Medicare Open Enrollment (Part 2 of 3)

In part one of our story on Medicare open enrollment, we took a look at the various parts of Medicare. In the second part of story, we take a look at the cost of Medigap coverage and its benefits.  All figures used in this story are for the current year calendar year, as figures for 2020 have not been released, yet.

Medicare Parts A and B are provided by the federal government.  Part A does not require payment of a monthly premium, but it does have an annual deductible of $1,364.  After payment of the deductible, Part A pays for 100% of inpatient hospital charges for the first 60 days.  After that, the patient must pay $341 per day of coinsurance for days 61 through 90.  Inpatient stays of more than 90 days come with a daily coinsurance charge of $682 per day.  Ouch.

Medicare Part B covers outpatient hospital and doctor visits, as well as laboratory tests, medical equipment, mental health care, ambulance services and some home healthcare.  Part B has a monthly premium of $135.50 and an annual deductible of $185.00.  Even after payment of those fees, Part B only covers 80% of patient charges, with the patient picking up the remaining 20%.  Double ouch.

This is where Medigap insurance comes in.  Medigap is available through private insurers and there are 10 different plans available through a large number of insurance companies.  Each plan requires payment of a monthly premium.  Fundamental to every Medigap plan is that it will cover the patient’s full coinsurance responsibility under Part A.  So, hospital stays in excess of 60 days will not cost the insured anything additional out-of-pocket.  For Part B, all but one plan cover the full 20% coinsurance requirement, and another plan will even pick up any excess Part B charges.  Medigap plans do not include Part D prescription coverage.

Plan A provides the least coverage, while Plan G provides the most comprehensive coverage.   Plan F, which currently is the most popular plan, will not be available in 2020 and, therefore, is not discussed in this story.

There are a few important differences between Plans A and G but the most significant difference is that Plan G covers what are known as excess charges, while Plan A does not.  Excess charges are where a physician charges a patient more than the accepted Medicare rate for a given test or procedure than the federal government is willing to pay that doctor.  The patient is responsible paying the excess charge under Plan A, but a patient with Plan G coverage is not.  This can be a significant benefit for seniors whose preferred doctor charges more than the standard Medicare rate.

But, how much more does it cost to get this benefit?  I asked Ashley Hutchinson, a Medicare counselor for Bath and Highland Counties, to help me.  Ashely said that monthly premiums for a 65-year old male under Plan A range from $84 to $192 depending solely on which insurance carrier the insured chooses.  Monthly premiums for Plan G range from $100 to $234 per month.  If one were to compare the cheapest Plan A and cheapest Plan G premiums, the difference is $16 per month.  Not only does that monthly $16 difference provide excess charge coverage, it will also pay the annual Part A deductible of $1,364, which more than offsets the monthly premium difference for those who have an inpatient hospital stay that year.

There are eight other plans that are not discussed in this story, any one of which might make the most sense for an individual insured depending on that person’s specific age, medical history and financial circumstances.  The best way to assess these plans is to speak with an objective Medicare counselor such as Ashley Hutchinson, Lorri Bratton at Bath Community Hospital or Rebecca Bivens at the West Virginia Disability Network.  Each of these contacts will provide the necessary information at no charge.  Full contact information for each counselor can be found on the Allegheny Mountain Radio website at the conclusion of this story.

In the third and final part to this story on Medicare open enrollment, we’ll take a look at Medicare Part D, which covers prescription medication.

This is Mickey Frank Thomas for Allegheny Mountain Radio.

Below are the names and contact information for the Medicare counselors in each of the three counties served by Allegheny Mountain Radio:

Ashley Hutchinson (Bath and Highland Counties)

Virginia Insurance Counseling & Assistance Program

(540) 468-2656

Lorrie Batton (Bath County)

Bath Community Hospital

(540) 839-7188

Rebecca Bivens (Pocahontas County)

West Virginia Disability Network

(304) 425-2040