November 2, 2011
Medicare: How do I evaluate additional coverage?
Medicare Advantage, Medicare Supplement, Medigap. Let’s get specific about which coverage to choose.
Medical insurance is not like any other insurance you have. Some common insurances, like home owners and auto, may be required by lenders and or state authorities, but you hope you never have to use it. You really have little choice on how much coverage or how much to pay. Medical, however, is much more personal in that most of us have a pretty good idea of what medical services we will need from year to year. Of course there will be unexpected illnesses or accidents from time to time. But overall, we can estimate our medical needs and how much they may cost.
So, we base our coverage on what premium we can afford, how many doctor visits we expect, what drugs we need, and how much risk we are willing to take with major medical expenses. High costs of health care pretty much dictate that we must have at least some protection against doctor and hospital visits that could lead to financial ruin. For example, my heart cath last year was expensed at $16,000. How would I have paid for that without insurance coverage? What if I had been diagnosed with a blockage that needed surgery? My out-of-pocket amount was $150. I can handle that, but not $16,000.
There are many, many questions you need to ask yourself and the insurer when deciding on what coverage type and coverage plan is right for you. Here are a few to get you started.
How much insurance do I need?
You may know the number of primary care and specialist visits, what prescriptions, and what lab tests you will have in a year’s time, and what they may cost. If you don’t know, you better find out so you can decide if extra insurance is worth the premium. Why pay a monthly premium of up to $200 per person, in addition to standard Medicare, if you don’t expect that there will be claims?
What is my basic health status?
A person with a history of heart problems, diabetes, back pain, eye problems, or any other regularly occurring health issues requiring hospitalization or specialist care can expect the possibility of them recurring during the year.
Which type of additional insurance should I get?
Medicare is standard and (somewhat) understandable. The Medicare Advantage and Medigap plans require lots more analysis to understand their options and coverages. They all are unique as to costs, restrictions, claims processing, etc. Learn as much as you can about how each would work for you. Don’t assume that the highest premium plan would be best for you.
What is a Medicare Advantage Plan (MA Plan)? Is it Medicare?
MA Plans are a form of Medicare administrated by private companies approved by Medicare. They must cover all of the services of Medicare (except Hospice) but can charge different out-of-pocket costs and have different rules for referrals, doctors, facilities or suppliers. For instance, a recent visit to an urgent care facility cost me $35 under my MA Plan, where original Medicare would have been $0. All MA Plans are not the same as to premiums and coverage, so they must be examined to determine how they work for your individual situation. You must still carry and pay the premium for Medicare Parts A & B. MA Plans are not Supplemental Plans.
What is a Supplemental Plan? (Also called Medigap)
This is insurance that can help pay some of the health care costs not covered by Medicare, like copayments, coinsurance, and deductibles. They are standardized policies, but different insurance companies may charge different premiums for the same exact policy.
Do my doctors participate with this plan? Some plans provide “in network” and out of network coverage, with a different co-pay for each. Using the latter usually means you pay more and have more paperwork to complete a claim. Ask your doctors if they “participate” with any plan you choose.
How much will I pay for prescription drugs? Are they covered under this plan?
Medicare A & B does not include coverage for prescription drugs. One recent mailing from a private insurer showed a monthly Rx premium of either $40.30 or $89.70 for the same coverage I now get for $0 premium. One friend of mine has the same plan as I and doesn’t even think he has drug coverage. He does, but hasn’t needed to use it.
What if I travel, go south for the winter?
What kind of plan should I get just to make sure I would not suffer financially if I had a serious illness or operation?
What would Medicare have paid if I didn’t have Medicare Advantage or a Medigap plan?
How do I access details on line?
What if I have other company retiree coverage? Should I keep it or change?
The questions and personal issues go on and on. By now it should be obvious that this is a very complex area and the best way to address it is to go to the seminars put on by most, if not all, of the insurance companies. Bring your “Medicare & You” booklet. Be an informed consumer!