, and with e-mails, sometimes they don't get back to you. So, the best thing to do is to write a letter, because then you can hang on to that letter and you can also send it, send a copy of it to your state health insurance commissioner.

WILLIS: You know, I don't always think of my doctor as my ally, but your should.

LARGEMAN-ROTH: Right, your doctor could be a great weapon for you in getting coverage. So for example, if your doctor prescribes physical therapy for you and the health insurance company says we're not covering that, your doctor can call the health insurance company and say that they're going to lodge a complaint with the state commission.

WILLIS: You know that's a great idea and it's really simple. You know, that's not hard to do to ask your doctor to write a letter.

LARGEMAN-ROTH: It's not. WILLIS: Let's talk a little about advocates because I know more and more people now are hiring advocates to help them out. Because, let's face it, this system is really, really complicated.

LARGEMAN-ROTH: It is very complicated. And a lot of us are working with our elderly aging parents these days, who have complicated medical issues. I know my mom certainly does and I do not have the time to spend to call all these places and write the letters, so you can hire a health care advocate, they will write the letters for you, and they know the ins and outs of the system. They know the changing laws.

WILLIS: How much do they cost?

LARGEMAN-ROTH: It's not that bad, $300 to $400 a year.

WILLIS: May be worth it if you've got a complicated situation. Frances, thank you so much for your help today.

LARGEMAN-ROTH: Thank you so much, Gerri.

WILLIS: Getting you the information you need on health care doesn't end when this show is over. Head on over to CNN.com/healthcare for answers to your questions, fact checks and how health care reform could impact you, your health and your bottom line.

We've talked about the proposals, the politics and the policies of health care reform, but what really matters are the people who need it most. Catherine Howard who is 29, self-employed and living in San Francisco. She bought a health insurance policy that she thought was perfect for her, a healthy young person, but then cancer struck and she found she was on the hook for thousands of dollars in uncovered expenses. CNN photojournalist Jeff King has her tell the story in today's "Health Care in Focus" piece.

(BEGIN VIDEOTAPE)

CATHERINE HOWARD, BREAST CANCER SURVIVOR: I have a great job, but I live like a pauper because I basically spend all of my money servicing the debt that I accrued while I was sick.

In 2004, I was working as a documentary film producer. I wasn't making a lot of money, but I knew that keeping up my health insurance was a priority. I was afraid that I would break my arm snowboarding or take a fall at work. I picked up the phone and I said, I would like to buy some health insurance, please. And this is the outcome.

I ended up almost $100,000 in debt after being diagnosed with breast cancer, having surgery, chemotherapy, radiation, some of these things I just put them on my credit card because I thought, if I don't die, I'll deal with this later. I pay something around $1,800 a month towards all my debt related to my illness, both the tens of thousands of dollars that I paid because my insurance didn't cover me.

And then the, you know, not being able to work. I have this great plan through my work now, but if I went back on the open market and tried to buy myself some health insurance, they wouldn't cover me. I have a pre-existing condition. You know, once you've had cancer, I could never just go out and buy the same crummy coverage that I had before. I would be denied.

I am a really determined person and overcoming cancer, I felt, has just been my mission for the last couple of years and getting out of debt, I guess, is another one. And just bankruptcy seems like a cop out and I don't cop out on stuff. I hope I'm alive to see the day I'm out of debt, you know. I'm 36 years old.

(END VIDEOTAPE)

WILLIS: Well, we're glad to see she's healthy.

It's back to school for kids, but are they ready to manage their, well, I guess I should say your money when you're not around?

(COMMERCIAL BREAK)

WILLIS: If you're a parent, this may be your favorite time of year, back-to-school season. But all the teaching doesn't have to happen in the classroom. Here to talk about how to teach your kids the ABCs of money is Janet Bodnar, she's editor of "Kiplinger's Personal Finance" in Washington.

Janet, great to see you again.

JANET BODNAR, KIPLING'S PERSONAL FINANCE: Oh, thanks very much, Gerri.

WILLIS: All right, I want to start with the kids really at risk and these are college students and I show our viewers some numbers, there. The average college student has something like $3,000 in credit card debt, which is insane because most of them have little or no income. So, what do you do to encourage those college students to be responsible in their money behavior?

BODNAR: Well, Gerri, I am a real believer that cash is king, especially for college kids. When you send your kids off to college, they need to learn how to manage a cash account, a checking account, with a debit card, so that they're not overdrawing that account. I think that's the best way to teach them financial responsibility. And they don't need to get a credit card.

WILLIS: Wait, well, whoa, whoa, whoa. Wait, but isn't that kind of controversial, no credit cards? I mean, don't they need to learn how to use credit cards by having a credit card?

BODNAR: No, I think they need to learn to use credit cards by learning to use cash first, and I say this, I have a kid going back to college this weekend.

WILLIS: I bet you're not really popular at home.

BODNAR: Listen, I gave him, he's going to be a junior this year. He has been managing his money with two checking accounts at home and school for two years now. He's done a wonderful job. I told him that he has my permission, if he wishes, to apply to, for a credit card. He's going to be 21 next month. He's proven himself. I have great faith in him. And you know what? He's probably not going to do it, because he says it would be too easy for him to spend money.

WILLIS: Wow. Tough love works. So, there you go.

Let me ask you, though, there are new rules coming out when it comes to credit cards and college students and they really want to limit the availability. What I'm wondering is that really going to work? Do you think that kids will get more offers in the mail, the card offerings in the mail? The card offerings will just happen off campus instead of on campus?

BODNAR: You know, it's hard to tell, Gerri, exactly how this is going to pan out. I think what might happen this semester, is a lot of kids will try to get in under the wire, you know, before the 21 rule kicks in, in February, and so I think that might happen. I don't know -- and we still don't know what kind of marketing there's going to be to kids.

I think it is important for parents to talk about credit can w their kids because even talking about it. We see from survey, kids are less likely to get cards and less likely to run up bills if their parents just talk to them about what credit is all about.

WILLIS: OK, let's talk about high school kids for a second. And you say something really interesting, I think. You say a lot of kids are offered, parents are offered prepaid debit cards for kids in high school. You say don't do it. Why?

BODNAR: Well, the prepaid cards I think again, kids need to have some responsibility managing their own money. If they have had a summer job, for example, I really like the idea of them having their own checking account so that they can get used to balancing the account and not overdrawing it. The problem -- prepaid cards can work, but there are two major problems, one of which, there are often a lot of fees attached and so parents need to be aware of how much this is going to cost them. It might actually be cheaper to have a regular checking account.

And the second thing is, the way the prepaid cards are often marketed is, well, when you run out of money, mom and dad can top off the account. That's not the point. That doesn't teach you responsible money management. So, you know the idea is, I've seen this, because I get them at work, you know, at "Kiplinger," I get a lot of press releases that say, hey, you know, need that new shirt at the Gap, and you don't have enough money, mom and dad can put some money in your account. That's not the idea.

WILLIS: Not so much. Not so much. You know, there's a big debate about allowance, when you give it, when you don't give it, what it's for. What is your recommendation?

BODNAR: My recommendation on allowance, and I go into this in great depth in our "Kids and Money" site at Kiplinger.com, I think that allowance is really good for younger kids who don't have income of their own. It's a way of getting money into their hands and the critical thing is they have to make decisions about how to spend this money. It's not extra money that you just give them on top of everything else. You're already buying for them. You give them financial responsibility to go with that money.

WILLIS: And your advice, half their age is the amount of give them.

BODNAR: Well, that's a base allowance. I'm often asked this, obviously it will vary from parent to parent, family to family, but if you start with the weekly allowance that's equal to half the child's age, parents feel good about that number and especially with younger kids, and then as kids get older you can expand that again, based on what you expect those kids to pay for, which for middle school kids should be trips to the mall.

WILLIS: All right. All right, Janet, very sensible advice. Thank you so much.

BODNAR: Oh, my pleasure, Gerri, as always.

WILLIS: Well, students are flooding college campuses and if you don't think you'll be able to make that hefty college bill, here's your last-minute guide to the money. If you haven't filled out our FAFSA form, that the Federal Application for Student Loan Aid, you still have time to get it in, but don't wait too much longer.

If you qualify for the Stafford loan or Plus loans, you'll still get your money. Most scholarships are probably gone for this year. but start looking for scholarships and grants so you can get a head start on next year's financial aid.

And ask about installment plans. More and more colleges are allowing folks to pay their tuition bill in small increments throughout the year rather than all at one time. now, for a fee 50 to 100 bucks you can spread your payments out without paying interest. If a family undurd unusual hardship since filing your taxes, say you lost a job on your salary was cut, you can apply for a professional judgment review. Your FAFSA can be changed to reflect the hardship and you can qualify for more government aid.

And don't forget to ask about your employer's tuition assistance program, some companies have these programs in place for employees and their dependents.

From college-aged kids to your little ones, "Sesame Street" has a new take on the economic crisis, helping kids make sense of it all.

Joining me now is my friend Elmo.

Hi.

ELMO, SESAME STREET CHARACTER: Hi.

WILLIS: Good to see you again.

ELMO: Oh, it's good to be here.

WILLIS: Can we take a quick listen to a song from the show?

ELMO: OK.

(BEGIN VIDEO CLIP)

ELMO: If we have love and we have each other, we got everything we need, friends and family.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WILLIS: Well the folks at "Sesame Street" recognize the tough economic times many families are face, so they dedicated a new prime time special to it called "Families Stand Together" feeling secure in tough time to help parents talk to their kids about finances. Joining us now to chat about is our favorite furry 3-1/2-year-old, Elmo.

Hi.

ELMO: Hi.

WILLIS: And Jean Chatzky. She's a personal finance author and part of the special. You guys are both working on this together. Thanks for being here, I really appreciate it.

ELMO: Oh, thanks for having us,

JEAN CHATZKY, PERSONAL FINANCE AUTHOR: Sure, thanks for having us, Gerri.

WILLIS: Let's start with jean here, because she needs to tell us a little bit about the special, what the lessons are, here. You know, "Sesame Street" has never been shy about discussing really tough topics. And they're doing it again.

CHATZKY: That's true. That's absolutely right. "Sesame Street" was hearing from its audience that they needed a script, a way for parents to engage with their children who they knew had questions, but didn't really have the answers for those questions. So, we explore the scenarios for four different families going through a variety of tough times, real families who were brave enough to come on and tell their stories and try to give them the language to help them work through it.

WHITFIELD: That's a great idea.

Now, Elmo. I want to ask you.

ELMO: Yeah.

WILLIS: Your family had some tough times, right? What happened?

ELMO: Well Elmo's mommy lost a job, which was kind of sad for Elmo, but Elmo was also happy because mommy was around a lot more.

WILLIS: Oh, that's nice. So there was an upside to the down side.

ELMO: Yeah, and also the upside is she got a new job, too.

WILLIS: Oh, fantastic. Well, that's great. So, you kind of benefited both ways.

ELMO: Yeah.

CHATZKY: And Elmo learned a lot of lessons through the experiences, too, right. I mean, you had a tough time knowing when you needed something versus when you wanted something.

ELMO: Right. So, it was more the things that Elmo needed and I wanted to ask them, you know, like instead of stuff like toys and stuff like that, Elmo got to learn that it was more important with the things that you need like food and clothes. Well, not that much clothes because Elmo doesn't wear that much clothes.

WILLIS: But, maybe mommy does.

ELMO: Yeah.

WILLIS: And you know what, it's really about starting that conversation in the first place, Jean. How do you sit down with your Elmo at home and say, you know, let's talk about money?

CHATZKY: You just put it out there and you talk not so much about the dollars and cents of it, as the concept, especially when your kids are as young as Elmo. You talk about the fact that mommy or daddy lost a job and you don't have as much resources, as much money in the way of resources coming into the family and that means we all have to work together to make some choices, and we may not be able to go out to dinner as often as we were before. We may not be able to take as many vacations a year. But you know what, we are going to have some great times having a picnic in the backyard.

ELMO: And movies, too. Elmo's mommy and daddy stay home and watch movies on TV instead of going out to the movies.

WILLIS: And so you hung out together. That's fun.

ELMO: Yeah, it was really cool.

WILLIS: That's nice.

So, do you share all information, Jean, or just...

CHATZKY: You have to be careful. I mean, my mother put it well to me. She is a longtime educator and she said, pay attention to the questions that children ask you, and answer those questions, but don't give them more information than they're actually asking you for because they are very attuned to how much they can actually understand. So, pay attention to what they're saying and then give them enough to make them feel OK. That's the most important thing. Your kids want to know you're going to be there to love them and be OK.

WILLIS: Well, that's an important lesson. And you know, we're going to talk about more lessons in just a second. How to sit down and budget as a family, you're going to help us, aren't you Elmo?

ELMO: Oh, yeah, yeah, yeah.

WILLIS: Excellent. We'll be right back.

ELMO: OK.

(COMMERCIAL BREAK)

WILLIS: Yeah, who doesn't love that theme song? It's fantastic.

ELMO: Elmo loves it.

WILLIS: Elmo loves it. Back with us, Jean Chatzky and Elmo. Welcome back.

OK., Jean, I want to ask you this question. We were talking about budgeting. And it's really tough to get that idea across to people who are 3-1/2 years old. So, how do you do that?

CHATZKY: Well, the parents actually have to do the budgeting and most parents, as you well know, don't. Most people don't and especially when money is tight, you really have to take a look what you have got coming in, what you have going out and where it's going so that then you can start making the right choices for your family about what the priorities are.

WILLIS: Elmo now, you had a conversation with your mother about this, correct, about budgeting?

ELMO: Yes.

WILLIS: And what did you learn?

ELMO: Elmo said it's more about what you need. So, it's really important for Elmo to understand that. Elmo thought that -- you know, Elmo bought, you know, Elmo's mommy bought too many toys for him, but it wasn't. It was OK.

WILLIS: Oh, no, that wasn't the real problem, was it?

ELMO: Yeah.

WILLIS: No, it was something much bigger. All right, well, want to involve kids in the process, obviously, and help them understand what you're doing, but how do you get them motivated?

CHATZKY: You want to give them a chance to help. Elmo loved helping through this process. Kids love helping. They love to feel like they can help the family start a new business, help the family learn to turn off the lights, help make dinner at home rather than going out to a restaurant.

If you can involve your kids in these decisions that they actually can exert a little bit of control over, it makes the whole family feel like a more cohesive unit and what we saw from Elmo's family, but from other families in this special, as well, was that this really brought them together.

There were a pair of brothers who talked about even though they had to leave their house and move to a smaller space where they shared a room, they like it because they're feeling closer together.

ELMO: Miss Jean, remember when Elmo's friend, Elmo doesn't remember his name, but he made those t-shirts to sell?

CHATZKY: That's right. A young boy, again, in the special, a New Jersey family suggested his family start making t-shirts to sell. They're doing it as a whole endeavor. We've got them up on the Internet selling them and they're working it out to supplement their income.

WILLIS: Elmo, what did you save on? Did you cut your own budget? Were you able to save some money?

ELMO: Well, Elmo wanted to go to a really cool amusement park, you know, with pirates and ships and stuff. But Elmo thought, that would cost money, so we went to the playground instead.

WILLIS: And was that fun, too?

ELMO: Oh, that was really cool! Elmo's mommy and daddy went and some of Elmo's friends went, too.

WILLIS: All right, well that's the perfect solution. Do you have any last-minute thoughts here about what you can really do to get the kids on board, get them motivated?

CHATZKY: Well, first of all, have them sit down together to watch the special. It's on in primetime and that's because this is really for families, it's not just for parents or just for kids, and that'll start the conversation.

WILLIS: And what's the Web site?

CHATZKY: The Web site is SesameWorkshop/ToughTimes, A lot of resources up there to help answer additional questions.

WILLIS: Fantastic stuff. Thank you so much, Elmo, Jean, great to have you here.

ELMO: Thank you. It's great to be here.

Yeah, come back, OK?

ELMO: OK. WILLIS: All right, sounds good.

As always, we thank you for spending part of your Saturday with us. YOUR BOTTOM LINE will be back next week right here on CNN. And you can also catch us on HLN every Saturday and Sunday at 3:30 p.m. Eastern Time. And you can hear much more about the impact of this week's news on your money on YOUR MONEY with Christine Romans and Ali Velshi, Saturdays at 1:00 p.m. Eastern and Sundays at 3:00, here on CNN.

Don't go anywhere, your top stories are next on the CNN newsroom. Have a great weekend.

ELMO: Have a good weekend.