Thursday, January 14, 2010

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.


  1. Hi,

    Could you provide me with links to the sources that you used to come to the conclusion that the IBM plan is a guaranteed right plan.

    I have a preexisting condition that is not a problem now but could be in the future. I want to verify that I don't have to enroll in a medigap plan now during my open enrollment period.

    This and your other post have be very helpful.


  2. What I said about the guaranteed plan issue is not exactly right because it depends on the state you live in how they define "guaranteed right". In most states it only applies if the plan you had been using was terminated or aspects of the plan radically changed. However, in states like New York there is continuous enrollment for medigap plans so you can always enroll in a medigap plan. They can deny you coverage for the first six months for preexisting conditions but if you had the IBM supplemental plan most insurance companies count that as "continuous coverage". In looking at the government defined medigap plans and IBM's plan - IBM's plan is pretty good. Your upside exposure is probably about $1400/year more out of pocket if you stick with the IBM plan and then get sick along the way versus forking out about $3000/year in premiums for a good medigap and getting refunds on copays and deductibles which prob be around $400/year (so your net oop is about $2500/year.) Save that money every year you are not sick and you might break even. Hope that helps.

  3. Though Medigap is private but have better facilities.

  4. Not sure what you mean,re facilities. A Medigap policy is private insurance acting as a secondary plan to original medicare. It covers what Medicare covers as a secondary payer. IBM secondary plan offerings are not government defined medigap plans (whether Aetna or United Healthcare). In a few areas they are better than medigaps, mostly they pay on par, some areas not as good. IBM Medical compares most closely to medigap "K" plans, Aetna Integration A compares most closely to medigap "C" plans. You have to do a detailed comparison to get a complete picture.