MEDICAL NEWS

Maybe you’re not 65 yet. Maybe your incessant phone calls are still about your car warranty that expired. But if you’re of that certain age when you are entitled to Medicare, or about to qualify, you are inundated with spam in your inbox and junk mail in your post office box, letting you know that you have options when it comes to Medicare.

The options these insurance agents want to tell you about are Medicare Advantage plans, commercial insurance plans offered as alternatives to traditional Medicare. The Centers for Medicare and Medicaid Services officially refer to these plans collectively as “Medicare C,” but marketers find the plans easier to sell by calling them

“Medicare Advantage.”

George Miranda

For the first time since its inception in 2003, Medicare Advantage enrollment surpassed numbers enrolled in traditional Medicare. And it’s easy to understand why. As the program has matured, the premiums for MA plans have decreased while the additional benefits have increased.

Medicare C differs from traditional Medicare

In order to understand Medicare Advantage, you first have to understand traditional Medicare (Medicare fee-

Medicare FFS is like the quote attributed variously to Mark Twain and to Sir Alec Issigonis (designer of the Austin Mini): “A camel is a horse designed by committee.’’ This time, however, the committee is the federal government. Anyone who has attempted to navigate a federal website understands that the Feds have a penchant for taking the simplest concept and making it tortuous. For example, in the real world, a benefit period is one year, but in the world of Medicare A, a benefit period for inpatient care is however long it takes to be discharged from the hospital, or from the nursing facility if that occurs pursuant to the hospital stay plus 60 more days. Medicare B has a more typical 12-month benefit period.

The deductible for Medicare A is $1,600 for an inpatient admission in 2023. For the first 60 days of an inpatient stay, your copay is $0. For days 61 through 90, your copayment is $400 a day. If your hospital stay extends beyond 90 days, you start using up your lifetime reserve days. There are 60 of those, and like matches, once they’re burned, they’re gone. The copay for lifetime reserve days is $800 per day.

In addition to inpatient hospitalization, Medicare A covers skilled nursing facility stays, home health and hospice care. The nursing home benefit covers up to 100 days in a benefit period (see above for Medicare A’s crazy definition of a benefit period). The first 20 days are free, with a $200 copay for days 21 through 100.

Medicare B covers outpatient care: physician office visits, outpatient physical therapy, outpatient surgery, etc. The Medicare B deductible is $226 in 2023. Once you meet the deductible you are liable for 20 percent co-insurance. There is no out-of-pocket maximum for Medicare B. The only silver lining is that your coinsurance for any one outpatient service is limited to the inpatient deductible of $1,600.

Making up for Medicare’s shortcomings

Because Medicare is like trying to stretch a fitted twin sheet onto a queen-sized bed, two patch-up programs have been devised to fill the gaps. The first is Medicare supplemental insurance (MediGap), a series of standardized commercial insurance products that will cover some or all of what Medicare FFS doesn’t. For instance, most plans will pay the inpatient deductible, as well as the outpatient co-insurance amounts, but be aware that, on the outpatient side, most plans do not kick in until you have paid the $226 deductible from your own pocket.

To learn more about Medigap policies available in our neighborhood, and pricing for these plans, visit medicare.gov/medigap-supplemental-insurance-plans/#/ m?year=2023&lang=en.

The other patch to traditional Medicare is Medicare Part D – the prescription drug benefit. Created during the George W. Bush administration, it was the mother of all crazy federal government machinations, with the infamous “donut hole,” where Medicare ceased paying for your drugs until you were basically bankrupt. Thankfully, through the years, the prescription drug benefit has become more logical and affordable.

Both patches – MediGap and Medicare D – require that you pay additional premiums, making Medicare FFS ostensibly more expensive than Medicare Advantage plans. For example, a person well known to me has traditional Medicare, an AARP Medigap policy, for which she pays around $170 a month and a Walgreen’s/AARP drug plan, which is approximately $30 a month. The cost of plugging the holes in Medicare coverage is about $2,400 a year for her.

In contrast to FFS, most Medicare Advantage plans provide prescription drug coverage at no additional charge. As for MediGap, you can’t have a supplemental policy if you sign up for a Medicare Advantage plan. CMS claims, however, that you don’t need a supplemental policy if you have managed care Medicare.

If the decision between traditional Medicare and Medicare Advantage sounds like a no-brainer, it is – for certain Medicare beneficiaries; however, for others, the siren song of lower premiums wrecks them on the rocks of taxing out of pocket costs for their care.

I’ll explain what I mean in next month’s column.