Which Medicare plan should you choose? Health journalist Charles Ornstein of the L.A. Times was making just this choice for his mother in “Puzzling out plan option for Medicare.” Even for a veteran health journalist, the choice is not as easy as it seems.
Below, I will give some background information which will help people like Mr. Ornstein’s mother better understand the choices she is facing.
- Medicare Advantage plan (Part C): “These programs are designed to provide full coverage — replacing traditional Medicare — and include HMOs and preferred provider organizations.” The CHA Medicare Advantage fact sheet states that “In order to join one of these plans, you have to have both Medicare Part A and Part B and you must continue to pay the Part B premiums ($93.50 in 2007). You receive all Medicare-covered benefits through the private plan chosen.” There are 5 types of plans.
- Medicare Health Maintenance Organizations (HMOs)
- Medicare Preferred Provider Organizations (PPOs)
- Medicare Private Fee-for-Service Plans (PFFS)
- Medicare Special Needs Plans (SNPs)
- Medicare Medical Savings Accounts (MSAs)
- Medigap plan: “Also known as supplemental plans, these cover co-pays and deductibles that patients normally pay under Medicare.” Medigap benefit packages are labeled A through L. Each letter represents a different standardized benefit package mandated by law. According to the CHA Medigap fact sheet, all Medigap plans must offer the following benefits.
- Co-insurance for hospital days 61-90 ($248/day in 2007) and co-insurance for the 60 lifetime reserve days ($496/day in 2007).
- 100% of the cost of hospital care beyond 150 days covered by Medicare, up to a maximum of 365 lifetime days.
- 20% co-insurance for Medicare approved charges after the $131 annual Part B Medicare deductible has been met.
- The first three pints of blood in each calendar year.
- Medicare Drug Plan (Part D): These are the Medicare prescription drug plans. Standard Part D coverage according to the CHA Medicare Part D fact sheet includes:
- An initial $265 deductible.
- Then, Part D covers 75% of the cost of all drugs between $265 and $2400 spent per year.
- There is a doughnut hole between $2401-$5451 where Medicare Part D offers no coverage.
- Above $5451, Part D pays 95% of drug costs.
- After the consumer has spent $3850 in out of pocket costs, Part D will cover all drug costs.
There are so many options, what is a person to do?
First do some research to help you understand what Medicare will cost and what benefits will be included. The California Health Advocates is a good place to start. For instance, you can learn about Medicare Part A hospital benefits. Some of the benefits included are as follows:
|Medicare Benefits for 2007|
|Service||Medicare Pays||You Pay|
|Days 1-60||Everything After Deductible||$992 Deductible|
|Days 61-90||Everything After co-payment||$248 per day co-payment|
|60 Reserve Days||Everything After co-payment||$496 per day co-payment|
|Beyond 150 Days||Nothing||All Costs Beyond 150 days|
|Source: California Health Advocates|
The Medicare.gov website also has some tools to help you choose a plan. The Medicare Personalized Plan Search seems like a useful tool. Depending on your trust level in the federal government, you may or may not believe that the Plan Search is constructed in an unbiased manner. Since I do not have a Medicare claim number, I could not try out the service.
If you trust your state government more than the feds, you can look at California’s Department of Insurance rate comparison website at www.insurance.ca.gov.
Just like making any big purchase, you need to do some research, shop around, and try to find an unbiased source of information to help you find the ideal plan to meet your individual needs. Good luck!