2011 Health Care Reform for Part D plans

If you decide to use the Aetna Integration Plan as you supplemental medical coverage then you will need to buy a Part D prescription drug plan from a private insurer. You HAVE to buy a drug plan to maintain continuous coverage. If you don't have a drug plan there will be a penalty applied of 1%/month for every month you are not covered by a part D plan if you change your mind. It is not a huge penalty because the monthly premiums are low and it is based on the national average which is about $33/month ... but it will cost about $4 per year for every year you are not covered and can add up. The penalty doesn't goes away (unless you fall below the poverty line and qualify for low income programs.) Some people who don't really want a drug plan buy the cheapest plan they can find in their zip code to avoid the lifetime penalty. Some premiums are as low as $15/month.

In 2011 there are changes to Part D that can lower your out of pocket costs if you do get into the doughnut hole. The old rule was that once you were in the doughnut hole you paid the entire bill for your drugs until you hit an out of pocket limit (about $4000). Granted you pay the insurer's discount rate for the drug - but the insurance companies have not been too good at negotiating discounts. Starting in 2011you will pay 50% of the insurer discount rate and also "get credit" for 100% of the cost toward getting out of the doughnut hole. For generics you only get a 7% break - I will guess because generics are much cheaper.

All of these pricing features are in the "configurator" planfinder on medicare.gov. Use it to determine your total cost for a given drug plan.

AARP "insurance"

I hear a lot of people talk about AARP as if it were an insurance company. It is not. In reality all that is happening when you see AARP as part of a name of a health or drug insurance plan is the private insurance company paid AARP a fee to use the logo. For many, the AARP "stamp of approval" means a lot. I don't have a clue how AARP vets those offerings nor what kind of fees they charge to use the logo. That is why the names of all the AARP plans are complex. For each offering the name has to be unique to the insurer and each insurer has several offerings.

I do know that the underlying insurer - whether United Healthcare, BlueCross/BlueShield and so on - does have a rating so the best thing to do when deciding what plan you want to buy is to evaluate the reputation of the insurer. There are a few ways to do that. In the "Medicare and You 2011" book at the back of the book there are ratings associated with the plans they profile. Your state SHIP (State Health Insurance Assistance Program) also has user ratings associated with plans offered in your state. You can find the phone number on medicare.gov. Also, ask your friends and your doctors what insurer they prefer. Sometimes an insurer is slow to pay or onerous about processing claims. The doctor's accounting office usually has strong opinions about who they prefer.

Comparison pricing is essential whether you are picking a medicare advantage, drug or a medigap plan. I strongly urge you to look at medicare.gov planfinder to do the comparison. It is the best example I have ever seen of your tax dollars at work to give you great information.

IBM medical plans are NOT medigap plans

Buried in an earlier posting I talk about medigap vs. IBM medical offerings but it is worth repeating because it is very confusing. If you are using original medicare there is government defined secondary insurance available for purchased from private insurers typically referred to as medigap insurance to cover your deductibles and the copays. There are 12 different types of plans defined by the government and each is designated by a letter A,B,C, M, N and so on. A private insurer offering plan "M" must structure it according to "M" components. Sometimes the private plans are called supplemental insurance. To find out what companies offer medigap plans in your zip code go to medicare.gov. Incidently, it makes no sense to pay more for a given plan - pick the cheapest private insurer for the plan you want. The plans offered through AARP (which are usually United Healthcare plans) are often priced well but not always so do comparison shopping!

NONE of IBM medical insurance options are medigap plans. That is why IBM medical plans are often referred to as secondary insurance. By law, you are only allowed to buy one medigap plan. Since IBM medical insurance is NOT a medigap plan you can buy IBM's medical/prescription drug coverage and also buy a medigap plan. Do this if you want IBM's drug plan but want better medical coverage than IBM's medical plan. It is unlikely that the IBM medical component of the coverage will be used but it can happen. There are services like acupuncture that are covered by IBM but not covered by a medigap plan.

Do not believe the IBM service center if they tell you that you cannot buy a medigap plan if you buy an IBM medical plan. It is not true.

2011 Enrollment

By now, you probably received the IBM selection package. It looks to me like not much has changed except the prices on some of the offerings and Aetna withdrew one of their Medicare Advantage offerings (PFFS). As an aside, I will speculate that they did not have a very good doctor network and the new regulations from the government to provide network specifics pushed them to shut it down.

I still don't think there is any "best choice". Each offering has advantages and disadvantages. The Medicare Advantage plans are as good as the doctors and hospitals they require you to use. If you want to go to an expert doctor or institution such as Sloan-Kettering you might not be able to do it. Make sure the plan gives you access to the doctors and hospitals you want to use.

The Aetna Integration Plan A is really tempting for those of us who use Original Medicare. It looks like a medigap insurance plan but at a fraction of the cost. It is NOT a medigap plan. Last year I went to their website to look at the detailed coverage and mapped it to a "popular" medigap plan to see how it compares (for example, details like skilled nursing coverage). The booklet you get from IBM does NOT provide sufficient information to let you do a comprehensive comparison. Since the Integration Plan A is not a medigap plan there is no governmental agency overseeing an appeals process. Again, I don't think that is a big deal. It is just part of doing a comparison.

All said, I personally was really tempted to sign up for the Aetna Integration Plan A. I decided not to do it when I looked at medicare.gov and got estimates from plan finder for my out of pocket costs on a non-IBM prescription drug plan. I estimate I would have to spend about $2000 more for my drugs with a non-IBM plan. Given that - I will take the bet (essentially a $2000 bet) that I will be healthy in 2011. (I lost that bet this year and reached the Out Of Pocket for the medical plan - $4000.) Still, I am staying with the IBM Medical/Prescription Drug Supplement plan. I know I need the drug coverage, I don't know if I will need the medical coverage, and I am an optimist.

I used myself as an example just to show the kind of work you have to do to pick the plan that is best for you. In the end it really is gambling. IBM is betting it can make money on you and you are betting you will have lower medical costs.

Appeal, appeal, appeal claim denials

Both medicare and UnitedHealthcare have an appeals process if a medical claim is denied.

The Medicare appeals process is dictated by the government and there are 3 levels of appeal. At the first level you are basically still dealing with administrative personnel. At the second level you are finally reaching medical professionals. When you appeal a claim you will need supporting information from your doctor as to why the procedure was necessary which can make it a little bit of a hassle to appeal. Some doctors have staff that help with appeals. It is a cost overhead headache and no wonder medical professionals are opting out of treating medicare clients given the fee structure is pathetically low. Even if your doctor is not much help - still gather your evidence and appeal! For example, Medicare routinely denies screening tests (e.g, EKG or blood tests). If you had those tests as a prep for surgery then submit copies of the bills showing the surgery. Of course, the logical assumption is Medicare would have realized you had surgery since they pay that claim as well. Don't get logical. Do appeal.

For UnitedHealthcare there is also an appeal process. However, because the IBM supplemental plan is not a government sanctioned medigap plan the appeal process is strickly a UHC process. It is perhaps a reason why you might want to consider buying a legit medigap plan. If you have a medigap plan then your appeal is going through government agencies at the second and third level. For IBM's supplemental plan if UHC denies the appeal your recourse it to complain to your state health insurance agency. It is a harder process and the chances of UHC being overturned are likely lower but those complaints are "registered" against UHC to help the state agency to look for patterns. So, use the UHC appeal process and the state complaint process. It may also be worthwhile to lodge a complaint with IBM if you think UHC is being unreasonable.

There is also an appeal process for drug plans. If the IBM plan (Medco) is denying coverage for a drug use the appeal process if the drug is not on Medicares "never cover" list. Don't waste your time appealing drugs on the "never cover" list. Most of them fall into the category of barbituates. You can get a list of those drugs from Medicare. Often times, coverage is also denied if the drug is being used "off label". That appeal argument is easier to win.

2010 IBM Enrollment Period

It's that time of year again. Lucky us. Some of you asked why IBM delayed the enrollment and why weren't they changing the offerings for retirees. I am guessing about why they delayed enrollment. Healthcare reform starts to kick in next year and impacts more about current employees than retirees. IBM HR is probably looking at what they need to do to comply such as perhaps offering supplemental IBM employees health insurance and/or negotiating with insurance companies on how the reforms will affect premiums. Again, it is my guess that is what is causing the delay.

There is nothing in heathcare reform that affects IBM retiree medicare offerings. Notice, they did not say they were keeping the price of offerings the same - just the offerings itself. They are probably negotiating with private insurance companies on the price of the Medicare Advantage offerings (eg, HMO and PPO offerings). The government is not going to reduce the "extra" subsidies for these plans in 2011 but is also not going to increase them either - as was done in previous years (and is an outrage that taxpayers should have been screaming about). Nonetheless, private insurance companies are raising their premium rates and blaming it on healthcare reform. How ethical.

Can I buy a medigap plan if I had IBM as secondary? Yes

There is a medicare "guaranteed right" regarding private insurance medigap plans that appears to apply to people who have been continuously buying IBM secondary insurance. That means the medigap private insurance provider does not have a right to deny you coverage for preexisting conditions if you want to move to a medigap plan. Even though IBM secondary insurance is not government sanctioned medigap insurance the fact that it is employer supplied insurance puts it into the guaranteed right plan coverage. Since IBM offers the plan every year with "slight changes" the fact that it changes is what enables the "guaranteed right" capability to be activated.

OK - what does that mean. IBM's secondary insurance is really disaster insurance. The premiums are low because they are betting you will never meet the thresholds to make a claim. You have to be pretty sick and pay a huge out of pocket expense before it kicks in. If you face that situation then enroll in a medigap plan during IBM's open enrollment period and switch to a medigap plan for the following year. The medigap premiums are substantially higher but the medigap insurance kicks in right away to pay copays and deductibles. In that sense having IBM's secondary insurance until you need better is a way to be sure you have access to the best coverage available should you need it.