Puzzling out plan options for Medicare

By Charles Ornstein

Nov. 4, 2007 12 AM PT

Times Staff Writer

My mother turned 65 this summer, an event Medicare marketers ensured she would not overlook. In the months before her birthday, slick brochures flooded her mailbox, touting Medicare health plans whose names alone promised virtues such as choice, value and advantage.

Choosing a good plan was important. My mother, Harriet, suffers from Parkinson’s disease and other ailments and takes more than a dozen medications every day.

Because I’m a veteran healthcare journalist, my mom asked me to help her pick the right plan, and I readily agreed. After all, how much work could it be? A few minutes to scan the options and pick the right one for her?

Wrong.

It wasn’t quick or easy, and the more I studied the options, the more concerned I became that making a mistake could have serious consequences.

Most people know that when they turn 65, they become covered by Medicare, the federal entitlement program that insures about 44 million people. But beyond the basic set of benefits, there are dozens of other choices to fill gaps in coverage and cover the cost of prescription drugs.

It can take days to pick a plan that seems like the best fit. What’s more, the number of options and their costs vary by region. My mother, who lives in a suburb of Detroit, had more than 100 plans to choose from.

One option would be a Medicare Advantage plan. These programs are designed to provide full coverage -- replacing traditional Medicare -- and include HMOs and preferred provider organizations. Mom had a smorgasbord of Advantage plans to choose from -- 40 in all, each with different premiums, co-payments, physician networks and limitations.

Alternatively, she could choose a “Medigap” plan. Also known as supplemental plans, these cover co-pays and deductibles that patients normally pay under Medicare. She had a dozen Medigap packages available to her, each offered by multiple companies.

Finally, if she wanted prescription drug coverage, there were 54 stand-alone plans from which she could choose.

In short order, I was drowning in choices.

Bonnie Burns hears stories like this every day. She is a training and health policy specialist with California Health Advocates, which provides guidance to counselors advising Medicare recipients statewide.

“People are just absolutely shocked and overwhelmed at the decisions they have to make,” she told me. “The number of plans, the sheer number, is just incredible.”

Medicare officials suggest using plan comparison tools on the agency’s website.

Burns recommends first determining which options are available, and then comparing those choices with the consumer’s existing health coverage. People also have to decide which benefits they want and what they can afford.

My mom had four health insurance options when she was a clerical worker at Easter Seals of Southeastern Michigan. She always chose the Blue Cross plan, even though it was the most expensive, because it gave her and my dad, Alexander, the widest selection of doctors and hospitals.

Now in retirement, she didn’t want to have to start getting referrals to see a specialist. Nor did she want to read pages of fine print to determine what is covered and what is not.

Though a Medicare Advantage plan might have saved her some money, it also could have restricted her choices, which I knew wouldn’t be acceptable.

That took 40 options off our list.

Next, we had to determine which of the 12 standardized Medigap packages was right for her. The plans are labeled A through L, and each includes a different assortment of deductibles and co-payments.

We settled on F, the one that seemed most aligned with my mother’s needs.

But even then, it wasn’t easy. Fourteen insurance companies offered the F plan in my mom’s ZIP Code, and their costs ranged from $117 to $221 a month, according to Medicare’s website. The options and costs vary according to where a recipient lives. Remember, each of the F plans offers the exact same benefits. Why does one cost twice as much as another? I couldn’t figure that out.

The Medicare site doesn’t tell you how much each insurer charges, and Michigan insurance regulators don’t provide that information on their site. They say it’s too difficult to keep up to date. That means you have to call each company individually.

Fortunately for those in California, the state Department of Insurance has figured out a way to let senior citizens compare sample rates on its website, at www.insurance.ca.gov.

To do my research, I called several insurance companies for their rates and sat with Mom when a salesman came to her house. I also called Michigan’s Office of Financial and Insurance Services and asked for information on previous rate increases for our top two choices and their histories of complaints.

The analyst who helped me said almost nobody requested this information. Even so, she sent me a 4-inch-thick complaint log by mail and a rate increase chart by e-mail.

This new onslaught of information left me more confused than when I made the request, so I set it all aside.

In the end, we selected a plan for Mom that her friends had and her doctors liked -- much the same way as how most active workers pick their health plans.

Her plan costs about $125 a month, taking into account an introductory discount. One of the features we liked is that older seniors don’t pay more than younger ones, as is the case with some plans.

That left one final task: choosing a prescription drug plan. Given the 15 medications Mom takes every day, drugs are a lifeline. Pick the wrong plan and it could cost her thousands of dollars more each year. After all, the cost is more than just the monthly premium.

Equally important are the drug co-payments and whether all needed drugs are even covered.

Fortunately, Medicare’s website allows people to type in the drugs they’re taking and it creates a customized chart to comparison-shop.

We picked the plan with the lowest overall costs, taking into account both the $25.70 monthly premium and her anticipated drug co-payments. It will still cost her thousands of dollars a year.

Burns told me that Medicare recipients should also verify the costs and which drugs are covered by checking the chosen plan’s website, and again by calling the plan on the telephone. (Keep notes and printouts in case you later have problems.)

It has now been three months since we made our choice, and Mom has no regrets, so far.

But in a few days, I’ll travel back to Michigan and we’ll start comparing prescription drug plans for 2008.

charles.ornstein@latimes.com

(BEGIN TEXT OF INFOBOX)

A brief overview

Medicare

The federal health insurance program for people 65 and older and the disabled. Consists of hospital insurance (Part A) and medical insurance (Part B).

Medigap

Also known as Medicare supplemental plans, they fill in gaps in original Medicare, such as co-payments and deductibles. There are 12 standardized plans, but premiums can vary widely

by company.

Prescription drug coverage

Also known as Medicare Part D, this is an optional benefit started in January 2006 and is offered by private insurance companies. Premiums, drug lists and co-payments vary by plan. There

is no standardized package.

Medicare Advantage

An alternative to original Medicare, these plans receive payment from the government to manage beneficiaries’ healthcare. Benefits can include prescription drug coverage. These plans often offer extra benefits and lower co-payments, but they may limit choice of physicians and hospitals

and impose other restrictions. There is no standardized

package.

Source: U.S. Centers for Medicare & Medicaid Services, California Health Advocates

Additional resources

Medicare

(800) 633-4227 or (800) MEDICARE

www.medicare.gov

www.medicare.gov/mppf (to compare Medigap and Medicare Advantage plans)

www.medicare.gov/mpdpf (to compare prescription drug plans)

California Department

of Insurance

(800) 927-4357 or (800) 927-HELP