Low or No Cost Medicare

Is there a better way for the 20,000+ Californians who turn 65 every month to afford their health care cost?

Medicare was signed into law on July 30, 1965 by Lyndon B. Johnson, as part of his Great Society.

Today, people live longer and healthier lives. Most people purchase a Medicare Supplement plan to cover the deductibles and co-insurance that Medicare does not pay for. As health care evolved, prescription drug therapy became an important tool in combating disease and keeping people alive. Unfortunately, many people could not afford the drugs they needed and had to make choices between basic necessities and their prescriptions. As a result, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which went into effect on January 1, 2006. Many insurance carriers offer various part ‘D’ plans ranging in price from $15 to $120 per month. Since Plan F is no longer available in 2020, now the most popular Medicare supplement Plan G cost about $140 today. Add both Part D premium and the $144.60 that most people pay for their Medicare Part B, their total monthly expenditure is in the $300 range.

Medicare Advantage Programs: Are they all HMO’s?

In today’s tough economic times it’s no surprise that about a third of people who are enrolled in Medicare opt for a Medicare Advantage Plan (MA) or Medicare Advantage Prescription Drug Plan (MAPD). This is because most Medicare advantaged programs are either free or low in cost. Unlike Medicare supplements the insurance carrier’s revenues come from Medicare (CMS). When you’re enrolled in a MAPD, you assign your Medicare over to an insurance carrier, and they become the primary payer. This is in contrast to a Medicare Supplement which is secondary and supplements or fills the gaps.

With original Medicare (No supplement), the insured has unlimited cost exposure as opposed to an advantage plan which caps your total out of pocket cost (usually between 1&5-k) Most plans offer low or no office visit copay’s in contrast to the Part B deductible and 20% that the insured would be responsible for with original Medicare. Medicare Advantage Plans must cover everything that original Medicare does at minimum and often cover additional benefits. Most MAPD plans are HMO’s. Insurance Carriers such as Scan, UnitedHealthCare, Anthem Blue Cross & Blue Shield of CA are among the better known players in the marketplace. They provide an invaluable service for those who can’t afford to pay premiums monthly. Most MA products are MAPD or Medicare Advantaged Prescription Drug plans as prescription, Part ‘D’ is all inclusive. Part D coverage is covered in three phases:

  1. Initial. First $4,020 (2020) of combined drug cost, payment from both the insured and the carrier. Most plans have a deductible which can’t exceed $435 in 2020.
  2. Coverage Gap or ‘Doughnut Hole’ between $4,021 and $6,349. When you are in the Coverage Gap stage, you pay 25% of the cost for brand-name drugs (plus a portion of the dispensing fee) and 25% of the cost for generic drugs. It begins after you and your plan have paid $4020 on your covered drugs. Although you'll pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs to help you get out of the coverage gap.
  3. Catastrophic coverage After your yearly out-of-pocket drug costs in (including drugs you bought through your retail pharmacy and through mail service) reach $6,350, you pay the greater of:
  • 5% of the cost, or
  • $3.60 copay for a generic drug (including brand drugs treated as generic) and an $8.95 copay for all other drugs

Although Part D isn’t free, it is heavily subsidized by the tax payers. To help defray the cost of those who use prescriptions, the government tries to sway those who don’t use prescriptions to enroll in a Part D program too. This is done by penalizing late enrollees by 1% of the average part D premium nationwide each month that they don’t enroll. In today’s tough economic times many people who would not consider a Medicare Advantage Product are taking a fresh look, and new products are there to entice them. The problem with HMO’s is that many people will not consider changing their doctors. That’s why it’s important that you check the various carriers network to see if your doctor is participating. The HMO plans of today are measurably better than yesteryear. More doctors who want to join the medical groups are denied than accepted. The better Medical Groups do an excellent job of organizing the patients care and making sure that the various specialists all have access to the patient’s information and talk with one and other. For patients with chronic condition’s they often have special programs for disease management.

When Can I enroll?

Enrollment in these plans is only available during certain times of the year. The major window is Annual Election Period (AEP) from October 15th through December 7th for a January 1st effective date.  Depending on your situation such as loss of employer coverage you may be eligible for a Special Enrollment Period known as a SEP. Remember to check your prescriptions as different carriers have different formularies. It doesn’t make send to have a zero copayment as opposed to a $5 copayment if that $100 per month retail prescription isn’t part of the carriers’ formulary. Also compare the maximum out of pocket cost for the plans on your short list.