Coffee heat rising

Funny knocks off Paul’s geeky air-conditioner

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If you haven’t seen Seattle’s best answer to a heat wave, check out Paul’s guide to how to make your own air conditioner, complete with detailed photos, over at Fiscal Geek.

It being hotter than a three-dollar cookstove here in lovely uptown Arizona just now, I decided the damped-down central HVAC $y$tem needed a little boost along these lines. Copper tubing is beyond my girlie handyperson skills, though…also beyond my level of industry, in 115-degree heat.

But a fan: I have a fan. It’s parked on my desk, where it blows directly on me, especially during the afternoon, when 82 degrees at the hall thermostat translates to about 90 degrees in the back bedroom that is my office.  And down on the bottom of the deep freezer I happen to have an old gallon orange-juice bottle, filled with frozen water. That’s ice, for the nonengineers among us.

Not only that, but I have Arizona folkways. The old buzzards used to say (long before I was an old buzzard myself) that before the advent of refrigeration, the few hardy Phoenicians brave enough (or poor enough) to spend the summer in the Valley of the We-Do-Mean Sun would stay cool by hanging wet towels over the cages of electric fans. This always sounded a little apocryphal to me…how did they survive electrocution, in the era of ungrounded plugs? But who am I to question my elders, eh?

So, I decided to try a couple of adaptations to Paul’s schema. These would rely on only one electrical device—the fan—rather than a fan and an aquarium pump, and would not require any manly tools to construct.

First, we have the Old Frontier version of swamp air conditioning.

This thing, in case you don’t recognize it right off the bat, is the rack that comes with a clothes dryer, on which you’re supposed to lay out flat stuff and tennis shoes to be dried, tumble-free. Maybe, just maybe, we’ve finally found a use for it.

And this? A wet rag. Actually, it’s a wet flour-sacking type kitchen towel.

The clothes dryer rack is clunky enough that it almost stands on edge by itself. Conveniently, though, our abbreviated five-foot shelf of reference works resides atop the desk, right next to the fan’s summertime abode.

This allowed me to prop the rack against a couple of the books, a maneuver that stood the rack up steadily enough to tolerate the wet rag without falling over and keeps the wet rag from contacting the electric fan. Just in case, though, I laid a section of the New York Times on the desktop, underneath the rack and its damp covering.

Then it was just a matter of…yes! turning on the fan!

Thar she blows!
Thar she blows!

This invention works best when the fan is set to full blast. At lower speeds, the wet towel, even though its fabric is pretty lightweight, blocks the air flow enough to leave you wondering what happened to the breeze.

The effect is…well…a bit swampy. Gives you some insight into why our City Grandparents decamped to the high country every summer.

Moving on… The first attempt with a plastic-encased block of ice looked like this:

Knowing the frozen bottle would sweat in the heat and suspecting its lid would leak, I put a cookie sheet (girlie tool) underneath it. Further concerned that the cold and possible condensation under the aluminum sheet could damage the fine surface of my superb cut-rate on-sale desk, I set a trivet under the bottle. This, I figured, would allow air to flow under the cold object, as well as around and over it.

In a later version, I put the trivet beneath the cookie sheet. This provided better balance. The slippery bottle, unevenly inflated as the water inside expanded while freezing, wanted to skid off the trivet; this arrangement proved a lot more stable. The aesthetic is tidier, too:

And how do these schemes work? Well, I’d say the ice block strategy is marginally more efficient than a wet towel on a fan. Interestingly, the ice block scheme cools better as the water inside melts and the plastic jug’s exterior sweats a layer of water. Probably the cooling effect comes from the water’s evaporation. In either lash-up, the fan has to be set on high to create any noticeable cooling effect.

IMHO, the effect is much enhanced by the application of ice to bourbon and water.

Retirement healthcare update

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A new development in the hoop-jumping contest that is figuring out how to get full coverage under Medicare:

The volunteer snail-mailed two thick brochures on Medigap—over a hundred pages, to go along with the hundred pages or so of data to be mastered before signing up for Medicare. Took an hour to shovel through the new stuff.

She apparently was wrong on two counts: First, COBRA is regarded as “credible creditable (!) coverage,” meaning that if you continue your employer’s coverage through COBRA between the time you’re terminated and the time you reach age 65, Medigap carriers can’t refuse to cover you for pre-existing conditions. And second, she didn’t know that attained age premiums (which start low but rise as you age, ending up costing more than you would have paid if you’d selected a pricier product to start with) are illegal in Arizona.

{sigh}

Well, I’m glad I finally got my hands on what appears to be definitive information. It’s a shame elderly people are expected to plow through over two hundred pages of dizzingly complex and confusing material just to sign up for something as basic as health insurance. And mighty annoying that the only people you can get on the phone are unpaid volunteers who themselves are a bit confused!

😯

Healthcare: The clinker for retirement plans

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On rumors that the State of Arizona will offer only two employee healthcare plans, Cigna and Aetna, when open enrollment comes around, I once again reviewed the financial prospects for my upcoming enforced retirement.

Right now, the State offers employees an incredible EPO plan, to which I subscribe with joy. It covers my doctors at the Mayo Clinic, and it costs all of $13 a pay period—that’s right, folks: $26 a month! Earlier retirement calculations have assumed that I’d stay in this plan this fall, which would mean that the discounted COBRA would cover it until I turn 65 in May, 2010, at about $150 or $200 a month.

Cigna is roundly hated by medical care professionals, some of whom will not even allow you in the door if that’s you’re insurer. At one point, Cigna was our only choice, after every other insurer dropped out of the bidding, claiming that Cigna came in with a bid too low to cover reasonable costs. Healthcare professionals I know here say that Aetna is even worse in terms of slow payment, bogs of paperwork, and collection hassles.

And you can be sure that neither of these outfits will offer a plan that covers virtually all our costs for $26 a month. To coin a phrase: LOLOLOL! That means my healthcare costs will go way up in September, and the cost of COBRA may very well be unaffordable even at the discounted rate.

However, both apparently will cover the Mayo, so I figure that if they offer a high-deductible plan, that will be the thing to get…and hope I don’t get sick or hurt before next May.

Contemplating this state of affairs brought me back to the question of what the whole cost of cobbled-together Medicare coverage actually will run. I’ve been estimating around $300, but I really have no idea, because I can’t find out what Medigap costs in Arizona.

I’m determined not to be herded into an HMO, which is what the Medicare Advantage plans are. My mother died hideously at the hands of HMO doctors. She would have died anyway, but she didn’t have to suffer the way she did. The people who operate an HMO—doctors included, in my experience—do not have your welfare at heart; what they have at heart is the bottom line. It’s not in the organization’s interest to treat you when you develop an expensive, catastrophic illness. They longer they can delay treating you, the less they’ll have to pay for your care between the time they no longer can ignore you and the time you croak over.

Now, if you’re going to die anyway, really: who cares whether you get treatment for the disease itself? The issue here is that all the time your doctors insist there’s really nothing wrong with you, they’re not giving you palliative care. A disease that’s going to kill you is likely to be extremely painful. And so what happens is that until you reach a near-comatose state, you suffer.

You suffer a lot.

To stay out of a Medicare HMO plan, you have to cobble together coverage by combining Medicare Part A (free for most US workers), Medicare Part B (about $100 a month), the required Medicare Part D (about $30 a month), and private Medigap insurance to cover the large holes in the government coverage (premiums apparently a closely held secret).

You can get Medigap insurance through your employer, if your employer offers retiree coverage. GDU does: the present, magical $26/month premium morphs into something well in excess of $300 a month, bringing the tab for the total package close to $500 a month. That’s for one person who takes no meds and has no health issues—other than the stress brought on by working for the freaking Great Desert University.

That’s well beyond my price range.

Stop the presses! Just this minute, a volunteer for Medicare called and said she would send a sheet comparing premiums for local Medigap carriers, plus a bunch of other information. We’ll see what that amounts to.

While gnashing my teeth over this, I found a Web site showing that Medigap policies can range in price—for the SAME COVERAGE!—from around $100 to to around $500 a month. A site over a year old shows that in Arizona, the most popular Plan C ranges in price from $976 to $2,735 a year. Not only that, but cheaper policies are engineered to increase in cost over time, so that after a few years you can end up paying more than you would have paid if you’d bought a more expensive policy at the outset.

The whole system is a minefield of rip-offs!

This is a problem. I can’t afford more than a total of $300 a month for health-care insurance, and the munificent amounts I’ll be able to scrape together between Social Security, much-reduced retirement savings, and a part-time job whose de facto hourly rate is well under minimum wage will disqualify me for any help with these costs. People are advised to comparison-shop for Medigap policies, but it’s virtually impossible to get rates online. You have to track down your state’s SHIP office and hope to God their volunteers have built a list comparing the several score of Medigap offerings in all their various permutations, and got the figures right (these outfits are apparently staffed exclusively by volunteers, or nearly so). Good luck with that!

Good luck, indeed. The volunteer who just called reports that COBRA does not count as “credible” coverage. In other words, according to her if I buy COBRA to cover the five months between Canning Day and my 65th birthday, these Medigap carriers can refuse to cover me for any pre-existing conditions, real or in the minds of their bureaucrats. Now, I had understood that Medigap insurers were not allowed to punish you for being sick. But evidently if that was ever true, it’s changed. Although they can’t refuse you coverage, they’re allowed to refuse to cover whatever ailment they think they’ve identified, at least for up to six months. But according to this page, COBRA does exempt you from the six-month waiting period…so, as feared, the volunteer counseling that seems to be the only source of comprehensive information has its limitations. Such as, oh…say, accuracy.

Any way I massage the figures, under the best of conditions things are going to be excruciatingly tight once I enter my enforced retirement, at least untilI reach age 66 and can again earn a living wage—or as close to it as I can come after being out of the workforce for two years.

Unless I get a lot more Social Security than I expect or the tax bite is a lot smaller than I think it will be, a 4 percent drawdown from savings won’t let ends meet. Five percent will keep me in the black…by about $50 over the course of a year, assuming I never, ever overspend my much-straitened budget. Even a 6 percent drawdown will just cover expenses, with only a couple hundred bucks to spare at the end of a year. Those estimates are based on Medicare and Medigap costs of no more than $300 a month.

If the cost exceeds that amount, then I’m up the creek. I’ll have to sell my not-out-of-the-ordinary home and move into an apartment or a trailer.

Defies belief, doesn’t it? Especially when you realize that studies show average Baby Boomer retirement savings range from $38,000 to $88,000, with a mean amount (in 2005, before the economic collapse!) of $49,944. That would put my savings, from which a sustainable drawdown can be expected to generate $17,000 to 25,500 a year, at 4.8 to 11 times the typical total you’d expect someone in my age bracket to have accrued. How do people with “normal” savings rates afford health care and still have enough to live in retirement?

Or…do they?

Worry: What’s our beloved employer up to now?

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None of this bodes well. Our Beloved Employer, the State of Arizona, is up to something, and it ain’t good. They are actually keeping the nature of the 2009-10 health care plans secret. Open enrollment starts on Monday, and HR on all levels—at the state and at the university—is refusing to tell anyone what choices we will have or what providers they will cover.

What this means is that (once again) the pooh-bahs expect people to be dangerously angry. The last time they pulled a serious number on us, when PeopleSoft was jacking us around to the extent that some people weren’t getting their paychecks at all, they had armed guards present at meetings in which they tried to justify the various ways they were screwing us.

Rumor has it that we will be offered only two health plans, one from Aetna and one from Cigna. Everyone here knows how likely it is that you will get in to see your accustomed doctors if you have Cigna as an insurer. From what I’m told by friends who are healthcare professionals, Aetna is even worse. When Cigna was our only choice (a state of affairs that devolved the last time our present governor was in power: coincidentally, her husband is a senior executive with that outfit), one of my doctors would not see me at all, even after I offered to pay him in cash! I had to go out and buy private insurance on the open market in order to have any choice at all in medical care—and around here, where medical care is about as good as the educational system, you do need to have some control, in the form of choice as to which doctors you will and will not see and which hospitals you will and will not end up in.

Since relatively few Arizonans are sensitive to this fact (in a right-to-work-for-nothing state, employees are just happy to get any health insurance), a limited choice of plans is probably not the issue. Some people will be annoyed, but not to the extent that the Mouthpieces will feel a need to have men toting guns present at public meetings.

No. The issue will be that the cost is going to go through the roof. And that will set people off.

The furloughs have done so much damage that a permanent pay cut in the form of a gigantic hike in health insurance premiums really will cause some serious outrage. We have had our salaries back to normal now for one, count it, one week. Over the past six months, I’ve been working at a $500/month cut in pay. My associate editor announced that she’s looking for another job, because the new little number they’re doing on her has cut her take-home pay to $200 a week.

If they raise insurance premiums to $200-plus for one person (which is what all the plans that are not HMOs other than the EPO presently cost), that will leave her working for…yes! nothing. Zero take-home pay. At that point, she’ll be better off to quit. Applebee’s, where she earns more in five hours than GDU was paying her in a week before its current shafting of her, offers a rudimentary form of health insurance that would carry her over until such time as she can find a decent job. My guess is, she’ll walk right out our door.

A-n-n-n-d… If that’s what comes down, I can’t do all her work plus all the work of the research associate they’re not replacing. Even if it’s only for four months, between September and Canning Day, I may be forced to quit, myself. Supposing Her Deanship agrees to let that much of our workload go and still keep our office open, an exorbitant health care premium will bring an end to my plan to save up enough cash to get by in the coming penury. It’s pointless to work yourself to death if the pay doesn’t do you any good. I’d probably be better off to quit, myself.

What a place!

We’re told the university system is getting $154 million in stimulus funding (quite a lot for educational institutions in this state, which tells you something right there: it’s a tiny, tiny drop compared to the amounts forked over to revive the automobile industry and to lay down more asphalt across our state). GDU is supposed to get the largest part of this.

When Her Deanship was canning me and again when she was raving on about how brilliant I am, several times she murmured that “there might be something” come December. Apparently they hope to find a way to salvage some part of our program if they get some money. But I’d have to think once, twice, three times about any such offer.

First, I really resent the prospect of another $300 to $500 cut in pay. Now, I realize that I’ll be paying something like that for Medicare out of a vastly smaller income. But it’s the principal of the thing: at least on Social Security I won’t have to work for my pittance. (I’ll have to work to scrape together two other pittances in order to survive…but we’ll overlook that for the time being. 🙂 ) Second, I’ve come to feel so angry about the way that outfit has treated my staff that I can barely stand to drive out there and walk onto the campus. And third, I’m tired of waking up at 4:00 in the morning and not being able to sleep for worrying about…well, about shit like this!

Helle’s Belles. I’m going back to bed. Too late to drug myself: I have to drive a car in a few hours. But damn it. There’s a limit to these three-hour nights.

Cash for Clunkers: A boondoggle?

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A billion dollars gets soaked up like water into a sponge, in four days, and then Congress appropriates still more billions of bucks to get people to buy new cars by paying them more than their junkers are worth? Fantastic. And I do mean that in its true sense.

How many more billions of dollars are going to run down the Cash for Clunkers drain?

Wouldn’t it have made more sense to use that money to build a decent public transportation system for one major city or one geographic region that doesn’t have one? Since almost no major US cities have anything that resembles viable public transport, surely it wouldn’t have been difficult to find a place to build one.

And if we want to get the gas-guzzling, emissions-belching junk off the road, there’s a simple way to do it: don’t let people register them. It wouldn’t take umpty-umpteen billion dollars to pass a law saying a car that’s X number of years old and that gets less than Y miles per gallon cannot be driven on the public roads. And no exceptions for “historic” vehicles. Then fine the bejayzus out of people who leave them rusting on private property or beside public thoroughfares. This would force owners to turn them in for salvage. Then those who can’t afford to buy a new junker could ride the lightrail, high-speed trains, and buses our taxpayer billions would be freed up to build.

It’d put a lot more people to work than a batallion of car salesmen, too.

Pay off debt or build savings?

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Over at I’ve Paid for This Twice Already, Paid Twice invites her readers to think about the relative importance of paying off debt or building savings. Which should be a person’s top priority? It is, as she points out, not a clear-cut decision.

Some people say that there’s “good debt” (such as home and student loans, owed on property or training that eventually returns more than you pay…supposedly) and “bad debt” (everything else; especially credit cards). I personally would argue that there’s only debt, and debt is slavery. Debt forces you to stay in the traces until you pay it off or until you die, whichever comes first. Over at Debt Kid, Jessica describes experiencing the same revelation.

Freedom from debt is freedom to live as you choose. Period. If working brings you personal fulfillment, you can do it—and a debt-free worker is one who has a great deal more disposable income (to say nothing of more options) than one who labors under the lender’s lash. If you want to retire or devote your energy to low-paid but altruistic work, debt freedom will make either of those choices possible.

I’ve used savings—in direct contradiction of advice from money advisers—to pay off debt and never once regretted it. Here’s why:

1) Revolving debt cuts your purchasing power by the amount of the interest gouge. If you pay 18 percent for everything you put on a charge card, then each dollar you spend is really worth only 82 cents.

2) You don’t actually own anything when you’re making payments on it. The bank owns it; you’re just renting it.

3) For most mere mortals, the so-called tax benefits of mortgage interest are negligible.

4) If you own your home outright, the absence of a mortgage payment increases your real take-home pay enormously. I couldn’t live on my net income if I owed on my house or had to pay rent. I paid $100,000 for my first house, for which I put down $20,000. Until I paid off the loan, I owed $9,960/year on the PITI. In the best of times, that $100,000 earned $8,000 a year in mutual funds. Paying off the mortgage freed up $830 a month for living expenses and savings. Taxes and insurance on my present house, purchased with the proceeds of the sale of my first paid-off home, are about $2,200 a year, meaning that today I have to set aside about $183 a month to cover those annual bills. That’s a far cry from an $830/month bite…which at the time I paid off the loan represented half my monthly take-home pay.

5) Where real estate is concerned, in normal market conditions (which one day will return), when a house is paid off and appreciating in value, the money you put into it is growing just as it would grow in a conservative investment, at about 6 to 8 percent a year. Thus the $100,000 I paid for my first house yielded $211,000 a few years later, allowing me to buy my next house in cash. Once a house is paid off, you’ll never lack for cash to keep a comparable paid-off roof over your head.

6) This is not true while you’re paying on a mortgage, because the mortgage interest eats up the gains created by the property’s appreciation in value. Over 30 years at 6 percent, a you’ll pay $115,838 in interest on a $100,000 loan; in other words, you’ll pay $215,828.45 for your $100,000 house. If you’d put that extra $115,838 in mutual funds over the same period, the compounding interest would have been paying you, not the bank. Paying just $200 a month extra against principal would cut your payback time from 30 years to 16 years and 3 months and drop your total interest gouge to $57,386.

7) Clearing off  debt opens the way for larger and faster savings. If you could afford to make a payment on a car, a house, or a credit card, then once you’ve paid off the debt you can afford to put the amount of the payments directly into savings and investments.

So, in a way, debt pay-down is a form of saving.

On the other hand, in recessionary times when one’s income is at risk, you need a substantial emergency fund. If you find yourself starting out during a recession, your first priority obviously should be to stash enough to live on for at least six months, preferably longer. IMHO the ideal emergency fund contains one year’s worth of your present net income.  Once you have it, though, you’re justified in devoting every extra penny to paring down debt of all kinds.

In good times or bad, saving should be part of your agenda. But since freedom from debt makes your money go further and allows you to save substantially more, getting out from under debt should be your top priority.