How old people navigate Social Security and Medicare is beyond me!
A friend of mine got a big television as a Christmas present and asked me to help install it. I bought a really nice wall mount at Harbor Freight for $35. Heavy as all get-out with a backing plate that easily spanned two studs! It came with 4" lag screws, too. That ain't going anywhere! So an hour or so later, we have it bolted to the wall, the television installed and even the soundbar (which I found at a campground, Sony with a subwoofer, too!). Then the fun began.
Upon power-up, the television needed to access the router. Do you remember your router password? No. Once logged in, it had to update the operating system - that took 30 minutes. Then another 30 to learn my way around an Amazon television and "install" apps like Netflix and YouTube (the only two not pre-installed! Welcome to the Social Media wars!). Remember your password for Netflix? What about your Google password? No and No. Between password resets (particularly Google) where the recovery account was either a dead e-mail or an old phone number, plus all the updates, well, it was a couple of hours of sheer frustration.
How is anyone over the age of 50 able to do this? They have to wait for the grandchildren to visit, I guess.
The same is true for Medicare - it is a daunting task to learn the lingo and the "windows" and the horrific consequences you face if you don't get it right.
Three months before you turn 65 - and three months after - there is a seven month "window" to sign up. I filled out the form online in November and hit "enter" in late December and got my card in mid-January, with an activation date of March 1st. Coverage begins on the first day of the month of your 65th birthday.
I went with "traditional" medicare - Parts A (Hospital) and B (Medical). Part C is what they call "Medicare Advantage" and from what everyone tells me, it is no advantage in some States, as it may not cover all the charges. Basically, your medicare money goes to a private insurance company who then insures you in a traditional manner. You may pay less (or nothing) in premiums, but if you get sick, you may pay more. In some States, apparently, it is an advantage. Just not Georgia. At least that is the way it was explained to me.
In 2025, most people will pay $185 per month for Medicare Part B, and most people will pay no premium for Part A. However, some people may pay more for Part A, for example, if you have worked less than 40 quarters. Usually, the premiums are deducted from your Social Security check or debited directly from your bank account. I guess that is another reason to claim Social Security at age 65 instead of later. Which I just did.
$185 a month sounds reasonable, particularly compared to the hundreds a month (as much as $1000) when I was on a traditional Blue Cross plan. It seems reasonable compared to the "standard" premium of $1800 a month under Obamacare (ACA) which is subsidized by the government down to a few hundred, or in some cases, zero. What is clear, however, is that $185 a month probably barely covers administration costs - the taxpayer picks up the rest in the form of the payroll tax. And by the way, as we shall see, there are other coverage charges to consider, Such as.....
Part D is drug coverage and you have to sign up for this during the "window" or pay a penalty later on - every month. People think this is unfair, but those same people think it is unfair that you can't get collision coverage after you've already wrecked your car or fire insurance while your house is on fire. You can't get something-for-nothing. I have one friend who declined coverage as his medications were inexpensive. They are now - that can change. Another friend decided to use the VA hospital which is an hour away. It was cheap, but a hassle.
If you decide, later in life, to get part D, there is a penalty formula calculated that is applied to every monthly payment from then on. It is only fair - you can't wait until you need a $1000-a-month prescription to seek coverage. That's now how insurance is supposed to work, or at least that is how it used to be.
When you sign up for Medicare at 65, there is no medical exam and pre-existing conditions are not excluded. They have to take you. That changes once you are on the plan, with regard to add-ons, as we shall see. Part D plans are priced based on what drugs you are taking at the time you sign up. So for me, a basic plan from Humana will run about $50 a month, with an annual prescription cost estimated at another $50 or so. I have five prescriptions, most of which cost less than $20 each for a 90-day supply. Is Part D a good value? It would be if, later on, I end up needing a $1000-a-month prescription. There are co-pays, of course, and some plans have zero co-pays if you use an online pharmacy as I like to do.
But supplemental plans are where it gets confusing.
During the signup window (Note, one agent told me, in the three months before your birth month only!), you can sign up for a supplemental plan (If you went with Medicare A&B and not C!), no questions asked, pre-existing conditions not an issue. If you miss that window or decide to change plans later on, you can sign up in the fall, but if you are really sick, they may refuse to write you, or if they do, under standard underwriting terms. It could get expensive, presuming they will cover you at all. So it pays to sign up during the window.
So if I decide I don't like the plan I chose, I have to go through regular underwriting, where pre-existing conditions are considered. Want to write me a plan? No pre-existing conditions, other than diverticulosis, gout, a stroke, and Parkinson's disease. Healthy as an Ox! So you see, choosing the right plan is a once-in-lifetime choice, which for me, means a one-in-the-next-decade choice. I am a realist.
Now, all you folks living in countries with National Health, have a good laugh at our expense and also take pity on us. What other country has such a backward system where some people are covered and others are not and there is a complicated set of rules and deadlines and cut-off-your-balls with a rusty hacksaw if you don't? Why is the government being generous on the one hand and stingy the next? It is like some inheritance that you can only get if you agree to stay in the haunted house overnight, but before February 10th or you lose it all.
Private health insurance, Medicare, Medicaid, Obamacare, Employer-provided health insurance - or no insurance at all. It is a patchwork mess at best. And essentially, the wealthier you are, the better medical care you can get. It is like the Dentistry business - no one opens a practice in Appalachia, where people need dental care. The smart move is to open a cosmetic dentistry practice near a wealthy city, where people can afford to pay a lot to look good. Similarly, it doesn't pay to be a GP in a small town - better to be a specialist in a big city, where people have good insurance or wads of cash to spend.
It is a screwed-up system, but we are forced to play within its bounds - like the Squid Game, I guess. And so long as you are winning, it seems like a good deal. I see seniors all the time gloating how their gall bladder operation "cost them nothing!" - but at the same time treat their children or grandchildren as failures because they faced medical bankruptcy. Why didn't they do the smart thing and wait until they were on Medicare to get sick? Smug bastards!
But I digress....
What are supplemental plans and how much do THEY cost? Which plan do you want? There are several, and the government dictates the terms of each plan. AARP/UHC for example, offers plans G, N, K, I, select G, and select N, to name a few. Each lettered "plan" has the same basic required terms as the same lettered "plan" from another insurer. So if you are comparing plan "G" from UHC with a plan "G" from Humana, the terms are going to be the same and the only difference is in the priciing.
Except.... They can't make this simple, can they? Some insurers (AARP/UHC and I think Humana) offer "perks" like the "Silver Sneaker" perk, where you can get a free gym membership (at participating gyms only!). There are also premium discounts if you have more than one person in your household getting a plan and if you sign up online - at least for some insurers.
AARP (United Health Care) Offers an alphabet of plans, including the following:
Plan G: $179.95 per month
Plan N: $160.25 per month
Plan K: $69.50 per month
Plan G has few co-pays and the (Gov't) standard $257 out-of-pocket limit, which seems ridiculous to me, having had $10,000 deductibles and out-of-pocket limits for decades now (I have been self-employed for 30 years). It is a Cadillac plan, to be sure. Cradle to Grave! Well, grave, anyway,
Plan N is not quite as generous, as you might expect, having $20 co-pays. Plan K has a 10% copay and a $7220 out-of-pocket limit. So, once again, we are tasked with deciding how sick we plan on getting and how much we think that will cost and how much we can afford. It is a shitty system.
And remember kids, you have to make this decision NOW and are stuck with it for the rest of your life. Since agents are on a commission (which may add $5 to $10 to monthly premiums) they tend to push plan G the most as the commissions are higher on the higher priced products.
There are a few major players in this game - UHC being the biggie, while Humana, Anthem Blue Cross, Aetna, and Mutual of Omaha are other significant players. Not surprisingly, their premiums are all within the ballpark of one another - by a few dollars at least.
So why pick one over another? In terms of "accepting insurance" this turns out to be a non-issue. If the doctor or hospital accepts Medicare (which 99% do) they are bound to accept your supplemental policy. In fact, it is transparent to them as they send the bill to Medicare, which pays 80% of the costs and then passes the remaining bill to your supplemental insurance provider who pays the other 20%. No paperwork hassles for the provider. This was a big issue for my Obamacare Ambetter plan, as some doctors refused to accept the insurance because of the low payouts and the hassles of submitting claims. So, no worries there with regard to acceptance, with Medicare supplements.
So again, why choose one company over another? The prices are all in line (within a few dollars of one another) and the coverage for each plan type is mandated by the government, Just pick one at random - right?
Well, there is one other issue - and I discovered this after asking several agents pointed questions and searching online. Premiums go up over time. And they go up for everyone, uniformly, not based on your claims. Some companies raise rates more than others, but getting hard data is difficult. I read a lot of reviews online, but in this era of the dead Internet, well, reviews are spammed.
For example, I read one review - which was repeated all over the net, leading me to believe it was part of a bot campaign (act shocked) - that Mutual of Omaha or "MoO" raises rates more than others, particularly at the five-year mark. I could not find hard data to back this up.
Most of the oldsters on the island are on the AARP/UHC plan, but some are on Cigna, Humana, Anthem Blue Cross, and I found one on MoO. He was complaining that at age 79, his premiums are now up to $220 a month! I kind of had to take him down a notch, reminding him I was paying over $1000 a month when I was in my 40's before the invention of Obamacare. $220 a month? I can fund that in loose change under my couch cushions.
So the idea that MoO raises rates more than others seems kind of specious to me. They have a 4.5 star rating on NerdWallet, while UHC has a 5.0. Anthem Blue Cross comes in at a sad 4.0. I read something in the paper the other day about UHC and a guy named Luigi, but I can't remember, because that was several news cycles ago and I am supposed to be outraged about something else now.
On the other hand, if you add up the Part B ($185) plus the Plan G supplemental ($180) plus the Part D drug plan ($50) you end up with a monthly premium of $415 a month (for one person!) which is considerably more than I am paying now ($0) or last year ($200 for two people). On the other hand, going to a cheaper plan doesn't save much, and dropping drug coverage could get expensive down the road. Given my health issues, well, maybe I should spend the money.
While changing to another plan down the road is not really realistic, one can always drop add-on coverage and simply pay the 20% medicare doesn't cover. For the very poor this is a real option as often hospitals are happy to get the 80% from Medicare and write-off the rest.
Again, these "survey" and rating sites are always suspect as they can be spammed by bots (A 5.0 rating? Really? No one complained, ever?). A note of caution: There are sites claiming to allow you to "compare" different plans - all you need to do is enter your e-mail address, phone number, and birth date! If you do, your SPAM box will be full and your phone ringing off the hook. All they are is a lead aggregator selling your info to various insurance agents and who knows who else.
Speaking of which, in the months leading up to your 65th birthday, you will get dozens of phone calls from overseas call centers, trying to sell you supplemental coverage. You'll get flyers in the mail and even brochures and whatnot. A local agent sent an entire portfolio of information which was helpful.
Do you go with an agent or just apply online? Good question. Agents can answer all of your questions and if they are local, at least that is something. But from what I can see, most companies offer a small discount (such as 5% with MoO) if you apply directly online as opposed to going through an agent. Problem is, the shit is so confusing that you feel you need to talk to someone about it, and it seems kind of shady to say, "Thanks for an hour of your time, I'll just apply online!"
But that's all I have learned so far, which leaves me with more questions than answers. Sadly, even with insurance, the future is an uncertain thing. Again, you Canadians and Brits can all have a laugh at our expense. Choosing Plans? Paying Premiums? Deciding how much illness you can afford? Madness!
But it is the madness we are stuck with. By the way, some of these supplemental plans pay for overseas coverage (20% co-insurance, $50,000 max) so that may come in handy if you decide to flee the country before they start construction of the crematoriums at Guantanamo Bay.
