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Are the Medicare Plans You Have Still Right for You?

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Here we are at the Medicare ‘Open Season.’ Starting October 15, and continuing through December 7, all people with Medicare can change their Medicare health plan and prescription drug coverage for 2014. Although I’ve been happy with the Medicare coverage I’ve had for the past two years, I thought this would be a good time to review my coverage to see if it still worked for me.


For 2013, my Medicare parts A and B and my Medicare Supplement plan F together cost me $2,852. After a few calculations, I found that if I had only original Medicare, I could have saved just over $1,000.

 


Drug coverage is another issue entirely. My Part D drug coverage premiums and my share of my prescription drugs will cost me $1,408. Without the Part D coverage, my drugs would have cost me $3,530; the insurance saved me over $2,100. Clearly a good deal but various plans have widely differing costs and co-pays.


I had been wondering if I could do better. Am I over-insured? Can I do better on my drug coverage? Would it make financial sense to drop just the Supplement F plan? Would a different drug plan be better for me? Should I consider a Medicare Advantage plan?


These are questions each of us should ask ourselves each year before the open enrollment season. Unfortunately, the questions are not easy to answer. I put together a spreadsheet showing my medical claims and payments, and my drug claims, to figure out what the numbers are. The information is available online, or by your paper ‘Explanation of Benefits’ (EOB) claim reports.


To complicate matters, my Part D drug plan sent me a thick book telling me about changes in my drug coverage for 2014. The arrangement of the book is so confusing, and the information contained in it is in so many different places, that I simply gave up on it. I think the intent is to make it so difficult to get the answer that people decide to just keep the plan they have.


It doesn’t have to be this hard. The Medicare.gov website is the single best place to get information on what your current plans, and potential alternates, will cover, and an unbiased estimate of what your total medical bills for the year will be. It is in my opinion the single best website on the internet. Period. The amount of information available, the way it is arranged, and the flexibility of the system make it easy to use for even the most inexperienced user. 


Not a computer user? You can get information from 1-800-MEDICARE (1-800-486-2048), or from SHIP (your State Health Insurance Assistance Plan; the folks at 1-800-MEDICARE can give you your state’s SHIP number.)


I don’t believe in going without health insurance. Even with basic Medicare parts A and B picking up about 80% of the cost, a lengthy hospital stay could bankrupt me.


Consider this. Medicare Part A provides excellent hospitalization benefits. But each time you are hospitalized your costs are likely to be $1,184. (It’s more complicated than that, but so are most things about health care.) The problem? There is no limit to the number of times you are hospitalized. For example, four hospitalizations could easily cost almost $5,000 for the year. There is no upper limit on your out-of-pocket costs.


Medicare Part B provides your medical care, such as office visits, lab work, x-rays and other medical services. It has a modest deductible (currently $147 for the year), and then pays about 80% of the approved cost. You are responsible for the rest, and again, there is no upper limit for the year.


Unless you have a lot of money stashed away, going without insurance is foolish.


You have several choices:


MEDIGAP / MEDICARE SUPPLEMENT POLICIES

Medigap plans, available from private insurance companies, cover part or all of the deductibles and copays you are responsible for in Medicare Parts A and B. If you like to avoid risk, most of these plans will nail down your medical costs (but not your drug costs) for the year. Each category of Medigap policy is exactly the same, no matter the insurance company.


Policies are named A through N. All but four cover your entire Part A deductible. Three cover your Part B deductible, most cover all or a portion of the costs Part B does not. The price of each category of policy varies widely by company, usually based on your age, where you live, and whether you are a smoker.


These plans are not cheap. For example, the most comprehensive, a plan F, ranges from $1200 to $2400 a year. But that will probably be the cost of your medical care for a year. The higher the price, in general, the more the plan covers.


PART D PRESCRIPTION DRUG POLICIES

Part D plans cover about 75% of your prescription drug costs, until the total costs reach $2850. After that you are in the ‘donut hole’ (also called the Coverage Gap) until your out of pocket costs reach $4550. Figuring what you actually will pay is complicated. An approximation is about $2050 before you reach ‘Catastrophic coverage,’ where you pay a small copay, usually about 5% of the drugs cost.


Your cost could be more, depending on your Part D policy premium, the plan deductible, and whether your drugs in the donut hole are brand name or generic. If they are all generic, your cost could be as much as $3000 for the year. However, without the drug plan, you would have paid $4550 for your drugs. Part D plans (in my area, yours may be different) range from $12.60 to $47.70 a month. However, you really have to look at the total cost for the year; cheaper plans tend to have higher estimated overall costs.


Individual circumstances vary. You may currently need so few drugs that you can go without a Part D policy. There is a modest penalty if you decide later that you need coverage.


Drugs and Part D premiums can feel out of reach if you have very limited income. Fortunately, there is ‘Extra Help’ available if this is your situation. In 2013, you may qualify if you have up to $17,235 in yearly income ($23,265 for a married couple) and up to $13,300 in resources ($26,580 for a married couple).


If you don’t qualify for Extra Help, your state may have programs that can help pay your prescription drug costs. Contact your State Health Insurance Assistance Program (SHIP). Call 1-800-MEDICARE for your state’s SHIP number.


MEDICARE ADVANTAGE PLANS

Advantage plans effectively replace original Medicare with an insurance plan that can have a monthly premium as low as zero. You still have to pay your Part B premium, usually $104.90 a month. The government contracts with these plans to pay a fixed amount each month to the insurance plan, which then provides you your healthcare and your prescription drug coverage.


Unlike most Medigap Supplement plans, Advantage plans usually have a copay for hospitalization and medical care. However, at least in my calculation of my current coverage and general health, an Advantage plan saves me money. For the plan with the lowest overall estimated medical cost, I save about $1,100 a year on my drugs alone. And my estimate of my overall costs show a savings of about $1,500 a year.


HOW DO I FIGURE IT ALL OUT?

Step 1. Figure out how often you had medical care this year and last year, and what you spent on that care. You can find that information at www.MyMedicare.gov, or if you have a supplement plan or Advantage plan, at your insurance company’s website. Similarly, how many drugs do you take, and what are they costing you? This information is usually available from your Part D insurance company, your Advantage plan provider, and possibly through your pharmacy or on their website. And, if your drugs are brand-named, there may be cheaper generics available. You might want to talk with your doctor about that, even if you decide to keep the plan you have.


Step 2. Are there other alternatives available to you for medical care and prescriptions drugs. Did you and your partner recently get married? If he still works, you may be eligible for coverage under his employer health plan. Are you a veteran? You may be eligible for medical care from the VA: you can apply online at www.va.gov and in general, you will get a rapid response by mail. You can also apply by phone, by mail, or in person at any VA medical center or clinic. Call at 1-877-222-8387 for information about any of these options. Is your income very low? You may also be eligible for Medicaid. Eligibility varies from state to state, so call your state SHIP for help. You can get the number for your state at 1-800-MEDICARE.


Step 3. Go to www.Medicare.gov, enter your prescriptions (if you haven’t already), and select your preferred pharmacies. On the next page you go to, headed ‘Refine Your Plan Results,’ you can limit the plans displayed by such things as your monthly premium, your drug deductible, your drug options (for example, you might want to display only plans that cover all the drugs you are taking), and several other options. When I am doing this, I generally ask to show only plans that have all my drugs. The website will display all the plans that meet your criteria, initially displayed from lowest estimated annual health and drug cost, to highest.


Step 4. If you are happy with the coverage you have, you don’t need to do anything. The plans you have selected will continue (unless they have notified you that they are not going to offer the plan in your state for the next year).


If you see a plan, or several plans, that interest you, you probably want to do a little more research, which you can do from Medicare.gov. Here are some of the details you should explore.

 

  • Does the plan allow you to see your current doctors and go to your favorite hospital? The plan website usually has a provider directory where you can find this information.

  • What kind of co-pays does the plan require? Medicare Advantage plans usually require a co-pay for each doctor visit, for the first 4 or 5 days of hospitalization, and for other services.

  • What other things does the plan provide? For instance, some plans offer dental, hearing and vision coverage. Many plans offer plans like ‘Silver Sneakers’ which give you a free fitness center membership. This is an important benefit, since an active senior is probably a healthier senior, and gym memberships often cost as much as $500 a year.


When you have selected coverage that you like, you can enroll from the Medicare.gov website, or by calling 1-800-MEDICARE.


If you can’t afford these plans, contact your state’s SHIP for help in finding affordable options.
You have until December 7.

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Last modified on Sunday, 03 November 2013 22:07