People get sick – sometimes really sick – but don’t always plan their health insurance needs that way.
For most, it’s more a matter of picking a coverage plan they think will work within their budget in this era of growing out-of-pocket health care costs.
The challenge often becomes the most daunting when people reach age 65 and become eligible for Medicare.
“The problem I find is people, if they're healthy, think they're going to be as healthy the remainder their life as they were during the first part of their life,” said Bill Daniels, coordinator of insurance outreach and counseling with the Erie County Department of Senior Services.
Those eligible for Medicare – which also include almost 3 million Americans with disabilities – can apply to the program any time of year. Daniels, however, will field lots more questions in the coming weeks as the window opens for those who might want to choose a new Medicare Advantage plan or new standalone prescription drug coverage.
Private insurers who offer these federally-funded plans already have started to advertise and send mailings in advance of the application period, Oct. 15 to Dec. 7. Plans go into effect at the start of the new year.
Older Americans aren’t required to buy prescription drug coverage – “but people who do sleep better,” Daniels said.
There are two ways for Americans with Medicare to get prescription drug coverage: through a standalone plan – there are 27 to choose from in Erie County – or through Medicare Advantage, which provides other Medicare services, too; 39 of those plans are available to county residents.
It takes time, effort and reality check to choose well.
“Most people I deal with are either underinsured or they bought the wrong insurance,” Daniels said.
He shared three cases he’s handled in just the past week:
- A just-retired nurse called Monday morning after she learned her current Medicare Advantage plan from United Healthcare doesn't cover treatment at Roswell Park Comprehensive Cancer Center. “Insurance companies negotiate what they're going to pay providers and Roswell has trouble taking care of people for what United Healthcare is willing to pay,” Daniels said.
- A 91-year-old man who found out he needs to go on kidney dialysis discovered that his Medicare Advantage plan requires a 20% co-pay for each treatment. “That’s thousands and thousands of dollars of out his pocket,” Daniels said.
- A 65-year-old man, who bought a Medicare Advantage plan three months ago because he liked the low premium, recently spent five days in the hospital and learned he might need a heart transplant. His Medicare needs now have changed, which is why the man and his wife came into Daniels’ office for some objective advice.
About 55% of the nearly 200,000 Medicare recipients in Erie County are on a Medicare Advantage plan. Most others chose Original Medicare coverage and bought a Part D standalone prescription drug plan, according to the Centers for Medicare & Medicaid Services (CMS).
“The big thing is to make sure you get the proper coverage,” Daniels said. “You have to plan ahead when you're buying insurance. The number one reason people are in bankruptcy in this country is health care costs.”
Daniels offered the following tips when applying for Medicare or Medicare Advantage for the first time – or considering a change in plans during the upcoming enrollment period.
Original Medicare pays for hospital care, emergency room and doctor visits, and prescription drugs.
The federal government pays private insurers to offer Medicare Advantage plans, which cover the same services, often with lower premiums and greater restrictions because those insurers receive less per person than what Medicare directly pays for services.
“The ratings are an issue because the care you receive pretty much depends upon the insurance company that you have,” Daniels said. The ratings scale stretches from 1 to a high of 5 – and Medicare gives more money to private insurers who perform better on clinical quality, member experience and other measures.
Many of those insurers provide additional incentives that can beef up those ratings, including partial coverage for dental care, and toward hearing aid and eyeglasses. More than 65% of Medicare Advantage plans in the U.S. provide at least one of those benefits, according to the Kaiser Family Foundation.
The top-rated plans in the region at 4.5 stars are also the most popular. Most are offered by the region’s three largest insurers, BlueCross BlueShield of WNY, Independent Health and Univera Healthcare.
Prescription drugs are key
Prescription drugs account for about 28% of health costs in Medicare programs, Daniels said. Insurers who run Advantage plans often annually change co-pays for the generic and brand name medications covered, as well as in some cases which drugs they will cover at all.
Some plans also require members to try a certain drug for a specific ailment before agreeing to pay for a preferred drug that treats the same condition but is more expensive.
This is why it’s so important for those who plan to keep the same prescription drug plan or Medicare Advantage plan in the coming year to find out what changes will be made – particularly ones that could impact the drugs they use and health care providers they visit.
“The plans can change,” Daniels said. So do health circumstances. He cautioned that those on traditional Medicare can pick up a supplemental Medicare plan at any time but may have to wait up to six months for it to cover pre-existing conditions.
Do the math
You can stay on the same Medicare plan each year, as long as the same plan remains available.
Many plans stay roughly the same from year-to-year, Daniels said, but two years ago 43,186 people had to find something else when two regional $0 deductible plans were discontinued.
Medicare Advantage plan premium costs, deductibles, co-insurance and co-pays – including for drugs you may take, and which doctor and hospital services are covered – also might change every year, so you have to pay attention, Daniels said.
The good news overall? The Medicare Advantage average monthly plan premium across the U.S. is expected to decrease 14 percent to $23 next year. More plans also will be available.
A Medicare Advantage Health Management Organization plan (MA-HMO, the most popular in the region) tends to be the most restrictive and least expensive form of Medicare Advantage coverage, Daniels said. You must see a doctor in the plan’s network except for emergency care and may find you need pre-authorization for medical procedures and other care.
Some of the more restrictive and less expensive plans need not accept patients with costly end-stage renal disease and can include 20% co-pays that can devastate financially should serious illness strike.
“They’re required to cover cancer,” Daniels said, “but the trouble is the chemotherapy. In a lot of these plans, you have a 20% co-insurance. That gets expensive. For example, you’ve got a $12,000-a-month medication and that’s $2,400 out of pocket.”
Help is available
Daniels, 67, handled Medicare-related applications online for himself and his wife, Geraldine, 65. He stressed that others who do save a copy of the completed application and check for a confirmation email or letter from CMS to confirm the process was successfully completed.
“You also can go to the Social Security Office on Exchange Street” and apply in person, he said, “but you have to realize that they're horribly understaffed.”
He and a small cadre of part-time staffers and volunteers also can answer questions or meet with eligible Erie County residents who call his office at 858-7883.
Those blessed enough to reach the retirement years need to understand they're going to pay a greater chunk of their income on health costs than they did when they were younger and – often – healthier.
“They’re higher risk,” Daniels said.
It was lots costlier to families before Medicare started a half century ago, but costs still matter, especially when you consider that federal health care and Social Security spending account for almost two-thirds of the federal budget, each easily surpassing all other budget lines, including defense spending, safety net programs and interest on the national debt.
Those who receive these benefits invested in them during their working lives as part of payroll deductions, but greater longevity in recent decades means many older Americans are receiving far more from the government than they invested.
This helps explain why those who receive Medicare are paying more out of pocket.
It also explains why it’s okay to reach out for help finding the best plan for you or a loved one.
“It’s tough to be a patient,” Daniels said. “This is complex.”
Health insurance options
Medicare is available to Americans age 65 and older, as well as some adults the federal government deems disabled. You can apply for related services and programs through the nearest Social Security Office or online. Options for those who are Medicare-eligible include:
If a health insurance plan from a current or former employer is better and less expensive, go with that.
Buy Original Medicare and Part D Prescription Drug Plan
These are available through Medicare, though there may be a restriction for pre-existing conditions if you wait more than six months after being eligible for Medicare before you seek a supplemental Medicare plan. This plan allows you freedom to choose services from most health care providers and hospitals, as well as help cover the cost of prescription medications.
Buy a Medicare Advantage Health Maintenance Organization (MA-HMO) policy
These are available at lower cost than Original Medicare plans, but you must use a restricted network of providers and hospitals. You also must obtain Medicare Part D prescription drug coverage for the plan if you want such coverage. Medicare Advantage plans do not have a waiting period for coverage, including prescription coverage. Also, if a person joins EPIC (see below), they can enroll in a Medicare Part D plan anytime during the year with Part D coverage starting the following month.
Buy a Medicare Advantage Preferred Provider Organization (MA-PPO) product
This allows out-of-network coverage at higher cost than for network providers and generally offers a greater amount of network coverage than an HMO plan. It also tends to cost more out of pocket. This is unavailable for most people with end-stage renal disease.
Buy a Medicare Advantage private fee-for-service plan
You can go to any provider or hospital in the U.S. as long as they are willing to accept plan fees and terms of care. Out-of-network coverage might be provided at additional cost. This is unavailable for most people with end-stage renal disease.
Join a Medicare Health Savings Account
This combines a high-deductible health plan with a self-funded medical savings account.
Also consider EPIC
The Elderly Pharmaceutical Insurance Coverage Program saves those age 65 and older by supplementing the Medicare Part D Prescription Drug Plan. Older state residents who are single are eligible if their annual income is $75,000 or less; the income cap is $100,000 for a married couple. Deductibles apply and co-pays range from $3 to $20, depending on the medication. Learn more at health.ny.gov/health_care/epic or call 800-332-3742.
Apply for Medicaid
Income eligibility guidelines apply for this government-funded program. In Erie County, call 858-6244. Many health providers, and hospital social workers, can help connect patients to this process throughout the region.
How to apply
Medicare: Visit medicare.gov or call Medicare at 800-633-4227 to learn more about what plan is best for you or your eligible loved one. For those comfortable online, an updated and easier-to-use Medicare Plan Finder at medicare.gov can walk you through the process by asking questions about your health, income, prescription drug use and more.
Erie County Insurance Outreach and Counseling: Unbiased one-on-one assistance from trained Medicare counselors is available by calling 858-7883. This program, part of the Department of Senior Services, can schedule appointments for sites downtown and in Amherst, Hamburg and the Town of Tonawanda. Elsewhere in the region, check with your county Office on Aging or senior community center.
Private insurers: BlueCross BlueShield of WNY, Independent Health and Univera Healthcare are among insurers which provide sites across the region for those seeking Medicare Advantage and related information. These health plans advertise and direct mail throughout the registration period – Oct. 15 to Dec. 7 – about the value of their products and how to arrange consultations.
Sources: Erie County Insurance Outreach and Counseling, Centers for Medicare & Medicaid Services