Medicare questions

July 1, 2021 9:12 AM

I am trying to figure out what my costs will be in retirement and need to plan for my maximum health care cost exposure. Please tell me if this is correct: 1) Once you're on Medicare, you are no longer eligible for ACA subsidies. 2) There is no OOP maximum to original Medicare; even if you need a heart transplant, you have to pay 20% of all costs. 3) The only way to have an OOP max is Medicare Advantage, which severely limits your choice of providers.

In my state, a person with taxable income of $18,000 can get a silver plan for $30/mo with a $1000 OOP max. Then when they turn 65 we force them to pay hundreds more in premiums and unlimited OOP costs? What am I missing?

posted by HotToddy to Health & Fitness (12 answers total)

1) Once you're on Medicare, you are no longer eligible for ACA subsidies.

Yes, this is correct - actually, even if you don't use Medicare, if you're eligible for Medicare, you lose ACA subsidies.
However, if you are not eligible for Medicare, you can still use the ACA.

2) There is no OOP maximum to original Medicare; even if you need a heart transplant, you have to pay 20% of all costs.

Yes, this is correct.

3) The only way to have an OOP max is Medicare Advantage, which severely limits your choice of providers

Medigap coverage is the common solution for this.

What am I missing?

The vast majority of health care spending is from older people. I suspect that ACA spending would have increased even further, and insurance costs would have increased even further, if older people had been included in ACA exchanges. Per the ACA, the range of premiums can only vary 3x between younger people and older people. Hence, increasing costs would increase premiums for younger people. This would be a very difficult notion to pass through a Congress that has approximately half of its members that do not believe the government has any significant role in health care policy.
posted by saeculorum at 9:23 AM on July 1, 2021 [3 favorites]

You missed the option to add a Medicare Supplement Plan or MediGap plan to original Medicare. Supplemental coverage may not be cheap, but depending on your expected levels of health care utilization, may nevertheless be a bargain.
posted by peakcomm at 9:27 AM on July 1, 2021 [3 favorites]

Response by poster: So but Medigap can ding you for preexisting conditions? I can't believe how complicated this is. It would actually be less expensive for me to retire now then go back to work once I turn 65.
posted by HotToddy at 9:34 AM on July 1, 2021

Medigap can ding you for preexisting conditions (either charge you higher premiums or flat out deny your application) if you apply outside of your Open Enrollment Period, which is the 6-months following when you turn 65 and enroll on Part B Medicare. If you apply during that initial open enrollment, they have to accept you and they have to charge you the same rates they would charge a healthy enrollee. Because of this, if you're considering buying Medigap coverage, it's best to do it right when you turn 65.
posted by bassooner at 9:52 AM on July 1, 2021 [9 favorites]

I can relate. I'm 63 with cancer that requires drug treatment for life and this whole thing scares the shit out of me.

So I'm chiming in to say not to overlook getting separate Medicare part D for prescription drug coverage. Cancer drugs can cost $30,000 a month or more, and other Medicare programs don't cover prescriptions. Some of the drug companies do offer "scholarships" where you can get the drugs for free though (covered by their utterly obscene profits).
posted by FencingGal at 10:45 AM on July 1, 2021 [3 favorites]

I should add: your hypothetical person making $18,000 would very likely be eligible for financial assistance programs (colloquially known as "charity care") at most hospitals, which a lot of folks aren't aware of. My main local hospital waives all costs for patients making under 300% of FPL (around $38,000) and waives 70%-80% of costs for patients in the 300%-400% FPL range. There's an application process involved, so it's stressful and not 100% guaranteed, but they likely wouldn't wind up liable for hospital cost-sharing for a transplant (but still might for doctors not directly employed by the hospital). My mother-in-law has low income and enrolled on a Medicare Advantage plan. She's been hospitalized twice in the past year, and the hospital waived her multi-thousand-dollar copays both times.
posted by bassooner at 11:21 AM on July 1, 2021

There's also a penalty if you don't get part D right away.
posted by still_wears_a_hat at 2:36 PM on July 1, 2021 [2 favorites]

It’s possible to have both Medicare and Medicaid; it looks like the income cutoff is just below your hypothetical $18K: https://www.medicaid.gov/medicaid/eligibility/seniors-medicare-and-medicaid-enrollees/index.html
posted by songs about trains at 8:00 PM on July 1, 2021

In answer to no. 2: you are correct, if you have ONLY original Medicare, you would have to pay the 20% out of pocket cost yourself, plus the deductible and a premium for Medicare Part B, currently another $148.50, I think;

In answer to No. 3, no, a Medicare Advantage Plan is not the only way to limit your out of pocket costs. Instead, you could have original Medicare and purchase a Medigap Plan F, which is the most complete Medigap plan currently available, and it will pay the remaining 20%, and purchase a Part D plan for Drugs; OR you could have Original Medicare and Medicaid, if you qualify, and a part D plan for drugs; or you could have Original Medicare and a Part F Plan and Medicaid (if you qualify) and a Part D plan for drugs. If you qualify for Medicaid you likely qualify to have your part B premium paid for you, and to have your part D premium paid for you, and to have reduced prices on drugs, under a what is called "Extra Help" or "Medicare Savings Plans".

You are correct, this is very complicated. Each state has an organization to help Medicare recipients parse through the care options and make choices. Also, you can go to Medicare.gov and look through the Medigap and Part D plans available.
posted by KayQuestions at 12:02 AM on July 2, 2021 [1 favorite]

I found it incredibly confusing and frustrating, and was advised by an 'expert' at my Area Agency on Aging to get a Medicare Advantage and did that. It has been fine. It's crazy for health care to be so complicated. I don't know if I made the right choice, but it doesn't seem like a super wrong choice.
posted by theora55 at 6:54 AM on July 2, 2021

My mom has the Medicare Advantage plan from United Healthcare and doesn't have any issues with limited providers. So maybe take a look at that one...
posted by Harvey Kilobit at 10:32 PM on July 2, 2021

I stumbled on this question -- hello from the future! -- and for something like a heart transplant you're not on the hook for 20% of all costs. The inpatient surgery and hospitalization themselves are under Part A and would be covered.

The 20% number is from Part B, outpatient. For Part B, your regular Medicare premium that you pay to the SSA pays for 80% of the negotiated SSA cost of outpatient things like office visits, outpatient surgeries, outpatient treatments, labs, tests, and a few certain very specialized meds, but you're on the hook for the other 20%. So most people get a Part B supplement of some kind to cover that. For example, I pay for a Plan F supplement, which right now is just over $400 a month. This is in addition to the $140ish Medicare premium that I pay to Social Security, and in addition to the $30ish/mo I pay another insurer for Part D - pharmacy coverage. I never paid even a penny for transplant Part B costs beyond my premiums, thanks to my water-tight supplement.

That 20% of Part B is the big deal -- it's is the part where things branch off for people based on which coverage they choose, and based on the utilization and intensity of their healthcare. I qualified for Medicare coverage well under retirement age due to disability/ESRD, which required an absolute ton of medical treatments and a huge cast of various specialists. In my case, I had to go with a Plan F because Medicare Advantage (specifically, at the time, it's changed a bit) didn't do a great job covering for my frequent, high-intensity medical care. An ESRD friend on Medicare Advantage was always wrangling with copays, and while things were cheaper premium-wise for her, they ended up being lots more expensive due to squishier coverage for Part B due to the expense and frequency of treatments and appointments.

This is all very confusing.

In my case, I got a referral to a Medicare broker through my employer's insurance agent when I stopped working & I had a really positive experience with someone who could explain all this to me found options for me based on my medical issues. He showed me different plans, explained each tier, helped me match to my doctor. I was skeptical about going to a professional, but in my case he gave me a lot of peace of mind.
posted by mochapickle at 4:26 AM on November 30, 2021 [1 favorite]