People think they're playing it safe by choosing traditional Medicare. But those with a disability need to understand how limited traditional Medicare coverage can be for them and how difficult it is to get supplemental coverage
Belleville, Ill. (Vocus) November 3, 2008
One of the longest awaited events for individuals with disabilities is the day they finally become eligible for Medicare, according to Allsup, a leading provider of Social Security disability, Medicare, financial and healthcare-related services to people with disabilities. Unfortunately, the relief of qualifying for Medicare coverage quickly diminishes for too many when they select a plan that doesn't meet their special needs and exposes them to unplanned medical and prescription drug costs.
"People think they're playing it safe by choosing traditional Medicare. But those with a disability need to understand how limited traditional Medicare coverage can be for them and how difficult it is to get supplemental coverage," said Paul Gada , personal financial planning director and product manager for Allsup Medicare Advisor℠ service, which helps people with disabilities choose the best, most affordable Medicare plan to meet their specific needs.
Individuals with disabilities who can no longer work become eligible for Medicare 24 months after their date of entitlement to Social Security Disability Insurance (SSDI) benefits. At that point, they can choose to enroll in a traditional Medicare program or a Medicare Advantage program. However, choosing the right plan that takes into account preexisting conditions and ongoing healthcare needs can be a daunting and confusing process.
Comparing Benefits of Traditional Medicare and Medicare Advantage Plans
Two key factors in evaluating different Medicare options are coverage and cost, according to Gada.
Traditional Medicare includes Part A (hospital) and Part B (medical). Yet, because traditional Medicare coverage is limited, many people also pay more to get supplement insurance (Medigap) and prescription drug coverage (Part D) to help offset high out-of-pocket expenses.
However, people with disabilities who choose traditional Medicare coverage often are unpleasantly surprised to learn they cannot take advantage of Medigap because pre-existing conditions frequently are excluded or have limited coverage.
In fact, 24 states also now severely limit Medicare supplement insurance options. In Texas, for example, people who are not yet 65 are limited as a group to getting only one Medicare supplement plan. This is the most limited standardized Medicare supplement plan of the 12 offered in Texas and provides only basic benefits. Meanwhile in 2008, Texans have 387 potential Medicare Advantage plans to choose from, 20 of which enroll only people with chronic or disabling conditions.
"An unfortunate irony is that medical issues related to the very disability that made them eligible for Medicare may also make them ineligible for supplemental insurance," said Gada. "They find themselves with just basic coverage under Medicare and mounting, unplanned-for out-of-pocket expenses they can't afford on SSDI income."
Medicare Advantage plans , on the other hand, at a minimum cover everything offered by traditional Medicare (Parts A and B). Also, these plans are required to accept most Medicare beneficiaries since medical history cannot be a barrier to enrollment. Many Medicare Advantage plans also offer additional benefits not covered by traditional Medicare, such as dental care, hearing and vision screening.
Most Medicare Advantage plans also provide prescription drug coverage options. Having adequate drug coverage is very important, especially if you are facing thousands of dollars in non-covered prescription drug costs while in the Medicare coverage gap known as the donut hole. In 2008, the donut hole begins when an individual's total drug costs reach $2,510, including the portion paid by Medicare and the individual's own out-of-pocket deductibles and co-payments. The individual then must pay 100 percent of the next $3,216 in out-of-pocket costs for prescriptions until total drug costs reach $5,726, after which Medicare prescription drug coverage resumes.
Despite the added coverage, out-of-pocket costs are generally less costly with a Medicare Advantage plan than if an individual has traditional Medicare and Medigap supplemental insurance. Traditional Medicare Part A is free and Part B premiums are based on the individual's income. For 2008, the monthly cost is $96.40 for single taxpayers with an income of $82,000 or less (or couples with $164,000 or less in income).
Everyone in a Medicare Advantage plan must pay the same monthly premium as those enrolled in traditional Medicare Part B. Additional costs depend on the benefits provided by the plan, with some charging an additional premium or having higher deductible and co-payment requirements. However, there are many Medicare Advantage plans that offer more coverage protection than Medicare Parts A and B, but have zero extra monthly premiums (above the Part B amount that normally is paid).
Also, Medicare Advantage plans still are generally less expensive than traditional Medicare because they cap the amount of out-of-pocket costs. For example, traditional Medicare plans typically require an individual to personally pay 20 percent of the Medicare-approved amount out of their own pocket. For someone with high medical costs this can quickly add up. Medicare Advantage plans, however, limit annual out-of-pocket expenses, typically between $2,000 and $5,000.
"One of the worst surprises for someone on a fixed income is unexpected costs," said Gada. "Rising living costs already are taking their toll; so to be hit with unplanned medical costs can be truly devastating."
Medicare Advantage Options May Overwhelm Some
While Medicare Advantage plans can provide better coverage, the choices can seem overwhelming. Depending on where someone lives, the Medicare Advantage plan options number in the hundreds. For example, someone living in New York City has 107 health plans to choose from and someone in Miami has 104 plan options.
"It's clear that people really need help in understanding their coverage options and prioritizing their needs so they can make a sound choice," said Gada, adding that in addition to Allsup Medicare Advisor , which provides a custom, printed report on options based on an interview with the individual, individuals also can find information on various plans on the Medicare site.
Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Founded in 1984, Allsup has helped more than 110,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 500 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.
The Allsup Medicare Advisor service provides customized, objective support to help individuals with disabilities navigate the complexities of Medicare and Medicare Advantage programs, analyze the best plan coverage and provider options based on individual preferences, better understand healthcare cost information, and simplify the confusing process of enrolling in a Medicare Advantage plan.
For more information, visit http://www.Allsup.com.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.
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