IBM Extend Health HRA accounts

I have been looking at various IBM chat boards to see what others are saying about the IBM shift to Extend Health.  I think I understand more about HRA accounts.  However, I have also seen A LOT of information posted that is not correct.  Anyone who is saying they know what specific products Extend Health will provide for us and/or the price of those products is either clairvoyant or they were able to hack into EH.  There are no products nor prices available yet and they will not be officially available until the beginning of October.

I do think the information floating around about HRA accounts is accurate.  I also dug back into my memory of health care changes.  Shame on me for not remembering it better as I was a manager and used to hold meetings on this stuff but I have tried to piece it together based on what I did recall and what I read. Here is my perspective.

In the late 1980s and early 1990s you might recall that there were many retirement incentive packages offered (and many jokes about being hit with a 2 by 4 to take a package).  Anyway, there was usually a component that included health care coverage that would come with the package.  Prior to those incentives when someone retired and became Medicare eligible, IBM covered both the part B premium costs and secondary insurance costs.  Successive retirement incentive packages would include warnings that if one did not take the package they would lose this or that guarantee of health care premium coverage.  In the beginning of 1997 health care premium assistance was eliminated.  Premium assistance is provided to retirees who retired prior to 1997 as a reimbursement.  The retiree files a claim with a third party company to get the reimbursement. I suspect there is a cap on the reimbursement for all employees.  I know this because my spouse, who retired in 1996, gets part B premium reimbursement but it caps at $900. That process is not being changed and is not part of EH.

Separate from that program, IBM subsidized retiree insurance.  What that means is they worked with insurance companies to create insurance offerings and paid part of the cost of a premium for us. In the late 1990s IBM told employees who were retirement eligible they would freeze this subsidy at a fixed amount per employee.  The amount was either $3000 or $3500.  I don't recall and I have seen both numbers being tossed around.  Let's assume it is $3000.  So, as insurance premiums increased from year to year, IBM passed along increases not covered by the $3000 cap to the retiree. We never saw that money and I will guess they had a pool of money so it wasn't literally $3,000/employee because some retirees did not use IBM insurance or used policies that cost less per year and some used policies that were more per year.

In the early 2000s IBM declared to employees who were not retirement eligible the subsidy was changing again.  For those employees, IBM would contribute a fixed amount of money to an account that would max out at $25,000.  So, if the employee got lucky and was not laid off prior to hitting the max, when they retired they would have a retiree subsidy assistance for as long as the $25,000 lasted.

Several years ago IBM totally removed the benefit --- ergo, there are some retirees that are "Access Only".

I am sorry I don't know the exact dates of all of those changes.  But you get the gist.

So, here's how that plays out with this move to EH.  Each of us will now get an HRA account that contains the subsidy we are eligible to receive.  The people who cap at $25,000 face the same process.  They can spend that money out of the HRA account until it runs out.  It rolls from year to year.

For people who get the $3000 subsidy - every year IBM will fund your HRA account with that money.  You then have to file paperwork to get that money as a refund for premiums and copays.  If you don't use it all or file paperwork to get it back by year end you will "lose it". You can only access that money if you buy an EH product.  In October you will be told exactly what will be in your HRA account in 2014.

An interesting aspect to this change is that IBM will likely now spend less than $3000/retiree because some will forget to file the paperwork and some might pick plans that don't use it all up.  So, it is another way for IBM to claw money back.  Sigh.

IBM Medicare Extend Health Pre-Call Research

I was talking to a colleague today and he asked me why he had to fill out information about his doctors, the conditions he has or the drugs he takes in his profile before he talks to an advisor.  The truth is you don't need to provide any of that information.

The reason they want to know about your doctors is because they will look for Medicare Advantage private plans that have those doctors in the group when they are advising you.  So, that is information you only need to supply if you want them to talk to you about a Medicare Advantage plan.  The reason they want to know about your drugs is so they can look for a private insurance plan that will cover those drugs.

I highly recommend you decide before you make you call in October what structure of Medicare insurance you want. It will save you and the advisor from wasting time on products you don't want. So, let me remind you of a few things about Medicare.

1. Original Medicare is the federal government insurance pool and the federal government is the payer.  There are no networks and it is not zip code based.  If a doctor takes Medicare you can go to that doctor.  If you decide to spend time in different states during the year this is the best kind of insurance to have since you are covered where ever you go.  If you decide you want to go to a specialty clinic (like Sloan Kettering) - if the clinic takes Medicare you can go.  It is easy to remember your copays and deductibles.  They do not vary from service to service whether it is an ambulance ride or a visit to a specialty doctor.  Any part B procedure always has between a 20% and 35% copay depending on whether or not the doctor takes assignment.
2. Original Medicare copays and deductibles can be covered by secondary private insurance called medigaps.  If you buy a medigap you pay the insurance premium directly to the medigap insurance company.  Again, there is no network.  If the doctor takes Medicare then the doctor takes your medigap because the Medicare claim that is filed is automatically sent to the medigap insurance company. If you want a medigap plan decide what kind of medigap plan you want. The plan types are described on www.medicare.gov and they will tell you what insurance companies sell those plans.  There is also general info at the following link:  http://www.medicareinteractive.org/page2.php?topic=counselor&page=script&slide_id=231 
3. Original Medicare and medigaps do not include prescription drug coverage.  If you want prescription drug coverage that is another type of private insurance. Do list the drugs you take in your profile so your advisor can find a part D plan that covers those drugs.  If you don't buy prescription drug coverage and then decide some years later you actually should have there will be a penalty on the premium of 1% per month of the average premium for every month you were without insurance. Look on www.medicare.gov for part D plans in your zip code that cover your drugs so that you have a comparison to any part D plan offered by Extend Health.
4. Medicare Advantage plans are a substitute to original Medicare and are offered by private insurance companies but must conform to government rules.  If you use an MA plan that private insurance company becomes your payer.  There will  be a group of doctors associated with the plan and a doctor can decide at any time to not be part of the group. How much doctors charge depend on whether they are "in network" or "out of network" - for the latter your copay will be higher.   The plans are zip code based so you must use the doctors that are part of their group.  If you move to another area you must get a new MA plan. These plans must cover all the procedures that original Medicare covers but they can vary copays from service to service.  So, an ambulance ride might have a 50% copay. Most MA plans do not include use of specialty clinics. MA plans can also include prescription drug insurance. They might also require an additional premium over an above the part B premium you pay out of Social Security.  Look on www.medicare.gov to see what MA plans are sold in your zip code so that you have a comparison to plans offered by Extend Health.  Reminder - MA plans are sold by profit and loss institutions. The federal government insurance pool obviously is not. 

 Decide what insurance structure you want BEFORE you talk to an advisor.  It will save a lot of time and let the advisor focus on plans that fit the structure you want. Also, I highly recommend you directly pay any premiums to private insurance companies the old fashion way.  Don't let them suck money from you automatically because if you switch insurance policies from year to year you'll get a major headache trying to disconnect direct paying to the old company.

IBM Medicare Extend Health Transition Questions, Questions, Questions

I just created a list of questions for Extend Health and thought I would post them up as they might help you think about what you want to ask them as you begin to understand this change.  Also, I don't understand the HRA subsidy so ignore what I said in my last post.  I believe I am wrong about the premium subsidy going into the HRA because on page 9 of their brochure they imply that the SHAP process stays the same.  My questions so far are: 

1.       Are all the Extend Health plans traditional CMS Medicare plans that are currently in the marketplace? Will there be any unique offerings like the IBM secondary medical plan that only kicks in after $4000+ deductable?  That was not a CMS approved plan.

2.       There are no CMS approved plans for dental or vision insurance as separate plans.  Will these still be offered as separate insurance plans or is the only way to get this coverage going to be  through a Medicare Advantage plan?

3.       If the offerings are all traditional CMS plans are Medigap plans then subject to the same state rules as CMS Medigap plans?  Like not being able to switch Medigap plan types once you make a selection unless that plan type goes away.  Will Medigap plans be subject to state rules such as age rated and zip code rated premiums?

4.       Does Medigap ‘guaranteed right”  still apply even if someone only used the IBM’s prescription drug plan in 2013 and had no secondary insurance?

5.        Will there be any non-CMS structured offerings like IBM’s prescription drug offering that had no donut hole and capped at $3500 of pay out – e.g, it was a CMS qualified plan because it was creditable coverage but not at all structured like a CMS part D plan. If there are any such plans will they still be subject to the higher premium rule for higher income individuals?

6.       Your brochure (page 6) implies you will only be offering Medicare Advantage plans that include prescription drug insurance.  Is that true?

7.       Both my husband and I are IBM retirees.  Is there any financial advantage to us enrolling separately versus as husband and wife?

8.       If I don’t buy insurance through Extend Health in 2014 am I precluded from buying through the exchange in future years? I am not an Access Only retiree.  What is that?

9.       What is subsidized IBM group coverage?  My husband receives a Medicare part B premium subsidy and he gets reimbursed through SHAP reimbursement.  Your brochure implies (page 9) that the process will be the same and it is not part of the HRA process and subsidized coverage.  Is that correct?

10.    You say your current insurance pool covers about 500K users for the companies you serviced before IBM contracted with you.  What is the current typical wait time for them to get answers to their questions? When IBM retirees join the pool how big will the pool become and what is your anticipated typical wait time to accommodate that big an influx of people?

A Little More Information

I did a little research about private exchanges and urge you do do the same - I just used google and found several articles about how companies are moving to these exchanges. I also went online to extendhealth.com and created a profile, scheduled an appointment on October 1st. I tried looking at the plans that will be offered but that information won't be available until October! They will be sending me a BS enrollment guide now that I have built a profile but that will be a generic description of the types of plans that will be offered.

From everything I have read so far it appears that we will be offered the same type of plans that are in the general market place. If you look on page 6 of the big brochure you will receive you see the generic options. That probably means offerings like the IBM secondary plan of $0 with a $4000+ deductible or Aetna Integration A will be gone - there is nothing like that in the marketplace - certainly not at that price - unless IBM subsidizes such an offering ... it doesn't sound like that is their plan. I think what IBM is doing is paying Extend Health to be the total administrator for selecting plans from the marketplace and that Extend Health will have more negotiating power with insurance companies because they have a huge pool of people who are generally healthier even though they are old farts because they tend to be upper middle class so EH will get "better" premium prices than one can get from AARP, for example. The interesting thing is if we have a claim complaint we have to deal with the specific insurance company --- not Extended Health and IBM is now totally out of it.

There is also a lot about an "HRA". I think I know what that is and, once again, IBM is messing around with people.  I know someone who retired in 1996 and gets a subsidy to pay his part B medicare premiums. It caps at $800 and he has to file to receive it - the deadline to do so is one year later. Well, now that subsidy goes to an HRA account with Extend Health. In order to receive it one must be using Extend Health insurance plans (even though some people don't want to use IBM offerings) and the withdrawal claims must be done within the claim year. Shame on IBM! People who retired earlier than 1996 had an even better deal - and, of course, are older - so the likelihood that they will screw it up and IBM will not have to pay the money is even better!

I am also wary that if you decide not to use Extend Health or screw up and forget to sign up you lose this health benefit for the rest of your life. I don't know what "Access Only" retirees are but it applies to them - it is not clear if it applies to us. They are really messing with people because they know old people do screw up.

Several friends and I plan to meet in the next week or two and create a list of questions. Then we will each call the information number to ask the questions and compare our answers. Stay tuned!

Big changes coming to the IBM Medicare options in 2014

I don't have the package yet but someone sent me the following link:

 www.extendhealth.com/ibm

There is a video on the website that is worth watching but it is basically content free when it comes to details. 

They use the word "Exchange" in the description which is unfortunate because people will get confused that this is somehow related to the Affordable Care Act.  It is NOT.  What IBM is doing is basically offloading our health insurance benefits to a third party who then decides what options to offer to us and at what price based on whatever subsidy IBM pays them.  My guess is IBM will freeze or shrink that payment over the years so our insurance benefit will eventually offer not much. We don't know what the offerings are yet but there are a few big changes that I think I see but don't completely understand. 

It looks like we will be offered traditional Medigap policies.  That means they are subject to the state Medigap rules.  In some states there are pre-existing condition wait periods and/or if you didn't buy a Medigap when you first turned 65 you can never buy one.  There may be a "guaranteed right" issue that can be used to override the second condition.  I don't know.  There will also now be zip code based premiums for Medigaps.  That means that policies in New York will be more expensive than policies in, say, Ohio.  Also, if you get any kind of subsidy from IBM (e.g., part B premium payments) IBM will now put that money into an HRA and then you have to file claims against that HRA to access the money.

More to come - just wanted to give you an early warning. 

Here's my biggest fear for our future - the next thing IBM will offload is our pension plan ala what some other companies have done.  That means they will be converted into an insurance company annuity or will offer a deeply discounted lump sum payment.  So, any ERISA rules governing the pension no longer apply.

Buying a Medigap policy

Most IBM retirees use IBM secondary insurance instead of buying a medigap plan on the market.  However, some of you might decide to buy a medigap plan instead.  There are several reasons why you might do it.  I won't go into those reasons right now. 

Over the last several months I have helped a couple of friends pick a medigap plan and then they try to buy it.  Notice, I said try to buy it.  I just filed a complaint with the NYS Department of Insurance because it turns out that it is not easy always to get companies who are offering the plans to respond.

As I have mentioned in the past - there are at least ten varieties of medigap plans that are strictly defined by the federal government.  The plan types are identified by letters like K, L, F, A and so on.  There are some medigap plans that are "high deductible" meaning they don't kick in unless you are really sick.  The offset to those plans are low premiums.  For example, the medigap F high deductible plan has a $2010 annual deductible but the monthly premium can be as low as $50/month.  If you are healthy, you'll end up spending way less in premiums and that will offset the part A &B deductibles and part B copay bills you will pay.  It takes a lot of being sick to be worth paying a premium of, say,  $200/month to have immediate coverage.

There is absolutely NO difference between one insurance company's K plan and another company's K plan.  These plans are defined by law. There are no doctor networks associated with these plans.  They simply work as secondary to Medicare so if the doctor takes Medicare then the doctor takes the medigap plan.  That means the logical thing to do is to buy the cheapest offering in your zip code.  The premiums can vary as much as 200% from one company to another. How do you know who is the cheapest?  Sometimes your state's department of insurance has the rates.  New York State publishes the rates. How do you know who sells a policy in your zip code?  Either call 1-800-MEDICARE or go onto medicare.gov to find out.

Why did I file a complaint?  Because the insurance companies with the lowest premiums are very, very difficult to reach or insist you must be contacted by an insurance agent in order to buy the policy.  I know this will shock you - the agent will then try to up-sell you to a Medicare Advantage plan or a no deductible medigap plan.  Many times the insurance companies did not even return phone calls when the buyer insisted they wanted a high deductible medigap. In one case - the agent hung up on a buyer when she insisted she wanted an F+ plan.  Some insurance companies (like AARP United Healthcare) won't even sell a high deductible plan (which is perfectly legal) but won't tell you that you can get one - just not from them.  Why don't they sell the plan?  Because they don't make much money on it.

If you decide you want a high deductible medigap plan - be persistent.  If the insurance company with the lowest premium is not responding COMPLAIN to the state department of insurance that they are doing bait and switch selling.

ACA Insurance Pools and Medicare

Several people have asked me if they can participate in the ACA individual policy provider insurance pools instead of being on Medicare.  The short answer is no.  Once you are over 65 years old most private insurance companies do not want to sell you insurance unless it is a Medicare Advantage or a medigap policy.  If you can find a company that will see you an individual policy still be very wary of doing so as it is highly risky on two fronts.  First, they can drop you at any time and tell you to go onto Medicare. That often happens when you get really sick.  I know this because 65+ people think they can stay on COBRA plans when they are terminated because it is offered. The insurance companies take the premiums until they get sick and then say WHOOPS you are too old to be on this plan.  And you cannot just go onto Medicare whenever you want - you have to wait for an enrollment window to enroll. Second, you will pay a Medicare premium penalty of 10%/year for every year you are not on Medicare which is a forever penalty and is calculated using the current year Medicare premium.  That means, as yearly premiums go up so does the cost of your penalty.

As the ACA begins insurance pool implementation I predict there will be a lot of erroneous reporting.  Do a lot of fact checking before you believe what you read.

Reading about Medicare overhauls might be bad for your health

There is much being reported about how our law makers propose to change Medicare in various budget proposals and sequestration cuts -  making it very difficult to ignore and it is nerve rattling.  There is no way to predict what will actually happen and much of the reporting is either over hyped or just inaccurate.  If you want to really understand the implications of various congressional proposals go to  the Medicare Rights Center and sign up for their news letters.  They provide excellent analysis: http://www.medicarerights.org/.

The Medicare Rights Center is a private, non-profit organization not affiliated with any government agency or corporate insurance company.  The reason I learned as much as I know about Medicare is that I have been a volunteer on their Medicare Helpline for about four years.  The organization has researchers, analysts, lawyers and a front line view of how hard it is for seniors and the disabled to figure out Medicare by answering over 14,000 helpline calls per year.  The phone calls I find the hardest to handle are from people in their eighties and older who are easily confused, at the mercy of their Medicare Advantage plans or medical providers, and haven't a clue about how to resolve problems.  These calls have shown me how lucky I am to have access to IBM insurance options and to still be able to figure things out for myself.  I dread the day I cannot and hope Congress will simplify Medicare insurance before then and that IBM will keep its promise to provide retirees with healthcare options. It's a lot to wish for.

The Medicare Rights Center regularly does analysis on those helpline calls and the impact of various government proposals.  They provide feedback to Congress on the current construct of Medicare, the private insurance industry providing Medicare Advantage and part D plans as well as the various congressional suggestions to revamp Medicare.  As an example, there is a notion held by some of our legislators that people who have secondary private insurance (aka medigap plans) go to the doctor more often than people who do not and thereby drive up overall Medicare costs.  So, the genius legislative thinking is those secondary plans should be "taxed".  The analysis of real data shows that is a wrong notion.  I, for one, do not enjoy going to a doctor no matter what insurance covers.  Turns out I am a good representative of the majority of people!  Hopefully, USA citizens will be informed enough to put pressure on legislators to act rationally.  It's a lot to wish for.

Appealing denial of coverage

When you are denied coverage for a medical procedure or a prescription drug it is important to do an appeal with your insurance company.  If you have a Medicare sanctioned plan the appeals process is governed by Medicare law.  Sometimes it takes a couple of iterations to get to an independent group (that is - not the private insurance provider) to get a fair assessment.

I just wanted to remind you that IBM secondary insurance and Aetna Integration insurance is not governed by the Medicare appeal process laws because it is not government sanctioned medigap or secondary insurance.  For those insurance policies if you are not satisfied with the decision they render you have to complain to the department of insurance in your state.  It is unlikely doing that will change the decision but it is important to complain because those departments track complaints and put pressure on insurance companies that are generating a lot of complaints.

I don't know what the appeals process is for IBM's prescription drug insurance plan.  Although it is a "creditable" plan, I am not sure if the company (CVS Caremark) is required to have the same appeals process as a government sanctioned prescription drug plan (PDP).  If you are choosing the IBM prescription insurance plan you should ask the question.  If it does not conform then your appeals are totally handled by CVS - which means there is no independent review and your chances of reversing a decision are slim.  If someone has an answer please post a comment.

Aetna Integration A detailed description

There is a brochure on the Aetna website that provides details about the Integration plan.  It is a good summary of the plan.  Unfortunately, I can't link to it because you need a user id to get to the site and you can only get one if you are enrolled.  If you are considering getting the insurance I suggest you call and ask Aetna to email you a copy of the brochure.  Here is the table of contents:

Table of Contents

Preface ........................................................................1

Important Information Regarding Availability of

Coverage

Coverage for You .....................................................1

Health Expense Coverage.......................................1

Treatment Outcomes of Covered Services

When Your Coverage Begins............................2

Who Can Be Covered ..............................................2

Retirees

Determining if You Are in an Eligible Class

Obtaining Coverage for Dependents

How Your Medical Plan Works........................5

Common Terms........................................................5

About Your Comprehensive Medical Plan...........5

Using the Plan

Cost Sharing

Emergency and Urgent Care...................................6

Coverage for Emergency Medical Conditions

In Case of an Urgent Condition

Coverage for an Urgent Condition

Non-Urgent Care

Follow-Up Care After Treatment of an

Emergency or Urgent Medical Condition

Requirements For Coverage.............................8

Clinical Review Criteria Requests

What The Plan Covers ......................................10

Comprehensive Medical Plan .................................10

Wellness......................................................................10

Routine Physical Exams

Preventative Health Care Services Expenses

Routine Cancer Screenings

Early Intervention Services

Bone Mineral Density Measurement or Test,

Drug and Devices

Vision Care Services

Limitations

Hearing Exam

Primary and Preventive Obstetric and

Gynecological Care

Physician Services .....................................................13

Physician Visits

Surgery

Anesthetics

Hospital Expenses ....................................................14

Room and Board

Other Hospital Services and Supplies

Outpatient Hospital Expenses

Coverage for Emergency Medical Conditions

Coverage for Urgent Conditions

Alternatives to Hospital Stays.................................16

Outpatient Surgery and Physician Surgical

Services

Birthing Center

Ambulatory Care

Home Health Care

Hospice Care

Other Covered Health Care Expenses .................19

Acupuncture

Ambulance Service

Diagnostic and Preoperative Testing ....................19

Outpatient Diagnostic Lab Work and

Radiological Services

Outpatient Preoperative Testing

Durable Medical and Surgical Equipment (DME)

.....................................................................................20

Experimental or Investigational Treatment .........21

Pregnancy Related Expenses..................................21

Prosthetic Devices....................................................22

Hearing Aids

Benefits After Termination of Coverage

Short-Term Rehabilitation Therapy Services.......23

Cardiac and Pulmonary Rehabilitation Benefits

Outpatient Cognitive Therapy, Physical Therapy,

Occupational Therapy and Speech Therapy

Rehabilitation Benefits

Reconstructive or Cosmetic Surgery and Supplies

.....................................................................................24

Reconstructive Breast Surgery

Specialized Care........................................................24

Chemotherapy

Radiation Therapy Benefits

Outpatient Infusion Therapy Benefits

Diabetic Equipment, Supplies and Education.....26

Treatment of Infertility............................................26

Advanced Reproductive Technology (ART)

Benefits

Enteral Formulas......................................................28

Treatment of Mental Disorders and Substance Use

.....................................................................................29

Treatment of Substance Abuse

Oral and Maxillofacial Treatment (Mouth, Jaws and

Teeth) .........................................................................30

Medical Plan Exclusions .........................................31

When Coverage Ends..............................................31

When Coverage Ends For Retirees

Your Proof of Prior Medical Coverage

Continuation of Coverage.......................................32

Continuing Health Care Benefits

Extension of Benefits ..............................................33

COBRA Continuation of Coverage......................33

Continuing Coverage through COBRA

Who Qualifies for COBRA

Disability May Increase Maximum Continuation

to 29 Months

Determining Your Premium Payments for

Continuation Coverage