Monday, September 30, 2013

IBM Medicare offerings and subsidy information

I just spoke to someone who called Extend Health today.  She was told the subsidy amount SHOULD be available on October 1st.  He said they were loading the files tonight.  Sounds so 1970s to me!  Anyway, you will be able to see your subsidy in your profile. 

That same agent also said all the plans you listed in your zip code on the Extend Health website might not be ALL the plans they can offer.  It makes no sense to me why they would do that - maybe they are only putting the plans online that pay the most commissions?  I am becoming paranoid about how this whole process is designed to befuddle us.  There probably is a legitimate reason.

That confirms to me that you need to KNOW WHAT YOU WANT BEFORE YOU ENROLL. In addition to looking at what plans are offered in your zip code on the Extend Health website before your enrollment call you must do additional research.

  1. Go to  on or after October 15 and find out what insurance companies sell medigap plans in your zip code by going to the top of the home page and clicking on supplementals and other plans. Decide what kind of medigap plan you want. Then call your local state agency (the state SHIP which can be found at ) to find out what the insurance companies charge for those plans. Make a list of the insurance companies that sell the plan you want from cheapest to most expensive.
  2. Go to on or after October 15 and find out what insurance companies sell part D prescription drug plans in your zip code by going to the middle of the home page and clicking on plan finder.  Enter your drugs and pharmacies and you will see a list of plans arranged from least expensive to most expensive. You also should look at the rules for pre-approval of the use of a drug such as what tier it is in (the higher the tier the higher the copay) and whether any of your drugs will require step therapy.  That means try a cheaper drug first. Make a list of the plan names and the insurance companies that offer them you would buy in order from the most preferred plan to least preferred plan.
  3. If you want a Medicare Advantage plan do not do step 1 & 2 above as you have decided to not use the government insurance pool know as Original Medicare and instead use private insurance.  I believe that the only kind of Medicare Advantage plan Extend Health is going to sell is one that includes prescription drugs.  That is indicated by all their literature and in their briefings. Go to on or after October 15 and find out what insurance companies sell Medicare Advantage + drug plans in your zip code by going to the middle of the home page and clicking on plan finder.  Look at the detail descriptions for the plans you like and make a list of the plan names and the insurance companies that offer them you would buy in order from the most preferred plan to the least preferred plan.
  4. When you call Extend Health for your enrollment TELL THE AGENT what you want generally and specifically!  You and your spouse only have to enroll in a medical plan (medicare advantage or medigap supplemental) OR a part D prescription drug insurance plan to qualify for your HRA subsidy.   


  1. Very important information received from Dr. Kyu Rhee, IBM Chief Health Director with more detailed information about IBM's subsidy funding Health Reimbursement Arrangements (HRA) and your choices, including funding information for a surviving spouse/dependent(s) who enrolls in the Extend Health [Private] Medicare Exchange.

    Also, an IBM retiree now can choose to add subsidized medical coverage for their eligible spouse/dependent(s) IN THE EVENT OF THE RETIREE'S DEATH.

    Every IBM retiree must fill out a form (to be mailed in early November) - whether or not they have a spouse/dependent(s) - indicating their election on surviving spouse/dependent(s) benefits in the event of the retiree's death. Similar to surviving spouse/dependent pension payment election, the surviving spouse/dependent(s) HRA-funding benefit decision is final and irrevocable.

    I strongly encourage everyone to promptly read the September 2013 mailing upon receipt.

    1. I agree. It is really important and a reduction in the benefit. The non-IBM spouse currently gets the entire benefit when the retiree dies and there is no reduction in the subsidy during the retiree's life. Once again, shame on IBM executives for breaking promises made long ago as it is a pittance amount for their bottom line.

    2. When did the mailing go out?. We are fulltime RVers and get mail every 2-3 weeks so maybe that's why I haven't gotten a Sept mailing.

      Also, your reply is a bit confusing. One sentence says "...and a reduction in the benefit". The next sentence says "there's no reduction in the subsidy" when the retiree dies. Are 'benefit' and 'subsidy' two different things?

    3. Plato is correct about this shameful reduction in our health insurance benefits. My cohort was promised an average of $3000 per person per year, including a spouse benefit with survivor privileges. Now IBM is saying it will only offer the full $3000 into an HRA if the retiree relinquishes the spouse survivor privilege. Otherwise, only $2374 will be deposited in the HRA.

    4. This comment has been removed by the author.

    5. Does anyone have the retirement papers stating exactly how IBM described the spouse survivor benefit for health insurance? Our memories are all the same, but we need something on paper before writing to Rhee to complain.

      We all knew about the full employment "practice", but IBM was always very careful to state that it was not guaranteed in perpetuity.

    6. My reply post was confusing regarding the subsidy benefit. I meant to say "it used to be" the spouse got the same subsidy as the retiree when the retiree died and they have now changed the rules. Sorry for the confusion.

    7. I just looked at my retirement papers. There is legalize about IBM having the right to amend, change, suspend, or terminate any benefit or other plan at any time. IBM was never legally obligated to provide retiree health insurance because it is not part of ERISA law (I don't know what ERISA stands for but it the government agency that stops companies from fooling with pensions). This is an ethical and moral issue. Not a legal issue.

    8. Plato, thank you for looking at your IBM retirement papers. You are right, this is an ethical issue, not a legal issue. The amount of money IBM saves by changing the survivor benefit is a pittance compared to the money IBM spends to buy startup companies or to pay executive bonuses, especially since people in my cohort and yours are now old and the additional actuarial cost of maintaining our survivor benefit would be much less than it was when we retired.

      FYI, I think ERISA means Employee Retirement Income Security Act.

  2. Dr. Kyu Rhee's, IBM Chief Health Director, September 2013 letter to IBM retirees included information about “Additional [prescription] Coverage” stating:

    “To protect those with significant prescription drug costs, IBM is establishing a fund to provide assistance to help with co-pays if your total prescription drug costs exceed $100,000 in a given year. You can access this coverage through Extend Health if you need this support. More details will be available later this year.”

    As some of you with a Medicare Prescription Drug Pan (Part D) or other prescription insurance coverage know, when adding co-pays with plan payments, drug costs can quickly become a major expense. Will be very interesting to see how this “additional coverage” will be administered; thus I am looking forward to the opportunity to review the details of this new coverage when available.

    As “PLATO” has stated, it is very important to review plan details for ALL health insurance plans and not solely rely upon plan summaries or highlights.

    1. Maybe I am missing something but it seems to me this $100,000 offer is not much of an offer at all and more of an empty gesture. There is already catastrophic prescription drug coverage in part D. In 2013 once your out of pocket expense is $4750 (excluding premiums) your copay drops to 5% of the cost of the drug. That means your drugs would have to cost $1.9M for the year to hit the $100,000 out of pocket expense before you can get the benefit iBM is offering. Isn't that pretty far fetched? If the cap had been something like $25K it would be meaningful.

    2. First, I want to restate something from my earlier comment: “As “PLATO” has stated, it is very important to review plan details for ALL health insurance plans and not solely rely upon plan summaries or highlights.” And secondly, I agree with your comments about the additional [prescription] coverage benefit.

      With that said, the question is, is IBM/Extend Health counting the co-pay ONLY for the $100,000 additional [prescription] coverage benefit, or are they counting PLAN PAYMENT as well, which , as you know, is done in Medicare Prescription Plans (Part D), which would mean the $100,000 coverage benefit can be rather quickly reached.

      Of course the “devil is in the details.” This may be a “feel good” benefit for IBM with very limited, if any, practical benefit to IBM retirees. Obviously IBM has access to ALL prior benefit pay out information and thus on actuarial basis has been able to determine the financial exposure with offering this “benefit.”

      One another topic, I have, and will continue, to refer IBM retirees to your blog, especially now that you have broaden your blog out to a national focus and you identify NY or CT specific comments, a nice touch.

  3. Extend Health now has Medicare Supplement (Medigap), Medicare Prescription Drug (Part D), and Medicare Advantage (Part C) plans loaded and available for review by Zip Code / county. As CMS now has 2014 plans loaded, INCLUDING Medicare Advantage plans with AND without a prescription benefit, you may want to review and compare your plan options/selection(s) at before making your selection(s) with Extend Health (to receive your IBM HRA subsidy).

    You do NOT have to be logged in, or even have an account or profile to review listed plans by Zip Code / county on the Extend Health Web site; although you will need to be logged in to save a plan in your cart. Also, an account or sign-in is not required to review/compare plans by Zip Code / county on the CMS Web site.

    As of a few minutes ago, dental and vision information was still a little sketchy on the IBM portion of the Extend Health Web site. Reminder, dental-only and vision-only plans are NOT Medicare plans and thus not CMS listed.