Is Our Health System Pushing You Into Medical Debt?
Some Ways To Avoid It
By Mary Johnson, editor
Even with Medicare coverage, older adults frequently carry debt for medical bills. Despite having other health insurance in addition to Medicare, beneficiaries are often underinsured and even worse — may not know it until hit with an unexpected medical bill. Unfortunately, those bills often wind up on credit cards, or financed through a healthcare provider or other type of pricey, high interest loan.
Traditional Medicare alone has no out-of-pocket cap, causing about 20% of beneficiaries to purchase supplemental Medicare insurance known as Medigap to pay for out-of-pocket expenses. Even with the Medigap coverage, a Part D plan is needed to cover prescription drug out-of-pocket spending. Until the passage of recent prescription drug legislation, there was no annual limit on what beneficiaries may spend on prescriptions. This is scheduled to change, but the new $2,000 cap on out-of-pocket costs won’t take effect until 2025.
Almost half of all Medicare beneficiaries are enrolled in private Medicare Advantage plans which have annual out-of-pocket limits. Even so those limits are most often unaffordable for the average Medicare beneficiary causing many to forgo medically necessary care. In 2021, annual out-of-pocket limits averaged $5,091 for in-network services and $9,208 for both in- and out-of-network care. Yet, in 2022, the average Social Security benefit is less than $1,623 a month, and 45% of older adults have little or even no savings at all according to TSCL surveys.
What can you do to avoid medical expense debt? Here are a few dos and don’ts:
Don’t respond to unsolicited phone calls and mailings, especially those that do not clearly identify the insurance company or are not from the company that handles your current Medicare coverage. Medicare beneficiaries have a huge problem with fraud and scam attempts. A scammer’s goal is to get your personal information such as credit card and bank account info, as well as your Medicare number. Even when from a well- known company, any change of plan requires time and due care to make sure a switch is in your best interest. Medicare marketing materials, even those from legitimate insurers are easy to spot. They are often full of glossy full color photos of carefree seniors, and woefully thin on the crucial details you need to make the best decision.
Do: Watch the mail for a package of information from your Medicare Advantage or Part D plan and check the specifics of your insurance coverage. Legitimate Medicare Advantage and drug plan insurers are required to send out information to their enrollees about changes to their coverage in 2023. This package is due to enrollees before the end of October. It’s a thick envelope that will be identified by your insurer. Most plans send out a no-gimmick black-and-white booklet printed on (cheap) plain paper which contains most, but not all, of what you need to know about cost changes for 2023.
Don’t: Throw your 2023 Part D or Medicare Advantage plan booklet away, no matter how boring and tedious.
Do: Review your plan coverage and write down your questions. Look for information such as:
- Participating doctors and provider networks — are your doctors and hospitals still in the network?
- Deductibles and co-pays for the services you currently use, and what you might need. What has gone up?
- Coverage for the prescription drugs you take. Check the drug tiers. Are your drugs still in the same tier, or have any been pushed into higher-costing tiers? This is a sneaky way that plans increase your out-of-pocket costs in hopes you aren’t paying close attention.
- Pre-authorization requirements and the services and prescriptions for which pre-authorization may be required.
Get answers by calling the customer service number for your health or drug plan for questions for which you can’t find answers.
Don’t: Leave this book in a random pile somewhere.
Do: Compare your health and drug plan options during Medicare Open Enrollment by getting FREE one-on-one counseling to understand your coverage. Even if you are happy with your current health or drug plan, you may be able to save money and reduce medical debt by finding a better plan. Figuring out insurance is about as much fun as doing taxes or getting a tooth pulled. Instead, get someone who knows how this stuff works to help you. It’s painless. Find trusted, unbiased help from State Health Insurance Assistance Programs (SHIP) in every area of the country. Many of these programs operate through Area Agencies on Aging. To find contact information for counselling near you visit: SHIP at https://www.shiphelp.org. Medicare Open Enrollment starts October 15 and runs through December 7.
Don’t: Forgo screening for income-related Medicare Savings Programs and Medicare Extra Help because you assume you wouldn’t qualify. If you are having trouble affording your healthcare costs, and carrying medical debt, that is reason enough to check.
Do: Ask about these Medicare programs that pay the Part B premium, some out-of-pocket costs for those who qualify, and provide help with prescription drug costs.
1 in 5 Seniors Applied for Medicare Extra Help or Medicare Savings Programs in Past 18 Months.
More than 1 out of 5, of participants in TSCL’s recent Senior Priority Plan Survey say they have filed an application for Medicare Extra Help or a Medicare Savings Program over the past 18 months. The programs can help cover the cost of premiums and out-of-pocket costs for health benefits and prescription drugs.