February 24, 2014

Medicare Decisions Made



About three months ago I wrote the post, My Medicare Decisions Are Only a Few Months Away.  Then, I was considering all my options for coverage that will begin on May 1st. Should I opt for traditional Medicare, pick an Advantage program, or take Medicare but add Medigap and Part D drug coverage?

The decisions are not easy. There are dozens of options available with all sorts of different monthly premiums, including some at $0. Being rather healthy (my recent food poisoning episode not withstanding!) should I take a bare bones package now and upgrade when my health requires it? What if I wait too long, have an expensive problem and my "gamble" backfires?

My Medicare card arrived in mid-January, actually several weeks before I could even sign up for anything else. Of course, I was given the option to mail the card back and tell the government I was not going with traditional Medicare. But, I think they mail the card as early as they do to "help" me decide. With the card in hand and active steps on my part needed to choose differently, they may be counting on folks just going with the easiest choice.

Not so fast. I still wanted to look again at all my options and costs. Betty and I discussed the amount of risk we were willing to accept to save some money each month. We talked through the choices and what seemed to make the most sense.

As I looked at Medicare Advantage programs I was initially attracted by the low premiums, decent coverage, and simplicity: one check to one company takes care of everything. But, upon closer inspection two serious flaws became evident. Advantage programs don't travel. That is, they provide for coverage in your home county, but are difficult if not impossible to count on when traveling. A good policy at home might turn out to be worthless if I had a medical problem while on an RV trip far from Scottsdale.

Secondly, the type of coverage that certain Medigap policies provide is not part of an Advantage plan. The customer will still be on the hook for a potion of costs that Medicare doesn't cover. And, it is not possible to buy a supplemental policy if someone is covered by an Advantage program. I could be liable for more than $6,000 in additional costs each year.

Two weeks ago, I finally made my choice, filed the applications, paid some money in advance, and prepared myself to enter a new world of health coverage in just over two months. I decided to go with traditional Medicare, adding both robust Medigap  and a Part D drug coverage policies. The cost was $250 less than I was paying last fall, and $70 less than the individual policy I purchased through the Health Marketplace for coverage that started January 1st.

Medicare will cover up to 80% of my expenses. The Medicare supplemental policy will pay the 20% remaining and for 100% of some services that Medicare doesn't cover. I choose Plan F, certainly not the most inexpensive, but with the type of benefits I want. The Drug coverage policy will leave me with a monthly cost of $3 for the two basic, generic prescriptions I take now. In the future, their formulary looks to be on par with others and should keep my prescription costs under control.

The cost of basic Medicare is deducted automatically from my monthly Social Security check. The other two policies will require me to pay two additional premiums. Was this the easiest choice? No. Was it the most inexpensive? No. Did it provide the security and peace of mind I wanted? Yes.

With a chance to pick other policies and other approaches every fall, I am feeling pretty good about things. Time will tell.





25 comments:

  1. I'm sure it is a relief to have that decision made! My husband has a Medicare supplemental policy as well, and I will do the same when I get to age 65. We chose against the Advantage program for some of the same reasons you did. Our local Advantage program offers a free gym membership for life, wherever you wish. Pretty enticing, with both of us being gym rats. But the cost difference in premiums doesn't come close to making up the benefit of the gym membership. We too, wanted to make sure our policy covered us wherever we were, not just in our home town. Interestingly, if you leave the country, Medicare does not cover you. However our supplemental policy will cover us no matter where we are in the world!

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    1. Same here: my Medigap policy does provide some foreign coverage! All the details to understand!

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  2. I'm sure you made a very good decision. There is no perfect decision in cases like this because we don't have crystal balls to predict our future health situations!

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    1. Luckily, ever year during the open enrollment period all decisions can be changed and new options chosen. That makes any decision not so scary.

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  3. I was surprised to hear the medicare advantage programs do not have any provision for out of area coverage! Also shocked that one could not even buy a supplement when using medicare advantage plans! How crazy is that for retirees,who often travel!?? A very informative post! I have a few years to go yet but this is very good information to be gathering--I wonder how and if options will change by then.

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    1. I assume the Medicare Advantage programs are attractive due to their lower rates and simplicity. But, as I discovered that comes with limitations that just don't work for us.

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  4. As juhli said there is no perfect plan. I spent months researching what I think will be the best plan for us right now--the Humana Advantage Gold Plan. Our primary care doctor and hospital system are in network. We hope for the best and at least the decision is made, for now at least.

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    1. As I noted above, if you find you are less than pleased with that choice during open enrollment each fall you can change. That is a real blessing.

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  5. Dave is very happy with his coverage, and now I'm anxious to get on but have to wait another year and a half. I'm spending over $700 monthly, just for me! It's insane!
    b

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    1. Wow...that is a lot. Betty's policy through the health marketplace, with much better coverage than she had before, is $360 with the tax credit. We are quite happy with that price.

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    2. PA is brutal for health care costs. And of course our idiot governor refused to participate in the ACA. But, it may go down when we move across the river. I'm hoping!!

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    3. Just don't live near a bridge that has lanes that close for "traffic studies."

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  6. Can't believe the angst you chaps across the pond must go through when you have to consider cost of/options for healthcare along with every other aspect of retirement. Thanks goodness in the UK we have the NHS (despite its failings). I have so many things to think about in planning my retirement and am so glad that funding healthcare isn't one of them. Take care and choose well.

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    1. Compared to the hassle before turning 65, getting Medicare coverage is a blessing. But, we certainly make the whole process more difficult than it need be.

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  7. All I can say at this point from personal experience, having been on Medicare for a few months is ... not so fast! I just received a Summary Notice informing me I "may be billed" $645.74 for services essentially associated with my annual physical. Guess I've got to get on the phone.

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    1. That doesn't seem right, does it? Sounds like your doctor may have decided to run a bunch of tests that aren't part of a yearly checkup. A phone call sounds in order.

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  8. All Medicare Advantage policies are not the same. Ours is a PPO which works a little differently. We can go out of network with very little difference in our costs and I do that routinely (even locally) so travel in the US has not been a concern. The problem now is that regardless of your location many providers are no longer treating Medicare Advantage patients because federal government has made cuts to the program and more cuts are to come. I have read that a "fix" for that may be coming. I hope so. My husband's former employer provides this as part of our retirement benefits so it was not our choice, but it has worked so far.

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    1. Interesting. I checked a few Advantage plans from different companies. Each company only offered one Advantage plan in Maricopa County (Phoenix) and all were HMO-type offerings. That coupled with the potential for over $6,000 out of pocket each year made that option a non starter for me.

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  9. I hired an insurance consultant to advise me as the whole process was confusing. He boiled it done to nuts and bolts and I have the same insurance as you do. I was concerned about the supplemental and the added expense since I considered myself healthy. However I went ahead with Plan F, luckily, as I've had two incidences where I have had to use the hospital. I'm paying $200 less than my old Humana policy, which I had renegotiated a year prior which had saved me approximately $200 dollars. So in two years I have saved about $400 dollars. I was hesitant to take Medicare, as I felt I was healthy enough, but I now feel it is the best insurance and value for my dollar. It's amazing how your body changes after 65, it's as if it is programmed to start failing. I guess my living on a boat exacerbates the problems.

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    1. The gamble that my relatively good health would continue wasn't worth the savings in monthly costs for me either. At the moment the Part D coverage will cost more than I spend just paying retail at Costco for two generic drugs.. But, again, one illness and I will be happy for the coverage that extra $20 a month buys me.

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  10. It will be interesting to see how well my husband's Medicare-plus-supplement with our Seattle HMO handles his three-day hospital stay (plus pacemaker) in Tucson.

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    1. Please write a blog post about that or drop by for a comment. I wonder how those long distance issues are handled.

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  11. Uff! Healthcare research has become a part-time job. My husband is retired with a Medicare Advantage plan but your article suggests we need to check a few things before setting off on our next vacation! That said, I look forward to Medicare (5 years yet...) given my insurance experiences recently. I resigned from my job (unplanned but necessary) two weeks ago, which is a bit of a challenge. After much research, it appears the COBRA option will be my best bet short term. But the amount of research it took to get to that decision was ridiculous.

    I hope your experiences with Medicare are as good as my husband's. We have absolutely no complaints so far.

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    1. For whatever reason the number of Advantage choices that are reasonably priced are quite limited in the Phoenix area. Coupled with the $6,000 potential cost to me and the lack of portability my decision turned out to be easy. It did take me several days and hours of research, though to feel comfortable with that choice.

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  12. Medicare is a program that can be a benefit for someone who doesn't have private insurance. It does cover most of the healthcare costs that you might incur when you're older, but it needs to be restructured so that it includes other services, and more than 80% should be paid as taxpayers pay in more than this through the years while they work.

    Jason Hayes @ DECORM

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