The DARK SIDE of Medicare

Medicare – the good, the bad and the ugly! Let’s discuss, the DARK SIDE of Medicare.

Part A Deductible

What is a deductible? A deductible is the amount that you have to meet out of pocket before your insurance begins to contribute to the cost share. Medicare actually has two deductibles; one for Part B and one for Part A. 

The Part B deductible is not that costly. It is once per year and once you have met that deductible, you’re responsible for copays or coinsurance. In 2024, the Part B deductible is $240.

The problem is the Part A deductible. It is applied per benefit period. 

The Part A deductible, unlike Part B, is not once per year. It is once per benefit period. Should you need to be hospitalized, you basically have 60 days from the day you last need care in the hospital or skilled nursing facility. This time period is your benefit period. The deductible that you’ve paid our of pocket will apply to any Part A covered services during that time. If you need to be admitted after that time, you will need to meet your deductible again.

For example, let’s say you need knee surgery and it’s been deemed medically necessary by your doctor. You’ll have to meet the $1632(2024) deductible first and then the rest will be covered by Medicare. If you need to stay in the hospital or require a stay in a skilled nursing facility to recover, you won’t need to meet that deductible again. Several weeks later, you’re able to resume daily activities and you’re no longer receiving hospital or skilled nursing facility care.

Then, disaster! Several months later, you fall and need wrist surgery. You’ll need to meet that $1632 deductible again. Hopefully, you won’t need major medical care and hospitalization with such frequency. But, should it happen, you should understand upfront what your financial obligations might be.

So, if you become very ill, you may need to meet that deductible multiple times in a given year!

No Out of Pocket MAX

Speaking of costs, let’s talk about the OOP MAX or rather that fact that there is no OOP MAX with Medicare.

An OOP MAX is there to protect you from major medical bills. So, should you become very ill and your medical bills begin to stack up usually your insurance carrier will take on the remainder of the bills once you reach a certain financial threshold.

This is not the case with Original Medicare. That means with Original Medicare alone, if you have major medical needs there is absolutely no limit on your potential medical expenses. 

Lifetime Reserves

Original Medicare alone can also basically have a cutoff of how long you can be hospitalized. Let’s talk about lifetime reserves.

Medicare will cover up to 90 days in a hospital. After that you have 60 days of lifetime reserve days. However, these lifetime reserves can only be used ONCE. And once they are gone, they are gone forever. This means you would be responsible for the entirety of the bill!

Late Enrollment

Now let’s talk about late enrollment penalties! Specifically, the Part B late enrollment penalty. 

If you are subject to the late penalty you will have to pay 10% of the base monthly premium for each full 12 month period you are without Part B. 

In 2024, the Part B base monthly premium is $174.70. So, if you go without Part B for 12 months you would have to pay $17.40 in addition to whatever your Part B premium is. If you go without coverage for 24 months, it would be $34.80 and so on and so forth. 

And remember, this is not a one time penalty. It gets tacked on to your monthly premium forever.

Medigap

Speaking of enrollment, let’s talk about Medigap!

Medicare is great, low cost, comprehensive health coverage, but there are still costs. Not only are there premiums, but there are copays and coinsurance and deductibles. There is also no out of pocket maximum.

If you enroll in a Medigap plan, you will pay an extra monthly premium but your supplement plan will largely take care of or possibly entirely cover deductibles and copays and coinsurance. That means you will have no medical expenses when you actually use your insurance.

Many costs associated with medicare are very low when you are younger and healthier, but as you age your medical needs will likely become more extensive. Or, if you are diagnosed with a serious medical issue, you will likely find that the costs with Original Medicare alone  are far too exorbitant. Especially because there is no out of pocket maximum.

At this point, you may want to enroll in a Medigap plan. However, once you are older and have more extensive medical needs it is likely that you will be denied. At the very least, you will certainly be charged much more than if you had enrolled when you were younger and healthier. This is because medigap plans may require medical underwriting.

However, if you enroll in the 6 months after your turn 65 and enroll in Part B, you will not be subject to medical underwriting. This is the best time to enroll in a Medigap plan. You may not utilize your plan as much in the earlier years, but your later self will thank you!

Medicare Advantage

Finally, let’s talk about Medicare Advantage. Many people are lured in by Medicare Advantage’s promise of additional benefits at no cost.

Yes, it’s true that Original Medicare does not offer dental, vision, hearing or prescription drug and that many Medicare Advantage plans do.

And yes, it’s true that many MA plans offer these benefits at no additional charge- you just continue to pay for your Part B.

Read more on Top 3 Medicare Advantage Nightmares!

However, these are managed care plans that operate within networks. That means that if you have an HMO, you can only go in network and many people have reported finding extreme difficulty in finding doctors and hospitals who accept their plan.

Even if you opt for a PPO, there is still the issue of preauthorization which means that even if your doctor approves you for a specific treatment or service, your insurance carrier has to approve it as well.

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