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Stupid Insurance Companies

I’m wasting time today trying to find a more affordable health insurance policy.  The one I have is outrageous and it all has to do with where I live.  If I move one state over, my health insurance costs drop to about 1/4 of what I pay now.  The policy I’m looking at has a higher deductible and co-insurance but in many respects, it’s identical to the one I had with Wyeth before I left.  It wasn’t until I went to a European company that I discovered what I was missing.  But along with that coverage comes a walloping, gigantic price tag every month and that’s the group rate.

I can’t believe that NJ has sicker people than in PA but there ya’ go.  Someone is taking advantage of a river.

But wait!  There’s more.  Reader givens sent me a link to this incident involving a lifeguard in Florida.  The lifeguard was asked to rescue a drowning man.  So the 21 year old lifeguard grabs his floaty thingy and runs off down the beach, Baywatch style.  By the time he gets there, some other people had dragged the guy out of the water and the lifeguard stayed with the semi-conscious man until paramedics arrived.  Great, you say.  Happy ending, no one drowned.

Not so for the lifeguard.  Here’s his account:

After the rescue, Lopez said his boss asked him to fill out an incident report and then fired him for leaving his assigned area.

“They didn’t tell me in a bad way. It was more like they were sorry, but rules are rules,” Lopez said. “I couldn’t believe what was happening.”

According to the private company that now manages the beach for the town, the rescue took place on an unprotected strip of beach not covered by the contract.  The swimmers in that area are advised to swim at their own risk.  The contractor says the liefguard left his section unprotected while he went frolicking in the surf.  The other lifeguards say this isn’t true and that they were aware of the situation and covered the beach.  Two additional lifeguards have quit in protest.

It’s likely that this dismissal was prompted by the rules set down for insurance coverage for the beach.  I don’t know if this is the primary cause but I’m betting that it is.

Now, what could the contractor have done differently?  I dunno but firing the kid seems a bit extreme.  After all, a lifeguard is trained to save lives and to not attempt a rescue might have gotten him in trouble with Good Samaritan laws, though, this *is* Florida we’re talking about so maybe they have never heard of Good Samaritan laws.  The drowning man should consider himself lucky that no one shot him for being on the wrong side of the beach.

But there’s more to the story.  It turns out that the contractor gets paid $334,000 a year for guarding this part of the beach.  But it only pays its lifeguards $8.50/hour.  Really??  You go through all of the physical and first aid training and you get as much as a hamburger flipper?  There’s something not right about this.

So, I did some math.  If there are 4 lifeguards on the beach making $8.50/hour for 40 hours a week for 52 weeks a year, that comes out to $70,720/year for all 4 lifeguards.  Let’s say the supervisor makes $16.00/hour.  That brings the cost to the contractor to about $104,000.  Add on an additional 10% for all of those employer related tax thingies (you know at this level of pay that no one is getting health insurance) and you come out to: $114,000.  Just to be on the safe side, let’s say that health insurance is included for some cheapo EPO with a $1500 deductible and 30% coinsurance for an additional $250/month per employee.  That comes out to an additional $15000 for a grand total of about $129,000.

What is the contractor doing with the other $205,000?  Maintenance on the beach towers and floaty things and first aid kits can’t be that expensive.  So, where is all the money going?  Is the contractor pocketing it or paying liability insurance?

And if they are pocketing a good chunk of the remainder, was privatizing the service really saving the town that much money?? And if taxpayers are so adamant about saving money, shouldn’t there be a cap on the amount of profit a contractor can make?  I’m just taking this thinking to its logical extremes.

Just curious.  How much do you want to bet that “privatizing” involves a lot of favoritism, kickbacks and corruption?

6 Responses

  1. I’ve been doing this sort of math on other local “privatizing” and I’m convinced that it’s propelled by corruption from top to bottom. When I was young highways were built by State Employees by the Highway Dept. Roads maintained by city employees, etc. That’s all done by local contractors now. And I just don’t believe that it’s more cost effective. I think the employees lose out by not getting the advantage of government benefits and pay scales (plus being a part of the system to move around as their skills and interests improve and change) These are just a couple of examples. We could include the “privatizing” of the post office, of NASA of Federal jobs in general.

    We’re still paying for these services with our tax money. But, WE don’t have any control of the quality when it’s outsourced. The job supervisors don’t report to taxpayers. All the details are naturally hidden from review.

    And that’s before we examine the money issues which you’ve so perfectly estimated (notice the perfect is qualified by the estimate)

    • How about return on investment? The taxpayers invested trillions of dollars in space programs, for example, but are getting only a pittance of tax return on industries like satellite television. Numerous other examples abound.

      On roads: I spent some time building & paving roads for the state. Our small crew was paid from minimum wage to minimum +25%. Only half of the crew had benefits– the rest of us were “part-time.” When the jobs went private, costs to the taxpayers multiplied by a factor of ten. Yep. That privatizing is the answer.

      • Being on the state highway crew was one of the best experiences of my life (aside from the wear and tear on my lungs and tires) — it paid so well ($669/mo in 1977) that when I transferred to a clerical job at the university, I make $100/mo more than other clerks because my old pay rate stayed with me! But, in those days, Kansas still had some lingering elements of it’s progressive past. I think that’s all gone now.

      • I’m glad you mentioned that. I was bothered by the remark about “…employees lose out by not getting the advantage of government benefits and pay scales…” For most jobs the state paid less than private employers, but the big benefit was security. That’s gone, and they’re cutting the pay and benefits even more because most voters don’t know. The Defense Department the same. They decided it was too expensive to use soldiers to do menial work in the kitchen and mess hall, so they’ve privatized the whole food service operation. Now it costs three times as much and the troops still have to have Burger Kings where they have to spend their pay. At least the pay has improved; how much would you ask to let people shot at you? Privatization is all about giving tax money to favored cronies instead of benefiting the citizens.

  2. The lifeguard story is not different from the old fire departments stories before the cities took them over. A fire crew might watch a building burn down and do nothing because the building had insurance with another company or wasn’t insured.

    That’s capitalism at its worst.

  3. It’s not that Jersey has sicker people than PA, it’s that the “usual and customary” rates paid to the providers in NJ are higher and reduce any discounts “negotiated” as compensation to in-network providers.

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