Thursday, September 12, 2013

IBM Medicare Extend Health Where to get more information

IBM insurance was great insurance but it was so convenient it stopped IBM retirees from really understanding the structure of Medicare.  We are now faced with having to deal with the structure. Medicare was created by committee and has been tweaked and poked by our legislators since its inception in 1965 so it really is hard to understand.  It requires a bit of a history lesson to even understand it.  I am not an authoritative source on the history but will try to give you enough so that you can understand what people mean when they talk about the Medicare.

I suggest you read a book Medicare sends you every year called "Medicare and You".  There are other resources to help you understand Medicare.  The Medicare Rights Center at 1-800-333-4114; a state agency called the State Health Insurance Assistance Program - lists the phone numbers for each state; Medicare itself at 1-800-MEDICARE
1965 - Medicare was created as a government, single payer  insurance for people over 65.  Sometime after that people with disabilities were added to the pool. It consisted of two parts. Medicare A for hospitalization and Medicare B for doctor services.  You have to work 10 years or 40 quarters to be eligible. You pay a premium for part B which is set by the government.  Part A is "free".  Medicare was not designed to pay 100% of medical costs, had medical procedure exclusions and did not include drug insurance. Because it didn't provide 100% cost coverage, secondary private insurance companies were allowed to offer "medigap" plans but the medigap plan structures were defined by Medicare.  There are 10 different kinds of medigap plans and each one is associated with a letter such as K, J, L, F.  Medicare changes the plans from time to time and some are no longer allowed to be sold but if you had the plan you can keep it.
1997 - Private insurance companies lobbied the government to be able to offer alternative insurance to the government Medicare A&B plan.  In 1997 they were allowed to offer insurance (then called Medicare Choice).  The government requires the insurance companies to cover the same procedures and apply the same fee structure for a procedure but how the fee is split between the insuree and the provider is up to the plan. The government gave the insurance companies the client's part B payment plus some to cover part A. The companies tried to make money by limiting access to providers via hospital and doctor networks such as HMOs and PPOs
2003 - Private insurance companies lobbied the government to provide a better subsidy because they weren't making any money.  The government increase their payment by 15%  per enrollee.  The Affordable Care Act is trying to eliminate the increase. The name of these policies change to be called Medicare Advantage plans.
2006 - The government created part D prescription drug insurance plans.  However, these plans are only offered by private insurance companies.  There is no government insurance pool.  The government pays the private insurance companies a subsidy to sell these plans and defines the structure of the plans.  Some Medicare Advantages plans added drug insurance to their plans.

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