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When Medicare no longer cares; how to take the pain out of the "medigap" that lies between federal assistance and actual costs of health care.


Unlike taxes, your personal Medicarecoverage may very well come to an end before you do. And although this Federal health-insurance program for people 65 and over has gone a long way toward absorbing some costs of health care for the elderly, a major portion of thos costs--close to 60 percent--is still borne by the patients themselves. These costs must be paid out-of-pocket or through extra insurance purchased privately.

Before getting to the question ofwhich insurance best fills this "medigap," let's look at just what Medicare pays--and doesn't pay. Medicare, a two-part plan, is available to persons aged 65 and over (and certain disabled persons) eligible for Social Security or Railroad Retirement benefits.

In Part A, basically a hospitalizationpolicy, the patient pays the first $492 in hospital charges. After that, Medicare picks up the tab for the full remaining cost of the patient's first 60 days in a semiprivate room. This coverage includes lab work, operating rooms, drugs, X-rays, rehabilitation, and other services. From days 61 through 90, the patient contributes a copayment of $123 a day. From the 91st to the 150th day this payment rises to $246 a day.

Part B--optional--picks up where"A" leaves off. It covers treatment by physicians, diagnostic tests, physical therapy, blood transfusions, and expenses of that type. To acquire the security of its protection, a participant pays $15.50 a month, at present. Although Plan B has a $75.00 deductible for the year, A.A.R.P. (the American Association of Retired Persons) calls the plan one of the best bargains to be found.

Plan B does not provide for suchitems as care in a nursing home, prescription drugs, and routine physical exams. Too often it does not pay even half the doctor's bill. Medicare covers 80 percent of the "Medicare approved" amount of the doctor's tab (except for home health-care services). This coverage might leave one to believe that a patient need come up with only the other 20 percent. Sadly, this too often is not the case, because some physicians have charged twice as much as Medicare has approved.

Say a doctor charges $1,650.00 forcataract surgery, and Medicare's approved fee for that operation is only $1,112.50. Medicare would pay 80 percent (or $890.00) of its approved amount, and most "medigap" policies would cover no more than the other 20 percent--$222.50. Thus, unless an additional policy pays more of the doctor's fee, the last $537.50 of the total doctor's fee must come from the patient's pocket.

And Medicare pays nothing foreyeglasses (except for cataracts) or hearing aids; for private-duty nurses or most immunizations; for dental work (except for jaw surgery or bone fractures) or, very often, foot care; for many eye and hearing exams; or for medical care in a foreign country.

Consequently, a serious illness orinjury without broad supplementary coverage or a prepaid health-care plan could leave a patient with such devastating bills that he might almost wish he hadn't recovered. But there are ways to ward off such financial blows--or at least to soften them somewhat.

* The "medigap" between theMedicare payment and the doctor's charge can be bridged by a "participating" doctor--one who agrees to charge no more than the Medicare-approved amount. Directories of these participating physicians are available for $2 from Medicare carriers and Social Security offices. The bad news is, only 30 percent or so of the nation's physicians have agreed to participate.

* Another way to beat the rap ofthe medigap is by Medicare-supplement insurance. A caution: Although many of these policies deal adequately with gaps in Part A, they are less effective with Part B, particularly covering doctors' bills.

John Dorfman, the executive editorof Consumer Reports magazine, recommends buying the most comprehensive policy you can afford. "Look for one that addresses the problem of physicians charging more than the Medicare-approved amount, and one that does something in the realm of drugs," he suggests.

One of the best starting points in thesearch for a medigap policy is the nonprofit Blue Cross and Blue Shield companies. They offer 84 plans across the country. True, these plans can vary in their coverage, but at least they constitute a yardstick to interpret policies from commercial insurers.

A.A.R.P. members are eligible forfour separate medicap plans with varying amounts of coverage and premiums ranging from $11 to $69 a month. Sold by Prudential insurance, the plans are highly rated by Consumers Union.

Should you opt for a medigappolicy, a few precautions:

Look for a lifetime guaranteeof renewability--and not policies that can be dropped at the company's option.

Group coverae may notbe cheaper or better. Check it out.

One comprehensive policysuffices. And switching policies could leave a temporary gap in your coverage. Preexisting-condition clauses could have you wait as long as six months for coverage, even if you had no knowledge of the problem. Other policies may exclude preexisting conditions altogether. Such a provision, usually on a rider, requires your signature, so check carefully before you sign.

HMOs (health-maintenance organizations)offer another method of protection. Many people are signing up for one of these prepaid plans in lieu of supplemental insurance. These plans cover much more but tend to be more expensive than comprehensive insurance policies. To join, a person under Medicare must be enrolled in parts A and B.

Blue Cross and Blue Shield has 77HMOs with 2.5 million members in 40 states. Monthly fees average slightly more than $30. Kaiser Permanente, active in prepaid medicine for nearly 50 years, now maintains HMOs in 15 states. They charge $29 to $45 a month. (A few HMOs in Florida and in California take Medicare enrollees free.)

There are advantages to a goodHMO besides cost savings: A group of general-practice physicians and specialists can render a second opinion on the spot; there's no searching for a "participating" doctor; offices, labs, diagnostic equipment, and patients' records are housed together; and patients, avoiding the red tape of claim forms, are reimbursed on the spot. A.A.R.P., which urges its members to consider HMOs, publishes a booklet about them entitled "More Health for Your Dollar."

Not that HMOs are without drawbacks. Amongthem, doctors on the staff or under contract may be unfamiliar with treating the elderly. The location may not be convenient. There may be long waits for routine appointments (but not for emergency treatment). Some customers have complained of great difficulty in enrolling or disenrolling.

Whatever the plan you choose forfilling the Medicare gap, may it be years before you ever have to use it--if ever.
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Copyright 1986 Gale, Cengage Learning. All rights reserved.

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Author:Allen, Michael
Publication:Saturday Evening Post
Date:Apr 1, 1986
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