Saturday, October 26, 2013

IBM Extend Health Buying a Medigap Policy - Easier Said Than Done

Update - 11/21/13 - the insurance agent said she must come back to the house to have us sign our policies for them to take effect.  I asked if she could just mail the policies  but she insisted she needed to bring them to the house.  Here goes another round of let me sell you .....this is just onerous.

I know, I know ... I keep saying that but I shake my head over what IBM has done to all of us.  It's not right.  We made IBM a great company by providing our expertise and labor. Although I am not a Marxist, I do believe our labor had great value and we made IBM prosper by  providing it. In return IBM made a  promise to value our labor via retiree health insurance.  We earned these benefits and now IBM is stealing from us.

Original entry on 10/26/13

My spouse and I bought our medigap policies a few days ago but it wasn't easy to do.  I started the selection process by looking at Extend Health offerings.  As I have said in previous posts, they offered very few choices and the ones they did offer were not from the lowest price products available in my zip code for medigap F high deductible.  So, Extend Health was not a good place for me to buy a medigap.
Medigap insurance is what is called indemnity insurance.  To quote Wikipedia -  "an indemnity is a generalized promise of protection against a specific type of event by way of making the injured party whole again."  In the case of a medigap the indemnity is defined very precisely by the particular letter associated with your insurance policy.  Each type of policy (A,B, F, K, L, N ...) specifies when the insurance policy will pay and when it will not pay.  The payment is always secondary to original Medicare and since it only pays as a secondary there is no specification for what medical procedures will be covered - only the degree to which it will cover your original Medicare deductibles and coinsurance (e.g., copays).
I wrote that paragraph because people are still anguishing over which medigap insurance company is better or worse or whether the doctor will accept the plan.  There isn't a better or worse and there is no doctor network involved in the payment process .  Every insurance company is issuing EXACTLY the same policy that works in EXACTLY the same way as second payer to original Medicare. CMS automatically sends the claim to the medigap for processing.  The doctor is not involved at all. Therefore, the only way to pick an insurance company is based on PRICE.
OK - so I wanted to buy the lowest price medigap F high deductible plan in my zip code.  I looked on to find out who offers policies and called the company that sells the lowest premium F high deductible policy several times plus I sent emails. They never returned my calls or responded to my emails. I wasn't surprised as I had heard this same result from several people over the past four years that I have been helping people with Medicare questions.  I don't know why they list as selling the policy and have actually filed a complaint with the department of insurance a year ago but never heard from them either!
I was able to reach an agent for the next lowest premium insurance company on my list. The policy was $10/month more expensive.  However, this monthly premium is still $28/month cheaper than the policy Extend Health offered. I had to buy through an insurance agent as it is the only way they sell the insurance.  The agent came to our house to sell us the medigap policy which also did not please me.  I deliberately told her when I made the appointment that I was only interested in buying a medigap F high deductible policy but I suspected she would try to sell us every product offered by the company.  And that is exactly what happened.  We said no to burial insurance, long term care insurance, annuity insurance ..... Try as we might to short circuit the sales pitch she pressed on.  After about an hour of sales pitch we were getting really cranky so she finally filled out the paperwork for us to buy the medigap F high deductible plans.  This insurance company also requires automatic payment out of our checking account which I do not like but kept reminding myself the premium difference for us was $56/month for these 2 policies versus the EH offered polices. Wow, that was so much easier then just going online and enrolling in IBM group insurance!  I wish Dr. Rhee would get a boil for every lie he is telling.  His body would be covered.
I also wanted to revisit the math surrounding medigap plans. People are still confused about which plan to pick.  Here is another way of looking at which medigap plan to buy.  I'll use myself as an example.  I am pretty healthy but I have a couple of medical conditions that require monitoring and it seems I end up in ER about once a year for something stupid like a sprained ankle, an infected cat bite or a gall bladder attack.  Even so, my medical bills are typically around $4000/year total. Medicare covers 80% of that so if I did not have secondary insurance I'd pay about $1000/year between copays and deductibles. If I pay a medigap annual  premium of $3000/year to immediately get 100% secondary coverage and only get $1000 worth of payments from the policy it seems to me to be a waste of money.    I'd rather pay $1048/year premium and the $1000 out of pocket.  Especially since the $2048 will be totally covered by my HRA subsidy and I will still have almost $1000 left to use for my part D coverage. 
If I really get sick then I know my insurance and out of pocket cost will cap at $3158.  At that point the F high deductible plan will take over.  So, I am betting $158/year that I will stay well.  Not a bad bet.


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