Beryl Gorbman

Beryl Gorbman, www.gorbman.com

Open enrollment period for 2012 Medicare is 10/15 – 12/7 2011 for coverage beginning January 1, 2012. If you are eligible for Medicare, you should be reviewing your coverages now and thinking over choosing or changing coverages as this is the only time you can do this until next year.

Use your copies of Medicare & You, the official government publication, and the resources at www.medicare.gov to verify what I say. Also, there are many details I am not touching on that might be critical to you – so check official sources thoroughly.

The difficulty of making good decisions about Medicare coverage is second only to the process of doing your own income tax. Both of these systems are so complex, and the results of making errors so dire, that I feel they are cruel setups for the average American to fail and cost themselves lots of money and perhaps their health.

When I went on Medicare, my smart retired nurse friend Judy R. had already done all the footwork for selecting good coverage. I just listened to her and on examining things more closely, saw how right she was.

Here’s the deal.

Medicare is divided into Parts.

Medicare Part A which is “free” to all Americans over 65. Part A covers a good part of  hospitalization and skilled nursing facilty costs. Part A has deductibles, some quite large. It does not cover doctor visits or consultations.

Medicare Part B is optional. It costs about $115 per year for everyone. Everyone is eligible. Part B partially covers doctor visits, medical equipment, PT, counseling, certain tests, x-rays and other diagnostics, an annual limited physical, limited optical services, and screening procedures and some preventive services. There are substantial limitations, co-pays and deductibles. Co-payments for chemotherapy or dialysis can be crippling. Part B pays no more than 80% of any of the services covered. Inquire carefully into HIV and AIDS coverage. If you can afford it, buy Medicare Part B.

Beyond A and B, there are other coverages you can buy from insurers. Which companies are involved vary by state and by county within states. Here are the general categories:

Medicare Part C. (aka HMO, PPO, Advantage). These are Medicare plans run by managed care organizations, like Kaiser Permanente, Group Health, etc. The plan must be Medicare-approved. Some of the plans offer help with prescription drugs (so you don’t need to buy Part D). These Medicare Advantage Plans, PPOs, etc.  have closed rosters of doctors and facilities. They vary in their amounts of co-pays.

When you buy a Part C Plan, Parts A and B are folded into it. Your monthly payment goes to the Part C Plan, and you don’t have to pay separately for Plan B. Plan C plan coverages vary and you need to check them out and verify what they do and don’t cover. Part C plans may offer services outside of Medicare requirements, like wellness programs, dental, vision, prescriptions, etc. Your main limitation with Part C is the closed system, the lack of free choice of doctors and hospitals. And of course, with Part C, you will have co-pays and deductibles.

There are excruciating details on what is and isn’t covered by Part C Advantage Plans on page 76 of your Medicare & You manual*. Also, on page 144 there is a list of all the Medicare Plan C companies, fees, and services. They are ranked according to customer satisfaction, which is interesting. Note the availability by county in WA.

What is generally not strongly stressed in Medicare literature, is that you can buy your own Medigap insurance policy, aka Medicare supplementary insurance. This does not have a handy alphabetical designation, like A-D. Medigap is meant to cover the GAP between what Medicare pays and what the patient pays.

You can own either a Part C Advantage plan OR a Medigap plan, not both.

Parts A and B are easy to sign up for and there is lots of info out there on how to do it. We won’t be discussing A and B any more in this article. Likewise the interactions between retiree insurance, etc. Read the manual. Medicare & You is mailed to every American over 65 every year. You should have already received yours if you are eligible.

Medigap Insurance is private insurance that can fill in many of the co-pay and deductible gaps left by plans A through C. It is often, but not always, more expensive than an Advantage Plan (C). You need to have Part A and Part B before buying Medigap.

Medicare Part D. This plan helps cover the cost of prescription drugs. You can buy a plan from a Medicare-approved prescription drug insurance company. These companies vary on which drugs they cover (formularies) and to what extent. You must compare them. The basic chart of companies and monthly fees is on page 147 of Medicare & You, but you have to check the individual formularies to see whether they carry the meds you need and which has the best prices.

If you don’t have a Part C plan or any plan with prescription drug coverage, you will probably want to buy a Part D plan.

Let’s look at Medigap coverage. If you can afford it, you should examine this option carefully. You can use any doc or facility that takes Medicare.

Under federal law, there are ten defined flavors of Medigap in the State of Washington. (They can vary by State.) Look at page 67 of your Medicare & You handbook to see what each one covers and doesn’t cover. Options are things like – paying your doctor co-pays, paying your hospital co-pays, blood, hospice care, paying deductibles, and covering foreign travel medical needs. Each of the ten plans covers all or some of these items and you pick the one that has the elements most important to you. Of course, the price of your Medigap plan can go very high depending on what you pick.

Medigap allows you to see any doctor or go to any facility that has a relationship with Medicare. You don’t need a referral. If you are going to have surgery, as with any other private coverage, it is wise to check in with your insurer beforehand to make sure they will cover it with no problems.

Now comes the fun part. These Medigap plans are available from a number of private insurers, different in each state. You need to go shopping because they can all charge different amounts for the same thing! For instance, if you choose Plan M, one company might charge $25 per month and another $100.

How do you pick a Medigap plan? It is totally up to you. You can pay a low premium and tend to have higher costs. Or, if you are a high-frequency medical consumer, you may want to pick a higher cost plan (like F or G) because you won’t have any co-pays, which will probably save you money in the long run.

(The alpha designations for Medigap Plans, A, B,C,D,F,G,K,L,M and N have no relationship to the the Medicare Parts A, B, C, D, etc.)

Here is how to figure out what each plan and insurer costs.

1. Go to www.medicare.gov
2. Under Family Plans, select Compare Medigap Policies
3. Fill in the window, mark No on whether you have a Medigap policy.
4. Now you are looking at all the Medigap policies. You can see that the range of monthly premiums for each plan varies widely. Let’s say you decided you are interested in Medigap policy F, based on what it covers. (You established that from the chart on page 67 of the manual.)
5. You can see that depending on what company you choose, the premium varies between $147 and $289 per month. You can also see that each company provides identical coverage (see Benefits checkboxes).
6. In the right-hand column, select all companies that offer policy F. You will see a list of all the companies which in your state allow the offer of policy F. Explore the column explaining how the ratings are arrived at. Be wary of companies that say, “Information not available.”
7. Go back one screen, and select View all benefits. Here you can see what the insurer pays and what you pay. Under plan F, you pay nothing for almost every category. This is one of the more expensive options.

There is a massive and exhaustive website called www.medicare.gov that has absolutely everything on it. Spend as much time as you can stand burrowing around in it.

Medicare seems to have a preference for Medicare Part C plans rather than the Medigap plans. They are probably a lot easier to administer. I can understand why they no longer feel it is their obligation to research the fees and details of the Medigap plans.

No part of Medicare pays for dental work or dentures or hearing aids.

Not all doctors or facilites accept Medicare, no matter how much extra coverage you buy.

Be analytical about Medicare options that are heavily advertised on TV, e.g. by AARP. AARP represents a number of insurance companies, and in my understanding is acting as a broker. The insurers they represent, like United Health, may have higher rates, to pay for the AARP brokerage fee.  There are two entities called AARP. there is AARP.org, the banner under which they advocate for the elderly, and then there is AARP Inc., which sells insurance of varying sorts.

NB: AARP is NOT an official source for Medicare information. The only official sources are the US Government publications at the beginning of this article.

I personally have Medicare Plan A, Medicare Plan B, Medicare Plan D and a Medigap policy from Mutual of Omaha. I receive statements and I don’t see bills. It all goes mysteriously through an administrator called CNS. I’ve been happy with Mutual of Omaha, recommended intially by the goddess Judy R.

Disclaimers: I imagine I have made some errors. If I have and you recognize them, please add a comment, so people will know. I am in no way an expert on this. I am a fumbling person over 65 who tries to negotiate her way through these Dept. of Health and Human Services manuals and websites. Even so, I would never try to do my own taxes, which involve secret twists that the average citizen can’t possibly know.

*The page numbers mentioned here for the Medicare & You book are for the Washington State version.