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Dr. Reese’s Bits and Pieces
October 2019 Newsletter


Fall is here and the leaves are changing.  This is one of my favorite times of the year with the cool nights and warm days.  No more 95+ degree days and the golf courses empty out. The past several years we’ve even avoided snow on Halloween!

We are also entering the election cycle for November 2020 already.  It was political campaigns and screaming talking heads that got me to disconnect my cable TV back in 2010.  I hate politics and politicians!  One of the things that has caught my attention is the “Medicare for All” promises being bandied about and the government takeover of all healthcare.  Since I am eligible for Medicare in December, I’ve had to start learning what it really covers and doesn’t cover.  Below is some of the information I’ve cut and pasted from Medigap Advisors (https://www.medigapadvisors.com).

Medicare
At age 65, you become eligible for coverage under the federal government’s Medicare program. You can sign up for Part A (hospitalization insurance) or Part A and Part B (medical insurance).
If you choose to use only Medicare’s coverage, you could be left with significant out-of-pocket costs. Medicare has no provisions for capping the amount of money you spend out of your own pocket.

There’s no prescription drug coverage included in Medicare, so in order to cover these costs you’ll need to sign up for a Part D prescription drug plan to go along with your Medicare coverage.This is why I cannot emphasize strongly enough that you need to have additional coverage in your portfolio to assist in paying your medical bills. For most people, a Medicare supplement plan is the ideal answer.

Your other alternative is to purchase a Medicare Advantage plan. Often referred to as “Medicare Part C”, these plans are administered by private insurance companies, and not only cover hospital and doctor costs (what is traditionally covered by Medicare Parts A and B) but also the costs associated with prescription drugs. You might also hear people refer to these plans as MA-PD’s.


You pay 100% of drug costs up to the annual deductible, and then you pay a portion of the costs of your drugs and your insurance company shoulders the rest. Once the total retail amount of your drug expenditures reaches a set amount you enter what’s become commonly known as the “doughnut hole," where you stay until you reach your out-of-pocket maximum for the year. At this point, you are pay only $8.50 for brand name drugs and 3.40 for generic ones.

The doughnut hole is the virtual place you end up after you run out of the initial drug benefits and before you reach your out-of-pocket maximum for the year. In the doughnut hole, you pay a percentage of the cost associated with a drug (and that percentage differs based on whether the drug is generic or brand name, at least for the next several years), and your insurance company pays the rest. The chart below shows how those percentages are changing over the next several years, as the federal government attempts to “fill-in” the doughnut hole:

image

Again, once you’ve reached your out-of-pocket maximum for the year, you’ll pay a flat rate for all prescriptions. (end of Medigap info)

My Conclusion
The biggest thing I learned from my research is that Medicare has lots of deductibles and co-pays and things they just don’t cover.  It is financial Russian Roulette to just go with the Medicare only option.  You can pay a new deductible every 2-3 months for a different medical problem instead of just an annual deductible like normal health insurance.

The other thing that we are not being told in the “Medicare for All’’ rhetoric I’ve heard so far is that it is private insurance companies who are making Medicare work for the seniors. The government plan is full of lots of holes that need to be plugged by other insurance plans to keeping seniors from being bankrupted due to medical expenses.  Not a good plan for all!

Happy Fall and Halloween!