How exactly does Medicare handle high medical costs?

[MichaelB]

Apparently not all Medicare supplemental policies are available in all states. Not sure why.

Sent from my two Campbell's Soup cans linked by a string

My guess is Medigap policies have to meet Medicare mandated standards but are private insurance with no federal sponsor and subject to state regulation. So, only available where there is clear profit potential.
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[aja8888]

I know most of you are under 65 and Medicare is not an issue to deal with yet, but for those who are near or in it, remember that having a MA plan and wanting to switch to a Medigap (supplemental policy) later on, acceptance is subject to a medical review for eligibility. If you have pre-existing conditions, you may not be able to qualify for a Medigap policy.

 

[imoldernu]

Federal Government Handbook
http://www.medicare.gov/Pubs/pdf/10050.pdf
The answers to most questions are there. Almost all of the restrictions are logical, or subject to board review, as in cosmetic surgery, or tests that are not called for by a doctor's recommendation.

We have been on Medicare and Supplement for 13 years. Medicare D since it began.
In that time, although we've had some major health issues, not one single problem with authorization or payment.
The people who handle requests for information at the government call center, are knowledgeable, understanding, and most helpful.
Of all the challenges that we face in the aging process, this has not been one of them.

 

[GrayHare]

In such a situation, Medicare simply refuses to pay for certain items and dumps their cost on you and/or the provider.

 

[Refresher]

I have full Plan F (not high deductible). I had a total hip replacement done by a top surgeon using the anterior procedure and my total cost out of pocket was $0. That included the pre-op physical, stay in hospital (which was brief - 2 1/2 days), follow up visits, meds (a few), a regiment of anti-blood clotting injections (administered by my DW ), and a week of home based physical therapy (which I cut short after three days). Stiches out after 10 days and then just long walks to strengthen leg. My premium for plan F is approximately $220/month. It's a good deal and coupled with the Medicare premium, and a good Plan D drug plan, it's considered the Holy Grail of insurance for a person on Medicare.

What is the monthly cost for everything a Medicare patient (with Cadillac coverage) needs to pay?
Are co payments and drugs reasonable compared to ACA?

 

[REWahoo]

What is the monthly cost for everything a Medicare patient (with Cadillac coverage) needs to pay?

There are a number of variables. Depends on your income, the drugs you take, and, in the case of a Medicare supplement policy, your age. For someone age 65, the total monthly cost of basic medicare, a comprehensive drug policy (Part D) and a Plan F supplement might be $300. For someone age 80, that same coverage might be $500 or higher.

My age 65 cost was $168/mo. That included a low-end Part D (I take no prescription meds) and a $2,000 high-deductible Plan F supplement ($44/mo vs $135/mo for the no deductible).

Are co payments and drugs reasonable compared to ACA?

I'm not aware of any co payments.

Are drug costs ever reasonable?

 

[Live And Learn]

My retirement plan includes 15k for medical expense for two after age 70 (30k per year before that). Seems like this should cover a cadillac plan so I'm happy.

Someone mentioned that you need to be medically approved for a Part F is you dont currently have one (after age 65). Did ACA not address pre-existing conditions in Medicare also ?

 

[REWahoo]

Someone mentioned that you need to be medically approved for a Part F is you dont currently have one (after age 65).

Not so. If you choose a Medicare supplement plan (any letter of the available alphabet) when you initially go on Medicare, there are no prequalification requirements. What I recall being posted was if you chose a Medicare Advantage plan rather than a supplement, then subsequently wanted to switch to a supplement, you had to qualify.

For the difference between a supplement and Medicare Advantage, Google is your friend...

 

[aja8888]

What I recall being posted was if you chose a Medicare Advantage plan rather than a supplement, then subsequently wanted to switch to a supplement, you had to qualify.

Yes, this above was what I posted.

As far as cost for me (at the moment):

Medicare part B - ~$110/month
Full Plan F - ~$220/month
Part D Drug plan - $22.50/month

Take only one drug - $8/month, no deductible in the Part D plan.

DW is about the same but has a pretty high drug requirement and we spend near $3500/year for our part of the drug cost. Her plan also has a $300 deductible.

 

[MRG]

The advantage plan is cheap, it's formulary is pretty light for DW needs. Many popular meds are just not covered. Some are reasonable, but many of those are on pharmacy $4.00 list. Other's well, I just got DW a bottle of ear drops, for $80.

MRG

 

[Refresher]

There are a number of variables. Depends on your income, the drugs you take, and, in the case of a Medicare supplement policy, your age. For someone age 65, the total monthly cost of basic medicare, a comprehensive drug policy (Part D) and a Plan F supplement might be $300. For someone age 80, that same coverage might be $500 or higher. My age 65 cost was $168/mo. That included a low-end Part D (I take no prescription meds) and a $2,000 high-deductible Plan F supplement ($44/mo vs $135/mo for the no deductible). I'm not aware of any co payments. Are drug costs ever reasonable?

I guess what I'm looking for is there an annual number (premiums plus out of pocket maximum) that is everything you may have to pay if your bills including prescriptions and treatments went into the millions.

 

[imoldernu]

Part B costs | Medicare.gov

BTW... the "most people" cost is the rate for single tax filing of $85K or less or joint filing of $170K or less. if I were in that bracket, I'd consider hiring a consultant.

Our total costs... Medicare B, Medicare supplement, Medicare D,average about $9K/yr. That includes all deductibles and what I would consider to be an "average" medication usage. YMMV

While everyone has the best intent in offering advice, you really should consider spending the time to understand how the system works, by going to the official government site for answers. The link above outlines costs for the various plans. For detailed information on costs of medications, (Plan D) it is necessary to go to the government website and enter your specific information to go to a camparison of plans that are available in your area.
For other questions, simply go to the government website, log on, and call the information mumber.
First page of "costs":

 

[REWahoo]

I guess what I'm looking for is there an annual number (premiums plus out of pocket maximum) that is everything you may have to pay if your bills including prescriptions and treatments went into the millions.

No, there isn't.

I think Imoldernu provided some good advice above. To understand Medicare you have to spend a little time and effort reading about the nuts & bolts of how it works.

 

[MRG]

I have used this site for DW mid last year(?). Then I focused on ACA as it seemed I had the health care costs. I'm realizing that my DW may need more coverage than her advantage plan covers.

Not sure I can change anything till next open enrollment, the big effort will be the research involved. YMMV.

MRG

Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

 

[SteveL]

One generally enrolls in Medicare shortly before turning 65, with coverage effective at 65th birthday. Medicare Supplement policies are then available without underwriting for 6 months provided you can provide evidence of having health insurance prior to 65th bday. Evidence is usually in the form of a letter. This same window applies to Medicare Advantage plans. If you continue to work and get coverage there, generally you sign up for Medicare Hospital insurance, and delay signing up for everything else until you stop work, and then the six month window begins.

Once you have medigap insurnace, you can retain indefinitely just by paying the monthly premium. However, you cannot change carriers without being subject to underwriting for pre-existing conditions.

Medicare Advantage plans have an annual period during which you can change carriers w/o underwriting. These plans are designed to simulate HMO's. This means that there are generally copays, deductibles etc.

For Uncle Sam, Medicare Advantage is a big loser. It costs the US about $800 per month per enrollee extra over and above the cost of regular Medicare. As the search for cost savings goes on, there will be additional pressure to reduce these subsidies. Some reductions are already in the ACA to help pay for it.

If you can afford it, Plan F is very desirable. My DW had a total knee replacement. Her total out-of-pocket was 0$. The downside of Medicare with a supplement, is that in some areas reimbursement for doctors is too low and many drs. refuse to accept Medicare patients. The coverage in Medigap policies is set by Uncle Sam, so all Plan F policies are identical. Medicare Advantage plans are all different and you need to review the options to pick the plan that is best for you.

Over time, you can expect your Plan F (or other letter) to gradually increase as medical costs go up.

Our per person costs for Medicare, plus supplement, plus drug plan are less than we were paying for retiree medical prior to age 65.

 

[aja8888]

Nice write up, SteveL. I don't recall having to show proof of prior continuing medical insurance when I signed on to Medicare, though.

All in all, Medicare has proven to be a great deal for us older folks as compared to the new ACA insurance costs across the board. While I have been fortunate only having a hip replacement since I signed on, DW has had several fairly lengthy hospital stays from problems related to COPD and she is on several costly meds. Most of this has been totally covered (Plan F also) although she hit the doughnut hole a few years in a row.

 

[Live And Learn]

Not so. If you choose a Medicare supplement plan (any letter of the available alphabet) when you initially go on Medicare, there are no prequalification requirements. What I recall being posted was if you chose a Medicare Advantage plan rather than a supplement, then subsequently wanted to switch to a supplement, you had to qualify.

Yep - that's what I understood. My question was really around pre-existing conditions. If disallowing pre-existing conditions is now illegal for ACA plans, why is it still ok for Medicare Supplement plan ?

 

[MichaelB]

Yep - that's what I understood. My question was really around pre-existing conditions. If disallowing pre-existing conditions is now illegal for ACA plans, why is it still ok for Medicare Supplement plan ?

Insurance always has a need to deter people from gaming the system. If people opt for the minimum coverage, and then increase it when they get sick, insurance doesn't work as well. What Medicare does is ask you to choose your level of supplemental coverage when you first sign up. You are guaranteed access to the policy level you choose. After that point you can increase coverage only if the insurer accepts, and you can decrease coverage as you wish, both during open enrollment periods.

 

[meierlde]

Another little fact about Medicare, it acutally starts the first day of the month you turn 65, and if you are born on the first it starts the month before. (To make the paperwork simpler).

 

[haha]

There are a number of variables. Depends on your income, the drugs you take, and, in the case of a Medicare supplement policy, your age. For someone age 65, the total monthly cost of basic medicare, a comprehensive drug policy (Part D) and a Plan F supplement might be $300. For someone age 80, that same coverage might be $500 or higher.

This also is state specific. My brother who lives in TX has a policy similar to yours. In WA, as well as some other states, the premium does not vary with age. It does vary with statewide underwriting experience. A few years ago the companies got cute and figured out how to wall off some older policy holders into a run-off group, which put them at a significant disadvantage. A change in state law put that to rest, and my premium immediately dropped by $75-$80/mo. WE have tended to have very consumer responsive insurance commissioners, Mike Kreidler currently.

Ha

 

[FIRE'd@51]

Insurance always has a need to deter people from gaming the system. If people opt for the minimum coverage, and then increase it when they get sick, insurance doesn't work as well. What Medicare does is ask you to choose your level of supplemental coverage when you first sign up. You are guaranteed access to the policy level you choose. After that point you can increase coverage only if the insurer accepts, and you can decrease coverage as you wish, both during open enrollment periods.

Herein lies a significant problem in the design of the ACA. As I understand it, during the yearly open enrollment, someone with a bronze policy can upgrade to silver, gold, or platinum if one's health deteriorates. Even worse, someone who didn't even buy a policy this year and elects to pay the fine, can purchase a policy next year if he/she develops a chronic condition which is expensive to treat.

 

[aja8888]

Herein lies a significant problem in the design of the ACA. As I understand it, during the yearly open enrollment, someone with a bronze policy can upgrade to silver, gold, or platinum if one's health deteriorates. Even worse, someone who didn't even buy a policy this year and elects to pay the fine, can purchase a policy next year if he/she develops a chronic condition which is expensive to treat.

I don't see this as a problem but a benefit. You end up paying for the added coverage, don't you?

 

[M Paquette]

Herein lies a significant problem in the design of the ACA. As I understand it, during the yearly open enrollment, someone with a bronze policy can upgrade to silver, gold, or platinum if one's health deteriorates. Even worse, someone who didn't even buy a policy this year and elects to pay the fine, can purchase a policy next year if he/she develops a chronic condition which is expensive to treat.

If you look at the pricing, the rise in monthly payment costs to the end user will roughly equal the reduction in deductible/max out-of-pocket costs from the higher grade plan. Persons doing this will effectively be paying the pro-rated difference in deductible over the course of the year.

Actuaries tend to be pretty thorough at this sort of thing...

 

[audreyh1]

If you look at the pricing, the rise in monthly payment costs to the end user will roughly equal the reduction in deductible/max out-of-pocket costs from the higher grade plan. Persons doing this will effectively be paying the pro-rated difference in deductible over the course of the year.

Actuaries tend to be pretty thorough at this sort of thing...

That's right. People buying individual policies don't usually "save" very much at all switching to the more comprehensive policy. Now if the employer is paying the higher premiums - than the more comprehensive policy is much preferred.

Point is apt, though, for someone refusing to pay for the insurance until they develop an expensive condition. This is where having adequate fines is important.

 

[haha]

Point is apt, though, for someone refusing to pay for the insurance until they develop an expensive condition. This is where having adequate fines is important.

+1 These policies are priced actuarially, not as a way to prepay for high expenses that you know you will very likely incur. This has to be prevented or the scheme will collapse.

Ha