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Your Bottom Line

Health Care Reform; How to Protect Yourself from Bank Fees; Seasonal Buys and Scoring the Best Deals; Affordable Summer Getaways

Aired July 25, 2009 - 09:30   ET


GERRI WILLIS, CNN HOST: Hello. I'm Gerri Willis and this is YOUR BOTTOM LINE, the show that saves you money.

Nickeled and dimed, we'll show you how to protect yourself from bank fees. Then the best time to buy: winter, spring, summer, fall -- a month-to-month guide on how to score the very best deals. And travel for less. Hey, we all need a break sometimes. Summer getaways that fit your budget. YOUR BOTTOM LINE starts right now.

We begin with one red hot topic: health care reform. Push and push back in Washington. No matter what happens you're going to feel it. In a recent CNN opinion research poll, Americans ranked health care as the most important noneconomic issue facing this country followed by the deficit and the ongoing wars in Iraq and Afghanistan.

In a primetime address Wednesday night, President Obama stated his case for health care reform saying it's crucial in the effort to rebuild our economy from what he calls a full-blown crisis.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not just about the 47 million Americans who don't have any health insurance at all. Reform is about every American who has ever feared that they may lose their coverage if they become too sick or lose their job or change their job. It's about the fact that the biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid.

So, let me be clear. If we do not control these costs we will not be able to control our deficit. If we do not reform health care, your premiums and out of pocket costs will continue to skyrocket.


WILLIS: So, one person who knows all about high medical costs is Jaquitta Williams, she is a TV anchor reporter formerly with our affiliate WSB in Atlanta.

Jaquitta, welcome, great to see you.

JAQUITTA WILLIAMS, VICTIM OF MEDICAL COSTS: Thank you so much, Gerri. It's so good to see you, as well.

WILLIS: Now, I want to tell our viewers here, you are a cancer survivor and just recently celebrated your two-year anniversary being cancer free.

WILLIAMS: Woo hoo.

WILLIS: And yet. Yeah, congratulations. I think it's fantastic.

WILLIAMS: Thank you.

WILLIS: And yet you say the health care system failed you. You had coverage when you were first diagnosed and yet you faced thousands of dollars of out of pocket costs. Tell us about that.

WILLIAMS: Well, you know, one thing I will say about having health care coverage, you know, a lot of people feel like I have good insurance, so I should be covered. However, there are still exorbitant amounts of costs that you could incur. I have been a victim of that, personally.

You know, I remember when I was going through my cancer journey, one of the things that was most important for me was getting rest, getting sleep, being up and ready for my cancer treatments, but a bottle of Ambien to help me sleep, and it was about 20 pills or so, was $125. And that's something that I had to have, but insurance did not cover, so I had to pay that $125.

Another thing that people don't keep in mind, when you are going through something like that, and this is why I understand some people still try to work while going through cancer treatments, is that when you go on disability, there is a portion of your paycheck that you are receiving, but not all of it.

So you're battling for your life, you're still trying to maintain a home, a car, bills and in the middle of that, trying to make certain you are staying on the path of recovery. So, for somebody like me, I couldn't think about all of those other things. I just wanted to get well. But, I had tong think about them because they were important to me and my health care.

WILLIS: Well Jaquitta, I can't imagine the pressures of fighting the cancer and fighting the bill collector at the same time. I know the pressures must have been extreme.

I want to bring in some experts now. Joining us to help make sense of the reform and what it could mean for people like Jaquitta and you, frankly, is Andrew Rubin from NYU's Langone Medical Center , he's also the host of "Health Care Connect" on SIRIUS/XM Doctor Radio and Deann Friedholm is the health care reform director from Consumers Union.

Now Deann, I want to start with you. You're a proponent of the president's plan. You think it's a great idea. Why do we have to act right now?

DEANN FRIEDHOLM, CONSUMERS UNION: Well, I think the first thing to think about is that there are 14,000 people every day in America who are losing their insurance and there are countless others that experience exactly what Jaquitta just described, they have bought insurance, they think they at least have catastrophic coverage.

And they don't find out until it's too late when they experience something like a major illness, such as cancer that, in fact, there are huge holes in their coverage that are going to lead them to financial devastation, bankruptcy, losing of houses. We've hear these stories over and over again.

WILLIS: Well Andrew, I want to turn to you, now. This plan is not inexpensive. It's going to cost a trillion dollars over 10 years. And there are many moving parts. Yes, it's going to cover everybody, but should we move right now? Are we moving too quickly? That's what critics would say.

ANDREW RUBIN, "HEALTH CARE CONNECT," SIRIUS/XM: Well, I think everybody agrees that we have a problem And it's bipartisan. Health care is not working right now for a lot of people. So, the debate really is how fast do you move it? And I think we have to do something. We have to solve preexisting condition problems for people. But the question that really has to be addressed is how fast are we going to do it? I think we need to slow it down a little bit.

WILLIS: All right. Well I want to bring in one other person now. Jessica Kovler, she's about to age out of her parents' insurance policy and her new job isn't set yet to offer her coverage.

Let's ask you, what's your situation? What is the problem? How has the system failed you?

JESSICA KOVLER, AGING OUT OF PARENT'S INSURANCE: Well, I have to say I have a brain tumor I've been battling for some time and I've been told it can be treated with medication. Unfortunately, my out of pocket expenses are going to be about $7,000 or $8,000 next month because on my birthday, my birthday gift where I should be celebrating being on this earth, is going to be spent going to the bank to make a big withdrawal so I can stay alive until September 1 when my new coverage kicks in.

WILLIS: Jessica, you know, I have to say, you know, we sympathize with you and we hope everything goes well.

KOVLER: Thank you.

WILLIS: But Deann, turning to you, I mean, this has got to be one of the big problems of the system. People fall in the gaps, they don't have coverage when they most need it. What can we do? What should we do? Is the president's plan enough, here?

FRIEDHOLM: Well, unfortunately, it's pretty complicated. It would depend on some of the particulars of her circumstances. But, generally speaking, for most people everyone would have access to some kind of plan without regard to preexisting condition. This was one of the most important changes that is desperately needed, in our health care system. That would help her a lot. She would not be left with a gap in coverage between losing her mother's coverage and starting her new job. WILLIS: Andrew, you know, if we delay, you know, do we face a possibility of more people falling through the holes in the system? Of not helping people who really need it right now?

RUBIN: Gerri, that's a great question. I actually don't think people are talking about delaying. And they shouldn't be talking about delaying, because as your guests point out they're in a bind and the bind grows bigger and bigger and deeper and deeper for more Americans every day. I think what we have to do is take the legislation that's being proposed, you know, in both sides of the aisle, and find middle ground quickly and President Obama has do know great job of that, keeping it front and center and finding the pieces that get us closer and closer.

Listen, health care got messed up over many, many decades. It's not going to be solved in four to six weeks of legislative battles.

WILLIS: Well, I'm afraid we're going to have to leave it there. I'm going to thank my guests, here. Jaquitta, thank you; Andrew, Deann. And Jess, just a special word to you, we're thinking the best for you and hoping the best. Good luck to all of you. Thanks so much.

FRIEDHOLM: Good luck.

WILLIS: Watching your household expenses is so important, right now. How overdraft and bank fees are up and what you can do to protect your money.


WILLIS: We hear consumer advocates up in arms about banking fees and credit card practices and it's easy to say that's well and good, but I don't have to listen because it would never happen to me. But it can, easily. If a check gets lost in the mail or you confuse the date you get paid, you could get slammed. It happened to me just a few weeks ago.

A large check cleared my checking account sooner than I expected. Unaware my balance had dwindled, I went about my Saturday morning routine picking up items at the grocery store, buying some stuff for the house. Each time the bank made good on the purchased item and charged me a $35 overdraft fee all without my knowledge.

Now, sometimes the fee was more than the purchase. I was mortified and I was angry when I looked at my account online. Fortunately, customer service agreed to waive $200 of the total $350 in fees, but it reminded me just how careful we all have to be managing our accounts.

I didn't leave my bank but some of you are voting with your feet. A new survey from Javelin Strategy shows 44 percent of folks who switched banks in the last three months did it because of fees.

Travis Plunkett is with the Consumer Federation of America and joins us now from Washington. Travis, I can't tell you how angry I was. But, you say there are other gotchas out there when it comes to oversight.

TRAVIS PLUNKETT, CONSUMER FEDERATION OF AMERICA: Well, a lot of people are angry about overdraft fees and many of the fees that banks are charging. One of the tactics that banks use, for example is they'll clear your debits from the largest size to the smallest size, no matter when you make the purchase. In other words, if you don't have the money for your large purchase, then a string of smaller purchases will overdraw the account and they will charge you $35 a pop, which is what they charged you.

WILLIS: Well, they get you coming and going. And it really adds to their bottom line. Some $31 billion in overdraft fees collected last year by banks. This is a huge and important part of their profitability.

PLUNKETT: Well, the problem is that more and more banks are using these overdraft fees. It's hard to avoid them. Even small banks, three quarters of all small banks are now -- you would think the small banks would be more trustworthy, but in this case they're not, three-quarters are charging overdraft fees. So our advice, look for a credit union, if you're eligible. Check with your local bank, find out what their policies are, get them to tell you ahead of time if this is what they do. And then avoid, at all costs, overdrawing your account.

WILLIS: Well, let's talk about other fees. There are all kinds of fees out there, obviously you can avoid overdraft fees by not overdrawing your account. But what other kinds of fees should I be on the lookout for? How else are they getting me, here?

PLUNKETT: Well, you mentioned some credit card fees, so credit card fees, the number of fees that banks are charging are increasing and the amount is increasing. For example, for late payment fees and over the limit fees. Then you've got service fees on your checking account, if your balance, for example, goes beneath a certain amount, you may get a monthly service charge which can be quite hefty. You've got ATM fees. This, as you say, is a very lucrative stream of income for the banks. They're losing money in other areas so they're hitting consumers with more fees.

WILLIS: Losing money in other areas, so we'll make up the difference. Well, I appreciate your help today, Travis. Thank you so much.

PLUNKETT: Thank you.

WILLIS: If you're strapped for cash a quick look at the calendar could lead you to the bargains. Though money may be tight there is no need to skip out on a fun getaway this summer. We are going to show you the most affordable spots in the country.


WILLIS: We spend a lot of time looking for ways to save, but for some deals all you need to do is check your calendar. "Kiplinger's" Robert Long joins us from Washington with summer highlights from their "Month-to-Month Guide to the Best Bargains."

Good to see you, Robert.

ROBERT LONG, KIPLINGER'S: Thank you for having me, Gerri.

WILLIS: All right, so you say you can save a lot of money, obviously, by planning purchases and really understanding how retailers do business. If that is true, what can I save on right now?

LONG: Well, the truth is, yes, you can save substantially on dozens of items throughout the year ranging from smaller household items, candy and gift wrap to some bigger ticket items: electronics, and even cars. Now, the truth is and the point is not each and every one of the items on our list at is available at these deep discounts, right now.

WILLIS: So, what should I go shopping for then? Let's say I do have a little extra money and unlike the rest of the world I want to spend it? Obviously consumer spending down, right now. You say furniture is a good deal, right now.

LONG: Yeah, I'll tell you, two items right now, furniture, absolutely. Furniture stores generally are getting new inventory in August. They're looking to clear their showrooms. You can look for discounts perhaps as high as 50 percent at your local furniture stores. Perhaps through Labor Day.

WILLIS: All right. So, you say patio furniture, produce -- I saw on your Web site you say it's a good time to negotiate that new deal at the gym. Let's talk about this fall. Because you do you want people to really plan those purchases. So, Robert, when we hit September what should I be looking at?

LONG: Well, you're absolutely right about planning the purchases. And I think the whole point here is really for consumers to incorporate a lot of these items into their year-long family budget, put these items on their calendar and really buy on their terms.

So, if we're looking ahead to September, you really want to save on a big ticket item, that's typically a good time, of course, to buy a new car. As the 2010 models are starting to roll in, 2009 models can be had for very good prices. Your goal there is probably to try to get within a few hundred dollars of invoice price on a car.

WILLIS: You also say, hey, appliances, computers, back-to- school, all of the stuff starts going on sale in September. How much of a discount can I score on some of these things?

LONG: Often in the case of some of the big ticket electronics you can go as much as 50 percent off. What you're looking for with electronics is what we call "door buster deals," and you'll typically see these on Black Friday coming out of thanksgiving and into the holiday shopping season. Retailers want to get you in the door during a competitive shopping season, get you hooked with that one big item you think you're save a lot on and then, of course, hoping you'll buy several other items while there.

WILLIS: That's right, there is so much to shop for and if you do it at the right time, you can save lots of money. Robert Long, thanks for your help today.

LONG: Thank you very much, Gerri.

WILLIS: Well, it's not too late for a summer escape, whether you enjoy the beach or the mountains, those trips don't always come cheap. Joining us with America's best summer getaways of 2009 at some really affordable prices, is "Travel + Leisure's" Mark Orwoll.

Mark, it is great to see you, again. Thanks for joining us, today.


WILLIS: All right, let's take a vacation, here. Let's say what is the inexpensive and fantastic beach getaway?

ORWOLL: Well, the one we like is Chincoteague Island and Assateague Island off the coast of Virginia.

WILLIS: Been there, it's beautiful.

ORWOLL: Oh, and Chincoteague is where you're going to be staying and lots of activities, but Assateague is the national seashore, it's like a mini Galapagos. You're going to see Bald Eagles, (INAUDIBLE), Dolphins off the shore, but most importantly you can see the wild phone ponies that roam the beach, there. This is a great natural history getaway for the whole family.

WILLIS: I love that. Now, is it expensive, though? I mean, can I do this on a budget?

ORWOLL: Very easy to do it. They have plenty of places to stay. There's a little B&B called Miss Molly's, only $140 a night including breakfast. But no problem, because lots of accommodations to choose from.

WILLIS: Now, I understand you have a road trip that's a personal favorite?

ORWOLL: It is, it's the Pacific Coast Highway. Highway 1 in California, that's where I'm from. This is a trip everybody should do, start in L.A., go up to San Francisco on the way you'll see Hearst Castle, you're going to see the classic beach town of Santa Cruz, Big Sur with the cliffs coming down into the redwood grove. This is, as I said, a once in a lifetime trip, the road from L.A. up to San Francisco.

WILLIS: And of course, the problem is really finding affordable digs. On this trip it can be tough. What's your suggestion?

ORWOLL: I think camping. There are tons of campgrounds along the way. You can spend less than $50 for a great campsite, sometimes with an ocean view.

WILLIS: All right, OK, that's a great idea. I've done it myself. It's gorgeous. Absolutely beautiful. Can we talk about wine regions for a second? Because, if you're from California, they you know Napa, you know the prices, it's very expensive. But you've got a great idea that won't break your budget.

ORWOLL: This is an alternative that most people don't know about, it's Michigan. Specifically the Leelanau Peninsula...

WILLIS: Michigan?

ORWOLL: Michigan. The Leelanau Peninsula and the Old Mission Peninsula. Listen, there are dozens of wineries, they're growing hundreds of acres of grapes up there, specifically Pino Blanc grapes. But beyond that, there are old lighthouses to explore, 130 foot high sand dunes, beautiful views of Lake Michigan and Grand Traverse Bay. It is an all-round destination.

WILLIS: All right, and so you have some suggestions on the Web site. We should mention your Web site.

ORWOLL: Yeah, We have a lot of specific places to stay and eat while you're going to these places.

WILLIS: And you can clicked through. It's absolutely gorgeous. I want to get to one other idea here, though, and that's the neighborhood. And you're talking about Boston, here and I've spent time in Boston. There's an interesting change there that made one neighborhood very accessible.

ORWOLL: Better believe it, Gerri. The old historic part of Boston, the north end, very Italian-American, great restaurants. It used to be separated by a big elevated highway, they took that down, made an underground highway. So, now the north end is part of Boston, once again. It's a great place to stroll. Paul Revere's house, the old North Church. They're having a restaurant week, two restaurant weeks in August, so you can save tons of money, go to great restaurants in the north end for as little as $15 for lunch. I mean, this is a great deal, a beautiful, beautiful urban neighborhood.

WILLIS: All right, Mark, thanks for your help, today.

ORWOLL: My pleasure.

WILLIS: Getting creative in today's economy. We'll show you what some folks are doing to get by.


WILLIS: Times are tough and some folks are getting creative to get by, including some kids. Take a look at this story of a young Ohio boy who was selling many of his toys to support his out-of-work father.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It's what you're doing that matters and how you're helping people.

UNIDENTIFIED MALE: I've prayed to God; let me win the lottery, as I'm sure a lot of people do. This is better than the lottery. This is worth more, because other people reaching out to us.


WILLIS: That little boy is so cute. One family brought dog treats and another drove 45 minutes just to hand deliver their donation. And over in Teaneck, New Jersey, one homeowner issing cooking up a hefty serving of humble pie. She's hoping a bake sale can help forestall the foreclosure of her home. Kerry Ederer of our affiliate, News-12 of New Jersey has the story.


KERRY EDERER, NEWS-12 REPORTER (voice-over): Angela Logan is saving her house one apple cake at a time.

ANGELA LOGAN: Well, I don't mind cooking day and night, which is what I've been doing. I just don't want to be sitting on the sidewalk.

EDERER: It all began when Angela had to find a fast way to make a $2,600 mortgage payment.

LOGAN: This will be my 20th year with this house and I don't want to lose it.

EDERER: With little money to spare, Angela had an idea. She'd bake her famous apple cakes and sell them for $40 apiece.

LOGAN: What makes the cake moist...

EDERER: She called them Mortgage Apple Cakes or MACs. And as word spread, the orders piled up.

(on camera): Calls for these apple cakes are coming in from all over the place, everywhere from Texas to Tennessee, even Iraq.

MELVIN GEORGE, ANGELA'S FIANCE: A soldier called and said they had heard about our story.

EDERER (voice-over): Angela's fiance, Melvin George, says her cakes are made with one ingredient you can't find in stores: Love. He also says the cakes are addicting.

GEORGE: I just know that you cannot eat these cakes and drive, because the moment you go, hmm -- you'll hit something.

EDERER: With hundreds of orders, Angela has far surpassed her goal.

LOGAN: It's like a dream come true. It's like coming from a nightmare into a dream.

EDERER: And with all the interest, she may even continue the business. That would be the icing on the cake.

In Teaneck, Kerry Ederer, News-12, New Jersey.


WILLIS: Congratulations to Angela. We hear she's already hit her goal and we hope she grows that into a bigger business. Maybe she can even get some small business administration loans. In the meantime, those cakes look good.

All right, speaking of having trouble making your mortgage payment, there are lots of companies out there offering to help you modify your mortgage loan, many of them charge a fee to give you the documents you need to modify the loan, but you don't need to shell out any cash.

You can apply for a mortgage modification on your own and you can get free help from nonprofit counseling organizations. Call this number: 888-995-hope to speak way counselor and get start and modifying your loan. The counselor will go through your financial situation and recommend the best options for you. And they may contact your lender for you to get the process started.

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. 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, right here on CNN. Don't go anywhere, your top stories are next in the CNN NEWSROOM. Have a great weekend.