If you are on Medicare you have probably received (or will shortly) your Official Guide to Medicare, sent to you by your friends in Washington. It’s a large and informative book which does a good job of explaining what you need to know.
For those people who are considering the merits or deficiencies of a Federal health care system but are not currently on Medicare, allow me to give you a brief overview of how the system is structured.
If you are Medicare eligible (generally you either have attained the age of 65 or are younger but have won a disability case with the Social Security Administration) then you are automatically enrolled in Medicare Part A. This portion of the program provides for payment to hospitals for their services. There is no premium associated with this coverage.
Part B of Medicare is optional coverage which pays about 80% of the negotiated fee for services such as doctors’ visits, doctor ordered tests including MRI’s, blood work, etc. The premium for this coverage ranges between $100 – $320 per month dependent on income. Medicare pays 80% of the charges which a patient incurs for these services – the balance being the patient’s responsibility.
Typically, people who have significant medical conditions or want to avoid incurring such charges should they contract a new infirmity will purchase a supplement from a private insurer. Depending on the plan, they may get private insurance coverage which may pay the balance that Medicare does not pay. Premiums for these plans typically range between $200 – $1,000 per month depending on the insurer and their underwriting determinations based on an individual’s specific health profile.
Excuse the skip in lettering but we will now go to Medicare Part D. This is the prescription drug portion of Medicare and is also optional. The cost of participating in Medicare Part D is also determined by income. Most plans require a monthly payment ranging from about $20 – $60 a month. Plans have an annual deductible which range between $0 – $325 before making any benefit payments. All require an additional co-pay for any prescription drugs a patient takes. Most plans do not cover all drugs which a patient might be prescribed or will only pay for certain drugs in non-generic form. They all contain a cap on the maximum amount of benefit they will pay annually and are underwritten by private insurance companies.
Medicare Part C is known as “Medicare Advantage”. This is also underwritten by individual insurers at no monthly premium cost to the patient and include a prescription drug plan. These plans include an annual physical exam at no charge. For all other services including doctors and hospitalizations and drugs the patient must make a co-payment which varies depending on the service that is involved. Of course, for an individual who is generally healthy, doesn’t make frequent trips to the doctor or takes a limited amount of medication, this is the most attractive supplement since there is no monthly premium – merely the co-payment which must be made for each service or prescription.
The reason I went into such detail on how Medicare works in its various components is because of a conversation I had with a friend the other day. She is a young 66 year old, active and healthy and living on Social Security for the majority of her income. She was covered under a Medicare Advantage plan but was informed by her insurer, Sierra Health Systems that they are discontinuing their plans in Clark County, NV in 2013. Anthem (which is Blue Cross) also underwrote this coverage and they too are discontinuing their plans.
So my friend was advised by her insurance agent that she can expect to obtain similar coverage for next year, but instead of paying no monthly premium, she can expect a premium of at least $30 a month with a new insurer for the same coverage. The reason which the agent cited – Obamacare.
This is a real person with an income from Social Security of about $1,100 per month who is currently paying $100 per month to Medicare for insurance coverage. That is 9% of her income. That cost (assuming that her Medicare Part B premium doesn’t increase at all) will now escalate to $130 per month – a 30% increase in the amount she must spend for insurance – thanks to the Affordable Care Act which the Congress passed and President Obama signed into law.
So for whom is the “Affordable Care Act” affordable? Apparently not for the members of Congress who, without reading the law, were wise enough to exempt themselves from being subject to it.