Question: I know that you've been over this before, but it never concerned me very much. Now it does. I have just turned 65 and have entered the strange world of Medicare and the need for some sort of supplemental insurance coverage. The reason is because, as I understand it, Medicare has a lot of holes in it. So I'm reading all of this literature and am really baffled. Particularly by the health services that advertise that they offer most or all of the supplemental coverage that the other companies do, but without the customary monthly or quarterly charge that the others require. This doesn't make sense to me, but I've lost the last column you wrote where you explained it.--T.R.
Answer: Well, you can't save everything indefinitely, so we'll run through it again. Sure enough, now that you've entered the senior citizen ranks, Medicare has become a very important part of your life, and you're quite right--Medicare, by itself, doesn't really cut it.
First, of course, you recognize the fact that there are two parts to the Medicare program. There's the basic Part A, "Medicare Hospital Insurance," which is yours simply by virtue of having been covered by Social Security.
The other branch of this is Part B, "Medical Coverage," which concerns itself with doctors' charges, both in the office and in the hospital, and with all of those other expenses associated with the hospital, over and above the room, surgery, X-rays, laboratory charges and on and on. For this you have $15.50 a month deducted from your Social Security check.
Neither A nor B--individually or in tandem--is enough. Under Part A (hospital), for instance, you're nicked $492 right off the bat for admission and your first 60 days and then, for the next 30 days, $123 a day. For a really serious, prolonged stay in the hospital the ante goes up to $246 a day for the next 60 days.
Part B has its own gaps. First, there's $75 deductible per year, but the real biggie in Part B is that it pays 80% of all "reasonable fees and charges," and there are frequently (if not invariably) big differences between what the medical community considers "reasonable" and what Uncle Sam considers "reasonable."
For instance: Your doctor prescribes and performs a procedure for which he bills you $200. Medicare, however, considers $150 to be the "reasonable" fee for the same procedure. Thus, Medicare pays $120 of the doctor's charge, which leaves you stuck with the balance of $80 instead of the $40 that you would have had to pay if the full $200 had been allowable.
These cracks in the Medicare program have always made some sort of additional, crack-filling insurance almost essential, but it has also opened the doors to a lot of fly-by-nighters, high-pressure insurance salesmen and just plain quacks preying on the natural fears of older citizens that--Medicare or no Medicare--they could get wiped out by a really serious illness or accident.
In Congressional hearings on the subject a few years ago, one 70-year-old lady testified that she had been sold no fewer than 17 separate "supplemental" insurance policies--virtually all of them overlapping and canceling out each other.
Of the many dozens of firms crowding the field, most are, fortunately, quite legitimate, although there are naturally wide variances in their charges and coverages. And trying to compare them--with all of their little, tiny type and their legalese--is, for the average senior citizen, a little bit like trying to compare a dozen unbroken eggs for freshness--difficult bordering on impossible.
Helping considerably here, however, is the annual study of the subject compiled by 75-year-old Jules Klowden, a retired Mutual of New York insurance man, for Senior World of California, the El Cajon-based monthly publication aimed at the 55-plus market.
This year's study encompasses 41 Medicare-supplement plans and covers eight categories falling under Medicare Part A and five under Part B.
Reprints of the 1986 "Comparison Guide to Medicare Supplement Insurance and Health Maintenance Organizations" are available for $2 each from Senior World Reprints, P.O. Box 1565, El Cajon, Calif. 92022.
Included in the comparisons: premium or subscription charges, registration fees, policies on pre-existing conditions, deductibles (if any) on hospital entry for the first 60 days, co-payment policies on the next 30 days, co-payment policies on the next 60 days, maximum periods of coverage for any one benefit, policies on skilled-nursing facilities, deductibles (if any) for blanket medical care, policies on outpatient care (for such things as X-rays, lab fees, radiation), policies on prescriptions, renewability of the contracts, travel restrictions out of the area and (where applicable) those portions of the state where the plan is available or, by omission, not available.