Medicare and MediGap Part II

The past few weeks we've mentioned, in general terms, what Medicare is and how various programs can help fill the gaps in coverage. This column we'll look at the specific gaps and the Medigap plans that cover them so you can make intelligent choices when purchasing Medigap coverage.

Medicare Part A covers your hospital expenses. You have a deductible that has to be paid first. For 2008 that amount is $1,024 for the first 60-day period in the hospital. This amount needs to be paid per benefit period, which, unlike health insurance most people have had before becoming eligible for Medicare, may be more than once a year. After 60 days of inpatient care, Medicare bills you a per day rate depending on how long you're in the hospital. If you are in the hospital after 60 days, you would pay $256 per day up to the 90th day. After that, you're required to pay a whopping $512 per day for the next 60 days! To make matters worse, Medicare shares in the cost for hospitalizations that go past 90 days only once per lifetime. So, if you have more than one hospitalization, you'll pay $512 for the 91rst through 150th day for that hospitalization. After that, if you're hospitalized again and are in there over 60 days, you pay the whole bill. You can see why it's important to have some sort of additional coverage to guard against those situations.

However, the costs don't stop there. Medicare Part B covers your doctor expenses. The deductible for that part is $135 per year, not per benefit period like Part A. After that, Medicare will split the costs with you 80/20. Unlike the plans in the pre-Medicare market, there is no cap. You pay 20% of the bill forever. To make matters worse, you are also responsible for any excess charges over and above what Medicare deems is an appropriate amount for the doctor to charge. Generally Medicare reimbursement to the doctors doesn't cover everything. Lastly, wellness, skilled-nursing care, hospice drugs, the first three pints of blood, home health care, and foreign travel emergencies have little or no coverage under Medicare.

Now, of course, it's not all doom and gloom. We have a multitude of choices to shore up our plans. This column we'll talk about the various MediGap plans that are available. As we learned last week, there are only 14 standardized plans available that are lettered (the states of MA, MN and WI being the exceptions). All Medigap Plans (A thru L) will pay the Part A costs after the first 60 days, the Part B co-insurance (your 20%), Medicare-approved wellness as well as those first 3 pints of blood. From there, you can customize according to your needs (and budget). If you travel abroad quite extensively, foreign travel emergency care may be important to you. If so, any of the plans except plan A or plan B will cover that for you. If hospice care is important to you, then only plans K or L will work. If you're concerned about excess doctor charges, then plans F, G, I or J will fit the bill. The first 60 days in the hospital will be covered with no deductible on all of the plans except Plan A. If you want more extensive wellness benefits than the ones covered by Medicare, you can get coverage for that through plans E or J. You can get at-home recovery (home health care) charges covered under plans D, G, I, or J. Lastly, skilled nursing home care can be covered over and above the 20 days allowed by Medicare with every plan but Plan A or Plan B.

A word about nursing home care...nobody ever thinks that it will happen to them. Medicare and Medigap plans only cover skilled nursing. Intermediate or custodial (the bulk of nursing home stays) are NOT covered. A separate long-term care policy is your best protection against those risks.

Medicare and Medigap plans can really help with your medical bills, but you should be smart about it. The Medicare website (www.medicare.gov) has information about Medicare, Medigap plans as well as Medicare Advantage plans (a different type of supplement to Medicare) and Part D drug plans, handy calculators, tips, and more on how to pick the right supplement for you.

Until next time, stay healthy!