His five myths:
"It's a little disappointing," Ron Hicks, the Dutchess County deputy commissioner for strategic planning, told the Poughkeepsie Journal last week.
IBM likely saved the semiconductor industry in New York state — and set the stage for the success of the SUNY College of Nanoscale Science and Engineering in Albany — when it built a $2.5 billion state-of-the-art computer chip factory at its industrial campus in East Fishkill in 2002.
But the future of the IBM fab has repeatedly been called into question in recent years — including that it could be sold — punctuated by the recent layoffs of more than 600 IBM employees in East Fishkill and neighboring Poughkeepsie. ...
Now, officials in the Poughkeepsie area — once an IBM stronghold in the state — are watching as the Mohawk Valley could potentially see $45 billion in investment and 30,000 jobs if three fabs were built in a plan led by the NanoCollege that also includes IBM and other chip companies.
The potential of the trend toward private health exchanges was underscored this week by an IPO that saw its shares go through the roof, and disclosures that yet another large company was moving workers to such an exchange. ...
Two weeks ago, news broke that IBM was shifting 110,000 retirees into a Medicare private exchange run by Towers Watson's ExtendHealth division, which already has about 300 companies as clients. Towers Watson's exchange primarily handles retirees but expects to soon sign up several big companies for active workers. Days later, Time Warner revealed it also would direct retirees to an exchange to get health coverage. ...
Private health exchanges offer multiple competing insurance plans, at different levels of premium and out-of-pocket costs, to workers, who usually are given cash by their employer to offset the purchase price. The online exchanges give employees increased options to meet their individual insurance needs and shift some of the cost and administrative burden from employers to workers.
At the time they did this, they initially said that those who were within 5 years of being eligible for retirement would have a choice and could keep the "old" pension plan or switch to the C-B plan. Everyone else would be converted over to the Cash Balance plan whether they liked it or not.
IBM tried to convince the employees that the C-B plan was a good thing, but the reality was that those in the C-B plan would see a significant reduction in their pension benefits. Employees who were mid-career (e.g. 15 to 25 years of service) took the biggest hit and would lose as much as half of their pension. Many employees figured this out and an uproar resulted. Part of the result was the establishment of this Yahoo group.
People complained loudly to IBM executives and wrote their representatives in Congress. In September 1999, days before a Senate hearing where IBM was summoned to testify, IBM backed off a bit and said that anyone who had 10 years of service and was at least 40 years old on July 1, 1999 would also have a choice of which pension plan they wanted.
The original group of employees who were given a choice of plans became known as First Choicers. The second group that was added are the Second Choicers. And those who had no choice are the No Choicers.
First Choicers were allowed to keep the old retirement medical plan. Everyone else, including the Second Choicers, were forced into the Future Health Account medical plan.
Guess what? IBM just changed the old retiree medical plan. IBM can change it again.
We tried to warn people that they weren't necessarily "safe" just because they retired.
Fair warning to the Medicare-eligible retirees: Even if your HRA subsidy, when you get it, is something you would consider reasonable or not too bad, remember...IBM is on the roadkill 2015 path and IBM hasn't been able to raise revenue. Whatever your HRA is for 2014, it can change for 2015. IBM will try to meet the EPS target. IMO.
This was major news for me, since it is almost impossible to find a doctor locally that will take new Medicare patients. So regardless of how good the insurance offering being suggested by Extend Health, if you can't find a doctor, the plan is worthless. I found this out a couple of years ago when IBM offered a plan through Aetna. It would have saved me over $200 a month, but no doctors would take new Medicare patients. So knowing this and knowing Kaiser that was not one of Extend Health's offering, we were going to be left out in the cold. I'm still going to look at the Extend Health offerings, but at least those of us with Kaiser have a fall back position.
This one I found when I was trying to figure out various scenarios like heart surgery and which Medicare. 'part' pays what. It is called: Are You a Hospital Inpatient or Outpatient? I found page 3 to be informative.
You can enroll at any time in the enrollment period, and change you mind about plan selection before the end of the enrollment period. Someone thought a selection made during the first weeks of October could not be changed.
I'd double check with your adviser at your appointment.
Also, I have heard from an IBM rep that the enrollment guides for IBM plans for non-Medicare dependents of Medicare. retirees will not be available until early November. I expect I will be enrolling after I see that data. I want to understand any options of using HRA funds for reimbursing spouses health plan OR is the HRA going to be split between us, like some of the other companies do. I'll Just have to wait.
One of my considerations is limiting the total out of pocket cost for the future large/expensive health event.
I think I may have found some data that will help. This report, "Medicare. Payments for Common Inpatient Procedures: Implications for Episode-Based Payment Bundling" provides some data on total Medicare. payments for some 'big' events from admission to 30 days post discharge. I am only interested in Medicare. payments as this is what Medicare. Supplement plans cover.
So this is my derived 'case' from the report: A CABG is $45K Medicare. payments, 60 to 80% go to hospitals. What would this cost without or with a supplement?
Since this event is not likely to exceed 60 days in Hospital, the member payment for part A is about $1.1K
For the other charges, 20 to 40% to $45K, yielding a max of $18k is Part B. So the Part B deductible and 20% would be $3.6K.
So now the question is what premium is worth capping $(1.1k+3.6K)=$4.7K? And, how often do these or similar events occur? This is an acute condition. This analysis does not apply to chronic conditions.
If one selects Plan F HD then the cap is $2.1K, saving $2.6K. If the premiums are $600 per year, then after 5 years without a 'big' event the premiums have cost more than paying the savings of $2.6K. At age 85 (I'm hoping) the premiums almost double, reducing the years to break to less than 3. One could do the same analysis for Plan F or others.
One side note is that after studying the 'submitted charges' versus Medicare. payments (including member payments), the really big savings in the Medicare. world are the rates set by Medicare. and the Part A coverage. This data was recently made available in spreadsheet form by Medicare.
I am beginning to appreciate how the insurance companies can make money on a $600/year plan F HD policy at age 65 (Texas)
Additional note. For MA plans with zero premium, I think max in-network out of pocket is $6.7K. If one can live with the MA network, MA rules and other restrictions, this may be a good deal, especially with minimal drug coverage at no additional cost.
Lots of moving parts in the new Medicare./EH world.
I am not done with this analysis and comments are welcome.
Then, I have friends where both of the couple bought a Medicare. Advantage plan.
When you come down to it, Medicare. is so much cheaper than plans non-Medicare people buy. Consider that Medicare. is free for 80% coverage (because you paid taxes during your career to get that), then you get to buy a supplemental plan pretty cheaply to help with the other 20% if you want to with lots of choices on how much cost sharing you want.
Those on the new ACA plans in 2014 will pay a high premium for the same 80% we get free (with the upper level "gold" plan, and the standard "silver" plan has only 70% coverage). They cannot buy any "supplemental" plan for the other 20% or whatever so they pay that out of pocket as well as the premium. There may be a subsidy if they have low income, but maybe not.
Diane joined IBM in 2002 from consulting firm Towers Watson, where she was principal and global practice leader for the worldwide employee rewards and performance management practice. Diane was with Towers Watson for 11 years, holding positions of increasing responsibility.
Editor's note: Thanks, Bob, for posting these. For the convenience of our readers, the PDF versions of these documents are also hosted on this site. See the links below:
Of course, the entire subsidy goes to the retiree's Extend Health plan, and $0 stays for the family. Realizing the employee medical plan is subsidized heavily by IBM, just imagine what the cost for say "employee/spouse" plus "1" would cost in premiums, given $0 subsidy! This could be easily be $1K/mo, for the basic United Healthcare (or other) PPO.
For 2013, the IBM Retiree Supplement (w/o prescriptions) for employee plus 2 or more dependents costs $40/mo, or $480/year.
I once calculated that the basic Prescription plan would return at most $9200/year if a family of four each maximized their prescription expenses, while paying $10,000 in premiums.
A good question is whether the employee-like IBM health plan will also be offered w/o prescription drug coverage. Understandably, the prescription coverage is expensive these days, with doctors prescribing all sorts of drugs or worse, brand-name drugs at $6-7/pill. Those who don't need drug coverage, or simply wish to pay on their own, would benefit by a low-premium supplemental coverage.
But, it seems IBM will not release information until it shows up in the mail.
Holding a fixed number of mutual funds, T.D.F.’s are sold as a no-brainer default solution. They have gained in popularity and hold nearly a half-trillion dollars in assets, up from $71 billion in 2005, according to the Investment Company Institute. They are sold by most major mutual fund groups and are becoming mainstays in 401(k)-type plans.
Yet T.D.F.’s may not be ideally suited to every retirement investor, particularly those near or in retirement. You have to look inside each plan and vet it carefully to see if it is right for you. ...
Expenses are also worth vetting. While average expenses have come down in recent years — to 1.07 percent in 2012, from 1.23 percent annually in 2008, according to the Investment Company Institute — they are no bargain. You can find a retail, broad-basket United States stock fund like the Vanguard Total Stock Market Index ETF for as little as 0.05 percent annually. As with any “fund of funds,” you are paying for the packaging and allocation features. ...
Choosing a fund by the target date is not going to help much in your decision. You have to take a close look at what kinds of funds they hold and how the glide path changes over time. Also ask whether the fund is aimed at getting you to retirement, then staying at a static mix, or getting you through retirement with an income-focused allocation.
Traditionally, retirees have been told to keep a significant slice — about 50 to 60 percent of their portfolio — in these risky assets, and that’s what many people tend to do. Then they hope and pray the stock market doesn’t plummet as it did in 2008 and 2009.
That’s why the results of a new study are so intriguing. It found that holding as little as 20 percent in stocks upon retirement, with the remainder in bonds, would result in a smoother ride during turbulent markets, and the money would last a few years longer.
About 14,500 retirees of Duke Energy, Progress Energy and others, including 6,600 retirees in North Carolina, began receiving notices last week alerting them that the utility company will no longer provide retiree insurance to supplement Medicare. coverage. Instead, the Charlotte-based power company will pay retirees an annual stipend, and the former employees will be responsible for picking their own insurance.
To qualify for the company’s stipend, however, the retirees will have to buy coverage from one insurer: UnitedHealthcare. The changes apply to all Duke retirees except unionized retirees in Florida. ...
IBM and Time Warner made similar announcements this month, and other companies are expected to follow. The primary benefit of offloading retirees from the company’s ledger is lower costs, and private insurance exchanges have arisen to take up the slack for businesses looking for options to manage runaway health care bills, said health care benefits expert Skip Woody, a principal with Hill, Chesson & Woody in Durham. ...
Many employers began fixing their contributions to retiree plans years ago to rein in costs, said Paul Fronstin, an analyst with the Employee Benefits Research Institute. He also said that it’s common to give retirees the choice of a single insurer to shop with
Several local Progress retirees said they were blindsided by the announcement and are skeptical that they’ll be better off.
“How can that be possible?” said Jerry Hargis, a Raleigh resident who retired from Progress in 1995 after 30 years with the company. “We’ll get a deal maybe this year, but next year what keeps them from going up?”
If you sign up with something else (e.g., your doctor or plan is not handled by the exchange), then you don't get the extra subsidy. Either way, you pay your own bills. How much of a disaster this is depends on a) what plans we are offered, and b) what kind of puny stipend IBM provides. And, of course, next year they can just zip the stipend out from under us. -Anonymous-
I suspect the FHA early retiree plans will also close and people would be pushed to the ACA Plans. The ACA plans are what you will now have access to and they are better, including subsidy if you have lower income (and the ceiling is pretty high).
The ACA gold plan pays 80% of costs, and you pay 20% (helped if low income), up to some annual ceiling. This is like the IBM FHA EPO plan, but the IBM EPO plan premium is a lot more at about $10,000 for self and no subsidy. I think you will be much better off with ACA and not IBM. -anonymous-
While the Affordable Care Act lowers drug costs for Medicare. recipients who fall into a coverage gap and provides certain vaccines and preventative screenings for free, about half of those surveyed are cutting back spending on food, travel and health care in anticipation of higher medical expenses, according to the survey released today by St. Louis-based Express Scripts, the biggest U.S. processor of prescriptions.
Medicare. has been providing taxpayer-funded health care to the elderly since 1965, while the 2010 Affordable Care Act targets working-age adults. A major provision of the new law is the creation of insurance exchanges where people under 65 years old can buy coverage starting Oct. 1. About 20 percent of seniors surveyed thought they would be able to shop on the exchanges.
“They don’t understand that Medicare. is different and isn’t really changing with the exception that there has been a move to preventative care and more use of medications,” said Rebecca Rabbitt, vice president of government programs at Express Scripts. “That message has been lost, if not absent, from a lot of the dialogue.” ...
For many seniors with Medicare., the law will save them money rather than increase their costs, Rabbitt said. By 2020, the so-called doughnut hole, a gap in prescription drug coverage that increases out-of-pocket costs, will be eliminated and is already being reduced. The law also includes free preventative care like certain vaccines and screenings, Rabbitt said.
More than 6.6 million Medicare. beneficiaries saved more than $7 billion on their prescription drugs since the law was enacted, the Department of Health and Human Services said in July. The law requires drugmakers to discount covered brand-name Part D medicines sold to beneficiaries in the coverage gap and provides subsidies for the covered therapies to those beneficiaries that rise to 25 percent in 2020 from 2.5 percent in 2013. ...
Though the law makes no changes to Medicare. eligibility or enrollment, about one-third of seniors mistakenly believe it raises the eligibility age, the survey found. About 17 percent said it was likely the exchanges would replace Medicare.
Employers are raising deductibles, giving workers health savings accounts that look like 401(k) plans, mimicking the health law’s online insurance marketplaces and nudging patients to compare prices and shop around for treatments.
Together the moves could eventually affect far more consumers than the law’s Medicaid expansion or health exchanges aimed at the uninsured and scheduled to open Oct. 1. Here’s a rundown.
Walgreen Co. is set to become one of the largest employers yet to make sweeping changes to company-backed health programs. On Wednesday, the drugstore giant disclosed a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace. Aside from rising health-care costs, the company cited compliance-related expenses associated with the new law as a reason for the switch.
Walgreen is the latest in a growing list of companies making changes to their benefits. International Business Machines Corp. and Time Warner Inc. both said in recent weeks they will move thousands of retirees from their own company-administered plans to private exchanges. Sears Holdings Corp. and Darden Restaurants Inc. said last year they would send employees to a private exchange. ...
Like the shift from pension plans to 401(k) plans beginning in the 1980s, the moves mark a transition in which employers are handing their workers more control over their benefits, some experts say. But as companies set their contributions at fixed amounts to limit benefits spending, workers could wind up shouldering a greater share of the burden if health costs increase. ...
Big companies have been gradually pushing far more of the costs of health care to workers. More than one-third of workers at companies with 200 or more workers had annual deductibles of $1,000 or more last year, according to a report by the Kaiser Family Foundation. That's up from 10% of workers at those businesses in 2006.
Though companies point to the health law for accelerating the trend of broad benefits changes, supporters of the law note some firms may be using it for cover as they make adjustments that aren't always popular with workers.
Strategies like moving workers to private exchanges "may be the way of the future, but don't blame the Affordable Care Act for it," says Ezekiel Emanuel, a former Obama administration health-care adviser and University of Pennsylvania professor of health-care management.
"For decades, rising health-care costs have burdened employers, but since the Affordable Care Act became law, health-care costs have been slowing and premiums are increasing by the lowest rates in years," said Erin Shields Britt, a spokeswoman for the Department of Health and Human Services.
It's not about uncertainty. Trust me, they are certain.
I was fortunate to have access to workplace insurance that included quality mental-health services. It’s a benefit I have come to really appreciate.
But many people don’t have access to such care. ...
I think about the folks who were working at the Navy Yard or other workplaces who have to deal with the aftermath of such tragedies. And while such incidents are rare, it is likely that you are working with people who are struggling with mental illnesses and need help to handle their condition. They aren’t likely to go on a shooting spree, but they may drink too much, take illicit drugs or fall into a depression they can’t shake.
Although many large and small group insurance plans include services for some mental-health and substance-use illnesses, there are gaps in coverage. About one-third of those who are now covered in the individual market have no coverage for substance-use disorders and nearly 20 percent have no coverage for mental-health cases, including outpatient therapy visits and inpatient crisis intervention and stabilization, according to the Department of Health and Human Services.
But starting next year, this will change for many workers.
Under the Affordable Care Act, insurance plans offered in the new marketplaces will have to cover a core set of services called “essential health benefits.” Included on the list of 10 benefits are mental-health and substance-use disorder services, which include behavioral health treatment, counseling and psychotherapy. Specifically, as part of what’s considered preventive services, plans will also cover alcohol-misuse screening and counseling, depression screening for adults and adolescents, domestic and interpersonal violence screening for women, and behavioral assessments for children. ...
The Affordable Care Act will provide one of the largest expansions of mental-health and substance-use disorder coverage in a generation, the Obama administration says. I hope that by expanding access to mental-health coverage, we can get people the help they need, and in the most severe situations prevent tragedies that result in the loss of life.
Instead, they received observation care, considered by Medicare. to be an outpatient service. Yet, a recent government investigation found that observation patients often have the same health problems as those who are admitted. But the observation designation means they can have higher out-of-pocket expenses and fewer Medicare. benefits.
More Medicare. beneficiaries are entering hospitals as observation patients every year. The number rose 69 percent in five years, to 1.6 million nationally in 2011, according to the most recent federal statistics. At the same time, Medicare. hospital admissions have declined slightly.
Here are some common questions and answers about observation care and the coverage gap that can result. (Seniors enrolled in Medicare. Advantage should ask their plans about their observation care rules since they can vary.)
Anyone who doesn’t see this should be forgiven. The stakes in this battle are almost always buried in news accounts about tactics and obscured by an unquenchable desire across the media to provide the latest take on whether President Obama is growing “weak” and has already become the lamest of lame ducks.
Yes, Obama has work to do in quelling doubts about his leadership. But little of what we’re hearing offers enlightenment as to why this big argument is happening in the first place, and why it matters.
To begin with, this is not just a fight between Republicans and Democrats. The GOP is clearly divided between those who take governing seriously — they still believe in government enough to accept responsibility for keeping it open — and those who see in every issue the “final conflict” that Marxists kept predicting. Stopping Obamacare, in their view, is necessary to prevent the country from reaching the end of the road to serfdom. Compared with this hellish prospect, who cares about shutdowns?
What’s fascinating, and this speaks to the perceived power of the tea party in primaries, is that it has taken only a small minority of House Republicans to push toward Armageddon. The Post’s Lori Montgomery and Paul Kane estimated that roughly 40 conservatives revolted against their leadership’s efforts to keep the government open past Sept. 30. That’s 40 in a 435-member House of Representatives. What’s become of us when less than 10 percent of one chamber of Congress can unleash chaos? What does this say about the House Republican leadership gap?
But it’s also important to understand why the Republican right is so fixated on killing or delaying ObamaCare before it goes into effect. Its central worry is not that the program will fail but that it will succeed. ...
In other words, Obamacare, like Medicare. and Social Security, could work well enough and improve the lives of enough people that voters will get “hooked” on it. For fear of this, the tea party’s champions would shut down the government and risk financial calamity over the debt ceiling? Even the Wall Street Journal’s reliably anti-Obama editorial page on Tuesday upbraided the “kamikazes” of the right.
By keeping spending at its current levels through mid-December, they had also voted to continue the sequester, which is preventing millions of people from getting public housing subsidies, Head Start seats, and unemployment benefits. The sequester is also taking a serious toll on scientific research and investment in infrastructure, not to mention its infuriating drag on employment and the economic recovery. How about another round of applause? ...
What he (Eric Cantor, Republican House Leader) didn’t mention, though, is that the House’s real beef is with Senate Republicans, not Democrats, many of whom have denounced the extremist tactic of threatening a government shutdown if health reform isn’t defunded. The defeat of the House demand in the Senate is pre-ordained, and when the measure comes back to the House next week without any mention of the health law, and with little time left to avoid a shutdown, the laughter and applause will be long gone.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
But that’s not the view of hard-line conservatives in the House, who are trying to prevent the passage of a debt-ceiling increase as well as a temporary spending measure to keep the government open past the end of the month.
They’re not talking about the debt. If they were, the House and Senate might have something to negotiate over. Up to now, the House has refused to even sit at the same table as the Senate and discuss ways to reduce the long-term debt (one of which, obviously, would be higher revenues).
No, House conservatives are narrowly focused on achieving one impossible thing: the end of health care reform.
Certainly there are frauds among the one in seven Americans getting help from the program formerly known as food stamps. But who are the others, the easy-to-ignore millions who will feel real pain with these cuts? As it turns out, most of them live in Red State, Real People America. Among the 254 counties where food stamp use doubled during the economic collapse, Mitt Romney won 213 of them, Bloomberg News reported. Half of Owsley County, Ky., is receiving federal food aid. Half.
You can’t get any more Team Red than Owsley County; it is 98 percent white, 81 percent Republican, per the 2012 presidential election. And that hardscrabble region has the distinction of being the poorest in the nation, with the lowest household income of any county in the United States, the Census Bureau found in 2010. ...
You have to wonder where this animus for those in the economic basement comes from. It’s too easy to say Republicans hate the poor. Limousine liberals can seem just as insensitive. And if Republicans were offering some genuinely creative approaches to helping the 26 million Americans who self-identified as “lower class” in a recent survey, they would deserve a listen. Tax cuts, the party’s solution to everything, do nothing for people who pay no federal income tax. ...
What’s at work here is the poison of ideology. Underlying the food assistance fight is the idea that the poor are lazy, and deserve their fate — the Ayn Rand philosophy. You don’t see this same reasoning applied to those Red State agricultural-industrialists living high off farm subsidies, and that’s why Republicans have separated the two major recipient groups of federal food aid. Subsidized cotton growers cannot possibly be equated with someone trying to stretch macaroni into three meals.
But Republican House leaders do have some empathy — for themselves. National Review reported this week that Representative Phil Gingrey, a hard-right conservative who wants to be the next senator from Georgia, complained in a private meeting about being “stuck here making $172,000 a year.” To say the least, he doesn’t yet qualify for food assistance.
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