Charles Petzold on writing books, reading books, and exercising the internal UTM

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The Idiots at HIP

December 2, 2008
New York, N.Y.

Because I'm self-employed, I pay for my own health insurance and I get it through an HMO called HIP, also known as HIP Health Plan of New York, an EmblemHealth company. My current monthly premium is $568.55, which I understand from my self-employed friends is not too bad.

But yesterday evening I opened a letter from Charles Mellia, Managing Director of Customer Service, informing me that my new monthly rate effective January 1, 2009 will be (deep breath) $1,453.04, representing an increase of over 150%.

Naturally this threw me into a state of total anguish. I quickly calculated that next year I would have to come up with more than $10,000 of additional income to pay for this rate increase. No, no! More than that! Because I'm not an incorporated business, I can't deduct my health insurance from my federal, state, and city income tax calculations, so the additional income I'll need is actually closer to $15,000.

And with this anguish came more anguish: Anguish over my plummetting income, anguish over book sales that plateau at 4,000 copies, anguish over my inability to get a decent book contract, anguish over my inability to get other work, etc, etc. Everything just piled up on top of everything else.

It wasn't a pleasant evening. Deirdre was at a class, and I couldn't talk to anybody at HIP because it was after hours and nobody was there.

Eventually I calmed down. I knew from past experience that the people at HIP are not too good with numbers, and they've done idiotic things in the past. A few years ago I changed my premium billing from semi-annually to monthly, and of course they screwed that up, and I had to spend some time on the phone walking them through the calculation.

Moreover, my years working at New York Life Insurance Company, mostly in Individual Health Insurance product development, resulted in my becoming very familiar with the New York State Insurance Department. I even took a business trip to the department in Albany one year. I knew they would never approve a rate increase of 150%.

I also did some Google searches for people expressing outrage that HIP had increased their premiums 150%, and I couldn't find anything. I became more convinced than ever this letter was just some typical stupid idiotic mistake.

This morning I called HIP again, and I was promptly connected to a "representative," and when I expressed my surprise at getting a rate increase of 150% I was assured that it was indeed correct and the increase was necessary because "we're in a recession." (Interesting that the letters were sent out before the official pronouncement of the recession.)

By this time, however, I was so convinced the letter was wrong, I wondered if my "representative" really understood what 150% meant. Lots of people — not just HIP employees — don't understand percentages, so I started quoting the actual numbers: $568.55 this year and up to $1,453.04 next year. "That's almost $900 more per month," I said, and finally he excused himself and I was on hold for ten minutes.

When he returned, he acknowledged that "those letters had gone out by mistake." My actual monthly premium next year would be $653.83, an increase of only 15%.

The idiots at HIP are supposed to be in the health care business, but how is receiving a notice of a premium increase of 150% good for my health? I lost several hours of my life in anguish over this thing, more time this morning on the telephone, and more time writing this blog entry to get the whole thing out of my system.

I emerged comparatively unscathed but I can easily imagine people reading such a letter from Charles Mellia, Managing Director of Customer Service, and keeling over on the spot.

Their death certificates would probably indicate "heart attack" but that wouldn't be the real cause of death, would it?


Funny they never seem to make the mistake in the other direction. Time for universal health care.

Joe, Tue, 2 Dec 2008 20:44:47 -0500 (EST)

> Time for universal health care.

Consider this:

    1. Republicans clearly identified Obama as a socialist.
    2. The American people elected him anyway.

That spells mandate to me. Time to defund Halliburton and move to a single-payer national health-care system. — Charles

The field doesn't attract the brightest crayons in the box...

— DanF, Tue, 2 Dec 2008 20:52:55 -0500 (EST)

For some odd reason, this post reminded me of Verizon Math.. Inability to deal with numbers is sadly not limited to the health-care business.

— Lars Nilsson, Tue, 2 Dec 2008 22:09:32 -0500 (EST)

I've lived in the US with health care, and I'm from Canada. There is a lot Canada can still learn from the US, but please take a look at the health care system here. It has warts, but beats the US hands down (and that was with insurance). At least when you get sick you don't need to get frustrated with someone on the phone, or worry you are going to get stiffed by crooks.

Or just move here -- it really isn't much colder than NY : )

— Debreuil, Tue, 2 Dec 2008 22:28:36 -0500 (EST)

Yes, there is little doubt that a sinlge-payer national health care system would have made this experience much better.

First, the governement would never raise your rate.

Second, being the government, they would never make a mistake. Third, if you had a problem with the National Health Service, they would have operators standing by 24x7, so you would not have to spend the evening in anguish. Fourth, the NHS representative that you reached on the phone at 10 PM on a Friday would have a high level a numeric literacy, as all NHS employees would be highly paid and have at least a undergraduate degree in statistics. Fifth, you would never be on hold for 10 minutes with the federal government waiting for a problem to be resolved.

I feel your pain. The other day I was at the doctor and he had me cool my heels for 20 minutes in one of those waiting rooms that you go to after you have been in the secondary waiting room, after you have waited in the main waiting room... It was unbelievable. I can't wait for a single-payer national health care system. While they are at it, I'd like to see a single-payer national housing system. Have you seen rents in NYC, even in the recession? They never go down! How can anyone afford to live there? Also, a single-payer national food and restaurant system would be ideal. Eating out is very expensive, and the price of imported cheese is astronomical. My parmiagianno regianno costs me $100 a month.... oh the inhumanity of it all!

— David Docetad, Tue, 2 Dec 2008 23:15:10 -0500 (EST)

$653.83 just for health insurance?! I'm in the UK and paying around $300 in taxes towards the National Health Service. You sure do get a bum deal in the states.

— Iain, Wed, 3 Dec 2008 00:49:20 -0500 (EST)

I understand that now you are happy of a 15% increase in your monthly premium?

In the end, this could even be seen as a very smart move from those people at HIP...

— Roberto Liffredo, Wed, 3 Dec 2008 02:33:51 -0500 (EST)

Wow Charles if your finding it hard to find work, what chance have us mere mortals :-)

Anyway glad you sorted this mess out...carry on with the great blogging!


Lee, Wed, 3 Dec 2008 04:13:41 -0500 (EST)

>> the increase was necessary because "we're in a recession."

...errr, how does recession relate to price increases - if anything recessions are linked to lower inflation and even deflation? I know these guys are not neccessarily the sharpest knives in the drawer but you think they'd be given some better material to parrot to the customers.

I don't know how insurance works in the US, but if I got a letter like this from an insurance company I wouldn't be phoning them to talk about it, I'd call their competitors for a quote. Maybe there are good reasons to stay with the same company, but for the good of your health is it worth at least looking for other quotes? Even a 15% increase seems steep to me.

— Stefan, Wed, 3 Dec 2008 06:33:23 -0500 (EST)

So, you are happy with a 15% increase. They are very clever men at HIP ;-)

PierreMF, Wed, 3 Dec 2008 07:02:57 -0500 (EST)

The increase effective January 2008 was 18.5%. — Charles

Interesting story, but wait until you or Deirdre have any significant health problem (God forbid) and see what nightmare unfolds with uninsurable pre-existing conditions!

Also you might talk to your accountant about employing Deirdre and setting up a medical reimbursement plan. It may help, but then again you live in New York with its rather more Byzantine legal system.

I rather like the new political slogan, "Spread the Recession," especially as it apparently means I get to increase my rates by 15%-18.5%.

rkgeorge, Wed, 3 Dec 2008 09:55:31 -0500 (EST)

Why don't you move to Canada? Nation-wide state-funded health insurance. Need I to say more?

Charles Nadeau, Wed, 3 Dec 2008 16:19:15 -0500 (EST)


You don't need to be "an incorporated business" to get health insurance deduction.

1040 form, line 29 :

Self-employed health insurance deduction.

You may check 1040 instruction or talk to your tax advisor to see if you qualify.


— Igor, Wed, 3 Dec 2008 20:14:38 -0500 (EST)

All is well that ends well. Same situation here in INDIA. Staff generally make such stupid mistakes. We do get deductions regardless of whether you are company or individual.

Parag Mehta, Wed, 3 Dec 2008 23:47:43 -0500 (EST)

I am an American, but I currently live in Germany.

Germany has a better system then "single payer", just ask all my friends from the UK.

In Germany they have a public and private insurance system where you have a choice between several public insurances with minimum coverage. It encourages competition in the public space such that most even give better then the minimum while still guaranteeing 100% coverage.

If you want more then what public is offering and you have the money then you can get private if you can afford it.

I think it is much better then a one size fits all solution of a "single payer" system, which is not a good solution since there is absolutely no incentive for providing good service.

As is many times the case North America should look to the best ideas in Europe and Germany's is near the top. I think a public/private system is the one that surely should be adopted in the US..

— Anthony, Thu, 4 Dec 2008 04:48:15 -0500 (EST)

I live in upstate New York. I'm always disappointed when I hear both Democrats and Republicans talk about health insurance. We don't want health INSURANCE, we want health CARE. Who needs insurance if everyone is covered in a national system? A national system will be cheaper and provide coverage to everyone.

P.S. I just recently purchased your 3d for windows book. Keep up the good work!

— Michael, Thu, 4 Dec 2008 17:32:13 -0500 (EST)

Dear Charles Petzold,

Please write more books, I'd be happy to buy and contribute to your income :-) I've already bought "Code" (twice) and "The Annotated Turing" and loved them!

Also, could you make those two books available in ebook form? Then I can carry them around on my pda 24/7. I'd be happy to buy them again in HTML.

PS for $683 a month, you might consider instead a plane ticket to fly to some third-world country (e.g. Sri Lanka) with good doctors and cheap prices.

David Ratnasabapathy, Thu, 4 Dec 2008 22:00:21 -0500 (EST)

Unfortunately healthcare never gets cheap, national healthcare is not a holy grail. It'll cost too. If fact, making changes to a healthcare system will cost even more, short term. But strong regulation of healthcare definately does a lot of good in my country.

I live in The Netherlands (Europe) and I pay 1100 euro a year for a basic plan (around $1500). This includes medical care, dental, paramedical and prenatal care; specialists, hospital stay, transport, a pair of glasses and most medicine. Although I could easily afford more, this is all I think I need for now.

Like in many European countries our government is responsible for the quality and accessibility of the healthcare. However, the government is NOT in charge of the healthcare system: private health suppliers are responsible for the provision of services. Insurance companies compete with each other, providers of medical services compete. It is an open market, but we limit healthcare companies to the rules of play.

It is not single-payer public national healthcare, it's not about enforcing the same package to all. It is about getting all in. At a fair price.

In return each citizen is required to purchase health insurance and we pay a contribution in taxes for people that do not have an income. (If you can't purchase an insurance the budget to do so is supplied for you. In any case you choose the insurance company yourself. You choose where to get medical care and which specialists.)

That seems to work well: everyone joins, there is strong regulation and legislation, but the rest is up to private sector.

— Eric Venray, Thu, 4 Dec 2008 23:06:15 -0500 (EST)

Today (December 5) I received a letter from HIP that indicated the correct rates and apologized for "any concern it may have caused you." — Charles

I can't blame them, I mean, its only a single zero they were off by, you shouldn't nitpick!

I came back to work to find you were gone... I miss asking you all my silly wpf questions and our super geeky conversations w/Andrew

Wendy, Mon, 8 Dec 2008 19:34:36 -0500 (EST)

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