Thursday, October 20, 2011

IBM Medicare choices for 2012

Open enrollment for Medicare coverage in 2012 began on October 15, 2011 and closes on December 7, 2011. This is a change from previous years. Unfortunately, IBM is not showing us their offerings in detail until November 2, 2011. That is too bad because it gives us less time to consider our options.
However, the brochure we just received does list what our choices are going to be even though the brochure is all about "Creditable Coverage" for prescription drug plans. If you don't see your current plan listed that means they are not going to offer it in November so it is a heads up.
There is a lot of language in the brochure about "Creditable Coverage" and penalties for not having proper prescription insurance coverage. They never provide details about the penalty which makes it seem more onerous. It is not a terrible penalty. It is 1% of the base monthly premium established by Medicare law. The base premium is established by the government every year. It is approximately $31 in 2012. That means if you don't have creditable drug coverage you will pay a 30 cents per month penalty (deducted from your social security) for every month you didn't have a drug plan IF you change your mind and decide to have a drug plan. So, if you didn't have a drug plan for a year you'd face about a $3.60 penalty IF you change your mind and decide to buy a drug plan in the future. There is NO penalty if you never buy a creditable drug plan. And some people don't do it. They say they do just as well buying drugs through Cosco or Walmart plans. Each person has to determine what is right for them.
The impact of not having creditable coverage is an important aspect to consider for non-Medicare eligible retirees buying insurance for Medicare eligible spouses. It might be worth it for you to take a non-creditable option and pay the penalty when you do move to a creditable plan. As I have said in the past ... you have to do the math.
In the past I did not consider choices for people who are trying to cover non-Medicare eligible spouses. I will try to do that in this enrollment period. It is a little difficult for me to do it because I don't see those options in the information I receive. However, there is a lot of very detailed information on that everyone can see. You should look at the resources in as well as the private insurance websites (e.g., Aetna) to be sure you understand the details of each plan. The IBM summary brochure is just that ... a summary.
So, happy 2012 enrollment period.