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

Article excerpt


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. …