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The Medicare Mystery: Where Do the Bills Come From?

hidden costs of medicareJust when you think you’ve got Medicare all figured out, another bill appears in the mail. Medicare is comprised of over 130,000 pages of guidelines, and unless you’ve got a lot of free time on your hands, there’s no way to absorb all that much information.

Over 48 million seniors depend on Medicare, and although it has proven to be an incredible program, it still leaves many seniors with leftover costs they simply can’t afford.

After Medicare pays its portion, you’re typically still left paying 20 percent of your medical bills. With no cap on annual out-of-pocket expenses, there’s no limit to how high your out-of-pocket expenses might go in any given year. The bills just keep racking up.

For instance, if a Medicare patient has heart surgery and accumulates $150,000 in Medicare charges, his 20 percent coinsurance adds up to $30,000!

The High Cost of Long-Term Care

With more and more of us living longer, long-term care is on the rise, whether it takes place in a nursing home or an assisted living center. Long-term care, however, is not covered by Medicare or Medicare supplement plans. With expenses reaching well beyond $60,000 per year, long-term care insurance is an invaluable option to consider.

What Is an Advanced Beneficiary Notice?

Have you ever gone to have a blood test or other procedure and been asked to sign an advanced beneficiary notice? This notice is to inform Medicare beneficiaries that it’s possible their procedure may not be covered by Medicare.

Medicare limits how often some tests or procedures can be performed, and some aren’t covered at all. Other services are only covered if you meet specific guidelines outlined by Medicare; foot care falls into this category, for instance.

It’s important that you read these notices carefully, and they should include how much you’ll be responsible for if your claim is denied by Medicare.

Be Careful When You Hear the Word “Free”

Medicare does cover a “Welcome to Medicare” well visit and annual well visits thereafter. But if your doctor orders certain tests or procedures, you could find a new bill in your mailbox. Some preventive services are covered 100 percent, but if you’re diagnosed with an illness and require further testing, you’ll likely be responsible for your deductible and any coinsurance that applies.

Set Yourself Free of the Dreaded Walk to the “Mailbox”

Medicare supplement plans, otherwise known as Medigap, are available to cover many of the out-of-pocket costs Medicare does not cover. They also limit your annual out-of-pocket expenses. For example, the high-deductible Plan F supplement pays 100 percent after you pay the first $2,140 in expenses. That’s a drop in the bucket compared to a $30,000 heart surgery bill! With a high deductible, you also keep your premiums at a minimum.

As you can see on our Medicare supplement grid, there are a variety of plans available, and each covers a variety of out-of-pocket costs. Medigap plans can save you thousands of dollars each year in medical expenses and keep your retirement nest egg intact. You can get a Medicare supplement plan anytime during the year, although you could be subject to underwriting if you’re past your initial enrollment period.

Medicare Advantage plans also provide an alternative to Medicare alone. Advantage plans combine your Medicare Parts A, B and D and are usually offered with $0 premium (you just pay your Part B premium). Your annual out-of-pocket expenses are also capped.

Medicare Advantage plans are only available during your initial enrollment period or during Medicare’s annual enrollment period, which runs from October 15 through December 7, unless you qualify for a special enrollment period.

Do you have any questions about Medicare Supplement or Medicare Advantage plans? Can we help you save on medical expenses?

Author: Wiley Long
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.

 

 
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