Kiplinger's Personal Finance Magazine: Fighting the Insurance Company

When a health care reimbursement is peanuts, don't get mad--appeal.

My daughter, who lives in Arkansas, has preferred-provider health insurance but went to an out-of-network doctor in New York City for allergy shots. For each $49 visit, the insurance company reimbursed her just $9.75. This is absurd--where can you see a doctor for $9.75?

--MARY S. CODY, Hamilton, Ohio

Your daughter has run into the "usual and customary" runaround: Insurers base reimbursement for health claims on average costs in your area. That's not an issue when you stay within the network because participating doctors agree in advance to be paid a lower fee and can't bill you for the difference. But because your daughter got her treatment in New York, where health care tends to cost more, Arkansas's reimbursement looks like chicken feed.

In some states, you must complete the insurance company's appeals process before you can take your case to the state insurance department or an independent review board (although a review board usually focuses only on questions of medical necessity).

Your daughter should do some research before presenting her case. Ask other insurance companies and doctors what they consider to be usual-and-customary coverage for the appointments, recommends Robert Ridgeway, Arkansas's deputy commissioner of insurance.

In some states--including Arkansas--the insurance department will do some legwork for you from the start, researching prices and then pressuring (but not requiring) the insurance company to increase its coverage if it determines it's too low.

Hassle-free ways to sell a car

I have an old Toyota that I'm trying to get rid of. I can't trade it in because I'm not buying a new car. Where will I get the most money?

--J.H.S., Salt Lake City

You'll most likely make the most money selling a used car yourself. But that's not always easy by the time you take out an ad in the newspaper, screen calls and go for test drives with potential buyers. (If you go that route, you can also advertise on the Internet; Autoweb.com, for example, charges $19.95 to advertise a car on its Web site and on Car and Driver Online for 30 days.)

It's less hassle--but less profitable--if you sell your car to a dealer or used-car lot. Some new-car dealers take only trade-ins, but some buy used cars and may offer more than you expect. Another possibility is CarMax, a used-car superstore chain that buys cars of all ages (check www.carmax.com to find one near you).

Whichever method you choose, look up the car's value in a used-car guide such as the Kelley Blue Book (www.kbb.com). If your offers are less than you'd hoped for, you may want to donate your car to charity instead. Many organizations--such as the American Cancer Society and local Red Cross chapters--accept cars whether they work or not, then sell them at auction. You can deduct the car's fair-market value from your taxes if you itemize. For example, if you are in the 28% bracket and you donate a car worth $1,000, you'll lower your tax bill by $280.

Are you as diversified as you think?

Are you aware of a program or screen that would enable me to determine how much duplication there is among the holdings of the 25 mutual funds that I now own?

--WILLIAM APGAR, Cross Lanes, W.V.

One powerful and simple-to-use program that can help you spot the similarities in funds is Overlap ($48 plus shipping for a single CD-ROM, $150 a year for quarterly updates; 800-683-7527). Select several funds to compare and the program will tell you how much their stock holdings and their concentrations in specific industries overlap. For example, Overlap shows that 22% of investments in Harbor Capital Appreciation, a long-term-growth fund, are also in Selected American Shares, a growth-and-income fund. The program doesn't tell you which specific stocks overlap.

The Portfolio X-ray section of www.morningstar.net's premium service will show you what percentage of your overall portfolio and of each fund you own is invested in each industry sector (it doesn't identify specific stocks, either). The answers are personalized, but you must type in the details of your portfolio (or hypotheticals, if you haven't bought the funds yet) before you can get any information. The cost is $9.95 per month, or $99 a year.

Tax breaks for home schooling

My wife teaches our kids at home. Are there any tax credits or deductions for home schooling?

--JIM PROVENZALE, Hagerstown, Md.

There are no federal tax breaks for home schooling currently on the books, but both the Senate and House of Representatives are considering bills to help defray the expenses of precollege education that would also apply to families that teach their children at home. The Senate bill would allow tax-free distributions from Roth IRAs for elementary and secondary education expenses. The House bill would provide a modest tax credit for tuition and expenses. Minnesotans already get similar breaks on their state taxes.

A lucky break for gamblers

I like to vacation in Las Vegas and gamble, but I've lost much more money than I've won playing blackjack. Can I write off my losses on my taxes?

--M.L., Clearwater, Fla.

If you itemize deductions, you can write off the losses as a miscellaneous deduction--but you can't deduct more in gambling losses than you've reported in gambling winnings, which is taxable income. One lucky break: With most miscellaneous deductions, you can write off only expenses that exceed 2% of your adjusted gross income. But gambling losses aren't subject to that limit.

Have a question? Send it to Q&A, Kiplinger's Personal Finance Magazine, 1729 H St., N.W., Washington, DC 20006, fax it to 202-331-7255 or e-mail it to q&a@kiplinger.com. Include your name, address and daytime telephone number. We can't reply by mail, but we'll print as many as space permits.