Wednesday, September 11, 2013

IBM Medicare Extend Health Does NOT Negotiate Insurance Premiums

It has been confirmed a couple of times that the Extend Health Medicare insurance products we will be offered are a subset of the SAME products in the general marketplace and will be the SAME price. One would think Extend Health would have more leverage with insurance companies.  Here's an even bigger irritant.  EH will probably not offer the cheapest Medicare insurance products in your zip code.  They offer insurance products where they are paid a commission from the insurance company to sell those products. 

I continue to urge you to decide what kind of products you want to get BEFORE you talk to an Extend Health advisor.  By way of example, I will tell you what I am doing. 

I looked on Extend Health's website to see what was offered to employees of other companies.  I did that by looking at and  (isn't it interesting that anyone can go to which is the site we are using to enter our profile information) and I saw the products offered by EH in my zip code in 2013. I am reasonably sure it will be the same stuff offered to us.  I am specifically interested in a medigap plan called F high deductible (F+).  Unfortunately, the F+ plan offered by Extend Health is not the cheapest plan in my zip code.  That's really irritating as there is no difference in the content of a medigap plan from one company to another.  By law, all F+ plans must offer the same coverage.  However, I have to use the one offered by EH to get the HRA subsidy. 

Here's my decision on what kind of products I want to buy:

  1. I want maximum flexibility to be able to go to any Medicare accepting doctor or specialty clinic (ala Mayo Clinic) anywhere in the USA irrespective of where I live.
  2. I want copay coverage (aka medigap secondary coverage).
  3. I want the cheapest prescription drug coverage available that covers the one drug I use.
  4. I want dental insurance only if it will include my existing dentist. 

Original Medicare is the only way I can satisfy #1. A Medigap plan is the only way I can satisfy #2 and as I said I decided I want Medigap plan F high deductible (F+). I will explain how I made that choice.  I will pick the cheapest F+ plan EH offers.For #3 I provided Extend Health with the name of the drug I take and will look on the website to see what plans are available in my zip code that cover my drug during Medicare open enrollment.  Hopefully, those plans are offered by EH.  If not, I will NOT use Extend Health to buy a part D plan.For #4 there is no research I can do.  I have to wait to see if EH offers a dental plan I can use.

I decided on an F+ Medigap plan because an F plans in general provide the most robust copay coverage and we are able to get reimbursed for our out of pocket expense from the HRA account.  Without a deductible ($2100/year) an F plan is really expensive and will likely use up all of the HRA subsidy and then sum.  It isn't worth it. Compare F monthly premium to F+ monthly premium + 175 (2100/12).If  F+  has a lower combined premium buy it whether or not you are healthy. If you get sick you'll hit the deductible but you'll submit the copay bills up to the deductible cap to EH for reimbursement.  If the plans have equal premiums and you are sick you may as well choose F (no deductible). If F+ premium is more expensive and you are healthy then decide if you want to take a gamble that your copays will be significantly less that $2100 for the year so you'll never pay out that much in copays.

Don't rely on the EH agent to do this work for you.  Get busy!


  1. Thanks for all of this information. My father worked for IBM for over 40 years and is now 88 years old...this is ALL too confusing and upsetting for him. Do you know if IBM has any plans to help the real OLD timers with all of this???

  2. There are a couple of ways to get help. But, honestly, it is very difficult to understand. I suggest you become your father's advocate. The Extend Health agents will help but your father really has to know what kind of Medicare coverage he wants before he calls. The insurance products he now gets to buy are standard Medicare products - custom IBM products are gone. There is an advocacy agency he can call that will explain the structure of Medicare: 1-800-333-4114. The is also an agency in every state called a state health insurance assistance program and is run out of department of the aging. To find your state agency look on: Be sure he tells them his company plan is terminating and he has to pick standard Medicare products but he doesn't understand how Medicare works.