I’m eligible for Medicare soon and I’ve heard that, depending on the Medicare insurance option that you choose, you could pay little-to-nothing for healthcare or be exposed to large out-of-pocket costs. Do you have an example of this? By the way, I’ve enjoyed reading your book and look forward to learning more!
Yes, this is true – two people can have the same experience and pay completely different amounts based on their Medicare choices. Here is a great example of this scenario, which I included in my book, Prepare for Medicare – The Insider’s Guide to Buying Medicare Insurance.
Why Choosing the Right Medicare Insurance Plan is Important
Why is choosing the right Medicare insurance plan so important? Easy. One wrong move could cost you thousands of dollars. One wrong move could make you ineligible for coverage down the road. One wrong move could bar access to a prescription drug you need, a doctor you wish to see, or a hospital you want to use or could make you miss out on valuable benefits you’re eligible for . . . or not, if you have the right insurance coverage. Here’s an example which shows the difference between a well-insured individual and a person who didn’t have the optimal Medicare insurance coverage.
Here’s an example from my book.
Tim and Alex both live in Miami, Florida. Both Tim and Alex, unfortunately, had heart attacks on New Year’s Day at the exact same time and took an ambulance to the exact same hospital. They each spent five days in the hospital before being discharged. Both have Medicare Advantage plans but from different Medicare insurance companies.
Tim pays $0 per month for his Medicare Advantage plan, as does Alex. Tim’s Medicare Advantage plan uses an HMO (Health Maintenance Organization) network, while Alex’s uses a PPO (Preferred Provider Organization) network.
Tim Chose the Right Medicare Insurance For Him
When Tim got home, he ran across a note from someone from the insurance company trying to deliver a hot meal to him. That’s when he realized he would get meals delivered to his door every day for the next ten days, free of charge, so he wouldn’t have to cook. He also had a call waiting for him on his cellphone from a care coordinator who walked him through his follow-up appointments, prescription drugs, and at-home care.
Doctors were able to keep tabs on Tim through a remote-monitored EKG and interacted with him often by telephone and the occasional video conference call right on his laptop. When Tim needed to attend doctor’s appointments in person for checkups, the insurance company sent a car to his house, where he was picked up and dropped off at the doctor’s office. Once his appointment was over, he was again picked up from the doctor’s office and dropped off at his house. Tim’s doctors also prescribed acupuncture to alleviate any additional pain Tim had because of his heart attack, which was also covered by his insurance. The insurance company even sent someone over to Tim’s house to assess his mobility to see if there were any items they could install in his home that would help with accident prevention. One of Tim’s new doctors helping him recover wasn’t in the insurance company’s network, but that’s okay because all Tim had to do was ask his insurance company to find a doctor in the HMO network, which they did.
When all of Tim’s medical and prescription bills finally came due, his total share of the cost for his heart attack came to $400. His Medicare insurance company charged him $0 for days one through five in the hospital, $25 per specialist visit to his cardiologists, and $100 for some diagnostic tests. The rest of the charges were from various copays for prescriptions he had filled at his local pharmacy.
Alex: What Happens When You Don’t Have Optimal Medicare Coverage
When Alex got home, he arrived at an empty house and a list of prescriptions he should fill. No care coordinator or nurse ever called him to see how he was doing. His heart wasn’t monitored in real-time. He was just told to get to the cardiologist’s office four days after discharge for a follow- up appointment. When it came time to go to his appointment, he wasn’t comfortable driving and had to call a few friends to see if they could take him. They couldn’t, so he called an Uber and paid $30 for the round trip.
Alex didn’t have a telemedicine option; every follow-up doctor’s visit had to be in-person. Alex was still in a lot of pain, and while his doctor also suggested that acupuncture could alleviate the pain, it wasn’t covered under his insurance plan, so he had to pay cash. No one from the insurance company was sent to his house to see if he needed grip bars installed in his bathtub. One of Alex’s new doctors wasn’t in the insurance company’s network. He was able to go anyway but was charged 50% of the cost of the visit, far more than the $25 it would have been had the doctor been in the network.
When all of Alex’s medical and prescription bills finally came due, the total cost of his heart attack came to $6,000. His Medicare insurance company charged him $695 per day in the hospital but also a $1,300 deductible on top of that. He had to pay a separate $325 deductible for his prescription drugs before his benefits kicked in as well. He had to pay for transportation to his doctor’s appointments and acupuncture out of his own pocket. His visit to the cardiologist out-of-network cost him another $250. His son came over to install grip bars in his bathroom, so he, fortunately, didn’t have to pay for that!
The Importance of Choosing a Medicare Insurance Plan That Offers More Financial Protection
Wait a second—how could Alex’s bill be more than ten times higher than Tim’s for the exact same heart attack, at the same time at the same hospital? Well, that’s because Tim clearly chose a Medicare Advantage plan that offered far more financial protection and additional health-related services than Alex did, even though they lived in the same city.
This example is based on a true story. While Tim and Alex are fake people, the Medicare Advantage plans I used as examples for each are 100% real and available right now. Fake Tim and Alex have more than forty different Medicare Advantage options available for purchase in Miami.
As you can see, picking the wrong one could literally be a decision that will not only cost you thousands of dollars but, more importantly, could cost you your health. It’s not just a Miami thing—I could tell similar stories using examples found in every state in the Union. The myriad of choices available makes it tough to find the right one for you, but it’s not impossible.
Even if you’ve already made Medicare insurance choices, this isn’t a one- time decision. Just as your financial situation, health, and living arrangements change, so do the benefits and premiums of Medicare insurance policies. The insurance choices you have, the enrollment periods, and the options and information are always changing and changing every year. That’s why you need to review your coverage every year.
Sticking your head in the sand won’t help; standing idly by while the calendar turns into a new year could cost you thousands of dollars. How do you know if you’re in a quality, reputable plan? Paying too much? Using a high-quality, reputable, expert Medicare insurance agent? If you’re a caregiver helping your parents or other family members decide, make sure to get the information you need to create solid financial decisions.
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Author Bio Matt Feret is the author of the Prepare for Social Security -The Insider’s Guide and the Prepare for Medicare – The Insider’s Guide book series and launched PrepareforSocialSecurity.com to help people get objective answers to questions about Social Security and Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.