PA’s attorney general filed suit against Verizon

Yet another reason to make sure you vote for pro-consumer attorneys general! Josh Shapiro stands up for the little guy:

That’s how Verizon began an email apologizing to customers after the Pennsylvania attorney general sued the communications giant for allegedly failing to deliver on marketing promises.

The email appears to be part of Verizon’s effort to make good on its promotional offers after Attorney General Josh Shapiro filed the lawsuit against the wireless company last week, claiming customers were unable to obtain promised Amazon Prime memberships and Echo devices.

“We’ve heard from some customers that they had trouble redeeming their Fios promotion,” Verizon wrote in an email on Feb. 14. “If you experienced any issues, we’re sorry about that. We want to let you know that your reward is ready and you’re just a few clicks away from redeeming.”

The cable scam

In other words, the business plan is to make the product worse for the people who actually use it. Via Ars Technica:

US cable Internet customers are using an average of 268.7GB per month, and 4.1 percent of households use at least 1TB, according to new research by the vendor OpenVault.

Households that use at least 1TB a month are at risk of paying overage fees because of the 1TB data caps imposed by Comcast and other ISPs. Terabyte users nearly doubled year over year, as just 2.1 percent of households hit the 1TB mark last year, according to OpenVault.

Cable Internet providers use OpenVault products to track “broadband data usage consumption levels for millions of subscribers,” the company says. This gives OpenVault visibility into how much data broadband customers use each month.

OpenVault found that households that face data caps use 8.5-percent less data than un-capped users, suggesting that cable customers limit their Internet usage when they face the prospect of overage fees. According to OpenVault, the caps can help cable companies avoid major network upgrades.

For cable Internet users, the need to limit usage to avoid overage fees isn’t a selling point. But for OpenVault’s cable industry customers, the ability to impose caps is a plus because it helps cable companies delay network upgrades.

Ads for short-term plans lacking ACA protections swamped consumer’s online searches

Consumers shopping for insurance online last fall — using search terms such as “Obamacare plans,” “ACA enroll” and “cheap health insurance” — were most often directed to websites that promote individual health plans that didn’t meet consumer protections of the Affordable Care Act, according to a new study.

They also failed to get adequate information about those plans’ limitations, according to the analysis by researchers at Georgetown University’s Center on Health Insurance Reforms.

The study, provided to Kaiser Health News ahead of its publication online, probed online marketing practices in eight states.

“It was disturbing, but not unexpected, to find such a high proportion of misleading ads and come-ons,” said Sabrina Corlette, the lead author. “That raises the risk that consumers could be duped into buying health insurance that they think offers comprehensive and secure coverage, but does not.”

The study focused primarily on the marketing of short-term plans, which don’t have to meet most ACA provisions, such as the requirement to cover preexisting conditions. The researchers found that regardless of the search term used, companies promoting or selling only these kinds of plans dominated the results.

Insurance regulators from each of the states told Corlette’s team that tracking the marketing and sales of short-term plans is challenging, as is educating consumers about the risks of limited coverage.

Michael Conway, Colorado’s interim insurance commissioner, told Kaiser Health News in an interview that he has a “high level of concern” that the marketing tactics the study found could have drawn unsuspecting consumers into selections that do not meet their needs.

“We are on alert for complaints,” Conway said. “If we have to strengthen our regulations on marketing, we will.”

Eric Cioppa, Maine’s insurance superintendent, said in an interview that his office has no evidence that consumers unknowingly purchased short-term plans based on misleading online marketing.

“We’ll respond accordingly and aggressively if we find that took place,” Cioppa said.

But Corlette said the findings provide early evidence that after regulatory changes by the Trump administration, some insurers are aggressively marketing short-term plans as a replacement for traditional health insurance, without fully informing consumers of the limits of the skimpier coverage.

That could warrant stronger federal and state oversight, she said.

The study, funded by the Robert Wood Johnson Foundation, looked at online marketing in Colorado, Florida, Idaho, Maine, Minnesota, Missouri, Texas and Virginia. Those states were selected to reflect diverse geography and regulatory approaches, according to the researchers. Of the eight, Colorado and Minnesota require short-term plans to adhere to a shorter contract duration than required by federal law.

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Changes In Short-Term Plan Rules 

The ACA bars insurers from denying coverage to people who have health problems or charging them higher premiums. The law also mandates a minimum set of health benefits and requires plans to cap enrollees’ out-of-pocket expenses.

By comparison, short-term plans can deny coverage to applicants who have a preexisting condition and often exclude or limit coverage of maternity care, mental health treatment and prescription drugs.

As a result, short-term plans cost significantly less — typically about half to a third of an ACA plan if the deductible is the same. They are sold outside the ACA exchanges. And people who buy them don’t qualify for the government’s premium subsidies.

These plans are not new. They predate the ACA and allow people to buy coverage between jobs, for example.

The Obama administration put a 90-day limit on such coverage in 2017 because of concerns that the less expensive plans would attract younger and healthier people. Losing such customers could undermine the stability of the ACA marketplaces because they would be left with older and sicker enrollees.

Beginning this year, however, the Trump administration lengthened the potential duration of short-term plans to 364 days and allowed customers to renew the plans.

Seema Verma, the administrator of the Centers for Medicare & Medicaid Services that oversees the ACA insurance exchanges, said those changes offer more affordable coverage that can be “a lifeline to people priced out of the ACA market.”

“These plans are different, and consumers do need to know what they are purchasing, which is why we now require more robust warnings about the limits of these plans than before,” she said. “Fundamentally, we believe in giving consumers more options and leaving it up to them to decide what is right for them and their families.”

The study evaluated online ads in the weeks just before and during the latest open enrollment for ACA coverage, which in most states began Nov. 1 and ended Dec. 15. The researchers analyzed 256 search results and 65 websites and interviewed state regulators in all eight states.

They found that Google searches were most often topped by paid “lead-generating” websites. Such sites don’t sell insurance but ask shoppers for contact and demographic information. Insurers and brokers can buy that information and contact prospective customers. Or, call centers affiliated with the lead-generating sites phone consumers and direct them to a seller.

The researchers also created a profile of a 29-year-old consumer seeking insurance who was in good health and with an income of $20,000 so she was eligible for premium subsidies for ACA-compliant coverage. They entered this consumer’s information into several lead-generating websites and fielded six phone pitches from brokers selling short-term and other non-ACA plans.

Among their findings:

During ACA open enrollment, only 19 percent of the searches using the common search terms yielded sites offering solely ACA-compliant plans. Before open enrollment, the return was less than 1 percent.
Lead-generating sites promoting short-term plans or other non-ACA compliant insurance products were the most common search result in every state, representing more than half of all search results before and during open enrollment.
The six brokers who encouraged the purchase of coverage over the phone provided minimal plan information. Most refused to provide written materials or discontinued the call when asked for such materials.
State officials lack full information about which insurers are marketing short-term plans to their residents, with one official calling it “one of our biggest blind spots.” Most said they plan to start monitoring the insurers’ practices more closely this year.

‘Necessary Niche’ 

An estimated 600,000 to 750,000 people bought short-term plans in 2017. The Trump administration projected last year that about 200,000 ACA customers would switch to this coverage in 2019 due to its rule change. A second government forecast predicted that the new policy would boost short-term coverage enrollment to about 2 million people by 2022.

Insurers who specialize in short-term plans vigorously defend them.

“This is a small and necessary niche in the [individual insurance] marketplace,” said Jeff Smedsrud, CEO of Pivot Health, based in Scottsdale, Ariz., and one of the firms whose website the study analyzed. “If people need temporary coverage, we are there for them. We don’t want people who qualify for a government subsidy to buy our short-term plans. They should get coverage under the ACA.”

Shaun Greene, head of business operations at, said short-term plans offer a more affordable option to people who don’t qualify for a government subsidy under the ACA.

But Matthew Fiedler, a health insurance specialist at the Brookings Institution who was not affiliated with the study, said the longer-duration short-term plans may befuddle some customers. The study, he said, “strongly suggests that some consumers are going to be confused and end up with plans that cover less than they expected.”

We can’t understand consumer contracts — but they’re still binding

Read the entire piece from The Conversation:

We accept standard form contracts when using social media, booking flights, opening a bank account, subscribing to a gym or renting a car. In all these cases, companies offer pre-drafted standardised agreements that are not negotiable.

At the same time, consumers are legally assumed to read the terms and conditions of their contracts. Because of this “duty to read”, consumers are held responsible for the written terms of their agreements, regardless of whether they read them or not.

While consumers have the legal burden to read their contracts, companies do not have a general duty to offer readable ones. As our research shows, most of them are incomprehensible.

America’s monopolies, of thee I sing


David Leonhardt writes in the NY Times about a subject that really motivates me: Monopolies. No, they don’t just happen. They’re the result of a political system that rewards their lobbying with deregulation and favorable legal treatment at the expense of the rest of us:

The federal government, under presidents of both parties, has largely surrendered to monopoly power. “The ‘anti’ in ‘antitrust’ has been discarded,” as the legal scholar Tim Wu puts it in his new book, “The Curse of Bigness.” Washington allows most megamergers to proceed either straight up or with only fig-leaf changes. The government has also done nothing to prevent the emergence of dominant new technology companies that mimic the old AT&T monopoly.

This meekness has made possible the consolidation of one industry after another. For a long time, though, it’s been hard to figure out precisely how much consolidation. The available statistics just aren’t very good, which isn’t an accident. In 1981 — around the time that the Reagan administration was launching the modern pro-monopoly era — the Federal Trade Commission suspended a program that collected data on industry concentration.

Fortunately, researchers in the private sector have recently begun filling in the gaps. On Monday, the Open Markets Institute — an anti-monopoly think tank — is releasing the first part of a data set showing the market share that the largest companies have in each industry. You can see the main theme in the charts here: Big companies are much more dominant than they were even 15 years ago.

Why are so many consumers cutting the cable cord?

Cut the Cable (Bill) - 10 Alternatives to Cable Television

Report: 33 million will cut the cable cord this year–higher than previous estimate

Research firm eMarketer says it underestimated how many people might become cord-cutters this year. The firm now believes that 33 million individuals will drop traditional pay TV service in 2018, meaning its previous prediction from July 2017 was off by about 6 million people.

eMarketer seemed to believe that TV providers such as Comcast would slow the bleeding by loading Netflix and other streaming services onto their boxes. Instead, those services continue to cannibalize cable and satellite TV service outright, while live TV services like DirecTV Now and Sling TV allow people to retain many of the same channels they had with traditional pay TV service.

They never seem to mention the high cost. Right now, my monthly cable bill is about the cost of a monthly payment on a luxury car — which, of course, I don’t have. (I have a 16-year-old car. I always pay cash.)

How can that be?

When I call to complain and try to lower my costs, they spout a bunch of word salad that says I can give up both premium channels and it will save me… $10. (I only have cable in one room, I don’t have DVR service.)

One of the reasons I founded CUFF is that I dream about the day that I can speak for 50 thousand or so activist consumers when I talk to politicians.

Should we be preparing for a recession?

Short answer: Maybe. In my opinion, probably.

I’ve lived through several recessions. My advice: Pay down debt now; you want to cut your monthly expenses. Stockpile household items (I always load up on toothpaste, soap, shampoo, laundry detergent, and whatever OTC medicines I need for my allergies. Basically, anything you will regret having to pay for when times are tight.) If you actually need to live off your investments (if you have any), lower your risk and put them in an index fund.

If I’m wrong, you don’t lose a thing.

Here’s some information on the topic of whether we’re headed that way:

Former CEO of large multinational: Trump’s trade war will raise prices for consumers and could trigger a recession

I’m a Depression historian. The GOP tax bill is straight out of 1929.

Wall Street’s favorite recession gauge is flashing yellow again — and not everyone thinks it’s a false alarm

Some thoughts on tariffs

Photo#204-Soy Beans!

Let’s make this clear: Tariff are taxes, and they raise the price of imported products for consumers. Countries don’t pay tariffs, consumers do.

The Trump administration doesn’t seem to know what it’s doing with tariffs, and the results are showing up in the cost of our daily purchases. (For instance, steel tariffs that raise the cost of an outdoor gas grill by $300.) Incidentally, these same tariffs have resulted in no gain whatsoever for American consumers. It’s all a show to drum up support for the mid-term elections.

Now President Trump is proposing to give $12 BILLION in aid to the giant agricultural farms hurt by his trade policies. Does this make sense to you?

The other thing tariffs do is cut off trade with other countries in retaliation, like the meat industry. You will see lower prices at the supermarket because the stockpiles are so high from trade cutoffs with other countries, but that won’t last long as the meat companies eventually go out of business.