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Turning 65: It Was Time for Medicare

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This is the first in a series of posts that examine the process of signing up for Medicare, navigating its rules, choosing supplemental coverage and planning for health care in a program with a very uncertain future.

Finally, it was time to sign up for Medicare after 23 years of writing about the subject as a journalist and giving advice to others. It was a coming of age, so to speak. Over the years reporting for a number of publications I had become sort of an expert on the program'one of the most complicated and complex the federal government has to offer. Medicare is wildly popular with beneficiaries for good reason. Without it, they would not get health care. But popularity is not the same thing as understanding, and lack of knowledge of how Medicare actually works has made seniors a juicy target for unscrupulous sales people and medical providers expert at scamming the system.

Medicare was never simple; it was intricately designed to satisfy insurers and doctors who opposed its creation. In the last six years, it has become even more complicated. This complexity stems in part from the fact that Medicare was never meant to cover all of someone's health expenses. In 2006, Medicare covered less than half of a recipient's total spending for medical and long-term care expenses. Seniors paid on average 25 percent of their total health care expenses including premiums, deductibles and out-of-pocket spending. How to cover those gaps is the first and most important decision anyone makes after signing up for Medicare. It was no different for me. Many seniors have more than 100 possible ways to cover these gaps. I had almost that many. Where to begin?

The first decision was whether to get all my basic Medicare benefits'hospital, doctor visits, lab services---from what's called original or traditional Medicare or from a Medicare Advantage plan. Medicare Advantage (MA) plans work much like old-fashioned HMOs. For a fixed payment from the government, health plans and providers agree to accept Medicare Advantage rates. In the last few years, those payments have been so high, MA plans have been able to throw in some extra benefits like dental or vision care. The downside is you have to use doctors in the plan's network. I would have to be comfortable with that.

If I chose original Medicare, that would mean selecting either a Medigap policy or keeping my retiree health plan from a former employer. Both of these options would cover the gaps in benefits under Medicare Part A, which pays for hospital stays and under Part B, which covers physician and outpatient care. They would cover most out-of-pocket expenses arising from those services.

Prescription drug coverage, known as Medicare Part D, added more complexity to my decision. If I kept my retiree plan, I would be able to continue the drug benefits I have now. If I chose a Medigap policy, I would have to buy separate drug coverage through what's called a stand-alone 'prescription drug plan.' If I elected to enroll in an MA plan, drug coverage would be included in the benefit package.

Each option came with advantages and disadvantages, which is the case for everyone signing up for Medicare. My goal was to find the option with the best coverage at the best price, and the one that offered the most long-term stability given the political upheaval surrounding Medicare itself. I began with some questions.

  • Should I take original Medicare or a Medicare Advantage plan? I would have to think long and hard about going into a restricted-doctor network because of long-term relationships I have with my doctors.
  • Assuming I picked original Medicare, would I be better off with a traditional Medigap policy and a stand-alone drug plan or keep my retiree health plan? I am one of the lucky few who still has excellent insurance from a retiree health plan that offers first-rate drug coverage. The coverage is expensive'more than $500 a month.
  • How much less would my monthly outlay be if I were to choose a Medigap policy and a stand-alone drug plan? This is where other considerations came in.
  • Would the retiree plan cover all of my Part B coinsurance, the biggest out-of-pocket expense in Medicare, if I went to out-of-network providers? My retiree plan, a PPO, offers both in- and out-of-network benefits. How it pays out-of network doctors is important.
  • If I chose the retiree coverage and my ex-employer dropped coverage, would I be able to choose a Medigap policy or a Medicare Advantage plan without having to pass an insurer's health requirements?
  • Since I travel out of the country a lot, which option'a Medigap policy or the retiree plan'would give me coverage out of the United States?

I was ready to search for answers, first looking at all the marketing brochures that sellers of Medigap and Medicare Advantage plans had sent my way.

 

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.


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Medicare   Trudy Lieberman   Pay for your Health Care   Trudy Lieberman - Turning 65   Aging Well  


Comments on this post
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medicareblogger says
April 11, 2011 at 6:31 PM

Trudy: You might want to talk to an independent insurance agent who works with Medicare Advantage, Medicare supplements, and Part D plans. I think you will be able to find one who is not "unscrupulous". The insurance agents I know (including myself) are very ethical and we provide a lot of help to our clients.

As insurance agents, we help our clients get signed up for help with their Medicare costs if their income is below a certain level. We also help them them enroll in programs that subsidize Part D drug costs for people with limited income. I visit with some of my clients every three months to help them re-order their prescriptions by mail. Mail order saves them money, but can be confusing, even for me.

Just a moment ago I got a call from a client, Jerry, who recently moved to Tucson from Colorado where he was enrolled in a Medicare Advantage plan. Given his age and health I told him to take advantage of a "special enrollment" that would allow him to get a Medigap plan with no medical questions asked. Jerry just called me to say he was getting a stove delivered and if I know what a "radiant top" is. I googled it and cleared up his confusion.

My point in sharing this story is that I go out of my way to help my clients, as do other agents I know. I know there are bad insurance agents out there, but most are good people who provide a very good service to seniors.

And while I don't like the idea of health insurance for-profit, Medicare Advantage (MA) plans in Arizona are very popular, with 45% of Medicare beneficiaries enrolled in these plans in Phoenix and Tucson. Nearly every doctor is contracted with the major MA plans, so the network is not an issue here in Arizona.

I tell my clients they should go with a Medigap Plan F if they want the best coverage and least confusion - but many are attracted to Medicare Advantage because it includes Part D and (in Arizona) comes with no monthly premium.

I blog at tucsoncitizen.com/medicare and share my knowledge of Medicare (and sometimes my political views) two or three times each week.

medicareblogger says
April 11, 2011 at 6:41 PM

Sorry to go on and on but...

Working with Medicare, I don't really think it is that complicated. If you get a plan F Medicare supplement, you will have 100% coverage for your Medical bills. Part D can be a bit more complicated, in my opinion.

Because you worked for a large employer with generous benefits, you seem to have more choices than most Americans. Most of my clients have a choice only between Medicare Advantage and Medicare plus a Medigap plan and Part D. Some people choose just Medicare with no other coverage.

In Arizona, 45% of Medicare beneficiaries are enrolled in Medicare Advantage (MA) if they live in the Phoenix or Tucson areas. MA plans have been in Arizona in one form or another for many years, and they work pretty well with most doctors being in their networks.

Because you had very good health insurance, you might think that Medicare plus a Medigap plan plus Part D is expensive. Here in Arizona a person can get a Plan F for $130 per month at 65. Add another $30 for Part D and $115.40 for the Medicare Part B premium, the total is $275 per month for 100% medical coverage (no co-pays no deductible).

I have many clients who went without health insurance until they turned 65, or they paid $800 per month for lousy coverage. These folks know that $275 (or $375) per month for wonderful Medicare coverage is an excellent deal. It's not complicated really.

If a person is talking to a reputable insurance agent, all of the coverage options will be presented and Medicare turns out to be not so complicated after all. I donâ??t think I can come up with 100 ways to fill the gaps in Medicare, even if I present every Medigap plan and every Medicare Advantage plan available in Tucson.