Monday, August 20, 2012

Non-Medicare Retirement Medical Insurance - Giant Rip-off? Depends on the Provider.

For those of us who were fortunate enough to have medical insurance coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act), so many of us have found it very beneficial.

Originally, my coverage as a retirement benefit was to be provided ‘free of charge’ when I retired from a company at 51 years of age with 31 years of service.   Yes, I had to work thru college to pay the tuition!
The company was in sound financial shape, but was beginning a merger with a company that I did not think was financially sound.  The company was relatively new, around 5 years and appeared to be growing exponentially.  I have always been one to review companies looking at the past 5 years before investing in their stock.  This company had no history as such.  I decided to relocate to another job for the next ten years.

I made a decision to leave, take a cash value of my retirement fund and roll it into an IRA.  The 401k was performing well, including the current company stock, as I was invested in about 60%.   As the merger neared, I started moving from stock to other investments.  Since the stock was still climbing, as I finalized retirement, I left about 20% in the stock. 

After the merger, I also noticed that the board and the new CEO was dumping as much stock as allowed. It became a daily stock watch to see what was happening.  I moved all but about $15,000 out of the stock.  When I reached $10,000, I dumped the remaining stock.

That was the beginning of a long fight of the CEO and upper management being charged with fraud.  The merged stock went from a high $59.00 to about  $.50.  It even stopped trading.

My ‘at no cost’ insurance was now about $100.00 a month.   Over the years, it gradually climbed to $591.00 a month.   I tended to have very good insurance coverage, even at high prices.

Last year, the merged company merged again with another company after the insurance premium had gone down a bit.   I still had very good coverage.  This year the new company changed the coverage from Health Partners Open Access to MEDICA, which did not reduce the cost from last year, but reduced coverage to 80%.  Luckily, I only had to keep them for 6 months.  I would never voluntarily choose that company for insurance.  Those six months had prescriptions filled without the correct prescriber listed and my card used to pay for the medications was compromised on their site. Credit card was cancelled and reissued.
Also this year, I had to enroll in Medicare, and of course, MEDICA is one of the companies bombarding my mailbox with junk mail.  They even had the nerve to start calling me on my cell phone, which I never give to any business.  I had to threaten filing a complaint with the Do Not Call office to get them to stop.

I have always supported COBRA, because it usually provides reasonable coverage to people who leave a job, whether voluntarily or involuntarily.

I finally retired in 2009 from the company that I accepted employment with.  I chose to continue with my former employer’s insurance, because it offered better coverage and I preferred the insurance provider.
This company also merged with another company, which reduced their insurance coverage to employees.
I was offered ‘retirement’ insurance from this company, but declined. Basically the price and coverage could best be described as ‘a joke’!

Advice to all young people (late 20 somethings or 30 somethings who may read this post….
  • Plan on how you would like to live. If you like the 'bling' you must have the skills and education to get the salary to support that life style.
  • It is not necessary to have the latest gadget or latest fad.
  • Buy good quality merchandise, shoes, and clothing.
  • Save at least 10% of your earnings; half in tax deferred and half in after tax.  Tax deferred means you do not pay tax on that money now and cannot use it until you are at least 59 1/2 without tax and a tax penalty!
  • Stop trying to keep up with the Kardashians, they are doing what they can to earn a living.   Why try to impress people who have no real meaning to you?
  • Impress yourself by knowing that come hardship, you will have a nest egg
  • Buy medical insurance, you could go broke without it!
  • Pay attention to what Suze Orman says!

© 2012

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