IBM to Move Retirees Off Health Plan
Source: Wall Street Journal
Big Blue's Health-Exchange Move Ends Once-Common Benefit
September 7, 2013
International Business Machines Corp. IBM -0.61% plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise.
The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increases.
IBM's shift is an indication that health-insurance marketplaces, similar to the public exchanges proposed under President Barack Obama's health-care overhaul, will play a bigger role as companies move coverage down the path taken by many pensions, paying employees and retirees a fixed sum to manage their own care.
In notices signed by Chief Health Director Kyu Rhee, IBM has told retirees in recent weeks that to keep receiving coverage, they will need to pick a plan offered through Extend Health, a large private Medicare exchange run by New York-based Towers Watson & Co.
Read more: http://online.wsj.com/article/SB10001424127887323893004579059393251153348.html
IBM to transfer U.S. retirees to healthcare exchanges next year
(Reuters) - IBM plans to move U.S. retirees off its company-sponsored health plan and shift them into new public insurance exchanges as a way of lowering costs.
IBM had selected Extend Health, which is owned by Towers Watson & Co, to provide retirees with new health options for medical, prescription drug, dental and vision coverage, the company said in a statement on Friday.
The plan, it said, offered IBM retirees more choice and better value than the company could provide through existing group plans.
IBM also said it was hosting meetings with groups of retirees across the country to inform them about the move to the country's largest private Medicare Exchange.
http://www.reuters.com/article/2013/09/07/us-ibm-healthcare-idUSBRE98602Z20130907
mike_c
(36,281 posts)eom
pnwmom
(108,995 posts)otherwise known as Medicare.
"The move, which will affect all IBM retirees once they become eligible for Medicare"
So I don't really understand it.
karynnj
(59,504 posts)I am an AT&T retire - not yet 65 - and I found it very hard to understand how their plan works once you are Medicare. It sounds like Medicare becomes the primary plan and the AT&T plan becomes a secondary plan. I have not taken the time to completely look at how they interact.
pnwmom
(108,995 posts)Policies that cover the costs that Medicare doesn't. Some companies have basically been running their own Medigap plans, but now they're telling their employees to get one from the private marketplace instead. (AARP, for example, offers some plans.) But IBM is paying them a credit that will cover much of the cost.
So this has nothing to do with Obamacare, actually. My m.i.l.'s company dropped their retiree medigap policies more than a decade ago, and she had to switch to one of the private ones.
http://www.newsmax.com/Newsfront/ibm-health-insurance-obamacare/2013/09/07/id/524363
Private health-insurance exchanges, which are similar to state-run organizations, present a range of policies and allow participants to choose what best meets their needs.
In IBM's case, the company will give its retirees an annual contribution through a health retirement account so they can buy Medicare Advantage plans and supplemental policies to fill in the gaps left by Medicare coverage.
The retirement accounts can also be used to pay for other medical expenses, but retirees who don't enroll in a plan through Extend Health will not receive the funding.
Chief Health Director Kyu Rhee said IBM is making the move to allow retirees more-sustainable coverage, not to cut costs, and that the insurance exchange can provide retirees with a wider range of plan, while controlling how IBM's contribution to their coverage is spent.
antigop
(12,778 posts)It says:
"IBM retirees will learn what the subsidy is on about Oct. 1, and both IBM and Extend Health said their coverage will be equal to or better than what they already have."
It says the "coverage will be equal to or better than what they already have."
The retirees don't know what the subsidy is yet. "Coverage" doesn't necessarily mean "cost".
It could just mean the policy coverage is similar--not necessarily the cost.
pnwmom
(108,995 posts)who are already on Medicare, so this is not related to Obamacare and going to Medicare for all wouldn't have changed this problem.
Lasher
(27,638 posts)In other words, he is a plain liar. 'More-sustainable' = cheaper for IBM, more expensive for retirees. 'Not to cut costs' = a plain lie.
What's really going on is, IBM is reducing its future financial liabilities. Since these retiree medical expenses have already been accounted for on their books, they can cite the cuts to declare phony profits. Then it's mega-bonuses galore for all the senior executives, yeeeeha! Pay for performance, that's the ticket!
It's all perfectly legal, and perfectly corrupt. IBM has a great deal of experience in perpetuating just this kind of fraud starting in the 1980s. They were leaders in conversion of Defined Benefit Pension Plans to Cash Balance Plans, and from there to Defined Contribution Plans, reducing pension value to the retiree as well as the cost to the corporation (and declaring phony profits) at each step along the way.
This is what's happened to pensions, and how it happened. It's been the same long story with decline of employee & retiree medical benefits, which also began in the 1980s.
By now there's hardly any blood to squeeze out of that turnip. But corporate executives can't be expected to earn actual profits, now can they? So they're going after what's left of the retiree medical benefits that employees have already earned. Oh, and look how handy it is, to blame Obamacare on the same sort of thievery that's been going on for at least three decades now.
antigop
(12,778 posts)comp.
rsilva95722
(1 post)According to the letter I got from IBM, if you sign up directly with Kaiser Senior Advantage you still get the annual contribution into a health account. Kaiser has elected not to be an option through Extend Health.
gopiscrap
(23,765 posts)pnwmom
(108,995 posts)Thinkingabout
(30,058 posts)Your entity from which you retired and whether you are a bargained for or not bargained for employee. The out of pocket jumps to $1065 for Long Lines bargained for retirees per year. You will get $46 a month reimbursement for your Medicare cost but jumping from $20 co-pay for office visits to paying $1065 before UnitedHealth starts paying is huge on our pension.
Carolina
(6,960 posts)everything. You typically need a supplemental policy to cover the 20% CMS doesn't.
Most people use an extension from their large group employer plans once they've retired, and a portion of their retirement goes toward paying the premium. Such large group plans are obviously cheaper and often include, vision, dental and prescription plans in their coverage.
Cutting off retirees and forcing them to purchase a 'medigap' policy on their own signals a worrisome trend and means a lot of people will be financially, medically strapped.
Obamacare is about insurance, not care! This is why we needed the public option. We are now pawns of employers and insurers like never before.
pnwmom
(108,995 posts)I support a public option but it wouldn't have affected this situation.
RC
(25,592 posts)They are two separate things. Medicare is set up to cover the elderly and their health problems. Single Payer eliminates the parasitic middle man, the insurance companies, to be replaced by government controlled payments and regulations.
You still need regular health insurance, because medicare does not cover everything.
http://www.medicare.gov/what-medicare-covers/index.html
Medicare doesn't cover everything. If you need certain services that Medicare doesn't cover, you'll have to pay for them yourself unless you have other insurance or you're in a Medicare health plan that covers these services.
Even if Medicare covers a service or item, you generally have to pay your deductible, coinsurance, and copayments.
Some of the items and services that Medicare doesn't cover include:
Long-term care (also called custodial care)
Routine dental or eye care
Dentures
Cosmetic surgery
Acupuncture
Hearing aids and exams for fitting them
Routine foot care
http://www.medicare.gov/what-medicare-covers/not-covered/item-and-services-not-covered-by-part-a-and-b.html
Carolina
(6,960 posts)I have BC/BS through my employment and this year, for the first time in 20 years, I have had to pay out of pocket in full up front... before I was even seen by the MD for my annual preventive care. In the past, I simply paid a co-pay
Too bad Obomber did not fight as hard for the public option as he is for intervention in Syria!
pnwmom
(108,995 posts)This is about medigap policies for Medicare recipients; and the ACA doesn't cover people on Medicare.
Little Star
(17,055 posts)REASON FOR ALERT:
This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate.
ALERTER'S COMMENTS:
Obomber? Let's destroy any discourse by emulating Free Republic.
You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Sun Sep 8, 2013, 12:42 PM, and the Jury voted 3-3 to LEAVE IT.
Juror #1 voted to HIDE IT and said: No explanation given
Juror #2 voted to HIDE IT and said: No explanation given
Juror #3 voted to LEAVE IT ALONE and said: I've noticed many DUers are using the term Obomber on DU not just this poster and not just FR. The majority here are against any bombing in Syria and are expressing their displeasure by giving him this nickname. I see nothing wrong with it.
Juror #4 voted to LEAVE IT ALONE and said: I don't like the "Obomber" snark, but the President has brought that on himself. I say let the post stand.
Juror #5 voted to LEAVE IT ALONE and said: No explanation given
Juror #6 voted to HIDE IT and said: Oooops. Someone's white sheets are showing.
Carolina
(6,960 posts)for letting me know about the alert results. I am not alone in using the term and I have used it in other posts. And actually in his youth playing basketball, that's what some teammates called BHO! As for now, if the shoe fits... And BHO does want to bomb Syria or certainly is fighting hard to do so.
Irony is juror #6 said someone's white sheets are showing.
Little does s/he know I'm black. I lived through segregation, through all the time period depicted in The Butler and worked for the NAACP. I have earned the right to call Obama a fraud. Recall that back in 2008, many veterans of the civil rights era were opposed to BHO's candidacy because he had not been through the 'fight' and they did not feel he had the ability to fight in him. And yes, there was a bit of sour grapes that it wasn't his time, he'd not paid his dues, and in Chicage he'd tried to unseat Bobby Rush. Anyway, everyone ultimately rallied behind him, but many are quietly quite disappointed. They were right... He doesn't have fight in him for things that matter to Americans, but he sure is zealously fighting for this intervention.
I am really getting sick and tired of DU's ridiculous sensitivities
are not the same for us
DemoTex
(25,403 posts)IBM: I've Been Moved
Gormy Cuss
(30,884 posts)Reuters got it right -- this isn't about offering "better value" to the retirees, it's about Big Blue saving money.
OhioChick
(23,218 posts)antigop
(12,778 posts)eggplant
(3,913 posts)...everyone would get about $75 PER YEAR. And that's if it ONLY goes to the medicare-eligible retirees. $8M/yr for a CEO of IBM is chicken feed.
antigop
(12,778 posts)executives.
eggplant
(3,913 posts)IBM is a publicly traded company. They have (like it or not) a fiduciary responsibility to its investors, not to its retirees. If you don't like the way they choose to do compensation, blame the board. If enough stockholders share your view, then you can organize and get a seat on the board and effect change.
But to say that screwing the retirees because "hey, look how much they are paying their CEO" is a crap argument. The amount of money IBM is spending on retirees is VASTLY MORE than they are spending on their CEO.
If you want to be pissed that they are screwing their retirees (and it isn't clear that they are), then be pissed about it for its own sake.
antigop
(12,778 posts)antigop
(12,778 posts)Together with new competition overseas, the pressure to respond to the short-term demands of Wall Street has paved the way for an economy in which companies are increasingly disconnected from the state of the nation, laying off workers in huge waves, keeping average wages low and threatening to move operations abroad in the face of regulations and taxes.
pssst...take a look at the share buybacks. They buy back shares ===> increases EPS ===>stock price goes up ====> Executives get their bonus.
eggplant
(3,913 posts)And as an exIBMer, I'm aware of just how shitty an employer they have become. My only point was that you implied a causal relationship between screwing retirees and executive compensation. Find me a memo that directly connects the two and I'll believe you.
In the meantime, it is possible for management to be scumbags without there being an actual conspiracy here.
antigop
(12,778 posts)pnwmom
(108,995 posts)scooter rider
(80 posts)And if you want anything decent you need to buy a supplemental policy from a private insurer.
Supplementals can cost as much or more than Medicare.
pnwmom
(108,995 posts)It has to do with buying a Medigap policy, which most people have been doing anyway. Ten years ago the company my m.i.l. received benefits from also decided to dump their retirees health insurance program, and sent them into the private medigap market. This is the same thing, except that IBM will be making payments to the retirees to cover much of the cost.
antigop
(12,778 posts)And even if IBM covered much of the cost the first year or so, the costs for the policies can go up in subsequent years. IBM is under no obligation to continue its contribution at all.
pnwmom
(108,995 posts)But the main point is this has been going on with companies for many years and it has nothing to do with Obamacare.
antigop
(12,778 posts)no "contracts".
pnwmom
(108,995 posts)at his large corporation.
antigop
(12,778 posts)not give working stiffs employment contracts...unless you are unionized and you have a collective bargaining agreement.
I doubt IBM is unionized.
pnwmom
(108,995 posts)But at his orientation twenty years ago there was a contract to sign.
antigop
(12,778 posts)out retirement medical benefits unless there is a collective bargaining agreement.
And as I said, I highly doubt IBM has any unions that have a collective bargaining agreement.
pnwmom
(108,995 posts)Summary: IBM's employees' union is delivering blow-by-blow accounts of Big Blue's layoffs tonight. The Wall Street Journal reported earlier Wednesday that IBM is looking to cut about 5,000 positions mostly in its global business services unit as it shifts work to India
antigop
(12,778 posts)From their website:
http://www.endicottalliance.org/why.html
From their homepage:
antigop
(12,778 posts)Last edited Sat Sep 7, 2013, 06:19 PM - Edit history (1)
http://money.usnews.com/money/blogs/planning-to-retire/2011/09/15/traditional-pensions-are-casualties-of-a-retirement-heisteta: And the company can cut your benefits after you are Medicare-eligible.
....The people who are better protected are those who are in a union and are in a collectively bargained agreement.
Response to pnwmom (Reply #47)
antigop This message was self-deleted by its author.
CountAllVotes
(20,878 posts)>>I doubt IBM is unionized, so there are no "contracts".
If IBM WAS unionized, they'd never get away with this shit!
enlightenment
(8,830 posts)just what the private company is calling their package of options. I went to the website and plugged in some data that gave me my options - didn't bother to look at costs because I have no way of knowing how they relate to what the retirees currently pay into the IBM group policy.
The confusion in this seems to be the use of the phrase "public exchange". This is a private company that aggregates data on different MediGap, etc, supplemental plans (they apparently also do this for full insurance - I guess for companies that choose to give employees vouchers to buy insurance rather than contracting a group plan).
I find it a little alarming that IBM is apparently pushing the retirees to this company; I would think, since they are not planning on helping them with the cost, that they wouldn't care where they went to find the best deal.
pnwmom
(108,995 posts)I guess they don't want to have to vet other sources.
enlightenment
(8,830 posts)but a pretty closed loop.
antigop
(12,778 posts)enlightenment
(8,830 posts)Nye Bevan
(25,406 posts)why do so many DUers ask for "Medicare for all"?
Mr.Bill
(24,325 posts)Kennah
(14,315 posts)If one looks at the cost of health as a percentage of GDP, U.S. leads in the OECD.
If one looks at outcomes, in a number of telling metrics, U.S. trails in the OECD.
http://www.oecd.org/health/
Medicare the way it is today is pretty shitty, but it's better than nothing.
ACA has put us on a path that I believe, and at least some DUers believe, will get us to real universal healthcare.
Will it take 10 years or more? Probably.
Will it be an at times very rocky journey? Almost assuredly.
Consider that the GOP is chasing it's tail, running in circles, with an almost OCD obsession with repealing ACA. Why is that? I suspect it's because they know, and their corporate masters know, that universal healthcare will take a big bite outta the fat asses of the one percent while raising the standard of living of all.
AngryOldDem
(14,061 posts)So how are retirees supposed to pay for the supplemental coverage that they will surely need?
antigop
(12,778 posts)Carolina
(6,960 posts)Last edited Sat Sep 7, 2013, 04:25 PM - Edit history (2)
everything. You typically need a supplemental policy to cover the 20% CMS doesn't.
Most people use an extension from their large group employer plans once they've retired, and a portion of their retirement goes toward paying the premium. Such large group plans are obviously cheaper and often include, vision, dental and prescription plans in their coverage.
Cutting off retirees and forcing them to purchase a 'medigap' policy on their own signals a worrisome trend and means a lot of people will be financially, medically strapped.
Obamacare is about insurance, not care! This is why we needed the public option. We are now pawns of employers and insurers as never before. And the TPTB are coming after Medicare, too.
Up until a few weeks ago I was self-insured. My premiums just went up over $100, and I was giving very serious thought to cutting back on my pretty-much bare-bones coverage (like dropping dental, for instance). I can only imagine what it would be like for a retiree to be forced to make these decisions, when basically **every** kind of coverage is necessary?
And as I said above, look for the day when even pensions will be a thing of the past. Not talking only about IBM, but everywhere. Then the only option will truly be to work 'till you die, and hope that your benefits will still be there as an employee. (Even at my new job is was announced last week that the pension plan is going to be adjusted -- downward -- beginning for those who retire in 2014.)
The assault on the middle class continues...what do the PTB think will happen when they finally DO kill it off?
pnwmom
(108,995 posts)policies.
Carolina
(6,960 posts)but a public option would have been a form checks and balances against the private insurance profiteers!
All my costs have risen -- what is deducted from my paycheck and what I pay at the MDs' offices -- all post ACA passage in 2010, ACA being upheld by SCOTUS 2012 and in anticipation of full ACA implementation in 2014!
I have yet to see a personal upside to the Health Privacy Protection and Affordable Care Act
pnwmom
(108,995 posts)you would still be able to purchase medical insurance -- something you can't count on now. And if you were to get in a car accident tomorrow and run up huge medical bills, your company couldn't subject you to an annual or lifetime maximum in benefit.
There is no reason to have expected costs to have gone down before full implementation; for many companies, this is their last chance to get increases in without being subject to state approval or disapproval of rate increases. However, the Kaiser foundation data shows that rate premium increases have slowed since Obamacare first began to take effect.
Carolina
(6,960 posts)cavalier: if I lost my job, I would still be able to purchase insurance...
Really? How the fuck do you PURCHASE insurance without an income. That's something I couldn't count on without an income! And don't tell me Medicaid...
pnwmom
(108,995 posts)And if your unemployment benefits and any other income were too high for that, then you'd still qualify for a substantial tax credit to reduce your premium.
Carolina
(6,960 posts)-- note I said CARE -- with Medicaid... the same healthcare as on private insurance! Many docs don't even accept it
pnwmom
(108,995 posts)They had been in foster care and had myriad health issues. He did have to check around, but he got excellent doctors for the boys, including the one who needed an unusual surgery.
I'm not claiming that all people will get equivalent care on Medicaid; but I'm sure you're educated enough and persistent enough that you would, if you ever needed it.
Carolina
(6,960 posts)for your Dad's partner's sons.
pnwmom
(108,995 posts)universal single payer, if that becomes a possibility again. Let's hope Vermont succeeds in pointing the way.
liberal N proud
(60,346 posts)So far they have kept it on the down low.
After laying of 15% of it's workforce earlier this year, they informed retirees the need to find alternative health care.
pnwmom
(108,995 posts)More than a decade ago, my mother-in-law's large corporation dropped its medical plan for retired employees eligible for Medicare, and sent them to the private medigap market. Between the medigap policy and her Medicare, my m.i.l.'s insurance covered almost all her costs.
That's what this is about -- and it's not the result of Obamacare.
Mr.Bill
(24,325 posts)did this decades ago. Or, at least something like this. Basically, their lifetime union health coverage became their secondary coverage once they reached medicare age. Sounds like IBM is just going to pay them a voucher to find their own secondary insurance.
In today's political climate, everything a company does to save $ on employees health insurance will be blamed on Obamacare, even though these cost saving efforts have been going on for decades.
pnwmom
(108,995 posts)It's a convenient excuse.
blkmusclmachine
(16,149 posts)iamthebandfanman
(8,127 posts)pnwmom
(108,995 posts)The issue is their medigap policies, because Medicare doesn't cover everything. Low income people can have Medicare and Medicaid; and others buy medigap policies to cover what Medicare doesn't.
Skittles
(153,193 posts)guess again - the greed will leave NO ONE untouched
pnwmom
(108,995 posts)forestpath
(3,102 posts)quadrature
(2,049 posts)thank you IBM.
everybody wins
Butterbean
(1,014 posts)roamer65
(36,747 posts)I am expecting that this will be my last year of employer provided health insurance.
OutNow
(868 posts)People who went to work for IBM right out of college in the 1960s and 1970s when the IT industry was growing rapidly were asked to make a fundamental choice: Work for one of the new high flyers and get a higher salary and lots of stock options right away but few promises about the future, or join IBM and make about 20% less in salary but the best benefits in the industry. Included in these best-of-breed benefits were a good defined benefit pension and free healthcare insurance for life.
IBM sure kept their promises about a lower salary. The rest: not so much.
There are some protections for pensions via federal legislation and the attempted theft of pensions by IBM was somewhat thwarted by an employee lawsuit and help from members of Congress including Bernie Sanders, Jerry Nadler and Maurice Hinchey.
Health insurance has no such legislative protection. The free health insurance for life is long gone. The employee/retiree "contribution" goes up every year. Now, starting in 2014 IBM has cast off any responsibility for retiree health insurance.
Just the latest smack in the face.
OhioChick
(23,218 posts)Sep. 7, 2013
ESSEX JUNCTION, VT. IBM says it has taken down a job posting that raised questions about age discrimination about six weeks after it laid off 419 employees at the Essex Junction plant.
The advertisement was for entry-level development engineers in Essex Junction and in Albany and Hopewell Junction and required that "all applicants must have graduation dates of January 2010 or later."
IBM Spokesman Doug Shelton said Friday that the posting was a thoughtless mistake.
He said it would be pulled down and replaced.
An employee group called Alliance@IBM alerted media outlets, including the Burlington Free Press, to the ad on Friday.
http://www.poughkeepsiejournal.com/viewart/20130907/BUSINESS01/130907015/IBM-pulls-job-ad-after-age-questions-raised