If you are turning 65, or are already a member of the Medicare-eligible market, you’ve more than likely spent a number of hours reviewing the Medicare system. During this research, I am fairly certain that you have wanted to:
1. Tear your hair out
2. Throw your laptop, desktop or tablet against the wall in frustration
3. Scream the harsh words racing through your mind at the people who wrote the Medicare rules and regulations
The Four Parts of Medicare
• Medicare Part A: Hospital insurance that covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery and home health care.
• Medicare Part B: Medical insurance, with coverage that includes doctor and other health care providers’ services, outpatient care, durable medical equipment, home health care and some preventive services.
• Medicare Part C: The additional insurance plans sold by private companies.
• Medicare Part D: Prescription drug coverage.
When you turn 65 and have met the work requirements, you automatically qualify for Part A and you can decide if you also want to enroll in Part B (some people qualify before age 65 based on being disabled or having certain illnesses). Part A has no cost and Part B has a $183 annual deductible, plus a monthly premium that’s based on income.
Seems simple enough. All you have to do is contact Social Security at the appropriate time (three months before or after you turn 65); register for Parts A and B; receive your red, white and blue card; present it when you require any type of medical services anywhere; and everything is taken care of.
Nope. Unfortunately, nothing is ever as simple as it seems when the government is involved. For instance, a person with Basic Part A and Part B without additional coverage has the following costs for 2017 (2018 not finalized yet):
Part A out-of-pocket costs for hospital stay (2017):
• Days 1-60: $1,316
• Days 61-90: $329 coinsurance per day
• Days 91 and beyond: $658 per day
Part B out-of-pocket costs for hospital stay (2017):
• $183 deductible
• Monthly premiums
• 20% of all hospital costs
Unless you bought one of the FAAG (Facebook, Amazon, Apple, Google) stocks in its infancy, you are at catastrophic financial risk if you are part of Medicare with only Basic A and B coverage.
In order to cap your costs, you will need to add Part C and/or D prescription plan to assist you.
So, you figure you can simply begin the research process to really understand all of your options. You start with the basic Medicare.gov guidebook. That’s an easy 136-page read!
Once you absorb all that information, which should only take anywhere between a couple of weeks to a couple of months, you can scour through all of the various plan options from the different carriers.
Seems easy enough, until you realize that here in the Metro-New York area there are probably several dozen plans per zip code, each with its own separate guides.
That means you will be attempting to decipher hundreds, if not thousands, of pages about premiums, co-insurance, deductibles, PPO, HMO, PFFS, Cost Share and prescription drug information. Then, you have to compare the pros and cons of each of these plans and how they fit into your budget and financial plan.
If you can do this without becoming dazed and confused, kudos to you. Odds are high though that you will end up picking a plan that doesn’t match your situation for one reason or another.
For instance, Part C plans can change each year. Plus, the part D prescription drug part of a Part C plan or a separate part D prescription drug plan can change during the year, which can cause a large increase in monthly cost to you.
The only way to be sure you are in the best-matched plan for your needs is to have an independent agent with a complete understanding of all the various plans and with no ties to any particular carrier take a look at your coverage. Then, he or she can advise whether it makes sense to look at other options or remain in your current plan.
In the next issue, I’ll address the difference between Supplement and Advantage Plans.
By Robert Remin