Help Thinking this One Through

[Spud]

Help me with some basic understanding of Medicare andbeneficiary payment for services.

I was looking over the Medicare Beneficiary demographicsdocument published by MEDPAC (available here: http://www.medpac.gov/chapters/Jun12DataBookSec2.pdf).

On page 23 the document presents Medicare’s average cost perbeneficiary based on the beneficiaries description of their ‘health status’(excellent or very good; good or fair; poor); the document goes on to presentMedicare’s per capita expenditures basedon these health categories. Thesefigures are: $5,437, $11,795; and $22,612 respectively. These figures are based on 2008 data.

My question, if the above figures are ‘Medicare’s’ cost, canit be safe to say that this is about 80% of the Medicare approved amount forthe services being billed? If yes, doesthis mean:

a. The beneficiaryis being billed for the remaining 20%?

b. If yes, doing the math to determine how much theMedicare beneficiary is paying for their annual health cost (assuming a zerodollar health insurance premium), it appears to me that Medicare beneficiarieswould be better off with a Medigap policy (from a cost as well as a conveniencefactor) when compared to both Original Medicare and MA plans.

Comments please on points a and b above.

 

[Pete Cormie]

a) probably no, since some expenditures would not be subject to any coinsurance (preventive care).

b)According to a Life Expectancy Table, I should live to age 78. Should I wait until I'm 77 to purchase life insurance? My point is that no one person is the "average". Some will be sicker (more expensive for Medicare) than others.

IMHO a Medigap is the Gold Standard, but not everyone can afford gold these days. Not everyone wants gold.

 

[Aksarben68022]

A.I think the Medicare data only details what Medicare pays out on average by "reported" health status. It doesn't take into account the 20% not covered because they don't pay out benefit on that 20%. The 20% is the responsibility of the med supp, MA member (up to MOOP) or beneficiary with no cap if they are on original medicare only.

B. I always tell prospects and friends who ask that if you can afford the premium for a med supp and still live a lifestyle you are comfortable with then by all means buy a med supp because once a year you can always jump into an MA plan should your finances change. On the flip side; if you choose MA and your health changes you can't always get back into a supplement (AARP being the expensive exception to that rule)

 

[Focus LTC]

This thread smells...

 

[Spud]

Focus LTC: please explain your comment. can you add value to the discussion?

 

[midwestbroker]

My thoughts:

There is a big bell curve with the figures. Being in good or fair health to one person may be very different from another's version of good or fair. As the pie chart reflects, most of the spending (59.4%) was on the good/fair health portion of the Medicare population.

I would not get too caught up on national figures, as most people just want to know what it will cost them, not the country.

If people want to know what the plan will cost them, do a couple year look back with them. In the past 2 years, how many times did they see their doc, specialists, etc.

I do agree with Aksar...a Medigap if in a GI period and affordable for the client is the way to go. They can always get a MA plan later provided they do not contract ESRD.