Thursday, November 9, 2017

IBM Medicare OneExchange Another Year of Medicare Supplement K plan

For those of us using Original (aka Traditional) Medicare A and B insurance (and NOT a Medicare Advantage managed care plan) this is a good time to reevaluate all your health insurance choices. Although it is not the time of year to change to a different Medicare Supplement plan, it is a good time of year to reevaluate everything.  Even the dental or vision insurance you have needs an annual  cost/benefit analysis.
I never could find a dental nor vision insurance plan that provided coverage for the providers I use so I "self insure" for those services.  Sadly, my spouse did not registered with the VA before 2003, after which all benefit eligibility became income base.  That means we cannot buy a wonderful private dental insurance plan offered through the VA.  We naively assumed IBM would always provide that insurance.  Still, every year or so I look to see if there is a dental policy worth the premium and deductible price.
The Medicare Supplement plans aka medigaps absolutely need reevaluation IF you live in a state that allows you to switch plans.  Ask you State Health Insurance Program (SHIP) about the rules.  If  there is no switching allowed, I urge you to lobby your state legislators to fix that limitation.  State legislators are allowing the insurance industry to hold seniors hostage in your state if there is no ability to switch.  Basically, it enables insurance companies to force seniors into Medicare Advantage plans by limiting access to medigaps.  It's very hard for people to realize the plan they pick the "first time" is the only plan they can have for the rest of their lives.
There is another aspect to medigap plans that is interesting.  If you buy a policy in one state (e.g., New York) and then move to another state (e.g., Florida), you get to keep the NY policy and the NY policy rate structure.  NY policies are community rated.  That means everyone in a given zip code pays the same amount no matter their age.  If you lived in a NY zip code that had better prices (e.g., Syracuse), you get to keep the rates associated with Syracuse when you move to a different state.  Sometimes I joke with people when I do counseling who cannot change.  I tell them to move to New York for a few months, get a better medigap, and then move back to their home state!

However, it's not all rosy in New York. The rates in New York for some medigap plans have dramatically increase going into 2018.  In New York City the cheapest medigap F plan available is now close to $300.  That  truly deserves a cost/benefit analysis to determine if  paying $3,600 per year is worth  the cost.
The first question I ask people when I do counseling is WHY did you buy an F plan.  Way too many people tell me it is the "most popular plan".  I then ask them if they have chronic conditions that require a lot of medical care.  Even when people do have chronic conditions, they typically go to the doctor about once a month.  A N plan in New York is about $200/month and would be fine for them.

Do the math!  Look at your Medicare Summary notices for 2017 and add up the deductibles, co-insurances and co-pays you would have to pay if you did not have a medigap.  Then look at the annual premium amount you pay for that medigap.   Are you over insured?  The only reason to be over insured is you have money to burn and do not want the burden of needing to write a check to pay a provider.  You are buying the convenience of that service.

This year, I did the math and my K plan continues to be good to me.  I paid $912 in annual premiums for my K plan.  The K plan paid out $250 in benefit.  That mean's my K plan cost me $662 for the year.  It also provided me with a "safety net" of knowing the maximum out of pocket cost I would face for 2017 is $5120 + $912 or about $6000 should I have a catastrophic event.  So I look at it as if I have a $6000 deductible if something health wise goes very wrong.  I have a $5000 deductible on my house insurance if my house burns down so it's about comparable. But I also live in a state that allows me to change medigaps whenever I want without preexisting penalties.  If I become chronically ill, I will switch to another plan that provides more comprehensive coverage.
What would I do if I lived in a state that doesn't allow easy switching?  I would buy a F high deductible plan.  It has a low premium and a deductible of $2200.  A relative in California has had that plan for 5 years for about $60/mo.  She knows her maximum out of pocket would be $2920 if she has a catastrophic event.  That's about the annual premium for a F regular plan in California but she only pays that much if she is sick! Most years, she has only needed to pay $720/year.

If you need more information, there is an excellent Medicare Supplement Guide published by Medicare.  I urge you to read it:

Tuesday, September 5, 2017

IBM Medicare One Exchange Medicare Fall Enrollment Time for 2018

Medicare Fall Enrollment is about a month away.  It starts October 15 and ends at midnight Dec 7.
As usual, I strongly urge you to make sure your 2017 health insurance policy choices will provide the best coverage for you in 2018.  Insurance companies CHANGE their policies every year. They add or remove doctors.  Doctors quit accepting plans.  Drug costs change and/or some drugs will no longer be covered.  Companies must update All plan information on October 15th. There is no point checking before that day because companies wait until then to do it. Use the plan finder option on to determine which plan is best for you.
Also, a reminder for those of you who have Medicare supplemental insurance or medigaps, this enrollment period DOES NOT apply to that type of insurance.  Change windows for medigap insurance are determined by the state you live in and range from "never" to "whenever you want". Consult your state department of insurance to find out the rules.
If you have traditional or original Medicare, your action in October is to examine the prescription drug insurance plan (PDP) coverage for 2018.  If you bought the PDP through One Exchange to qualify for your HRA/FHA benefit, then look at the plans they offer to determine if there is a better plan available.  You might find it is cheaper to forego the HRA/FHA funds because the subset of plans they sell will cost you substantially more in copays versus having the funding.
Reminder, the set of insurance plans One Exchange sells are EXACTLY the same plans that are available to anyone on Medicare in your zip code but they don't sell ALL the plans that you could buy. They only sell the plans for which they get commission as an insurance agent.  It may actually happen that there is a better plan available in your zip code for your drug coverage not sold by One Exchange.  You have to weigh the benefit of staying with One Exchange and having funding from your HRA/FHA and IBM catastrophic drug coverage versus NOT using One Exchange because you might actually pay less out of pocket by using a non-One Exchange plan and fore-fitting the subsidy. If you face that situation, tell someone at One Exchange what is happening.  They might have an exception process.

If you have a Medicare Advantage (MA) plan that does not include prescription drug insurance then you have to look at both your MA plan and your PDP plan.  Make sure your MA doctor network is still giving you access to your providers.  If not, ask your provider what plans they will accept in 2018 as the first step to information gathering.  Then look to see if One Exchange sells that plan. Once again, if the MA plan is how you gain access to your HRA/FHA you have to make a decision over what takes priority.  Is it the doctors or the HRA/FHA money.
If you have a Medicare Advantage plan that does include prescription drug insurance (MAPD) you may have to switch to a different plan if there are drug coverage changes or if there are doctor changes. This is the hardest plan to change since it involves trying to find a better plan that includes both components and buying it through One Exchange. It might be, that you decide to revert to traditional Medicare with a supplemental policy.  BE CAREFUL because state rules apply.  You might not be able to get a supplemental policy.  Once again, you also need to decide if the money you get from your HRA/FHA is worth you sticking with an MAPD plan that does not meet your needs.
Take action in October!  It's important to your health!

Thursday, May 25, 2017

IBM Medicare OneExchange Lowering Prescription Drug Copay Cost

We are almost half way through the year and often at this point Medicare recipients encounter cost or coverage problems for new prescriptions or price increases on existing prescriptions that significantly drive up the cost of their medications.  Here are a few suggestions on how to cope with unexpected drug costs:

1. Don't assume a prescribed drug is the only drug available to treat your condition.  If a prescription is expensive, ask your doctor if there is a generic alternative or another drug that will do the same thing.  Better still, show the doctor your drug plan's entire formulary and ask if any of those drugs will be suitable for your condition.

2. If there is no flexibility in the drug you need to treat your condition but the cost is high or there was a price increase, try to appeal to your plan for a pricing exception and/or ask them to lower the pricing tier for the drug for the rest of the year.  If you get an exception or a tier change it will only last until the end of the year.  Be sure to pick a "better" part D plan during fall open enrollment.

3. Make sure you are getting your drugs from a "best price" pharmacy if you buy drugs from a pharmacy.  Ask the insurance plan what pharmacies provide the best prices for their plan.  These are called preferred pharmacies.  You might have to travel a few more miles to get a prescription filled but the price difference can be significant. Even if there are no preferred pharmacies in your plan, the prices will often vary - particularly for independent pharmacies - but also for the chains so ask different pharmacies in your area what they will charge to fill a prescription before you fill it.

4. Ask your pharmacy if there is a  prescription discount card that can provide a lower copay. However, if you do use a prescription discount card, the cost of that prescription will not be included in any doughnut hole calculations.

5. Ask your local pharmacy if they will provide a "better price".  Some pharmacies will sell you drugs at their cost if you do a lot of business with them - particularly if they are not part of a big chain.  Again, if you don't use your insurance to buy a drug, those costs are not included in doughnut hole calculations.

6. Many older people shy away from mail order suppliers and prefer to use local pharmacies.  Give mail order a try! Mail order (if available through your current plan) - often significantly lowers your copay.  However, you will likely have to buy larger quantities of drugs to get the lower price. If you can afford the cash flow it is worth it.

7. EVERY YEAR in October, look on plan finder in or call 1-800-MEDICARE and ask them to help you find a better plan

Thursday, March 16, 2017

IBM Medicare OneExchange Future Healthcare Legislation

Although the legislation to change the ACA (aka Obamacare) did not pass, it does not mean that legislative actions to modify the ACA, Medicaid and Medicare insurance will not occur.  There will  likely be modifications that will be embedded into other acts and budget proposals that will affect Medicare.
I urge you to pay REALLY close attention to ALL legislative actions to be sure you understand the impact to Medicare. As an example, the legislators, in 2013, enacted a "doc fee structure fix" which was good because doctors were increasingly not accepting Medicare.  But that legislation also included disallowing the sale of medicare supplement F plans after 2019 because it is a "first dollar pay"policy.  That means when someone buys an F plan Medicare Supplement they never pay a doctor bill in trade for paying a substantial insurance policy premium.  As I said in the past, legislators believe people who have F plans use doctors more than people who don't.  There is no data behind that assertion to determine if it is true and, if so, why.  Typically people who buy F plans have more health issues.  Nonetheless, it was included as a bargaining chip.

I believe a good way to stay informed about healthcare legislation is to look at nonpartisan advocacy agency analysis (albeit no group is purely nonpartisan). Many do an excellent job of analyzing pending legislation and executive orders about healthcare.  The agencies I suggest are AARP, Medicare Rights, AMA, the American Hospital Association, and the Kaiser Family Foundation. Links to their websites follow:

Tell your legislators how you feel about pending and/or enacted changes.

Monday, March 13, 2017

IBM Medicare OneExchange Over 65 Still Employed

People who continue to work past the age of 65 often keep using employer insurance as primary insurance instead of using Medicare.  Typically, employer insurance is more comprehensive (for example it might include acupuncture coverage which is not covered by Medicare) and is also subsidized by IBM.   However, if you leave IBM and join a company with fewer than 20 employees you must enroll in Medicare to have primary coverage.
Generally, there is no advantage to enrolling in Medicare if you work for IBM past 65.  Some people do choose to enroll in Medicare part A (hospitalization coverage) because there is no premium payment for part A and it might provide secondary coverage in some circumstances (e.g., part A might permit an overnight stay in a hospital for a given procedure where IBM's insurance might not).  However, if you have a Health Savings Account (HSA) with a High Deductible Health Plan (HDHP)  DO NOT enroll in Medicare part A if you want to be able to contribute to your HSA.  Contributions stop as soon as you enroll in part A.
Also, be careful of when you start taking Social Security if you have an HSA. Enrolling in Social Security causes up to a six month retroactive enrollment in part A if you also enroll in Medicare.  You will pay a tax penalty for any HSA contributions you made in the prior six months if you were Medicare eligible. I know, it's complicated.  If you want to keep it simple, just remember to stop contributing to an HSA six months before you retire if you plan to immediately collect Social Security.  The good news is the money remaining in your HSA will be available to use tax free for your Medicare expenses until it is depleted.
When you (or IBM) decide it is time to retire there a a few things you must do to guarantee a smooth transition.  Generally, I recommend you enroll in Medicare part A & B a month before you leave your job to be sure you have no enrollment problems. It will cost you a month worth of your part B premium payment but that's a whole lot better than having no insurance coverage while you try to sort out a problem.
You actually have 8 months from the last day of your employment to enroll into Medicare.  DO NOT take 8 months to do it.  Also DO NOT take COBRA unless the COBRA coverage includes something that Medicare does not cover and you need that coverage.  COBRA is expensive SECONDARY insurance coverage if you are over 65.  That means if you get sick, it will only pay your co-pays  and you will be responsible for the bulk of the provider costs if you do not have Medicare.
There are two forms you need to bring to Social Security (which is how you enroll in Medicare) when you are about to retire.  Yes, I am recommending you physically go to a Social Security office. You can easily find the forms online:

  • Form CMS 408 (Application for Enrollment into Medicare) to be filled out by you
  • Form CMS L564 (Request for Employment Information) to be filled out by IBM HR.

    The second form is the proof  you had continuous employer health insurance after you turned 65 so that you will not have late enrollment penalties.  Why do you have to "walk it in"? Social Security has been significantly impacted by federal budget cuts. Mailing it in is a little risky because of the cuts. If it gets lost you will have no proof of who actually processed the form.

    When you walk it in, get the name of the agent who takes the forms and the date they processed your application.  That is important information to have in case any mistakes are made.   

Wednesday, February 1, 2017

IBM Medicare OneExchange Medicare Supplement F & F-HD GONE after 2019

In 2015 there was a "Doc Fix" law passed by congress to improve the fees paid to doctors (which hadn't been raised in years so doctors were starting to opt out of Medicare).  The congress decided to counterbalance that remedy by eliminating medigap plan F effective 2020.  I wrote about this when it happened:

There is a subtle consequence of this change.   I didn't realize the F High Deductible plan will also no longer be available in 2020 because it is a derivative of the F plan.
I really like the F-HD plan.  The K plan is good but I think an F-HD plan from a solid insurance company is better.  I will probably switch to an F-HD plan in 2018.  I don't know what I will do.

Added 2/2/17:
I did a little more reading on and thinking about the F plan longevity.  Even if I do enroll and have the F or F-HD before 2020, over time it is highly likely the premium for F plan types will increase more rapidly than for other medicare supplement plans,  I write that because the insurance pool for the F or F-HD plan will shrink after 2020 as people die and the age demographics in the pool will keep increasing without "younger people" in the pool.  Also, there might be new Medicare Supplement options available that are better price performance.

In the comments section of this post, a viewer was kind enough to provide information about what is being proposed by the National Association of Insurance Commissioners.  In particular the "G" plan is being proposed to have a G-HD option:
This is a proposal.  It could change.  I also urge you to also pay really close attention to the new administration's actions regarding Medicare and make your voice heard if you do not like what is being proposed.  Paul Ryan has for years championed a Medicare "voucher" system and is eager to make that change.  If this administration adopts such a plan, it essentially means we will be given a stipend to go buy insurance.  The government insurance pool (aka original Medicare) might be one of the options to buy but it's not known. If it will be offered, it's not known at what cost.  If there is no government insurance pool, there is no need for Medicare Supplement insurance. I wince as I write that last sentence and will shout out loud and long to my representatives if it is proposed.
I have no crystal ball. I am keeping my K plan because it is a good price performer for me for right now and I will intently watch this evolution.  I also live in a state that allows me to change my medigap any time  to be effective the first of the next month. If your state doesn't, take action and press your state legislators to change the state laws regarding Medicare supplement plans.