(Full coverage and quality of coverage take priority) 1)Receive the quality of care I really need 2)Protect myself from financial ruin if catastrophically ill or injured 3)Have confidence in the financial solvency and claims paying ability of my insurance carrier 4)Limit my out-of-pocket expenses 5)Maximize my convenience 6)Moderate my cost for coverage relative to my (in all likelihood fixed) income.
Ask yourself, What are my wants and needs relative to health insurance and how do they differ?
UNDERSTANDING MEDICARE PART A (BLOOD; HOME HEALTH; HOSPICE; IN-PATIENT HOSPITAL; SKILLED NURSING FACILITY CARE) 2009 DEDUCTIBLE = $1,068 PREMIUM = GENERALLY PAID FOR BY SOCIAL SECURITY CONTRIBUTIONS WHILE WORKING (UNLESS SINGLE INCOME EQUAL TO OR GREATER THAN $85,000 ANNUALLY OR $170,000 JOINTLY) PART B (DOCTORS SERVICES; OUT-PATIENT SERVICES; OTHER MEDICALLY NECESSARY SERIVCES) 2009 DEDUCTIBLE = $135 PREMIUM = $96.40 PER MONTH (UNLESS SINGLE INCOME EQUAL TO OR GREATER THAN $85,000 ANNUALLY OR $170,000 JOINTLY) * GENERALLY MEDICARE ONLY PAYS 80% OF MEDICARE APPROVED CHARGES. HOW WILL YOU PAY THE 20% DIFFERENCE OR EXCESS CHARGES?
STEP 1 You must first establish a strategy for paying the 20% of your cost for medical treatment and the cost of your prescription drugs – not paid by Medicare.
You Have 4 Basic Options for Meeting the 20% of Medical Costs (and 100% of out-patient prescription drug costs) Not Covered By Medicare OPTION I) Your employer or former employer continues to cover you on the companys group health insurance plan and pays all or the majority of your costs. (You are one of a fortunate few if this applies to you and you will probably want to take this option. You can be assured that if you lose it at some point – you will then be guaranteed the alternative options (to follow) for 63 calendar days from the day coverage ends, notice of such or denial of a claim – whichever comes first.)
REQUIREMENTS TO PARTICIPATE IN ALL OTHER OPTIONS 1)ENROLLMENT IN MEDICARE PART A 2)ENROLLMENT IN MEDICARE PART B (COST IS $96.40 PER MONTH IN 2009)
WORD OF ADVICE Approach Your Options From a Financial Decision Making Perspective
OPTION II) MEDICARE SUPPLEMENT WITH STAND ALONE PART D Rx COVERAGE If (your) cost is not an option, the vehicle which will most ensure you will be out the least amount from your own pocket is : Medicare Supplement (Medigap) Policy Plan F (coupled with stand-alone Part D Prescription Coverage either from the same company or a separate company.) Costs will begin at approximately $140 per month for the supplement Plan F and $0 to $100 or more per month for the Part D coverage.
ADVANTAGES OF OPTION II (ASIDE FROM PREMIUM – THE IDEAL) WILL EXPERIENCE THE LEAST (PERSONAL) DOLLAR COST FOR YOUR MEDICAL TREATMENT WILL FIND YOUR COVERAGE (IDENTIFICATION CARD) ACCEPTED VIRTUALLY EVERYWHERE
DISADVANTAGES OF OPTION II MOST COSTLY (PREMIUM) OF OPTIONS E.G., WILL BE OUT OF: MEDICARE PART B PREMIUM: $96.40 MEDICARE PLAN F PREMIUM: $150.00 PART D PREMIUM: $30.36 TOTAL MONTHLY COST = $276.76* *(COST LIKELY TO INCREASE AS YOU AGE)
OPTION III) MEDICARE ADVANTAGE (MA) PLAN OR MEDICARE ADVANTAGE WITH (BUILT IN) Rx COVERAGE (MAPD) PLAN $0 to $100 or more per month for the medical portion and $0 or more for additional Part D Prescription coverage Ability to combine medical and prescription drug coverage in one policy (MAPD) Only medical eligibility restriction: Cannot have End Stage Renal Disease
3 MAIN TYPES OF MA PLANS 1. HMO (Health Maintenance Organization) Advantages: Often lowest in cost in terms of premium; copays and out-of pockets Disadvantages: To date – very few providers (doctors, hospitals) have elected to join HMO networks. If your doctor is in the network - that is good – but what if he/she refers you out? You are either in the network or outside it and – if outside – you have no benefits whatsoever. 2. PPO (Preferred Provider Organization) Advantages: Generally (not always) lower in cost in terms of premium Disadvantages: Again (as with HMOs) there are, to date, very few providers (doctors, hospitals) who have elected to join PPO networks. If your doctor is in the network, that is good – but what if he/she refers you out? While (unlike an HMO) you may go outside the network at your discretion – it will be at a significantly higher cost to you.
3. PFFS (Private Fee For Service) Plan Advantages: Least restriction in terms of your providers. There is no network for the provider to join (which saves them considerable paperwork) and they need not accept a reduced fee for seeing you. All a provider must do is be currently seeing Medicare patients; agree to bill the company and accept the payment schedule (which should always be (at least) equal to what Medicare would pay.) Disadvantages: Those offering the lowest copays and out-of-pockets are generally the highest in cost (premium). While there are few reasons why a provider, who is already filing claims with Medicare (Medicare itself is a PFFS plan) on behalf of patients, should not be willing to do so with your Medicare Advantage company – it is their prerogative. However, because Medicare Advantage plans have only recently existed, many providers are still unfamiliar with how they work. Hence they may reject such without investigating the terms. If your provider will not investigate and / or agree to the terms / file your claims – you will have to seek treatment from a provider who will.
OVERALL ADVANTAGES OF OPTION III A)Lowest premium cost of all plan or plan combinations B)Premium savings can be applied to copays C)Ability to change plans each year as desired D)Value Added benefits such as dental and vision; fitness club membership (not available with other options) are often included
TRADE OFFS = A)Out-of-Pocket Expenses do exist and usually accumulate by way of copays * The good news is – each plan has a maximum out-of-pocket which is generally $1000 to $5000 annually (in the worst case scenario). Some plans (mostly HMOs) have $0. *Excellent option for Medicare recipients via Under Age 65 Disability
OPTION IV) Self –Insure (Last Option) While Medicare will cover 80% of your medical expenses after your deductibles (Part A Deductible is $1,068 in 2009; Part B is $135) Ask yourself: How high will my 20% go? What is 20% of the cost to treat chronic cancer? What is 20% of the cost of an organ transplant? … of a severe injury?
There is no such thing as a perfect situation, but at least, today, there exist options which were unavailable as little as three or four years ago. Several options offer guarantees of protection which also did not exist previously.
GUARANTEES MEDICARE SUPPLEMENT: YOU CANNOT BE DENIED COVERAGE (OPEN ENROLLMENT) IF YOU APPLY WHEN FIRST ELIGIBLE, I.E., THE SIX MONTHS BEGINNING ON THE FIRST OF THE FIRST MONTH IN WHICH YOU ARE BOTH AGE 65 AND ENROLLED IN MEDICARE PART B MEDICARE ADVANTAGE AND PART D: CANNOT BE DENIED (INITIAL COVERAGE ELECTION PERIOD) 3 MONTHS PRIOR TO, MONTH OF, AND 3 MONTHS AFTER ENTITLEMENT/ENROLLMENT IN MEDICARE PART A & B MAY MAKE ONE CHANGE TO MEDICAL COVERAGE SO LONG AS NO CHANGE IS MADE IN HOW YOU RECEIVE YOUR PRESCRIPTION COVERAGE FROM JANUARY 1 ST – MARCH 31 ST EACH YEAR (OPEN ENROLLMENT PERIOD). CANNOT BE DENIED (63 DAYS) REPLACEMENT COVERAGE ANYTIME YOUR COMPANY GOES OUT OF BUSINESS, OR IS NO LONGER AVAILABLE IN YOUR AREA GUARANTEED YOU CAN CHANGE YOUR MEDICARE ADVANTAGE OR PART D PLAN EACH NOVEMBER 15 TH - DECEMBER 31 ST (ANNUAL ELECTION PERIOD) GUARANTEED YOU MAY CHANGE FROM A MEDICARE ADVANTAGE PLAN BACK TO (ORIGINAL) MEDICARE SUPPLEMENT PLAN WITHIN THE FIRST 12 MONTHS IN MEDICARE ADVANTAGE PLAN (ONE TIME ONLY)
Sample Options Male; Female Age 65, Non-Tobacco User MONTGOMERY COUNTY, Texas 77380 Plan TypePlanCost of Doctors Office Visit Cost of Hospital Stay Out-of- Pocket Maximum Monthly Premium Medicare Supplement Plan F$0 (medical expenses) $150.00 Medicare Advantage MAPD (PFFS) $0 $3,500 (medical expenses) $0.00 Part D Prescription Drug Coverage PlanN/A COPAYS: $7;$40;$70;33% to $2,700 drug costs then 100% until yearly out-of pocket = $4,350 COPAYS: Greater of $2.40;$6.00 or 5% $36.40
DO THE MATH NOW WITH MEDICARE SUPPLEMENTMAPD (MEDICARE ADVANTAGE WITH PART D PRESCRIPTION DRUG COVERAGE) Annual Supplemental Premium = $1,800.00 Annual Part D Premium = $364.32 Part D Deductible = $295.00 PCP Visit Copays = $0.00 Specialist Visit Copays = $0.00 $0.00 $120.00 (12 Visits @ $10 each) $360.00 (12 Visits @ $30 each) TOTAL OUT-OF-POCKET = $2,459.32 $480
CONCLUSION This presentation was designed, first, to introduce you to the types of products you may utilize to meet your supplemental needs (relative to Medicare) and, secondly, to help you devise a strategy for doing so. The information contained herein is in no way designed to be representative of all your options and should not be construed as a substitute for the personal, professional service offered (in this presentation) or that of a licensed financial, insurance or legal specialist. We have taken all means to ensure the accuracy of the information provided herein; we accept no liability for losses resulting from changes in law, government policy or the use or misuse of this information.
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