I love October in the Midwest. In my opinion, it has the best weather of the entire year. The air is drier, and the evenings are great for sweaters or sweatshirts. After some hard frosts, our allergies may be less intense. We experienced Americans, 65 and older, also have another round of health-care choices – Medicare enrollment between Oct. 15 and Dec. 7.
Since I signed up for my own coverage a couple years ago, I had not examined the Medicare.gov website. I set that up yesterday and learned quite a bit. (We all remember the fiasco of the Affordable Care Act – Obamacare – website, don’t we? I set my expectations accordingly.)
Assume you are hitting age 65 this November. Your initial decision is vital to your health-care future because you can choose any coverage available – the best, most expensive and comprehensive – even if you are mostly dead (in the words of Miracle Max in the movie “The Princess Bride”!). If you are older, are pretty healthy and just want to compare alternatives to your current plan, you should be able to switch plans.
How much choice do you want with regard to your doctors, hospitals and special care? Mainly you choose between a health maintenance organization service that takes responsibility for almost everything about your health care versus a more open-ended insurance solution providing you broad choice of doctors, specialists and hospitals as you go along during the rest of your life.
The first is called Medicare Advantage (Medicare Part C). Twenty-eight plans are listed for Jackson County. The immediate attraction to these is the monthly premium, often $0 in addition to your regular $135.50 Standard Part B premium. (The $135.50 is being deducted from your Social Security payment. If you don’t receive a payment, you are paying this monthly out of pocket. If you are an employee of a company with more than 50 employees, then your company coverage is still primary and you are not having to choose a Medicare plan until retirement or separation from service.)
The most important factors for these are whether your doctors and preferred hospitals are in the network and the amount of total out of pocket maximum (OOPM) expense per year for which you are responsible. Instead of a premium per month, you pay a co-payment for each doctor visit and usually a larger amount such as $340 per day for inpatient hospital deductible for up to the first five days.
Some Advantage HMO plans have an OOPM of $3,200 per year. So your exposure can be as little as $266.67 a month. The co-payments for drugs can be additional to this, so make sure you know about both.
I have personally always wanted to have the freedom to go to Mayo or Cleveland Clinic or elsewhere if I need a world-renowned specialist for my condition. (It’s not that I am important – I just love choices.) But the Advantage PPO plans give me that opportunity too. For example, several alternatives have a higher in-network OOPM plus a $10,000 a year OOPM even if you use completely out of network physicians and hospitals.
Next week I will cover the other side of the equation, the Medigap policies and Part D Drug Plans. In the meantime, if you have insomnia, read this column five or ten times!
(Past performance is no guarantee of future results. Advice is general in nature and not intended for specific situations)
Ron Finke is president of Stewardship Capital in Independence. He is a registered investment adviser. Reach him at firstname.lastname@example.org.