5 Replies Latest reply on Nov 11, 2012 9:20 PM by jkom51

    Do differences in secondary insurance plans really matter?

    DH
      I'm 62 and thinking hard about retirement. One consideration is Medicare and my insurance that becomes secondary when I turn 65.
       
      A little background: I retired from a University and was covered by the retirees family health insurance for a few years. Then I took a full time job and have been working for another employer, and taking the health insurance from that employer, for the past 7 years.
      If I stay another 3 years at my present employer, I will be eligible for retirees insurance from that company when I turn 65. Of course, that insurance will then be secondary. The insurance from the company is a little better than my previous insurance for about the same cost. I am still eligible for the first insurance and can get back in when I want to.
       
      So, my questions are - do I retire now and go back to the original insurance, then allow it to become secondary at 65; or do I wait it out another 3 years because my present insurance might be better than the previous insurance when it becomes secondary? Is the difference worth holding out for?
       
      Are there differences in insurance plans when they become secondary or are they all pretty much the same?
        • Re: Do differences in secondary insurance plans really matter?
          JerryD
          Sit down with the HR rep and discuss in detail. 
           
          Don't have much experience with secondary coverage but my gut feeling is that there could be large differences for employer plans.  Unlike Medicare supplemental insurances which have to conform to specific coverages for a given plan, I am unaware of any such restriction on employer plans.
            • Re: Do differences in secondary insurance plans really matter?
              DH
              Since my original post, I went back to the HR reps with my questions. Unfortunately, the rep for one plan does not know the other's plan, and vice-versa. So little help there.
               
              You're probably right with your gut feeling, so the best thing I can do is a lot of research.
               
              Thanks for posting.
                • Re: Do differences in secondary insurance plans really matter?
                  jkom51
                  There is preventive care and there is critical care. Differences in insurance plans are usually in critical care. As you age, critical care becomes much, much more important.
                   
                  In order to compare these two policies you will need the actual documents as they relate to secondary insurers. IOW, you don't want to see what they pay now, you want to see what they will pay for as secondary insurers.
                   
                  By law they MUST give you this. A lot of HR reps have no idea how to obtain this for you. It may take a conference call between you, the HR rep, and the insurance customer service rep to get it. You might even have to insist upon talking to a supervisor or manager. DO IT.
                   
                  Unless you are familiar with legalese (a secondary language all its own, lol), you will need someone to help you go over the terms. This might be a senior aid social worker, a geriatric care manager,  a CFP with a CLU designation, or a health insurance broker.
                   
                  Here's the kicker: Under what the Repubs deridingly call "Obamacare", ALL lifetime caps are eliminated as of 2014 for new policies written after 1/1/2014. This is a very, very big deal. It is not unusual for very stringent "caps" to be placed not only on critical care but the all important follow-up (like physical therapy and expensive meds). Under the health reform act, such caps are eliminated.
                   
                  Eliminate the health reform act, and caps are legal again. Cancer medicines, for example, can be outrageously expensive! Some cancer survivors have experienced hitting a $250K cap on post-critical medications within two months, leaving them without resources for a needed 6-month regimen. 
                   
                  So you will want to be very sure that critical care limits are comparable between the two policies. Medicare on average pays 51% of total senior healthcare costs over the remainder of an average lifespan.
                    • Re: Do differences in secondary insurance plans really matter?
                      DH
                      Thanks for the good information. I will certainly try to get the documents and get some help deciphering them.
                       
                      I'm beginning to think though, that this may be a moving target. Now that we have Obama for four more years, and presumably "Obamacare", aren't both plans likely to change? I wonder if enough is known about the new law to make decisions on how it will look three years from now and how it will affect both plans for which I am eligible.
                       
                      jkom51 - you mentioned the elimination of caps on NEW policies written after 1/1/2014. Does that mean I have to somehow have a NEW policy initiated after that date, or do all existing policies automatically have the cap lifted then?
                       
                      Also, I wonder if "Obamacare" is likely to be an "equalizer" for all secondary policies?
                       
                      Again, I am trying to decide whether to retire now, but I don't want to make myself ineligible for a better (secondary) insurance policy if the difference is significant.
                        • Re: Do differences in secondary insurance plans really matter?
                          jkom51
                          From my understanding the caps are lifted ONLY for new policies written as of 2014. Whether or not your insurance becoming secondary to Medicare will qualify, is something I don't know. I wouldn't count on it. The carrier can make a good case that this is NOT a new policy, it is merely a switch from primary payer to secondary payer.
                           
                          However, the insurer may not be able to answer this very important question for you, at least not yet. Their general counsel would have had to review the legislation and given their recommendation, with the board voting to implement suggested changes or not. That would take a long time to 'filter down' to the customer service rep level.
                           
                          I would talk to the insurance rep and HR using the assumption that things will NOT change for your circumstances, and making sure to understand precisely how the change to secondary works and what the coverage options entail.
                           
                          Overall Medicare covers on average only 51% of total lifetime medical expenditures. Insurers are under no obligation to increase their secondary coverage to cover any more than they do already. Therefore, with Medicare in far worse financial shape than SocSec, I would anticipate changes in government policy eventually, that will put more financial responsibility on seniors to shoulder more of the costs.
                           
                          A nationalized health program would probably not be able to support any real increases in elderly medical coverage, even if by some miracle universal health coverage gained the support of both parties. All it would do is help provide basic medical care for the uninsured employed and non-employed, to get them out of using hospital emergency wards for back-up care.