With inflation continuing to make it necessary to stretch our dollars, we thought we’d look at ways to make medical expenses more affordable. To that end we spoke with Linda Shoenfelt, an expert in Medicare operations and the Medicare experience.
Getting the Right Plan
“Expenses fall into a couple of different buckets,” she says. “You have your premium for part A and the government pays for that, so you don't have to do anything. You have your premium for part B. And that is the one that can either come out of your social security check if you're already retired and getting a check, but if you're not getting a social security check because you’ve put it off or are still working, then you actually have to go ahead and pay that part B direct to the government.
“The B piece is for your doctor’s visits, etc.,” she adds. “The A piece is your hospital stuff.”
So, the first thing is deciding whether you want to pay for Part B, or have it taken out of social security. If you decide to pay out-of-pocket for Part B, that may be your only out-of-pocket medical expense – with your co-insurance payments from Medicare Part A. You will have an additional Medicare expense if you purchase a Medicare Advantage plan, called Part C.
“When you opt for a Medicare Advantage plan,” Shoenfelt says, “sometimes there's no additional premium because the health plans are getting their money from the government to pay for them. But then they will give you other co-pay co-insurance rules that they can make up.” Both you and the provider get an “advantage.” It's possible, therefore, that moving to a Medicare Advantage plan could give you more benefits for the same amount of money. But . . . there’s always a but.
“The downside with Medicare Advantage plans is that you also are then beholden to the insurance company's rules,” Shoenfelt explains. “And the biggest issue there is where you can go, which doctors are in the network your Medicare Advantage plan offers. When you use original Medicare, you can go to any doctor facility that accepts Medicare.” But when a private insurance company takes over your Medicare with an Advantage plan, then you have to abide by their rules. “To get more benefits, you have to have more rules,” Shoenfelt says.
The question you need to ask yourself, and it may depend on your health, is are you willing to sacrifice more medical care freedom for more benefits?
A Second Potential Money Saver
Figure out the medications you take and what conditions you have that cost you money for care,” Shoenfelt says. “Figure out then what your out of pocket expenses would be for those things in different scenarios with different plans and coverages. If you don't have very many medications, you may not have to pay for Part D (drug coverage).” Then you also need to check your Part C because it may offer drug coverage you don’t need and will still be paying for.
See If You Qualify for Subsidies
The next way to save money: See if your income is low enough to allow you to qualify for subsidies. “Your finances play a role in this because the government has a bunch of programs for people below certain income levels,” Shoenfelt says. “In that case, instead of paying for Part B, sometimes the government is paying for that.” Overall, Shoenfelt says, your money saving opportunities are in three buckets:
1 - What program you end up in – whether that's original Medicare, original Medicare with a Medicare supplement plan attached (which you pay for separately), or a Part C Medicare Advantage plan plus a Part D drug plan. The program that you choose is your first opportunity to save, because this is where your premiums, your co-pay, your co-insurance and your overall out-of-pocket costs are controlled.
2 - The next bucket is your out-of-pocket. Here you can save money by following certain rules that your plan groups have: You can go to preferred providers and preferred pharmacies, you can do mail order for your drugs. Once you decide what program is for you, then you can see how the program can save you money.
3 - The last bucket is whether or not you qualify for financial assistance.
Two other quick topics about saving money. The first is Easy Pay. It doesn’t really get you a discount, but what it does do is take your payment automatically from your checking account so it’s one less thing to remember, and if the rate changes your payment will automatically change. One area where Easy Pay (or Auto Pay) can be very helpful and save you a lot of grief if not dollars? If you forget to pay for your policy and it gets canceled, it’s a pain to get it back, you may have late fees, and you will be without coverage.
Stay Healthy
One last way to save money is perhaps the least discussed but the most obvious: Try to stay healthy. Walk a lot, do strength training, work on your balance, kick some of your bad habits, engage with others, laugh, take your meds, make sure your vaccinations (pneumonia, shingles, etc., are up to date), take precautions against Covid and be aware of changes in your mind and body – and get them checked out quickly.
By the way, all those TV commercials you see for Medicare Advantage plans? The government is cracking down on them. Not because they’re necessarily scams, although their advertisements certainly have a scam-like “ACT NOW” quality. Shoenfelt says the commercials are the hook into legitimate insurance brokers, but they are deceptive “because sometimes they make you think they actually are Medicare, and people think they're calling Medicare when they're really calling a third-party broker.” Read more about fraud protection here. The other thing that's deceptive about the ads is that states have different Medicare rules but the ads make promises that may be available in one market but not another. Medicare is therefore getting tougher on what the commercials can and can’t promise.