This past week I had the unpleasant—although not unusual—experience of explaining to a patient that the Medicare insurance coverage he had was not, in fact, the insurance coverage that he thought he had purchased.
The patient in question was a 65-year-old man who had become eligible for Medicare at the beginning of this year. It appears that he was confused by the myriad Medicare-related insurance programs whose advertisements bombard the airwaves around this time of year, and it is worth reviewing how exactly these programs work, because they are rather confusing.
Medicare, as most people are aware, is one of the largest federal programs of any kind, and provides healthcare benefits to qualified Americans as of age 65 (although some people can qualify for the program at a younger age if they have particular disabilities). The initial enrollment period for Medicare begins three months prior to one’s 65th birthday, but enrollment is immediate if someone who is turning 65 is already obtaining Social Security benefits (and then the monthly Medicare premium is deducted from the monthly benefits check, as low as $121.80 each month in 2016).
There are multiple “parts” to this program, which is Medicare-speak for various types of coverage, including hospital coverage (Part A), physician office coverage (Part B) and outpatient prescription drug coverage (Part D*). If a 65-year-old is automatically enrolled in Medicare because he is obtaining Social Security benefits, his enrollment defaults to Parts A and B. Everyone else has to apply for benefits, and failing to apply may result in penalties. Parts A, B and D provide substantial but incomplete coverage, and have a deductible (an initial portion of allowable charges which the patient pays before Medicare begins paying, which will be $166.00 in 2016) and a coinsurance (a percentage of the allowable charges which the patient is responsible for paying, which for Medicare is 20 percent).
There are also commercial insurance programs which work in concert with Medicare coverage. These come in two varieties: coverage which supplements any gap (hence the names Medigap and Supplemental Insurance) which is unpaid by Medicare (such as the deductible and coinsurance), and something called Part C, or Medicare Advantage (which we will call “MA” for the sake of brevity). When a patient has Medicare + supplemental coverage, she can see any Medicare provider, and the supplemental plan covers some or all of her financial obligations which Medicare doesn’t pay. But when someone enrolls in MA, the entirety of her health insurance is taken over by the commercial carrier, and she can only obtain care from providers who are participating in Medicare and also in the commercial carrier’s Medicare network (unless her plan has out-of-network benefits, which we have covered in previous columns). The patient with an MA plan may have a copayment, coinsurance, deductible and any other restrictions as are established by the MA insurance carrier.
In the case of our caller last week, he thought he had enrolled in Original Medicare + supplemental coverage through Aetna, but in fact he had purchased an MA policy from Aetna. Medicare mailed him his Medicare membership card around his birthday, which it does to everyone, and he thought receipt of the card conferred benefits. However, that card never provided any benefits for him because his enrollment in the commercial Aetna MA plan superseded it. Since January he had been ignoring all the medical bills which had been sent to him for copayments and coinsurance in the mistaken belief that he had no financial obligation on those invoices.
While my phone call with this patient was not a happy one, at least one outcome was positive; he now knows what his financial responsibilities are, and can make arrangements with his creditors to avoid being sent to collections.
Make sure you understand the terms and limitations of your insurance policy so that you understand what your procedural and financial obligations are. This is especially true as we approach January, since many plans’ provisions change with the new year. Even if you have the same insurance carrier and insurance ID as in years past, your responsibilities may have changed, and ultimately, as the consumer, you are responsible for them.
If you have an issue you would like addressed in an upcoming Your Clean Bill of Health column, or if you would like to share an anecdote or unusual case you experienced, write to [email protected].
* Some MA plans include coverage for Parts A, B and D. Others provide combinations thereof. Part D, when purchased as a standalone product, in combination with Original Medicare Parts A and B, is provided through a third-party carrier, which is contracted through the government.
Yossi Faber earned his MBA in healthcare magna cum laude from the joint Mount Sinai School of Medicine—Zicklin School of Business program at CUNY Baruch. He is a member of two healthcare industry-focused networks of expert professionals, and is an invited lecturer at major medical centers and state medical societies. He founded and manages Clean Bill of Health (www.cleanbillofhealth.com), which provides both medical billing services to physicians as well as advocacy services for patients to review and help reduce the burden of their medical bills. Yossi lives in NJ with his wife and children.
By Yossi Faber
