Swimming With The Sharks

When you are on the beach–my metaphor for retirement–you want to keep your worries to a minimum.  If I wanted to worry I would not have retired from health care.

From the beach you can see sharks circling but you don’t know whether they are man eaters or vegans.  That is worrisome.

I thought that I was through with Medicare for the time being after writing and posting “Medicare For No One” last week.  It was my intent to comment on another subject this week.

Then I saw what might be a shark in the form of a mass mailing from NorthBay Healthcare last Tuesday. They announced that they were going to offer effective January 1 a Medicare Advantage HMO product through the AARP/United Healthcare program.

Was this a shark attack? Should I be worried now that I had a choice regarding Medicare?

Until receiving the announcement I was going for the third year to cover myself and my wife with a finely crafted traditional Medicare coverage from the Feds (Parts A and B), Silver Scripts (Part D Prescription Drugs) and Mutual of Omaha (Medicare Supplement).  It takes a spreadsheet to keep everything in order.

Now I have another choice.  Currently the only insurance company offering a Medicare Advantage plan in my county of residence is the “Big K” ( whom I called the “Elephant” in the blog I wrote for NorthBay).  Since Medicare Advantage HMO programs eliminate the need for a Medicare supplement plan as well as sometimes offering additional coverages, the monthly premiums are significantly lower than traditional Medicare.

With Medicare Advantage plans you give up the freedom to go for care wherever you wish and must agree to have your care “managed” by sharks.  That is probably unfair–I was familiar during my career with health plans who were benign sharks.  Still, a shark is a shark and you need to worry about them.

The result is that my beach time is being spent going over another set of charts trying to decide whether I want to swim with a Medicare Advantage shark.  Once you commit to a Medicare Advantage plan and then decide in the future it is not for you, it may not be possible to get a guaranteed issued Medicare supplement plan when you switch back to traditional Medicare unless certain specific conditions are met.  At this writing I still have not made up my mind about switching.

The Big K as the only health insurance company offering a Medicare Advantage plan in the county is attracting members from other providers because of the cheaper rates.  I know from my own experience there were many NorthBay patients who prefered to stay with NorthBay but absent an alternative to the Big K Medicare Advantage plan decided it was in their best financial interest to switch.  Now NorthBay can seek to attract those patients back. Continue reading “Swimming With The Sharks”

Medicare for No One

You get a different perspective on things when you are on the beach  rather than toiling in an office.  That especially applies to political posturing of which lately there has been no shortage.

Among the slogans bandied about by some candidates in the just concluded election was “Medicare For All”. As a political slogan it had a certain appeal.  It’s a code word for single payor health insurance which is to say the feds or the state.

Already our newly elected governor here in California is backing away from his promise of such a system in California.  Like me on the beach he suddenly has a new perspective on the issue of financing healthcare.

My first reaction to the slogan was the result of my former career–how could healthcare professionals and organizations make it financially if all reimbursement was based on the Medicare model?  Medicare pays what it want to pay when it wants to pay without regard to the cost of providing the care.  The feds also have a vast bureaucracy devoted to making billing and receiving payment for services rendered as difficult as possible.

My second reaction was to remember that I am no longer involved in the provision of health care but am now as a retiree more likely to be a recipient of care.

What could be wrong with Medicare for all?  A lot as I have learned as a fairly recent Medicare beneficiary.  Those who casually advocate for Medicare for all do not seem to realize that it comes with a series of costs to recipients that can adversely affect a . monthly budget.  Medicare is not free care–far from it.

Medicare Part A which covers hospital inpatient services has deductibles which must be paid.  If you are fortunate enough to never have to be hospitalized this is not a problem.  There is no additional monthly premium for Part A. Whoopee!

Medicare Part B covers physician and other services.  This is an “optional” coverage but unless you are into do it yourself surgery you probably should opt into Part B.  Taking Part B requires the payment of a monthly premium which , depending on income level, can range from $135 to $460.  Those are not insignificant amounts, particularly for low income folks in retirement.

Medicare Part D is the Medicare Prescription Program which is designed to help cover the cost of drugs.  It comes with its own set of monthly premiums.  It also uses an income means test to set a monthly premium.  As an estimate I will use $20 a month.

Next comes optional so-called Medigap insurance which helps to cover costs not paid by Medicare.  If you get very sick Medigap insurance is a financial lifesaver.  The cost for this insurance depends upon the coverage and the insurance company selling the product.  The feds provide guidelines for this insurance.  $150 a month per person is a good estimate.

So at a minimum a low income retired couple is looking at monthly Medicare related premiums of $460 and it can go to $1370 or higher for retired couples with the highest income.

For those of us on the beach who can afford it Medicare works but like a lot of us it is creaky.  It is a jerry built design not suited as a model for effective healthcare financing.

“Medicare for All” does not address the real issue of affordability.  It would require the dismantling of the existing health insurance industry which, as dysfunctional as it can be, is still preferable to the monstrous, expensive  and voracious Medicare bureaucracy.  I won’t even go into the massive tax increases for both employees and employers which would be necessary.

Medicare for all?  I am for Medicare for no one other than retirees who paid for it with a career’s worth of taxes.   For all other citizens the country needs  a fundamental rethinking about how health care is financed and also incentives for individuals to adopt healthy lifestyles.

That’s not sexy.  That’s not easy. That’s why our elected representatives never get it done.  Slogans are much easier.  Ask California’s new governor if that is true.