October 2009 Archives

      NBC News has reported that credit card companies are experimenting with annual fees for certain card holders to make up for lost revenues. http://today.msnbc.msn.com/id/33335064/ns/business-consumer_news/

      If your bank indicates an intention to impose a fee for your credit card, raise a fuss, and if you can afford it, consider closing your account to make a point. But not all consumers can or should do that, because as noted in the news story, credit scores can be adversely affected by closing and reopening credit card accounts. Savvy consumers will think twice before closing their accounts, but now is the time to make your point if you so choose. Let the card company know in writing why you're cancelling the card--so there will be no doubt in its corporate mind.

      Introduced July 14, 2009 to the House of Representatives, America's Affordable Health Choices Act of 2009, otherwise known as HR 3200 (the lengthy text of which can be seen here: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3200) provides many health care coverage improvements for Americans. Some of the provisions are smart and simple improvements of protections for consumers of health care insurance. One might be tempted to us as an example minimum standards for health insurance programs. However, as with all regulatory action, minimum standards must be regulated, and that reduces flexibility and adds costs which ultimately will be borne by consumers either in their premiums or through taxation. A better approach would be to rely on user-friendly, standardized, disclosures that present a menu of benefits, so that consumers could price shop in light of fair disclosures and evaluate what omissions and inclusions may be driving a plan's premium costs. Why not standardize the minimum benefits? An easy answer might focus on elective procedures that involve moral issues. On strictly religious grounds, some consumers may not want their premium payment to cover abortion services. Another example might focus on the age or gender of a consumer: an elderly man might choose not to have coverage for obstetrical or gynecological services, whereas a younger person might choose to omit coverage for geriatric services. The question is, do we want one size fits all policies, or mightn't consumers benefit from accepting certain risks in order to save premiums. Less controversial consumer protections would be requirements that coverage must be provided for a price that is not based on preexisting conditions, increased transparency, disclosures and clear notices.

      The similar Senate Bill, Affordable Health Choices Act S. 1679 (seen here: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:S1679:) now contains a variety of amendments that have been survived the committee hearing. A good summary of the recent proposed amendments can be see here: http://www.towersperrin.com/tp/showhtml.jsp?url=usa/service-areas/health-care-reform/health-care-reform-pulse.htm#

      Virginia consumers frustrated by arbitration clauses in Federal claims against powerful corporations may get relief soon. Yesterday, the Department of Defense Appropriations bill was amended by a provision to limit forced arbitration in employment contracts with defense contractors. The vote was 68-30, and now moves on to a conference committee for reconciliation with the House version.

      The Defense Appropriations bill may seem an odd place for consumers to begin getting relief, but that is a function of the fact that claims against defense contractors are more likely to be large, and the injustice arising from forced pre-injury arbitration more stark. For example, there is the case of Jamie Leigh Jones, who after being drugged, raped, and confined in Iraq tried to pursue a lawsuit against her employer. She was denied due to a forced arbitration clause.

      Jamie Leigh Jones is testifying today in support of the bipartisan Arbitration Fairness Act (S. 931 / H.R. 1020). The Act would ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the system in their favor at the expense of consumers and employees.

      Virginia has an Arbitration Act that strongly favors arbitration clauses, even if they are buried in small print in the back of a contract. If you don't think its fair for companies to slip these into their contracts with consumers, let your state Senator or Delegate know you want change.