When Dotty Swanson qualified for Medicare, she quickly signed up for a Medicare Health Maintenance Organization. The HMO offered more coverage–from physicians services to prescription drugs–for less money. But now the 76-year-old Arcadia, Calif., resident wishes she’d spent more time making that choice.
She blames her HMO doctor for failing to diagnose a brain tumor that festered for a year, finally landing her in an emergency hospital. And she says the HMO is responsible for a disorienting middle-of-the night transfer from the hospital into an intermediate care facility three days after her brain surgery.
“They told me the HMO wasn’t going to pay anymore, so I was out. They needed the bed,” Swanson says of her 3 a.m. transfer Thanksgiving morning.
The true source of Swanson’s woes is heavily debated. The hospital blames the HMO; the HMO places the bulk of the blame on the hospital. Some of the problem may be that Swanson simply didn’t know how to properly negotiate her health insurance system.
Health care experts say consumers should take note. Millions of seniors who have recently turned age 65 (or who will soon), and some 300,000 current Medicare enrollees who must switch plans because their current HMO is withdrawing from Medicare, now have the ability to make health care choices.
By and large, these choices boil down to three: Medicare alone, which is usually the least expensive, but the least comprehensive; Medicare plus a supplemental insurance plan, which can cost between several hundred and several thousand dollars more each year, depending on where you live and the plan you choose; or a Medicare HMO, which usually offers the most comprehensive care–from physicians services to prescription drugs–at a cost that’s only slightly higher (if at all) than Medicare alone.
Although you usually have the right to switch Medicare health plans once annually, there are advantages to choosing wisely the first time around. That’s because Medicare rules require insurers to give “guaranteed access” to any of 10 standard Medicare supplement insurance plans to first-time enrollees. Moreover, the premiums you’ll pay will not be boosted to account for poor health.
However, if you choose Medicare alone or a Medicare HMO and later change your mind, you are only guaranteed access to certain Medicare supplement insurance plans–the ones without prescription drug coverage–and, then, only in specific situations. The premiums you pay will also depend on your health. If you are older or sicker than the average new enrollee, you’ll pay more for coverage.
As a result, it is very important that seniors think carefully about health care before they choose, says Lisa N. Rizzo, community education coordinator for the Center for Health Care Rights in Los Angeles.
What should you be thinking about?
– What’s familiar? What type of health insurance did you have before you retired? If you were successfully enrolled in a health maintenance organization while working and understand the way they operate, you probably know how to manipulate the system to make it work better.
For instance, the linchpin of HMO coverage is a primary care physician, who takes care of your routine medical needs and refers you to specialists when you need them. If, like Swanson, you find your primary care doctor unresponsive, you can suffer unnecessarily. Yet, you should know that most HMOs allow you to switch primary care doctors at nearly any time. Had Swanson switched early in the process, she may have received better care.
– What can you afford? There are 10 standard Medicare supplement insurance plans, that pay everything from the consumer’s deductibles and co-payments to prescription drug costs. None is cheap, says Melissa Gannon, vice president of Weiss Ratings, an insurance research and information service, based in Palm Beach Gardens, Fla.
The least comprehensive plan, the “A” plan, can cost anywhere from $350 to $900 annually, Gannon says. Meanwhile, the “J” plan, which provides the most comprehensive coverage, can set you back from $1,200 to $3,500 annually.
However, if you can afford the cost, taking Medicare plus supplemental insurance gives you one important thing: choice. You get to choose your doctors. You get to decide when to see a specialist. You don’t have to wait for referrals or deal with the bureaucracy that’s inherent in managed care plans.
If you later decide you don’t need all this coverage, you can drop your supplemental insurance and enroll in a Medicare Hmo.
You can’t necessarily go the other way unless your HMO drops out of the Medicare business. Even then, you are not guaranteed access to all Medicare supplement plans and your premium rates may be higher. Rizzo says this is why she counsels seniors who can afford supplement insurance to buy it, even if they sign up for a Medicare HMO.
That’s relatively surprising advice considering the fact that if you are in a Medicare HMO, you are nearly certain not to need supplemental insurance because the HMO will cover most of the same things as the supplemental policy. The HMO will also be the primary insurer, so the HMO would pay first. Still, while Rizzo acknowledges that the coverage will be useless, the ability to get it is valuable.
“It’s just a precautionary step for people who can’t decide which is better,” Rizzo says. “It’s more to maintain your guaranteed access to the supplemental coverage than anything else. That way, if you decide the HMO isn’t for you, you won’t have lost the right to buy a supplemental policy.”
However, what most experts agree you should not do is opt for Medicare alone. While Medicare can cover both hospitalization and physician’s bills, the program pays only a portion of eligible charges, leaving the patient with substantial co-payments. If you land in the hospital, you’ll also have to pay a $768 deductible (in 1999) before Medicare pays anything. If you spend too many consecutive days in the hospital, your hospitalization coverage can be used up, leaving you to shoulder the full cost.
“It’s very risky,” says Gannon. “It’s fine to hope for the best, but you ought to plan for the worst.”
Need help making retirement-age health care choices?
Virtually every major city supports a Department of Aging, which provides referrals to a variety of services, from Meals on Wheels to health care counseling. Aging departments are listed in the government section of the phone book usually under the title “Senior Services.”
Those who are trying to shop for Medicare supplement plans also often get help through their state Department of Insurance. Some insurance departments offer listings of the companies providing Medicare Supplement insurance. Some also provide a sample listing of premium rates. (However, premiums do vary from city to city because of variations in the cost of health care.)
Weiss Research (800-289-9222) also can provide shopping guides for Medicare supplement insurance, including a report that spells out which companies sell policies in your area, what they charge and whether their premiums are fixed for life, or vary from year to year. The report costs $49.
