How good is Medicare?

Medicare is a pretty good insurance plan but it has some big gaps and no cap on a person’s medical bills.  For 2010 the Part A deductible will be $1,100.  This means, if you go into the hospital you must pay $1,100 of the hospital bill and Medicare pays the rest…EXCEPT for doctors’ fees.  Doctor fees come under Part B of Medicare, which has a $135 deductible.  After you pay this deductible Medicare will pay 80% of your doctor bills.  You must pay 20%.

I have heard many stories of people who have “just Medicare” and have run into big medical bills.  Here is an example:

I got a call recently from a man in Bullhead City, AZ  who  lives on $1,100 per month and has Medicare.  He was recently rushed to the hospital and spent a week getting treatments for a liver problem.  Medicare paid all but $1,068 (2009 deductible) of his hospital bill, but he has to pay 20% of the bills for the surgeons and doctors who treated him during his hospital stay.

He told me he now owes thousands of dollars in medical bills, which he cannot pay. He still needs treatment, but doctors and labs have told him he needs to pay his 20% upfront or they won’t see him.  Needless to say, he hasn’t got the money and is not getting treatment and tests he needs.

This example shows that Medicare alone is not adequate coverage, as 20% co-insurance can easily add up to thousands of dollars.  And Medicare has no limit on what a patient might pay for their 20%.

I know Democrats hate Medicare Advantage, but these can be helpful for a person like this man who is on a limited income. With most Medicare Advantage plans, his costs would have been limited to between $600 and $1,000 for his hospital stay. And he could see a specialist for treatment for about $40. He could get the care he needs if he were enrolled in a Medicare Advantage plan.

As usual, when it comes to arguments for and against something, the truth lies somewhere in the middle.

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11 Responses to "How good is Medicare?"

  1. Jonathan DuHamel says:

    How do you apply for Medicare part D?  Is that done through the government or do you contact an insurance company?

  2. medicareblogger says:

    You can sign up for Part D drug coverage between November 15 and December 31st, and your coverage would begin on January 1st, 2010.  While Part D is a Medicare program, the drug plans are provided by insurance companies. 

    To find the right plan for you, you can go to www. Medicare.gov and click on “compare drug plans”.  You put in your zip code and the system will give you a list of companies offering drug plans in your county.  There are 46 drug plans offered in Pima County (!!??).

    If you take brand name drugs you will want to use the function on the Medicare site that allows you to put in your drug info.  The system then tells you the best plans for your prescriptions.  You see, each company has a different “formulary” and some drugs might not be on every company formulary.  As well, some brand drugs are a tier 2 on one company’s plan and a tier 3 on another company’s plan.  Tier 2 drugs might have a $30 co-pay while tier 3 could be $70 – a very big difference.

    The next thing you will look at is cost, and the lowest cost plans are on the first page on the Medicare.gov site where the plans offered in your county are listed.  These cost between $17 and $20 dollars, but most people don’t choose these plans because they have a deductible of $310.  This means you get to pay $18 per month but you must still pay the first $310 of your prescription bills.

    Most peope who take several brand drugs will choose the higher priced plans, which run between $34 and $60.  I see that Unicare has a plan with no deductible for $25/month – but I think their formulary may be limited. Most people probably choose the AARP Preferred plan for $35.20 per month.  United is the actual insurance company for the AARP plan and they have a large formulary.

    You can sign up on-line for a plan or with an insurance agent.  When you turn 65 you have six months to sign up for Part D.  If you delay enrolling in Part D, say one year, you will face a penalty for late signup.  So if you waited 12 months to sign up for Part D, a 12% penalty would be added to the average Part D premium (whatever that is). If the average is $35, you would pay for your AARP plan premium ($35.20 plus 12%, or $4 = $39.20 per month).

    Whew, that’s a bit complicated isn’t it?  Why do you suppose that is?

  3. medicareblogger says:

    Corection on the Part D initial enrollment period when you turn 65.  You can sign up for Part D 3 months before you turn 65, the month you turn 65, or the three months after you turn 65.  If you turn 65 in January you must sign up either in Jan., Feb, March, or April.  After April you will not be allowed to sign up until the end of the year and you will pay a penalty for those months when you could have been covered but were not covered (May – December, 7 months).

  4. tiponeill says:

    “I know Democrats hate Medicare Advantage, but these can be helpful for a person like this man who is on a limited income.”
    Umm – as a Democrat I can’t remember having the least tinge of animosity towards Medicare Advantage – although I can safely say that Republicans have exhibited hostility towards Medicare in general.
    I would be happy to back that statement up – would you care to back up your incredibly partisan “Democrats hate Medicare Advantage” with any references ?
     

  5. Christina says:

    Medicare is not perfect. It costs a lot of money in relation to a disabled or retired person’s Social Security Income (which is NOT an entitlement — we all paid into the system).
    Many doctors refuse to treat Medicare patients because they feel reimbursement is too low and agreeing to take Medicare limits the fees they can charge. So it is hard to find a doctor.
    However, a disabled or elderly person is otherwise pretty much uninsurable. Or insurance costs more than income. Or insurance does not cover pre-existing conditions. Or all of the above. Medicare compared to available alternatives is great because it is something.
    Is the person in your example working with a counselor? A low-income person can qualify for Medicaid, which pays all the rest of the bill.
    One pays for Medicare. It is about to be upped to more than $100 a month without Medicare recipients getting any increase in Social Security payments (because there is no recorded inflation because inflation data does not measure the real expenses of seniors). Part D has been roughly $30 a month.
    Medicare pays 80 percent for the conditions and procedures authorized in Medicare and You (If the treatment is not in Medicare and You, it is not covered).

    To cover the remaining 20 percent not paid by Medicare requires Medigap Insurance. I use AARP’s Plan F. I don’t know what the new rate will be. The old rate is roughly $187 a month. It covers the deductibles and the remaining balance Medicare does not pay.

    I pay about $315 a month, about 20 percent of my monthly Social Security income. I pay more in deductibles for medications and for medication not covered by Medicare Part D. So roughly one-third of my income goes for total medical-related expenses.
    I pay more for health care than I do for housing.
    Have to say that when I hear regular, healthy people complain that they have to pay more than $300 a month for health care, I just shrug. When they get disabled or retire, they’ll be paying what I pay.

  6. medicareblogger says:

    President Obama has said on multiple occasions, “We need to get rid of Medicare Advantage”.  Rep. Pete Stark of California, who heads the Ways and Means Subcommittee on Health has made many statement sabout getting rid of Medicare Advantage. I could go on and on with examples of Democrats attacking Medicare Advantage.

    These private Medicare plans are attacked by Democrats because they represent the privatization of Medicare.  During the Bush years these plans were given more money to attract more seniors to move from Medicare to Medicare Advantage.   Now they say these private plans are paid 14% more than Medicare pays out for the average Medicare beneficiary. 

    But it is not clear that Medicare HMO’s, like we have here in Tucson, are paid more and thus wasting Medicare funds.   Democrats have written substantial cuts for Medicare Advantage into the healthcare reform bills in both the House and Senate.  I’ve read the bills.

    With 40% of seniors in Pima county enrolled in these plans, there is going to be a lot of confusion in 2011.  Plans have already made changes for 2010 due to small cuts pushed by the new leaderhip in Medicare – and plan enrollees are just now getting that information.

    You can see my back and forth with a person who gets paid to study Medicare budgeting and policy in the link below.  This economist is a number-cruncher who sees ways to cut costs out of the Medicare budget – but he is oblivious to the effects the cuts will have on seniors living on very limited incomes.  His general response is:  not that many seniors will be affected, and too bad for those that are hurt by the cuts.

    Seniors making less than $900 per month get AHCCCS (Medicaid). But there are many, many seniors living on $1,000- $1200 per month. These folks might get help with their drug costs, but they don’t get help with medical costs.  This is where Medicare Advantage, in my opinion, is a better choice than just having Medicare – because Medicare leaves them with 20% co-insurance.

    http://theincidentaleconomist.com/medicare-advantage-cuts-once-more-with-feeling/

  7. medicareblogger says:

    Christina: 
    I told this man to go to AHCCCS because, with his medical bills, he might qualify for AHCCCS to become his secondary payer.  I’ve talked to people who have big medical bills and learned that AHCCCS will use a formula where their monthly medical bills will be substracted from their income, thus putting them under $900 per month which would qualify them for AHCCCS.

    The Medicare Part B premium is not going up for 2010. It is $96.40, which is generally take out of a person’s social security check.

    You are a good example of someone who is struggling under our crazy healthcare system.  The government gives you social security and then takes it away to cover your health insurance costs.  Most seniors on Medicare are fairly healthy, but for people with chronic illnesses there needs to be a better system so you can afford to live AND get medical care.  Unfortunately, I don’t think the healthcare reform bills are addressing your needs and the needs of millions of people like you.

  8. tiponeill says:

    I stand corrected – I wasn’t awaqre of the details of Medicare Advantage being a private plan that we have to pay more for than Medicare.
    As such it seems only fair that we would pay the same amount to Medicare and Medicare advantage, don’t you think ?

  9. medicareblogger says:

    Payments will most certainly be cut to Medicare Advantage, but it depends how they structure the cuts. Do they do it to drive insurance companies out of the business of Medicare Advantage?  This could leave seniors with no options for their Medicare coverage.  Or do they look at what types of Medicare Advantage organizations work within the budget constraints in order to continue to make this type of option available to seniors?  I hope they choose the latter. 

    I hope they don’t throw the baby out with the bathwater, which would leave seniors on limited incomes with no choice and no protections.  I have a feeling from everything I’ve read, that the only advocates for Medicare Advantage are the insurance companies and Republicans.  There needs to be an advocate that Democrats might listen to concerning Medicare Advantage and how Medicare HMO’s can protect seniors with limited incomes. 

  10. Marie says:

    MedicareBlogger – I need some guidance.   My kid sister who is in her 30s and who lives with me is developmentally disabled.   Previously, I was able to carry her on my private insurance, but that isn’t an option anymore. 

    She has Medicare, parts A and B.   Aside from recently getting a pamphlet, okay…  a book, detailing info, rules, regs, etc.   I have nothing else.   We’re lost.   Where do I even start in terms of learning about Medicare?  

  11. medicareblogger says:

    You can email me at medicareblog@gmail.com and I’ll answer any questions you might have.

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