When you compare Medicare insurance with that of health insurance for the working population, it’s an alphabet soup.
Most in the workplace have the benefit of human resources assistance to decipher insurance plans, whereas retirees navigating Medicare often have to go it alone.
Some of the key decisions retirees need to consider when preparing to buy Medicare include:
• How much is it going to cost each month?
• What is my out-of-pocket exposure?
• What do I pay when seeing a doctor?
• Where do I have to go to get my care?
For those people on employer group policies, which are the majority, employers shop and select a limited number of coverage options. Benefits experts in human resources departments help employees with actual choices and how to manage claims and more.
For individuals who purchase insurance on their own, decisions are often driven by price since there is no employer contribution to defray the cost.
With the erosion of group retiree health coverage, retirees are forced onto the retail market to make a decision about their Medicare health coverage. This can be daunting: in the Chicago area alone, there are over 200 different permutations of available options.
A New Lexicon
To sort this through, retirees are forced to learn a new lexicon to construct their health coverage:
• Medicare Parts A, B, C and D
• Medicare Supplement Plans A through N
• Medicare Advantage
Rather than just simply asking what do I have to pay to see a doctor, or how much a hospital visit will cost, they wade through statements like, “Medicare Part B pays $0 until the $140 Part B deductible is met.” (CMS guide, “What are Medigap Basic Benefits”).
As a result, most retirees, depending on their financial situation at the time of retirement, either take Medicare Supplement Plan F or an inexpensive Medicare Advantage (managed care) plan.
Plan F is the coverage that provides first-dollar coverage for almost everything. The problem is that, when combined with Part D drug coverage (which is separate), Plan F is the most expensive premium option on the market and many seniors may not need it.
In addition, among Medicare Supplement plans, it is the most profitable for carriers and brokers. Medicare Advantage (MA) plans are much less expensive on a monthly basis. But they come with restrictions that may not become apparent until you need services that are not fully covered.
No stone is left unturned; everyone suffers to an extent trying to navigate Medicare’s complexities. The best first step is to understand the lexicon that is Medicare’s alphabet soup.