America's Elder Crisis, Medicare Edition

Miscellaneous and Personal Stuff I Must Share
1

They call, or we call them, an inexhaustible stream of elderly, disabled, and/or poor Americans, all with their stories to tell. Different in the details of course, but in the aggregate a theme develops, a daily oral history of a shattered medical insurance system, not broken because of governmental incompetence but of an insane ideological commitment to “choice” and “competition” and “the market” even in areas where these ideas do not belong.

And it has been my experience in the private Medicare insurance markets that these ideas, this ideology, is causing massive suffering among our elderly population, a population set most of us will enter during our lives, therefore making this our problem too.

I sell Medicare Advantage plans. I work for a company that does phone sales (largely boosted by the COVID disaster and the work from home movement), and my job is to talk to 30-50 seniors and others who have Medicare and pitch them new plans, every day. Some don’t want to talk, no big deal, more do. And while the debate of the value of call centers and telemarketers is fascinating, please note this isn’t the topic of this thread. I understand a lot of you do not like this and, for this thread, I will concede every one of your complaints with this: Yes, I live in a society in which I wish to eliminate even those parts I benefit from. I am Legion. I contain multitudes. Thank you.

Regardless, our seniors are in pain, they’re dying, and they are being nickel and dimed out of existence, stories like the following, common:

My first husband and I had Tricare, a wonderful insurance policy because he retired from the military and kept all his military benefits. Unfortunately, Sammy died 5 years ago and I remarried – and do you know what? They told me that just because I remarried I had to lose all my Tricare benefits! I was an army wife for 25 years, I served too, in my own way, and yet this gets taken away from me.

Now I’m dealing with copays, co-insurance, doctor networks… I can’t even go to the VA anymore, I had to switch my doctors, and now I’m paying out of pocket hundreds of dollars for my diabetes medications and treatments every month.

Today, I talked to a woman…

John. John. John. I’m so confused. I had an incident, John, they called the ambulance, and I got $700 charged because the ambulance wasn’t in my network. I then went to the dentist for a deep cleaning, you know? And I got a $1,200 bill for it… no, it’s OK, I financed it so I’ll have it paid off in a few months, but I look at my plan and apparently it only pays for basic dental and not comprehensive? Can you tell me what this means?

And what are my solutions? To look at a patchwork of plan options, dependent by county, looking for marginal improvements in the plan… “well, this plan has your diabetes medications at $9 instead of $47”, “this plan has $2,000 in dental benefits compared to your plan”, and it’s just fucking insane because, at the core, all these plans are the same, they’re different only by degrees. And they’re only marginally different because the ideological commitment to capitalism applied to government-mandated insurance minimum-coverage requirements forces companies to come up with various gimmicks like “free transportation” or “Part B buybacks” or “healthy food cards”, all of it to convince people, some barely subsisting on social security, to use Humana instead of United HealthCare.

Ladies and gentlemen, given this forum, this thread will have some basic premises which are not being debated:

  1. That insurance, fundamentally, is a socialist enterprise… the pooling of individual funds into a common account to allay the financial impact of risk on the individual members of the group.
  2. That the bigger the insurance pool, the sounder it is financially. (In America, you can see this in workplace health insurance – go work for Flush Big Corp and you get very nice plans, go work for Struggling Small Business and your plans are usually for shit.
  3. That principles of competition usually work fine for insurance enterprises which are not universally required or desired – auto insurance is an obvious example, homeowners, even life insurance.
  4. That principles of competition do not work for insurance enterprises which are universally required or desired, the most obvious example being health insurance.

That is why this is here, in MPSIMS, because I want to relay the stories of destruction wrought by one segment of the American health insurance* industry, not debate that it is a thing or why it’s a thing or how we can fix it or whatever. There is a major crisis, no debate about it – I talk to the consumers daily and I hear their frustration, their pain. This is my Rush Limbaugh of threads – I am starting from the above statements as axioms and will provide stories which buttress this viewpoint. If you want to argue the above, that’s awesome - please, start a different thread and I may join. Or not.

  • And I do mean insurance, which is what many are referring to when they talk about “socialized medicine”. It is not the doctors or the medicine which is failing America, financing our doctors and medicines via individual private companies is what is failing America.
2

Medicare Primer

Let’s start with a Medicare lesson which all of us Americans will need to know unless we die before the age of 65, a lesson which so many people I talk to never even thought about until after they made a decision which impacted the rest of their lives. I do spend part of each day saying the following… perhaps in not so much detail, but, usually, at the end of my spiel, the person on the other side of the phone wants to know why nobody ever explained any of this to them before.

Medicare (MC) is government-provided health insurance for all Americans aged 65 and older (there are some ways you can get MC under 65, but we’ll ignore those for now), and is bought on an individual level. Not everyone is in the Medicare system (military retirees, many private company retirees), but most civilians who have been in the private workforce their entire lives probably are on Medicare @ age 65.

There are three levels of Medicare protection:

  1. The most basic level of protection is Original Medicare (OM). Original Medicare is broken into three “Parts”:

Part A: Hospitalization, pays for everything from the moment you are admitted into a hospital until the moment you are discharged.

  • You will be assessed a ~$1,400 deductible every time you enter a hospital, this deductible resetting 61 days after your last stay (meaning you can pay this 5 times a year if unlucky).
  • There is no premium for Part A, and it usually begins automatically the month you turn 65.

Part B: Medical, pays for everything not in a hospital – doctor visits, tests, blood work, therapy, etc.

  • You are assessed a co-insurance of 20% on every Part B service used. If you have a $100 doctor visit, you pay $20. If you have a $1,000 diagnostic test performed, you pay $200. And if your long-term, non-hospital oncology treatment is $1,000,000, you pay $200,000.
  • There is a premium for this generous plan, currently $148, deducted from each Social Security payment/check.
  • Part B does not start automatically – you have to apply for it, and if you have similar coverage… say, you’re still covered under an employer plan… you can avoid applying for it and save that $148.

Part D: Drugs. Guys, it took until Bush 2 for people to say, “Yeah, maybe it would be a good idea to include prescription drugs into Medicare”, possibly the most progressive bill he signed into law, to be honest, and the answer to the trivia question “Name one good thing accomplished by George W. Bush”. And you thought this thread would be useless, didn’t you?

As you can tell, there are problems – extensive use of Medicare will bankrupt much of the middle class prior to their deaths, which is not a good thing. And I have talked to such people. It is that 20% coinsurance which is the killer.

So, if you get one thing from this post it is this: YOU DO NOT WANT TO HAVE JUST ORIGINAL MEDICARE.

  1. Medicare Advantage (MA), the next level of protection and the missing “Part C”, above. These are the most common plans, they are the ones which are the subject of all those fucking ads on TV, and they are the plans which I deal with, the ones which demonstrate most starkly the falsehood of “choice”. And, to get a MA plan, you must have both Parts A and Parts B.

MA plans have the following characteristics:

  • They usually have a $0 premium (you still have that $148 deducted, though)
  • They work a lot like employer plans – there are coinsurances, deductibles, hard $ coverage limits, even a “Maximum Out of Pocket”. You will have HMO’s and PPO’s. You will have some that act like “full coverage”, with low copays, some will be more “catastrophic”, with higher copays.
  • They are managed by private companies, usually massive insurers like Humana, Aetna (who owns CVS (or the other way around)), United HealthCare (UHC), BCBS, Cigna, as well as a myriad of smaller players (Empire, WellCare, Devoted). I haven’t looked it up, but I assume that Aetna gets that $148 you pay to Medicare if you get an Aetna plan.
  • They are marketed with an array of benefits which are not included in Medicare including dental and vision benefits (do NOT get me started about how the American health insurance somehow convinced Congress that dental and eyes are not health), transportation benefits (free rides to the doctor, very big among seniors), and even refunds on that $148 Part B premium. (BUT THERE ARE ALWAYS TRADE-OFFS, SO WHEN YOU GET SOMETHING, YOU’RE CUTTING OUT SOMETHING ELSE. JUST WARNING YOU.)
  • They are divided by county. In other words, different counties have different plans, and if you move from one county to another, you may have to change plans (if you’re in the same metro, no problem), and if you move from one state to another, you almost certainly will need to change plans.

The single greatest advantage to the MA plan is this – that 20% Part B is capped by that “Maximum Out of Pocket” (MOOP) mentioned above, which is defined as “the most you, the insured, have to pay in medical expenses before the plan pays 100% of all costs for the rest of the calendar year”. MOOP ranges from $900-$7,500, depending upon plan.

There are three types of Medicare Advantage Plans:

a. Chronic Special Needs Plans (C-SNP) – designed for people with chronic conditions which cannot be treated, only maintained. Only patients with chronic lung and/or heart disorders, and diabetes patients as well, qualify for these plans. These plans include A (hospital), B (medical), and D (prescription) coverage.
b. Dual Special Needs Plans (D-SNP) – designed for people on both Medicare and Medicaid. These plans typically have the most in the extra benefits mentioned above – unlimited transportation, dental up to $5,000, even free food at the grocery store. These also provide A, B, and D coverage.
c. “Regular” MA plans. These are for the rest who do not fit in the above categories. These plans typically have fewer benefits than the D-SNP or C-SNP plans, most come with Part D coverage in addition to A & B, but you can buy a regular MA plan without Part D.
Again, the biggest advantage to the Part C, Medicare Advantage plan, is that protection from the 20% coinsurance charged you by OM. The biggest disadvantage is that they are largely pay-to-use plans – that $0 premium is enticing, but then… copays. Deductibles. Coinsurance. It all adds up.

  1. Medicare Supplement (MS) aka “Medigap” plans, so named because these plans cover the entire gap between Parts A & B, and full payment. You know how you talk to your grandma who says she got her knee replaced and it didn’t cost her a cent? She had a Med Supp plan, guaranteed (or is on Medicaid.)
  • MS plans always come with a monthly premium, this premium ranging from $50 - $500, usually falling from $175-$300.
  • MS plans do not come with prescription drug coverage (requiring you to buy a separate policy, usually between $20-40/mth), nor do they include any of those benefits you see advertised by Joe Namath and Mike Ditka.
  • You are guaranteed to be issued a MS plan when you turn 65 (or first get Part B, whichever is later), but after this “guaranteed issue” period, you will have to pass medical underwriting to get a supplement plan, something difficult for many seniors to do.

America, I’m gonna make your decision simple for you: UNLESS YOU ABSOLUTELY CANNOT AFFORD THE PREMIUMS, OR UNLESS YOU LIVE IN FLORIDA OR CALIFORNIA, ALWAYS GO FOR THE MEDICARE SUPPLEMENT PLAN, ESPECIALLY DURING THE PERIOD YOU ARE GUARANTEED THE DAMNED THING! And the reason is simple – a $200 premium is $2,400/year, which can cover hundreds of thousands of medical costs. And while that $0 premium for the Medicare Advantage plan sounds enticing, very few Medicare Advantage plans have Max Out of Pocket costs as low as $2,400, most averaging $4,000 and hundreds of plans with $7,000+ Max OOP’s. And I’m telling you, for those seniors on limited incomes, the ones who pay that $185 MS premium upfront are always happier with their plans than those with $0 MA plans who pay to use. And since I’m going to be a senior one day, I, too, will probably be happier paying that premium up front.

Florida and California are different – they have fantastic MA plan designs and getting a MA plan in these states is not a potential time bomb, especially with their low Max out of pocket. You may have a suck-ass county (Sorry, Yuma!), but as a general rule, these states offer MA plans which are competitive with MS plans.

TLDR: Original Medicare costs a lot. You can reduce these costs significantly with a Medicare Advantage Plan. You can reduce them even more with a Medicare Supplement plan, but you will pay a $150-$500 monthly premium for this plan. Never stay with Original Medicare. If you can afford the Supplement plan, get the Supplement plan. If you can’t, get the Advantage plan.

(Team, I didn’t even get into enrollment periods yet. Completely insane stuff. Will come later, when needed.)

3

Choice

This one is pretty light – I didn’t want to start with the starving woman who was moaning for food, or the lonely lady in the North Carolina rest home who calls me on occasion, telling me she loves me, or the ones who realize that their country and, many times family, have abandoned them. “I worked for 40 years and I can’t see the doctor because I can’t afford to. I paid my taxes, I worked hard, why?"

Yeah, didn’t want to start with that. Let’s start with economic insanity. Let’s start with “Choice”.

“Choice” is a big thing in American political-economic discourse, especially among politicians who learned their stuff in the Reagan and Clinton eras – offering Americans “choice”, from restaurants to tires to websites to cable TV channels to even the multitude of paprika brands on the shelves at my local grocery store, we are tyrannized by the multiplicity of options.

But in the Medicare insurance world “choice” creates bizarrely minor marginal differences between insurance plans, where the customer is faced with choices so minor they are picayune, if not insulting.

Olga calls, came from Russia about 20 years ago, smart woman in upstate NY. Saw an ad on TV, decided to call, wanted to make sure she had “the best” plan available. She’s in a MA plan which costs her $17/month and is an HMO* and she likes the insurance company and doesn’t want to leave them. I look at the other plan options – oh! There’s a PPO**, by the same multi-billion corporation, which is a $0/mth plan. Yay! Compare the benefits – the ones I’m legally required to disclose are all the same, and many of the extra benefits are exactly the same.

But… Olga isn’t dumb. Olga knows there is a trade-off. She knows she’s paying $17/month for something, and by God and by damn she was going to make me find it.

And I did.

One of the extra benefits are called “Over The Counter” (OTC) items, allowing the policyholder to effectively go to CVS or Walmart and get $X of medical-related supplies (vitamins, supplements, bandages, ice packs, effectively the medical products section of these stores) every month.

The HMO she was paying $17/mth for included $200/year of OTC benefits.
The PPO for $0/mth had no OTC benefits.

The “choice” offered her was this:

1. She can pay $17/mth, $208/year to get $200 in “free” OTC benefits in a limited network of physicians,
2. She can pay $0, lose those OTC benefits, and get a slightly better network.

And that’s it. That was the only difference between the two plans. And there’s some dweeb at InsureCo USA who determined you could offer the customer “choice”… at no cost to InsureCo, of course… because he figured out how to swap a mere $200.

I explained to Olga that she was effectively paying $204 to InsureCo to get $200 of “free” stuff from CVS, meaning the stuff wasn’t free and she was, in fact, paying a 2% surcharge … and she was happy with that! She kept her plan! And that’s fine, but it’s a false choice because she netted exactly the same.*

“Choice” personified. This isn’t choice. It’s deception.

*HMO – Health Maintenance Organization. For the purposes of this thread, they have smaller networks than the other type of network (PPO) and you are required to get a referral to see a specialist from your primary care physician in order to see a specialist.

**PPO – Preferred Provider Organization. Larger networks than HMOs, and you can go see any in-network specialist you want to without a referral from your primary care physician.
All told, it’s better to be in a PPO. If you feel your heart flutter, do you want to waste time waiting for your PCP to agree the problem is above her pay grade … or do you just want to go directly to the cardiologist.

4

This is fantastic, man, keep going.

5

I was working at the grocery store when Medicare Part D(isaster) announced its upcoming launch, ca. 2000, and there was a lot of publicity about how pharmacists were almost universally opposed to it. One of my co-workers, who had 20 years on me, summed it up this way: “When that goes online, you will find out just how free it is.”

15 years after it did go online, he’s more correct than ever.

6

In my experience Part D is quite a success. There are insane variability between Part D plans, however, and because of this bizarre need to have multiple insurance companies, many low-density rural counties tend to have shit plans. Some of the population counts on these plans are insanely low… ‘oh, only 546 people signed on to this one. Why does it even exist?’ and all that does is, yes, split the pool, making the plans more expensive.

Freedom!

But, in the end, levemir @ $300 (list price) or $47 (part d basic), what do you choose?

7

Absolutely agree. Going on Medicare is somewhat traumatic — at least it was for me — and the plethora of choices only made it worse. If I may toss in a plug*, what saved me from an ulcer was a conversation with a Senior Health Insurance Benefits Assistance (SHIBA)** representative who broke down my options and informed me that if I chose original and Part F (Medicare Supplement), my employer would cover half the premium. This is not to disparage John’s work, but for someone facing the initial enrollment they can make the process a lot easier.

MHO, the biggest mistake one can make when choosing a Part D plan is focusing on the premium without taking one’s prescriptions into account. It ain’t easy (and the doughnut hole adds unnecessarily complexity), but failure to do so can cost boocoo buxx.

* I’m going to anyway.
** I can’t seem to find a catchall SHIBA website, but my understanding is that all states have a version of the program.

8

Great posts, @JohnT – well written, well argued, and very informative.

The irony of it all is that not only does the US lack universal health care, and stiff the under-65s with a fundamentally unworkable and grossly overpriced disaster of private health insurance, but the Medicare mess was supposed to be the federal government’s plan to at least fix these issues for seniors. It’s a major step in the right direction, but man, is it complicated and inefficient!

I’m in Canada and it’s frightening to me that, but for an accident of history, I might be living the same nightmare. The accident of history was the introduction in Saskatchewan of universal hospitalization coverage in 1947 and full medical coverage in 1962, the latter viciously opposed by both Canadian and American medical establishments and of course the health insurers. Both became the models for health care coverage adopted by every province and supported by federal subsidies and a framework of national standards.

It’s amazing how simple and streamlined the system can be when coverage for medically necessary procedures is universal, unconditional, and directly pays 100% of costs. When going to the doctor, or being admitted to a hospital, there’s literally nothing I need to know about insurance coverage, nor are there any decisions or “plans” I need to “enroll” in. If I have a valid health card, I know I’m covered. Both private insurance and US Medicare are so incredibly complex (to me, at least) that it boggles the mind. And there’s no reason for it. At all. If I had to deal with a system like that here I’d be lost.

9

I turn 65 in August and I’m ignoring the messages I’ve received from Kaiser about Medicare. I’m in California.

I just do not want to deal with this.

I know my current coverage is not great and I don’t know if it’s going to get better or worse when I have to make the change.

I had an episode of bad indigestion the other day and I wasn’t sure for a little while if I was having a heart attack or not. But the only thing on my mind was how much it was going to cost me to get help. I think this is ridiculous.

10

You didn’t mention what county in CA you are in, but the above rankings still apply:

  1. Supplement
  2. Advantage
  3. Original Medicare

However, the Kaiser plans are very good ones especially if you prefer managed care systems, where everyone from your cardiologist to your endocrinologist to your PCP all work from the same patient histories, charts, etc.

Feel free to PM me if you wish to discuss further, thanks!

11

I had a neighbor with Medicare Advantage. He developed a heart condition and needed a stent. But the Medicare Advantage company delayed a decision on its pre-authorization for several days. After that he switched back as soon as possible to a Medicare Supplement plan. [With the Supplement plan the operation would have proceeded as soon as the doctors were ready; no need for pre-authorization.]

12

When I went on Medicare 5 years ago I chose a Medigap plan because none of the MA plans in my area covered my clinic. It has been great. My wife got a knee replaced and we only paid under $15 for some drug co-pays. I had prostate cancer surgery with a leading expert for no cost to me. No worries about going out of network, which is important because our kids live in other states - and overseas when we signed up.

Great OP, but if you don’t want to print it, we found “Medicare for Dummies” an excellent overview of the program and all the options.
Yes, it could seem overwhelming when you sign up for the first time, but the Medicare site isn’t too bad - if you have some background from reading. I originally had a great Plan D from Aetna but that went away when CVS bought them. It is kind of a crapshoot, since you can only check the formulary and thus expected costs for the drugs you know you’ll be taking, not the ones you might have to take.
Still, while I had very good insurance when I was working, Medicare is better.

BTW, teachers here have Kaiser. I know a lot of them, and I’m not that impressed. My son-in-law’s father died in a Kaiser hospital when they didn’t notice an embolism in his leg, which was swollen and infected. I know on place for everything is good, but my clinic basically has almost everything I need in its walls. So I’d never switch to Kaiser.

13

John, add me to the chorus of gratitude for those posts. At 62, I became disabled and went on Medicare. I was told MS plans were not an option. I am now 64. When I’m 65, will I be able to get a Medicare supplement plan? If so, that’s what I’ll do, thanks to your excellent explanations.

I’ve often wondered how people with less education and/or lower IQ’s and/or less persistence navigate the Medicare maze. From your posts, I can see they often don’t and end up in miserable circumstances. It shouldn’t be this hard.

And then there’s the issue of nursing home care for people with, say, dementia. Does it seem to you that most people assume Medicare covers those costs? In reality, if you can’t afford the $8000/month, the patient has to go on Medicaid–yet another maze and in some ways, an even more complex one.

Again, thanks for an enormously helpful series of posts.

14

Yes:

https://www.medicare.gov/supplements-other-insurance/when-can-i-buy-medigap

Imgur

15

Thanks much!

16

Yes, this is wonderful and very, very welcome.

I also echo @nelliebly’s praise.

17

@JohnT

Can you find out a site that tells how to reach each state or territority’s state health insurance assistance office? Mine was of great help to me and remains just a phone call away. My tax dollars at work.

18

To be honest, even for us pros that site is “Google”. :slight_smile:

19

A giant step towards rectifying problems like this is, when you go to the polls to vote, to remember which party gave a trillion dollar tax break to the rich and well-heeled.

20

What is the search term to type into google?

I really need the basics laid out in noisome detail. ‘type these words XXXX YYY ZZZZ’ to find your state’s agency that is ready and waiting to help you answer questions about health insurance questions.