Even retired accountant Beth Marchilena of Nashua was intimidated by the menu of plans, deductibles, co-payments, co-insurances and maximum out-of–pocket expenses when she first selected from the Medicare lineup when she turned 65 years old.
“It was a very scary process,” said Marchilena, now 67, and accustomed to dealing with devilish details in her former profession. “It helps to be an accountant. Sometimes there’s just too much information.”
According to AARP, roughly 10,000 U.S. baby boomers turn 65 every day, a trend that will continue to bump up the number of Medicare recipients in New Hampshire, which currently stands around 195,600.
With that age milestone comes an important choice, other than whether to start collecting Social Security: From the menu of possibilities and permutations, which Medicare plan or plans make the most sense for me?
“I think any insurance is confusing,” said Bonnie Bernier, 67, of Manchester, who collects Social Security Disability because of asthma and COPD, and is insured both through Medicare and Medicaid. “Unless you read the fine print, there are more costs involved than you realize.”
Marchilena, Bernier and 12 others came to Manchester’s William B. Cashin Senior Activity Center last week to learn about options from Anthem Blue Cross and Blue Shield, the state’s largest health insurance provider, during Medicare’s open enrollment, which ends Dec. 7.
This year, Marchilena has a strategy for deciding whether to stick with her current coverage — three plans for hospitalization and outpatient care, prescription drugs and supplemental insurance totaling $331 a month — or switch to a less expensive combo-plan with higher deductibles and costs per visit.
“I’ll just go home and play with the numbers and see which one works better,” she said.
That’s sage advice. But unless you’re math-savvy and used to unraveling numbers, it may be wisest to seek professional guidance when making your decision. It’s also important to sign up at age 65, unless you have employer insurance, to avoid costly, ongoing late enrollment penalties.
Choosing a plan involves weighing personal factors, including how much financial risk you’re comfortable taking, which prescription drugs you regularly use, and whether you have chronic medical conditions that require expensive ongoing treatment.
Online explanations at Medicare.gov and www.nh.gov/insurance, the NH Department of Insurance, make the basics pretty straightforward. If you’ve kept copies of last year’s medical expenses, you can plug in the numbers and compare what those services would cost under current alternative plans.
Your best first step in understanding the menu of choices is to make an appointment with a Medicare specialist at ServiceLink Aging & Disability Resource Center. ServiceLink representatives cannot sell you insurance, but they can enroll you in Medicare Advantage combo plans, register you for affordable drug coverage, and explain your options for supplemental insurance to cover what Medicare doesn’t pay.
Another top prospect for demystifying the fine print, evaluating slightly varying supplements and insurance costs, and coverage under various plans is to consult an independent insurance agent trained in Medicare, who also represents multiple insurance carriers. Unfortunately, there’s no central list; agents are typically found by word of mouth and through your representative for other insurances.
Both ServiceLink and insurance agents’ help are free. There’s no way to skirt Medicare’s alphabet soup terminology, but here’s a plain-language run-down on the basics, which will help you compose a list of questions to ask.
At the beginning, you have two choices. One is to go with original Medicare, consisting of Part A for hospital and skilled nursing (rehab) costs, and Part B which covers 80 percent of outpatient surgeries, office visits, labs and diagnostic tests. There’s no cost to Part A, but it has a deductible of roughly $1,350 per hospital visit, and daily co-pays depending on the number of days of inpatient care. Part B runs $135/month for an individual whose income is $85,000 or less, and $135 per person for a couple filing jointly and earning $170,000 or less.
To that, most people add a Part D drug plan for between $12 and $100 a month. Even if you don’t use any prescriptions now and consider yourself healthy, you‘ll require coverage at some point. It’s smart to sign up now for the cheapest one because waiting means you’ll pay an additional monthly penalty indefinitely when you do sign up. That can cost much more in the long run, according to Medicare experts.
To eliminate gasp-worthy balances due and the stress of financial unknowns, most people purchase a Medicare supplement, also known as a Medigap plan — private non-government insurance that covers Medicare’s deductibles, co-payments and co-insurances, including the 20 percent not paid by Part B.
If they can afford it, most people opt for the Cadillac supplement, known as Medicare Plan F, which reduces the final bills to zero for Medicare-covered expenses. Plan F costs $200 a month if you’re 65 and male — $185 a month if you’re 65 and female. The purchase price quickly climbs with age, so it’s wise to buy when you’re 65 and live with minimal annual cost increases instead.
A budget-friendlier alternative to Plan F is Plan G, which covers everything but the Medicare Part B annual deductible of $185, for lower monthly prices that make it cheaper within the first year.
When does it make sense to use this cobbled-together approach? When you can afford the monthly payment, which can run $300 to $400 for a top drug plan and supplement at age 65, and when you don’t want the headache of balances due and deductibles to pay. As long as you don’t mind carrying three insurance cards, it can be the most intelligent option if you have any chronic medical conditions that require expensive, ongoing treatment, experts say.
Now for the other, streamlined alternative. Medicare Advantage plans combine the benefits of Parts A, B, and D, for a monthly fee (running $33 to $86 monthly for an Anthem plan, less for some United Healthcare plans) with varying deductibles, co-payments and co-insurances. You’re still responsible for the Part B monthly charge of $134 in 2018, which rises to $135.50 next year. A perk of Medicare Advantage is its wellness coverage, which includes preventative screenings such as routine colonoscopies, gym memberships and benefits for annual dental cleanings and eye exams.
Ed Erskine, an independent agent in Londonderry, said most of his Medicare-eligible clients sign up for Medicare Advantage plans because they’re typically simpler and less expensive up front since you pay as you go. In New Hampshire, 23 different insurance companies offer Medicare Advantage plans, including Anthem, Aetna, United Healthcare, Humana and Martin’s Point.
Andrea Patterson, an independent agent in Alton, said participating companies vary by county: In Hillsborough and Rockingham, there are over 20; in Belknap County, there are just 14, and does not include Anthem.
The services covered by Medicare Advantage plans are standard, but the price structures and bottom lines vary significantly between carriers. That’s why it’s important to consult someone knowledgeable when it comes to gauging your yearly medical and prescription needs and picking the most sensible option.
Written By: Roberta Baker
Published On: Dec 3 2018