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Medicare and Health Care


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Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age person with End-Stage Renal Disease (ESRD). There are many different parts to Medicare; with all of these options, it can be confusing.

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OUtside  
#21 Posted : Tuesday, November 26, 2019 9:55:16 PM(UTC)

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Your comment 'BUT many (FEHB plans as estimated by Checkbook) ended up in pretty much the same place when “max cost to you” was factored in,' needs further clarification, it seems to me. I looked at the data tables and the max cost for self plus one ranged from a low of around $9000 (2 plans) to a high of around $27000, and everywhere in between. Yes, some were around the same amount, but there is a wide range to look it if that is your primary cut for selecting a plan.

And I would say Checkbook's use of $25000 in expenses reflecting a high expenses category is probably ok because even if expenses are higher, the most you would pay for a plan on that list is $27000, consisting of premium plus copays. I do agree expenses could easily be higher but I think we could both agree that a high expense category likely includes an in hospital stay, which would be expensive but would be paid primarily by Medicare Part A and would only affect the FEHB having to pay the Part A deductible, assuming it is one that does. In fact, if expenses go a lot higher, Part A expenses would probably be significant.

On that point of Part A expenses, if your summary of expenses by age group depicting the much higher costs of the elderly includes in hospital costs, I think it should be clarified to include that point because the groups we are talking about both have Medicare Part A, so the actual costs to the FEHB for that care is much lower. And, in fact, it is the younger population age <65 who are costly for in hospital care as far as the FEHB program is concerned.

Edited by user Tuesday, November 26, 2019 9:56:52 PM(UTC)  | Reason: Not specified

Sante123  
#22 Posted : Wednesday, November 27, 2019 7:29:56 AM(UTC)
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OUTside:

I will reply paragraph by paragraph to make things as clear as possible.

Re: Your Paragraph #1:
The quote you posted is actually a paraphrase, and not what I actually said. I said....

“Oddly enough, those that came out on top were better deals over a variety of cost scenarios (none, low, average, high) BUT many ended up in pretty much the same place when “max cost to you” was factored in.“

So I was referring to the top rated plans, not all of them. Which makes sense since I doubt many folks pick from the bottom of the list.

Re: Your Paragraph #2:
All of my posts under this topic have been about the perils of not taking Part B (for those who feel they will eventually need to rely on Part B in later years.) I don’t understand why in your reply you would focus on the opposite scenario. If you actually were not, and hoped to make the case that Part A will absorb the costliest expenses, then I must still disagree with your premise. These days, the bulk of healthcare delivery takes place on an outpatient basis. Even care delivered by a hospital is considered outpatient unless a doctor specifically orders admission as an inpatient. And that generally doesn’t happen unless the patient is expected to need hospital care spanning at least two midnights. Outpatient surgery and related care is one of the fastest growing areas of healthcare and it can be expensive. In HCOL areas, simple cataract surgery (the #1 most common surgery) can cost $7000 in allowed charges. A single chemo session can cost around $90,000 in allowed charges. A series of radiation treatments can run from $100,000 to $200,000. All of it outpatient. None of it paid by Part A. But with or without Part B, there is a substantial cost difference between the Checkbook Guide’s enrollee cost for high medical expense and the max cost to you numbers. For Self plus one retirees with Parts A and B, the difference runs around $9-11k. That’s a LOT of money, proving my point that Checkbook’s notion of “high expense” isn’t nearly high enough.

Re: Your Paragraph #3:
Elderly folks tend to consume all forms of healthcare in greater proportions than younger age cohorts. That includes inpatient, outpatient and, very importantly, prescriptions. FEHB plans incur greater costs when they enroll high-cost individuals, no matter how old they are. Now, as I already posted before, this can be mitigated for annuitants by having them enroll in Medicare Parts A and B. But that doesn’t affect the 25-30% of costs related to plan prescription costs. And the most commonly incurred costs are not mitigated at all if the enrollee never takes Part B. [Remember, I am commenting primarily on the financial costs to annuitants and plans of not being enrolled in Part B.]

Addendum: My last paragraph contains a bit of an overstatement. Plans do incur greater costs dealing with annuitant enrollees w/o Part B. And those enrollees may incur higher costs themselves because of the lack of wrap around coverage. BUT.....merely being eligible for Medicare Parts A and B, regardless of whether you sign up or not, entitles you to be charged the much lower Medicare-allowed rates for covered services from participating providers. That lowers costs from what they would be for those in the non-Medicare population. It does not change the fact that, as a whole, healthcare costs for older folks cost more than younger folks. And that, on the whole, annuitant enrollees will cost their FEHB plans more if they pass up Part B, than if they sign up for it.

Edited by user Wednesday, November 27, 2019 8:56:14 AM(UTC)  | Reason: Added clarifying addendum.

OUtside  
#23 Posted : Friday, November 29, 2019 4:30:25 PM(UTC)

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Sante123, regarding the following from your post above:

“Oddly enough, those that came out on top were better deals over a variety of cost scenarios (none, low, average, high) BUT many ended up in pretty much the same place when “max cost to you” was factored in.

So I was referring to the top rated plans, not all of them. Which makes sense since I doubt many folks pick from the bottom of the list."

In context of this discussion of whether Part B has been worth it to you, I think only the cost scenario of High Expenses is relevant to this discussion, because in terms of cost effectiveness, Part B is most likely only going to be worth it $-wise if it provides waived co-pays in excess of the Part B premiums. Yes, there is the sleep tight factor of having wrap around coverage, but I don't think the original poster was asking that. Even if they were, one could argue even if the cost is one million dollars it could be worth it in some measure, say, to someone with chronic insomnia or some other exceptional instance.

But your comment 'BUT many ended up in pretty much the same place when “max cost to you” was factored in' suggests we are not reading from the same page in the financial analysis provided by Checkbook.

When I selected High Expenses for someone of Medicare age approximately 40 plans were listed. Taking the first 3, the max to you is 23% higher for the highest max vs the lowest max plan. For the top 5 plans, the difference is 56% highest vs lowest, and for the top 10 plans, the difference is 98% highest vs lowest.

These are substantial differences which I wouldn't describe as being 'in pretty much the same place' and should require a careful look by someone wanting to select a plan with a low max to you number, IMHO.

Edited by user Friday, November 29, 2019 7:35:51 PM(UTC)  | Reason: Not specified

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Sante123 on 12/14/2019(UTC)
Sante123  
#24 Posted : Monday, December 2, 2019 9:36:56 PM(UTC)
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fedwife:

Whenever someone asks the perennial Part B question, they are likely to hear from some folks who claim to have saved a bundle by avoiding Part B premiums. They are also likely to hear from others who have avoided the roller coaster of unexpectedly high medical bills by embracing those same Part B premiums. So, the definitive answer to the question of whether it pays to take Part B is..........it depends. Not a very satisfying answer, is it? Which is why the question keeps coming up. The truth is there are many variables in play. Some involve your choice of plans. Some involve your health status, not just based on one’s past, but on the near and distant future as well. This last bit is often unknowable, no matter how healthy one might have been to date. So, the best course is to be as realistic as possible about one’s likely healthcare needs going forward, AND to evaluate ALL of one’s insurance options in a multi-dimensional way. I just now stumbled across a refreshingly comprehensive analysis by Walton Francis from last year that does just that. He seems to go one step beyond what the Checkbook Guide normally offers, and he does so very concisely. I hope you find it helpful.

https://www.fedsmith.com...-fehb-plan-choices-2019/
fedwife  
#25 Posted : Friday, December 6, 2019 8:41:21 PM(UTC)

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Thank you Sante123 for the link and your thoughts. Thanks to everyone else who has responded. I ended up signing up for Medicare B, but then cancelling it at the last minute. I'm not on Social Security yet, and I had received a bill for $400 for Medicare coverage for three months. I knew another bill for $400 would arrive again soon. That's a lot of money to us, and I just couldn't bring myself to do it. My health was good enough, I had good insurance, and it seemed like throwing money away at the time. Yet I know when the new year starts and I can sign up, at the penalty cost, I'll still start worrying if I should sign up because I might need it later, and it will be too expensive because of the penalty!


OUtside  
#26 Posted : Saturday, December 7, 2019 3:16:15 PM(UTC)

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Earlier Sante123 made the point that absent Part B, a retire with Part A only '...may well be descending a slippery slope into unaffordability.'

Assuming failing health of the retiree experiencing high health expenses, it seems to me this would also require one or more of the following developments: 1) as in other insurance systems, eg Obamacare, plan premiums would be based on age, reflecting the fact that the older the enrollee, the costlier the enrollee, therefore, a higher premium would be charged; 2) similarly copays would be based on age, for the same reason as 1), ie, higher individual copays would be charged vs younger enrollees; 3) plan catastrophic limits would be set specifically for older retirees, for the same reasons as 1) and 2).

But under the current system, retirees pay the same premiums, copays, and out of pocket limits (except they may pay less for doctor services based on the usually lower Medicare rates), so unless these factors were to change, I think the most likely source of unaffordability would be 3), plan catastrophic limits, but raising the limits could turn away younger enrollees who, if they are doing their homework during open season, could look for better deals. In a sense, just as Sante123 points out, adverse selection occurs when better plans attract high cost retirees, perhaps the reverse could be true about raising plans limits if that were to drive away younger and less expensive enrollees.

Above, I pointed out there is wide variance in the catastrophic limits of the 10 highest rated plans by Checkbook. I think it would be good for all retirees to keep such catastrophic limits in mind when selecting a plan, moreso, perhaps, for those absent Part B, for one reason, with Part B and copays waived, the retiree with Part B may never get there in a certain number of cases if he/she is not paying anything out of pocket for medical services.

Edited by user Saturday, December 7, 2019 3:18:30 PM(UTC)  | Reason: Not specified

teeeeej  
#27 Posted : Saturday, December 7, 2019 3:40:39 PM(UTC)
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Originally Posted by: fedwife Go to Quoted Post
Thank you Sante123 for the link and your thoughts. Thanks to everyone else who has responded. I ended up signing up for Medicare B, but then cancelling it at the last minute. I'm not on Social Security yet, and I had received a bill for $400 for Medicare coverage for three months. I knew another bill for $400 would arrive again soon. That's a lot of money to us, and I just couldn't bring myself to do it. My health was good enough, I had good insurance, and it seemed like throwing money away at the time. Yet I know when the new year starts and I can sign up, at the penalty cost, I'll still start worrying if I should sign up because I might need it later, and it will be too expensive because of the penalty!




You owe the penalty rate forever. I would highly advise to take it right away if you want it.
GSBS  
#28 Posted : Thursday, December 12, 2019 3:51:37 PM(UTC)
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Is paying 50% more monthly in Healthcare Premiums (FEHB & Part B) worth saving a possible 20% co pay? What am I missing in the big picture?
OUtside  
#29 Posted : Thursday, December 12, 2019 5:21:42 PM(UTC)

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It depends on how many 20% copays you have to pay. As people get older and older, they tend to have to pay more and more copays, which add up and can exceed the Part B premium. So the person continues to pay them until he/she reaches their plan out of pocket maximum limitation. Others will have better statistics than I, but I believe many people experience the most health care during the last couple of years of life, but if that is an average, it also means others will be in that situation in earlier years perhaps even in their prime years.

One reason to understand your plan catastrophic limitation is to focus in on just that, what your catastrophic limitation on out of pocket expenses would be in a very bad year. Sante123 pointed out that plan catastrophic limitations have been rising in the last few years but that doesn't mean they are all rising at the same rate or will continue to do so. Checkbook lists the catastrophic limitations of all plans and also attempts to resolve differences among the plans on this issue because not all plans calculate the same on this point. For this reason, it is urgent to understand how your plan makes this calculation. For a contrived example just make this point, suppose your plan has a low limitation you would probably be comfortable paying out of pocket assuming you had a bad year, but at the same time the plan just happens to exclude a certain medicine which you take daily and is very expensive. You would never be able to count your copay for that medicine toward your out of pocket limit.

And just to note, even if you had Part B and got a small break on the price by the plan on that prescription, you would not be able to count the cost of that prescription towards your limit either.

Note, it's a contrived example only to make a point of the importance to understand your plan out of pocket limit. Without heading to your brochure, can you quote the out of pocket limit of your plan and what it both includes and excludes?--Just took my own advice and read my own plan's catastrophic limitation provisions-- very interesting.

Edited by user Thursday, December 12, 2019 7:59:47 PM(UTC)  | Reason: Added last sentence

GSBS  
#30 Posted : Friday, December 13, 2019 3:51:19 PM(UTC)
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Wow you're amazing. My catastrophic limit is $7500 and yes, I need to read up on that section. They don't mail you or print the handy booklet anymore, sure its online. I didn't realize medications rejected or partially paid by Blue Cross would be picked up by Medicare, I will read about that as well. I have 4 years before Medicare although under OPM D.R. I have to file for SS next year and first thought I had to elect Medicare at that time
OUtside  
#31 Posted : Saturday, December 14, 2019 10:15:11 AM(UTC)

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Sorry, the example may have confused you. Part B doesn't ordinarily pay anything for prescriptions, but some fehb plans reduce their prescription copays for subscribers who have Part B.

Your plan web site probably has an area where you can order a paper copy of their brochure mailed to your home. Checkbook has a nice utility allowing quick on line access to all the plan brochures from their program.

Reading the section of brochure on the catastrophic limit will tell you what is included in the limit and what is excluded from the limit, important distinctions to understand when considering out of pocket costs in a bad year. And it is important to know that plans don't necessarily do the limit in the same way; the only way to know the differences among plans is to scrutinize the catastrophic limit sections.

Edited by user Saturday, December 14, 2019 10:20:07 AM(UTC)  | Reason: Not specified

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GSBS on 12/14/2019(UTC)
Sante123  
#32 Posted : Saturday, December 14, 2019 10:01:14 PM(UTC)
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Originally Posted by: OUtside Go to Quoted Post
Sante123, regarding the following from your post above:

“Oddly enough, those that came out on top were better deals over a variety of cost scenarios (none, low, average, high) BUT many ended up in pretty much the same place when “max cost to you” was factored in.

So I was referring to the top rated plans, not all of them. Which makes sense since I doubt many folks pick from the bottom of the list."

In context of this discussion of whether Part B has been worth it to you, I think only the cost scenario of High Expenses is relevant to this discussion, because in terms of cost effectiveness, Part B is most likely only going to be worth it $-wise if it provides waived co-pays in excess of the Part B premiums. Yes, there is the sleep tight factor of having wrap around coverage, but I don't think the original poster was asking that. Even if they were, one could argue even if the cost is one million dollars it could be worth it in some measure, say, to someone with chronic insomnia or some other exceptional instance.

But your comment 'BUT many ended up in pretty much the same place when “max cost to you” was factored in' suggests we are not reading from the same page in the financial analysis provided by Checkbook.

When I selected High Expenses for someone of Medicare age approximately 40 plans were listed. Taking the first 3, the max to you is 23% higher for the highest max vs the lowest max plan. For the top 5 plans, the difference is 56% highest vs lowest, and for the top 10 plans, the difference is 98% highest vs lowest.


Sorry for the belated post (and the fat-fingered thank you I inadvertently gave to your comment. It was unintentional, but not undeserved.)

Yes, it is clear we are reading from different screens in the Checkbook Guide. I was reporting the results for a high-expense retired couple with Parts A and B. In that context, 7 of the top 10 plans had cat max levels in the $19,000 range. And for each of those 10 plans, the max cost-to-you levels were substantially higher than the high expense cost-to-you figures. So, my original observation was accurate.

Edited by user Saturday, December 14, 2019 10:20:52 PM(UTC)  | Reason: Not specified

OUtside  
#33 Posted : Thursday, December 19, 2019 10:05:01 AM(UTC)

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Sante123, thanks for posting the article written by Walt Francis linked above.  I agree it is very informative and worth reading carefully.

While focusing on the basic issues of fehb/Part B, the article makes these additional interesting points:

1) Having 2 duplicative health insurance systems side by side each with costly premiums for enrollment would not occur on a 'sane planet.'

2) Providing wraparound coverage (fehb+Part B) probably raises taxpayer costs by 20% per retiree ($2500/year each) due to additional ('unnescessary') care 'free' to those covered by both systems and also provides additional income to their providers.   The estimated total increased cost to the govt is about $2 billion per year.

3) Medicare Part D, prescription drugs, could be a cost effective supplement to fehb retirees but few enroll in it.  The annual premium is about $400-$500 per person per year.

Regarding 3) I read Francis's comment that few retirees enroll in Medicare Part D in context of the point he makes that Medicare Part B retirees should take a careful look at less expensive fehb plans which, when pared with Part B, can provide wraparound coverage at less out of pocket cost.  But if those less expensive plans also have less generous prescription drug coverage, then a Part D enrollment may serve well toward making up the difference despite the extra cost of the Part D subscription.

If this is so, one would have to think the same mitigation of high prescription drug expenses should be available similarly to Part A only retirees.

I would like to see more discussion on this subject but to keep this post from getting longer, I will a make separate posting about it shortly..

That we were looking at different pages in the Checkbook financial analysis, I was looking at the summary for self plus one Medicare Part A only from the standpoint of your comment of Part A retirees eventually may face a non affordable option, trying to discern such a trend.  But in the analysis I reviewed, the top ten plans average a max cost of around $14000 vs the $18000 average from the page you reviewed, apparently the greater part of the difference being itself the cost of Part B premiums.  If the max to you cost is accurate, I would say that trend is not yet obvious in the Checkbook data and I didn't see it in the Checkbook commentary either in this year's issue.

In an earlier post, I tried to better understand your idea of a 'slippery slope into unaffordability' faced by a retiree who postpones Part B enrollment while rich benefit plans become more expensive due to the effects of adverse selection.  I now think I understand better and would make the point that multiple 10%'s of penalties on the premium increase the premium analogously to the higher premiums paid by high income retirees.   In other words, as In the article, Francis refers to the latter '.. as  enrolling in Part B becomes very problematic,' because of the difficulty of making the enrollment cost effective-- ie, the same occurs when a retiree waits too long to enroll.

Finally, it follows that as to the basic question raised by this thread, if an fehb retiree decides to enroll in Part B as well, they should do so at the first opportunity in order to avoid paying a penalty for late enrollment later.  For some retirees, especially for those very satisfied with their current fehb plan, the decision is not an easy one.

Edited by user Thursday, December 19, 2019 10:07:32 AM(UTC)  | Reason: Not specified

OUtside  
#34 Posted : Monday, December 23, 2019 3:47:34 PM(UTC)

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Following up briefly on the above discussion about Medicare Part D, I think we need more information on this subject such as how coordination works between Medicare and fehb for someone in enrolled in both for prescription drugs and how to figure out whether a Part D enrollment would be cost effective.

Sante123 pointed out earlier that 25 to 30 % of health care expenses can be comprised by prescription drugs, I believe the OP mentioned hesitance about enrolling in a less costly fehb plan while taking Part B due to concern about the cost of spouse's medications, another posting raised the concern of high medical bills as one gets older and the satisfaction knowing insurance coverages are there to accommodate the need, I mentioned Checkbook high cost estimates for max to you out of pocket in a bad year, there was discussion about the high cost of the Part B late enrollment penalty which multiplies 10% per year of delay, the article by Walt Francis mentions the problematic nature of Part B premiums for high income retirees--- all of these instances and many more discussed at this web site from time to time seem to me now require a much better understanding how Medicare Part D could be an effective enrollment for fehb retirees.

Edited by user Monday, December 23, 2019 7:28:24 PM(UTC)  | Reason: Not specified

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