Medicare sets the pace in health care costs

When I’m 65…

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Several years ago (ok, a little more than a decade ago), I was contracted to manage the finances (and rehabilitation) of a multi-site, multi-unit apartment complex that stretched from Baltimore to Hagerstown to Silver Spring (all in Maryland) to Loudon (Virginia). During that time, we increased occupancy to over 95% in three of the units- and kept the fourth at 80%, so we could rehab a section of units at a time.

But, one of the side requests from the Managing Partner was to help him discern how he could accommodate his new health care program. Medicare. Which had just developed new criteria (including Medicare Advantage). And, as one of my favorite persons, Cathy Miller, has often reported, it was a humbling request. Because Medicare – and all its flavors- makes the US Tax Code look like a reading primer. (See Jane Run comes to mind.)

For those of you who think I’m nuts (no polling here; there’s way too much going around the US right now telling us whose nose is ahead by an inch today), check out a few of Cathy’s blogs. (Here’s a great first choice.) But, I will explain things my way.

Medicare Primer

You have to understand that Medicare was a lot simpler back in the 60s and 70s.  But, it also was brand new, needing a little fine-tuning.  (And, seeing how this fine-tuning went, no one should be surprised that there is resistance to the same political folks’ fine-tuning of Obamacare.) But, as a means for “improving” Medicare (that means the government found a way to push costs onto consumers, just like our insurance companies and employers have been doing), the program split into Part A (hospital expenses) and Part B (physicians, equipment, outpatient obligations)- with a 20% co-pay. (There it is- moving costs to the patient.)  (Of course, all those other ‘parts’ we will discuss are strictly patient responsibilities, too.)

And, required (ok, it’s not required, but if you don’t participate, you probably think Donald Trump is not only a business genius, but he also needs no advisors or counselors for anything, since he knows it all) folks to purchase supplementary plans. Part D is the most common addition, since it covers prescription drugs. (Note, carefully, this is a private insurance plan- and not really part of Medicare- despite its moniker.)  And, if you don’t enroll as soon as you are able, then you will be penalized with surcharges forever.

Moreover, some 30% of Medicare recipients obtain what is called Medicare Advantage plans. (This is also known as Medicare Part C.) These provide relief against the out-of-pocket expenditures (those 20% co-pays), among other aspects. Unfortunately, too many of these (private insurance) plans are really HMOs in disguise, requiring you to use the practitioners and facilities they favor.

As I said, if you don’t sign up for these programs when the government wants you to (that’s the portion of the requirements that justifies its moniker), you can either be penalized- or blocked from coverage for a while. That means sign up when (ok, a few months before) you turn 65. If you keep on working (and have health insurance), you have a window when you stop working. And, of course, those “change-of-life” events. Plus, an open enrollment period every year. (Notice the similarities to PPACA [Obamacare]?)

Now, that I made it as clear as mud, I can tell you that I signed up. And, opted for the best Medicare supplement I could find. Sure, it doubled the cost of Medicare. (Sorry, Virginia, Medicare is not free.) But, my plan is NOT a PPO or an HMO and leaves me with basically no major out-of-pocket costs.

Your Medicare subscription fees are deducted from your social security or civil service annuity payment. And, if you don’t receive those payments because you opted for a later retirement, you should sign up for automatic withdrawals. (You can pay by check, but you must make those payments on time.  And, as Cathy Miller just indicated, for 90 days for that very first payment.) Because if you are late paying, you can get your participation cancelled. Which means more penalties or blocked coverage.

 

Here’s a link to Cathy Miller’s Medicare Infographic- with live links to get even more information!

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