For those affected by IBM's transfer of approximately 30% of its pension pool to Prudential/MetLife, this is a description of the process known as "Pension Risk Transfer". It is some measure of comfort that this process is regulated by the federal government:
https://www.investopedia.com/terms/p/pension-risk-transfer.asp
Today I helped someone who's 90 year old mother is on a UHC Medicare retiree plan from a major corporation. How ironic. The mother is a patient in a rehab facility and receiving PT. UHC just denied providing more days in rehab because it's "not medically necessary" even though the primary care doctor said she should stay in the facility for another 90 days. Her offspring is jumping through hoops trying to appeal the UHC denial.
Why would a Medicare Advantage plan deny and make it difficult to get medical care? It's all about making money. The primary way Medicare Advantage plans make money is by "managing care". That's a clever way of saying they make sure the amount of care their policy holders receive in claim payouts does not exceed the amount of money allotted to provide medical services.
At the beginning of every year, Medicare gives Medicare Advantage plans a fixed amount of money to use for each policy holder. If the policy holder doesn't need much medical attention, then the Medicare Advantage plan gets to keep the money. If the policy holder gets very sick, the Medicare Advantage plan does everything it can to discourage the policy holder from continuing in the plan and/or carefully "manages" the policy holder's treatment. The plan could make the case to Medicare for getting more money for a very sick policy holder, but it's a lot easier to "manage" the treatment. Often, the plan become so ornery in that management, the policy holder decides to switch to original Medicare. Perhaps a deliberate strategy? Sick policy holders are not good for business.
Original, traditional Medicare is a federal government insurance pool. The federal government is not about making money, it's about providing healthcare. In fact, when analysis is done, the federal government is more cost effective at providing healthcare coverage than Medicare Advantage plans.
In the following analysis, Kaiser Foundation found people more often switch from Medicare Advantage to original Medicare than the other way around. It most often happens when people also have Medicaid. Then they don't have to worry about being able to buy a Medicare Supplement plan (aka medigap) to cover coinsurance and deductible costs. Medicaid does it. The rules for getting medigaps vary from state to state. Many states don't prevent insurance companies from denying or doing underwriting to significantly raise the premium of a medigap if someone switches from a Medicare Advantage plan to original Medicare. Do you know the rules in your state?
If you have original, traditional Medicare with a medigap, you have the best health insurance insurance money can buy. Isn't that the most important thing to have at this stage of our lives? Don't throw it away because IBM is telling you some BS about their UHC Medicare Advantage plans. Next thing you know, Joe Namath is going to appear on their brochures.
I called the UHC IBM phone number to find out more about the IBM UHC Medicare Advantage Plan coverage in 2023 and how the "stipend" works because a lot of information is floating around and I wanted to be somewhat accurate in writing this post. There isn't a lot of information about the UHC plans. The website retiree.uhc.com/ibm has a lot of "coming soon" information. The agents who answer the phone are very kind but all they want to do help enroll people into one of the two plans (which is so premature it's insane). I am not going to describe the plans because there isn't much information about them beyond that there are two plans and one is more expensive than the other. They are the Essential Plan and the Enhanced Plan.
As regards the stipend (don't call it an HRA!!!), it is true the stipend is only available to users of the "Essential Plan" and it seems to be about $1,300. HOWEVER, the Essential Plan has a maximum annual out of pocket cost of $5,000 for the year and an Rx deductible of $395. The Enhanced Plan maximum annual out of pocket is $750 and an Rx deductible of $50. Even though there is a monthly premium for the Enhanced Plan (about $130/mo), why one would ever get the "Essential" Plan is unknown (at least by me) because of that max out of pocket (which is often talked about as MOOP).
I specifically asked if UHC policy holders could go to Sloan Kettering or City of Hope. The answer I got was no. That's no surprise. I just wanted to verify it.
Reminder, I will never, ever enroll in a Medicare Advantage plan no matter how good it "looks" on paper because I believe they are Medicare DisAdvantage plans if you get really sick.
This next part has nothing to do with UHC Medicare Advantage Plans but it is about our benefits.
I asked UHC what happens to people who have "FHA" money left in their account. How does that work in terms of accessing the money to cover medical costs? Of course, the UHC agent didn't know. She gave me another number that put me into IBM pension information and when I hit the number for Medicare information I was right back in the UHC call center. I don't know what will happen with that money, but if you have an FHA and can prepay 2023 premiums in 2022 you might want to spend out your FHA before you lose it if you don't intend to use the Medicare Advantage plans.
There are two other IBM benefits I asked about and the UHC agent really had no idea what I was talking about. These benefits are probably disappearing but IBM has not mentioned anything about it. You might recall that IBM told us they would jump in and help with the cost of drugs for the rest of the year if the retiree had spent about $8,000 out of pocket. IBM also would help with the cost of home care (which is not covered by Medicare no matter what the plan) when the retiree spend about $6,500 and also do it for the rest of the year. These were described in IBM's "About Your Benefits" Publication.
I wrote in a prior post that I believe IBM is stealing compensation money from retirees. I talked to a friend who is a lawyer and they sort of agree. The next step for me is to find a class action lawyer who agrees.
I know too much about the dastardly things Medicare Advantage plans do to people. At this stage of our lives, the most important thing is having access to the best health care we can get. The stress of dealing with an MA plan that denies or delays treatment can be really bad.
I want to know that I can just call up and make an appointment at Sloan Kettering, should I need to do so, and my insurance is not going to be denied. I want to know that I can go see any Medicare doctor without needing a referral. I want to know my insurance won't second guess what my doctor recommends as treatment or that I cannot get the medications I need because I cannot pick a stand alone Rx plan that best fits my medication coverage at least cost. I just looked at Sloan, Mayo Clinic, MD Anderson, Cleveland Clinic and City of Hope. They all accept original Medicare. They accept "some" MA plans and then say "check with your insurance". That's not good enough.
Edited on 9/18/2022:
Yesterday, IBM had two major announcements for retiree benefits. The US retiree pension fund that supports 100,000 retirees are now annuities administered by Prudential and MetLife. The payout will be the same, but the federal protections are gone. There is no ERISA oversight for annuities, meaning there are no federal guarantees we will get our payouts for the rest of our lives. I am sort of surprised because I thought IBM "made money" when the pension was overfunded. Maybe the rocky stock market helped them decide they didn't need the risk of having to fund the pension if it was under funded and if the annuities go bust, well that's not their problem. Anyway, if you haven't seen anything about it, this link does a good job describing it:
https://www.pionline.com/pension-risk-transfer/ibm-offloads-16-billion-pension-liabilities-annuity-purchases
This was a big shock but the other big shock is what happens to our HRA funding. In 2023, you will only get HRA funding $1,300 only if you enroll into one of the two Medicare Advantage plans structured for IBM by United Health Care. You must pick the "basic" Medicare Advantage plan and funding will only cover you copays. For those of us in Original Medicare with a Medicare Supplement, we get NO money if we want to continue in that structure.
This is dreadful for a couple of reasons. First and foremost, United Health Care is a miserable company. They are all about making life as difficult as possible both for providers and policy holders. They require pre-approvals on almost anything that is costly such as surgical procedures, DME or prosthetics. They second guess doctor recommended procedures and won't pre-approve treatment. They control the prosthetics that can be used for things such as knee replacements, they require referrals any time you want to see a specialist. Most importantly, they deny, deny, deny, full well knowing people will give up and not get a procedure if it is a pre-approval or pay a claim if the service has been delivered and then denied because appealing a denial is complicated. Even if you do the appeal right, they somehow manage to screw up the process and will make you crazy until you appeal 2 or 3 times.
How do I know? I have been advising people about Medicare and how to handle denials and appeals for many years. UHC screws up everything. Don't even bother to try to call them if you have a problem. They will spin you in circles. You must do written appeals and file written grievances to get their attention. I don't know if is on purpose or as a way to get providers and/or policy holders to give up and go away. I bet it is on purpose.
Why force us onto a Medicare Advantage plan, and the one that has less benefit? A guess. Maybe we are not croaking fast enough and IBM is tired of providing HRA funding. It will essentially eliminate the medical benefit for retires without having to announce that they are breaking a promise. UHC probably gets some money for each policy sold and then controls the amount of services people get so retirees won't go through the full stipend. Many Medicare Advantage plans make money strictly from the federal government and have a zero premium and very low copays but they also control access to medical services so maybe IBM doesn't even have to give UHC money. Want the latest cancer treatment? So sorry. You wanted a pace maker? Your doctor didn't make a good enough case for it. Denied. Getting something like $200 a pop from IBM for each MA plan sold is not chump change to UHC who likely promises to dramatically cut IBM cost because UHC will control access to medical services thereby limiting the reimbursements.
I am sad. I never thought IBM would get to this. I understand why they wanted to get out of managing a pension or managing health insurance policies. It is ancillary to their business. I initially wasn't happy about losing the insurance IBM provided before 2013 (which was fabulous) and being pushed to Via Benefits but, at least it gave me choices. It is a low blow to force all Medical eligible retirees into Medicare Advantage plans and a really low blow that the company providing the policies is United Health Care. Even Humana is a better company!!! Really, a low blow. It means retirees will get sub-par medical treatment because of a dodgy insurance company that is only interested in making money and could care less about the well being of policy holders. The IBM company executives don't care either. They need to squeeze every penny out of piddling programs to pay their fabulous executive bonuses. Sad. Really sad.
Do you remember when we were told our retiree benefits were "part of our salaries"? IBM told us not to quit and go to other companies that paid better salaries that didn't offer those benefits because, when factored in, IBM's salary was better! I wish I had that documentation. The company is basically stealing our earned income. Isn't that illegal?
