Sunday, October 6, 2013

IBM Medicare Confusion Abounds - Beware What you Hear and Read

I've been looking at some of the chatter about Medicare medigap and Medicare Advantage plans that has been posted other places.  Too often what people write is wrong.  Sadly, the Extend Health agents are also saying things that are wrong.  Double check everything to be sure you are getting an accurate description of Medicare rules and offerings and Extend Health rules.

For example, people are saying some doctors won't accept medigap plans.  Doctors don't chose to participate or not participate in medigap plans unless they are are "Medigap Select" plans.  There are only a couple of states that have those kinds of plans and even then "Select" plans are only available in a subset of state counties.  Everywhere else a doctor cannot say they don't accept a medigap as Medicare automatically sends the claim to the medigap for processing.  The doctor can say they don't want to wait for a medigap plan to pay them because the plan may be slow to pay.  The doctor might therefore ask for coinsurance payment up front.  You will then be reimbursed by the medigap for the coinsurance.  If you decide to get a medigap with a deductible you obviously have to pay the doctor coinsurance anyway until you reach the deductible amount for the policy.  Reminder - any coinsurance you pay will be reimbursed by Extend Health if you still have money left in your subsidy (I keep seeing postings where people are really confused about that). People also write about a lifetime cap for medigap reimbursements.  Maybe it applys to Select plans but regular medigaps are required to payout and can only cancel a client if the client stops paying medigap premiums.

I have seen people mix up medigaps and Medicare Advantage plans. Someone wrote about the vision and dental coverage provided by a medigap. Again, unless it was a "Select" plan - medigaps never offer vision and dental coverage but Medicare Advantage plans often do.  I have seen people write about how medigaps are age rated so the older you get the more expensive it will be.  IT DEPENDS ON YOUR STATE. I have seen people focus totally on the cost of Original Medicare + medigap+ part D versus a Medicare Advantage plan.  There is so much more to the decision of what insurance to have than the price tag of the plans you choose.  Reminder - if you need an expert doctor (say, for a second opinion) and they don't accept your MA plan (but do accept Medicare) you will have to pay the total cost of the doctor visit out of your pocket if there is no money left in your HRA.  There is no way to factor that into a "cost" analysis.

There are still a lot of unanswered questions about Extend Health.  EH stated that you must buy a "medical insurance policy" from them to qualify for your subsidy.  So, what if you just buy one policy from them will you then be able to submit bills for premiums and copays for both you and your spouse?  That would mean you can buy a cheaper medigap for your spouse if EH doesn't offer it. EH has said you must buy a medical or part D plan for your spouse to be able to file bills for your spouse's against your HRA.

The medigap insurance policy that Extend Health offers for medigap F high deductible in my zip code is one of the more expensive offerings in my area and it is also Humana - which is famous for poor customer service (try to call Humana once you have a policy with them - it is easier to reach the Pope). It is the only one they offer for my zip code.  I keep reading that Extend Health will sell you the policy you do want if you ask for it!  So, I know that Empire Blue Cross's price for exactly the same policy is $30/month less --- I am specifically going to ask them if they can sell me that plan!

There are other questions you have to ask your state health insurance assistance agency that are important questions to get answered before you sign up.  The top of the list is whether the state that has rules for issue age rated medigap pricing (also known as entry age rated pricing) require insurance companies to sell you a medigap plan at the issue age you bought IBM's insurance because you had continuous secondary coverage and have a guarantee issue right.  It might dramatically lower your premium price if it applies.  I doubt Extend Health will know and I doubt the insurance company will tell you unless you ask the question.
I just looked at the drug plans offered by Extend Health.  First off, there are 25 drug plans available in my zip code in 2014.  I just looked on to see it.  EH offers me 12 plans!!!  It is also difficult to determine if my drugs are covered by those plans when I look at the EH information.  Don't rely on EH information alone to pick a drug insurance plan. 
Finally, EH had ONE dental plan and ONE vision plan to offer in my zip code.  The dental plan was "stupid".  I would have to pay about $626 in premiums and deductible to get $1000 in coverage for the year. The vision plan wasn't much better but I only had to pay about $168/year to get nothing.  Maybe there are more plans they will offer if you ask? Make sure you ask your dentist and you eye doctor/eye glass store what plans they take and what they think are the best plans to get before buying a plan from Extend Health.  Reminder - no matter how you buy a dental or vision plan or self insure you can get reimbursed for the premiums, copays and total bills from EH as long as you bought an EH medical or part D plan and still have $$$ left in your HRA.


  1. Plato, again I want to thank you for the cogent suggestions you have been making in dealing with the IBM retiree betrayal. Extend Health is offering me five Medigap plans, but only one F plan. BC/BS Plan F thru Extend Health costs $230/month, $15/month more than AARP UHC Plan F, which is not offered by Extend Health. The cost of Plan F for one person is $25/month more than I will have in my account, so my wife will be buying her Medigap plan from someone else, not Extend Health.

    My wife and I together will have to pay $240/month for supplemental health insurance, instead of the $57/ month we have to pay in 2013 for Aetna Traditional Choice Medicare Integration Plan A, which is comparable coverage. Dr. Rhee said in his letter that we would be getting the same or lower cost health insurance coverage through Extend Health. Not only is that clearly not true, but I have a hard time believing that health insurance premiums have gone up so much in one year. I would have expected to pay about $100/month more in 2014, but actually we are going to be paying $183/month more in 2014. This idea of something being left over in the account to cover eyes and teeth is a pipe dream.

    1. The Aetna Integration plans were actually unique corporate group plans crafted by Aetna for a bunch of corporations called the Retiree Health Access. This was a TRUE exchange where the product was a group product crafted fpr the pool of insurees who benefited from being in a large insurance pool of corporate retirees that were possibly healthier than the the general population in that age demographic. One would have thought IBM would have picked this marvelous private health exchange to serve our needs given for 3 years many IBM retirees were delighted with Aetna Integration. For some reason IBM walked away from it. It probably meant IBM couldn't mess with the subsidy money in a way that gives them the potential of having retirees leave money on the table because the reimbursement process is so onerous.