Friday, September 16, 2016

Unraveling the Medicare Knot

 There were leftists upset that Obamacare was created, instead of expanding the existing Medicare program. There was a certain logic to that instead of the health insurers biased and very complicated scheme of Obamacare.  Medicare, howver, makes all private sector insurance seem simple.  It takes a government to really foul things up.

This is a document in process as I attempt to figure this stuff out.

The Alphabet Soup

Part A covers hospitalization and costs you nothing.  I think the reason is that, as expensive as hospital care is, it only takes a few trips when you are past your "Best By" age to remove from Social Security and Medicare.

If you paid Medicare taxes (and how, if you were employed, would you not?) it's free:
[M]ost people get premium-free Part A. You can get premium-free Part A at 65 if:
  • You already get retirement benefits from Social Security or the Railroad Retirement Board.
  • You're eligible to get Social Security or Railroad benefits but haven't filed for them yet.
  • You or your spouse had Medicare-covered government employment.
If you're under 65, you can get premium-free Part A if:
  • You got Social Security or Railroad Retirement Board disability benefits for 24 months.
Part B covers non-hospital medical costs.
You pay $166 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment.
The cost is $121.80 per month deducted from your Social Security or  Social Security Disability check.  Preventative care such as annual physicals are not subject to deductible so free.

Part C are Medicare advantage plans in which the governments hands over your Part B premiums to a private insurer along with money from you.  Still trying to figure out why you would sign up for this.  More below as I figure it out.

 Part D is a prescription drug coverage program is a private sector insurance program which you pick.  Some Medicare Advantage programs (Part C) include Part D.  This is so confusing to me that I suspect many people make less than optimal choices.  There is a monthly premium (which varies enormously, from $18.40 to $162.10 here in Idaho), an annual deductible varying from $0 to $360 with exemptions for Tier 1 and Tier 2 drugs (not yet sure what those are) and every plan has its own "formulary" which is a list of covered drugs showing what you will pay for them.  Something I do not understand yet is "Gap Coverage" (also known as "the donut hole" but it appears to be some limit on your annual coverage.  This explains it.  Once you exceed the maximum amount, you pay the full prescription costs until you reach the catastrophic coverage level (total drug costs: $6154, at which point you pay 5% of drug costs.  This gap is supposed to phase out in 2020.

It appears that a very large percentage of Part D beneficiaries reach the coverage gap.  I would guess these are people with serious health problems (the kind you and I will never have).

So what does Part C (Medicare Advantage) cover that Part B doesn't?  It would appear costs that exceed the Medicare-approved amount.  But how do I find that schedule to see if Part C makes sense?   I can't find it.  The amount of advertising I see for these plans makes me wonder if they are sensible.   How many of you have experienced costs that were above the Medicare-approved amount?  I understand many providers simply eat the difference, which might explain the reluctance of many doctors to take Medicare.

A friend used to sell Medicare Advantage plans and referred me to Services for People on Medicare
(Senior Health Insurance Benefits Advisors Program - SHIBA), an Idaho state program that apprently drives insuers crazy for giving unbiased information.  I'll call them Monday.



    Basically, the pros (and cons) of Medicare Advantage / Medicare Part C depend on the plan chosen. It may include vision or dental or prescription drug coverage. It may have less than a 20% co-pay. It may have narrower networks than Medicare-in-general, or require referrals more often.

  2. I believe part C also covers prescriptions, and it can be cheaper than B + D. As I posted before, I avoid it because it traps you into the private company's network of providers. It is akin to an HMO or potentially narrow PPO.

    The donut hole in part D is typical of socialized systems. You have to cover up-front a bunch of costs in order to sell the program to relatively healthy people. And, you have to have catastrophic coverage. The donut hole is in between, because it didn't have much of a constituency.

    That said, Part D is pretty good because it brings in competition, since it is from private companies, and you can switch once a year. That's because Republicans designed it.

    You should know that it is easy to compare Part D programs with each other, for prescriptions you know you must take. On the Medicare site, you can put in all your prescriptions, and it will tell you the full annual cost to you of each plan that covers your area. So, you can opitmize current maintenance meds with that, but you also want to study what would happen if you got on a new med that you hadn't entered - i.e. actual insurance of a risk rather than a third party payment of an expense you know up front.

    The tiering is typical of almost all drug plans these days, not just Medicare. It is a way of organizing meds into cost groups, and they pay differently depending on what group the a med is in. It is a bit confusing, but it essentially steers you towards lower cost meds, especially generics. I think its a good idea, even though it is hard to track.

    You should also know that with Part B, there are at least three kinds of providers.

    Those that "accept Medicare assignment" are paid directly by the insurance at the Medicare rate.

    There are others that agree to bill Medicare for you, but not take payment from Medicare. They can charge 15% over the Medicare rate and you have to pay that 15% - unless your Medigap coverage pays it, which mine does. For example, I use Mayo Clinic, and they do not accept assignment.

    Then there are those that refuse to have anything to do with Medicare (I go to one of these). In that case, you are totally on the hook for the full cost.

  3. Medicare Advantage plans usually cover prescriptions but it apopears not always. The less expensive Part D plans, at least here in Idaho, are cheap enough that B+D is cheaper than Part C plans.

  4. On the Medicare site, you can put in all your prescriptions, and it will tell you the full annual cost to you of each plan that covers your area.

    Ah, I should add that the costs you are cited will not always be the same after you sign up, and companies are quite up front about both this and that their formulary might change during the year. But playing games there will cost them in satisfaction scores next year.

    And as I noted in a previous comment, although perhaps not in such detail, in one case, a plan used Express Scripts for their mail order service, and this resulted in an absolute refusal to dispense a vital drug for me (had to get it retail at greater cost). It was rather Kafkaesque, Express Scripts declared the brand name drug was their generic, but they or the plan refused to cover it because it was brand name.

    I suspect this was part of an evil plot (literally) by the original drug company that produced it, for at the same time they came out with a patent protected new formulation that was 1.5 times the strength and sweetened, the latter addressing a real issue that some people found to be a serious issue in using it.

    I'm talking about Astelin vs. Astepro, formulations of the antihistamine azelastine in nasal spray form, a wonder drug that took me from getting more than one sinus infection a year to one every several years (when combined with a nasal steroid, which are now OTC! And maybe initially more expensive than previous drug plans...).

    Caveat emptor, on Medicare's Plan D selection subsite look really hard and in detail (drill down to the specifics on the plan's specific page) at the satisfaction scores. I would try really hard to avoid touching one that wasn't at least 4 out of 5 stars, and less than 3.5 is right out.

    And, yeah, it's a complicated nightmare to game out, but that's something people like you and me can do. When we get enough sleep....