“We grow a little every time we do not take advantage of somebody's weakness.”
Bernard Williams
Bernard Williams
“I need an easy friend,
I do with an ear to lend,
I do think you fit this shoe,
I do, won't you have a clue?
I'll take advantage while
You hang me out to dry
But I can't see you every night
Free. I do.”
Nirvana, About a Girl
I do with an ear to lend,
I do think you fit this shoe,
I do, won't you have a clue?
I'll take advantage while
You hang me out to dry
But I can't see you every night
Free. I do.”
Nirvana, About a Girl
Traditional Medicare, (Medicare Part A plus Medicare Part B), is a terrific health insurance program for our nation’s seniors. The insurance carries affordable premiums, deductibles, and co-pays; and it offers flexible and comprehensive health expenses coverage. Medicare’s one glaring shortcoming is that it provides no annual cap on out-of-pocket insurance expenditures. The sky is the limit when it comes to paying Medicare deductibles and co-pays… to infinity and beyond!
Two different types of proprietary Medicare Supplemental programs exist that address the issue of Medicare’s lack of an annual patient cost cap: Medicare Advantage Programs (Medicare Part C), and Medicare Supplement Programs (Medigap). Each of these programs is defined and closely regulated by the federal government; which dictates the standards, parameters and benefits of these supplemental private insurance products. Both types of insurance are sold by commercial insurers under the close scrutiny of Medicare. Both place a limit on a patient’s annual out-of-pocket expenses, excluding the expense of insurance premiums. One is a better deal than the other.
A Medicare Advantage Program is a commercial insurance product that acts as a total replacement for traditional Medicare Part A plus Medicare Part B. Recipients who enroll in a Medicare Advantage policy actually leave the Medicare insurance system entirely, and have their defined benefits completely administered by a commercial insurance company. Benefits offered must be at least as good as, or better than, those benefits provided by the traditional Medicare program. The federal government guarantees this level of coverage to be the case.
Medicare Advantage Programs (Medicare Part C) offer low insurance product premiums, along with an annual out-of-pocket insurance expenses cap of up to sixty-seven hundred dollars. Enrollment does not require a record of previously good health for qualification; applicants do not need to “health-qualify” to be eligible to apply. Medicare Advantage Plans are closed-network health plans that require enrollees to use contracted health providers within a defined care network. Care networks are usually geographically small; and network coverage does not travel well outside of home turf.
Medicare Supplement Programs (Medigap) offer insurance premiums ranging from low to high. Enrollees remain in Medicare Part A plus Medicare Part B; while the supplemental commercial insurance policies work to pay some, or even all, of the deductibles and co-pays levied by Medicare. Enrollees are also liable to pay the monthly Medicare Part B insurance premium. Lower priced policies pay some expenses, while higher priced policies pay all expenses. A wide price-range of policies are available.
Medicare Supplement Programs offer annual out-of-pocket insurance expenses caps ranging from as low as zero dollars to as high as twenty-one hundred dollars. Medicare Supplement Programs with higher annual caps are available for premiums that compare favorably to most Medicare Advantage Programs. Medicare Supplement Programs are not restricted by closed care networks, are widely accepted by most health providers, and travel well to all corners of the nation.
Enrollment in Medicare Supplement Programs is restricted by a record of previous health; applicants do need to “health-qualify” to be eligible to apply. However, persons who are newly enrolling in Medicare must be guaranteed admission to a Medicare Supplement Program. Even an applicant with morbidly or mortally debilitated health MUST be accepted. This once-in-a-lifetime guarantee is a federal mandate. This offer is good for the three months before your birth-month, your birth-month, and the three months after your birth-month… in the year that you turn sixty-five years old.
An enrollee’s health at the time of the sixty-fifth birthday and afterward is the key to deciding which of these two supplemental insurance product options to choose. A person with chronically poor health is likely to pay the maximum annual out-of-pocket health expenses cap required for every single year of remaining health. Unwise enrollment in a Medicare Advantage Plan by a critically ill senior can result in an annual financial burden of up to sixty-seven hundred dollars plus insurance premiums; compared to an annual payment of zero to twenty-one hundred dollars plus insurance premiums for a comparable Medicare Supplement Program.
Switching from a Medicare Advantage Plan to a more affordable Medicare Supplement Plan is not usually feasible after the initial federally guaranteed Medicare enrollment period; because a chronically ill enrollee would not “health-qualify” for the change. The enrollee is effectively trapped by poor health in the more costly option for the remaining years of life.
Similarly, an enrollee who is in good health at the time of the sixty-fifth birthday needs to consider that they are entering into a period of life when health can decline rapidly and unexpectedly. Even a healthy and robust senior whose circumstances later decline can be trapped by poor health in a costly Medicare Advantage Plan. Pay me now, or pay me later.
Comparing the financial burden posed annually by a Medicare Advantage Program versus a Medicare Supplement Program is a simple exercise in arithmetic. Add all of the monthly premiums paid annually, to the total at-risk annual out-of-pocket liability for each of the types of supplemental insurance program to make the comparison. This comparison does not take into account the additional Medicare Part B monthly insurance premium. Consider the following real-life example of product comparisons:
o A Medicare Advantage Program enrollee with a sixty-five dollar per month premium and a sixty-seven hundred dollar cap on out-of-pocket insurance expenses is at-risk to spend seventy-four hundred and eighty dollars for every remaining year of life.
o A Medicare Supplement Program enrollee with a forty dollar per month premium and a twenty-one hundred dollar cap on out-of-pocket insurance expenses is at-risk to spend twenty-five hundred and eighty dollars for every remaining year of life.
The extent and quality of insurance coverage in each of the above examples is identical. The financial risk involved is seriously dissimilar. The math don’t lie.
My charity work as a Consulting Pharmacist and Medicare Educator regularly puts me in contact with chronically ill Medicare seniors who are trapped by poor health in too-costly Medicare Advantage Programs. Their number is legion, and their stories are sad. Nothing can be done to help them out of their financial bind.
Hard work is needed to better educate future Medicare enrollees… and to inform the trusted health providers who consul them and advise them. Our advice can help. Increased awareness of this cautionary tale can educate patients who are approaching that critical sixty-fifth birthday, and allow them to choose more wisely. A caring pharmacist, better knowledge, and simple mathematics can become a new enrollee’s real Medicare advantage.
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