How to protect against big medical bills?

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How to protect against big medical bills?

Postby dahsom » Mon May 06, 2013 9:54 pm

I live with a husband in his late 40s who is overweight, smokes and drinks a lot. He also has a bipolar disorder and tends to go on a spending spree when he is manic. After losing a lot of money in his recent manic episode, he agreed to let me manage our finance.

Through hard work, wise investment and frugal living, I managed to save up about 1.5 million dollars and we are debt free. Our modest home as well as 2 new cars are all paid off.

My annual income is about 150,000 and we spend only about 25% of our income. I still worry due to my husband's potential medical bills. Due to his condition he has Medicare. Still, we spend about $400/month on his medication.

While we have enough money to sustain us and fund our retirement, I am very concerned about incurring high medical bills. I heard that a certain type of annuity will protect you from creditors.

Is it true? What would be the best way to protect our savings? Set up a corporation and let the company own everything? I think Kiyosaki (Rich dad...) suggested that. Or, is there an investment product that will protect us? Divorce?

As a first generation immigrant, I worked very hard to come this far and don't want to lose everything at once. Please let me know what I should do if you know. Thank you!!

------------------------------

Oops, I missed a zero. My income is about 150,000/yr. My husband doesn't work. His social security disability benefit is only about $700/month. He gives me 200 and keeps the rest as his allowance. I am willing to pay my fair share of medical bills. After reading the recent Time magazine cover story about how greedy and outright fraudulent medical institutions are in this country, I became very alarmed. We may be charged way more than what is "fair."

I'm not interested in hiding money or doing anything illegal. I used the term "protect" to mean getting protection from excessive/unfair charges (e.g. 200 for a Band-Aid, hundreds of treating doctor's gown etc. according to Time's article) and even from my irresponsible spouse. The country where I came from has a national insurance system where every involved party contributes a fair share to make it work. I was even thinking of moving back to my country or some other country where I don't have to worry about being out on the street after working hard for several decades and pay my share into the system.

I am not desperate. I've done well so far. My well balanced portfolio has achieved 28% gain at the moment. I am thinking proactively to make my future safer while I live. I appreciate all the replies. Even the negative ones make me think what I should not do.

My CPA told me to establish an Scorp to avoid paying the self-employment tax. So I did and was able to save a lot. I don't think it's dishonest. I don't know. It's this kind of advice I think I am looking for.

My husband has Medicare with part D but his psych med is expensive esp. when we are in the donut hole. Thanks to Obama, the hole will close soon I hope.
Last edited by dahsom on Tue May 07, 2013 1:18 pm, edited 6 times in total.
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Re: How to protect against big medical bills?

Postby 2stepsbehind » Tue May 07, 2013 10:23 am

dahsom wrote:Through hard work, wise investment and frugal living, I managed to save up about 1.5 million dollars and we are debt free. Our modest home as well as 2 new cars are all paid off.
...
My annual income is about 15,000 and we spend only about 25% of our income.


Are you missing a zero or does your husband make the vast majority of your income?
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Re: How to protect against big medical bills?

Postby Mill » Tue May 07, 2013 10:30 am

If youre looking for RichDad advice, You two could get divorced, split all assets evenly and he could slowly gift everything he owns over to you post-divorce. :oops:
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Re: How to protect against big medical bills?

Postby Sanbalto » Tue May 07, 2013 10:34 am

How to protect against big medical bills? I would say start with trying to improve your husband's health. Get him to quit smoking, drinking, and lose weight (I know it is very very hard, but that is the best thing you can do). Don't ever give up on that front.

$400/month for scripts? Have you shopped around different pharmacies? I recently changed a prescription of generic Lipitor from CVS to Costco which saves me about $100/month. It is suprising how drug prices vary amongst pharamcies. Make sure there aren't generic alternatives that doctors could prescribe. Even better, ask for drugs on the Walmart or Target $5 dollar programs.

Can you afford supplemetal insurance? In 2014, the Affordable Care Act may allow your husband to find some good options in health insirance.

I hope you don't take this wrong way, but I think the the idea of trying to "hide" your money away from creditors to be morally questionable and part of the problem in our country. If you have plenty of money, you should pay your bills. Especially when you think that if you don't, fellow Americans will end up paying for you.

Good luck.
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Re: How to protect against big medical bills?

Postby tomd37 » Tue May 07, 2013 10:41 am

Speaking of Costco pharmacy prices, I have a neighbor whose spouse requires a lot of expensive prescription for her ongoing medical condition. He tells me that Costco has a "price point" at which some of their prices go down. For example, with a price point prescribed quantity of 100 the pricing is less than what it would be for a quantity of 90. Worth checking about.
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Re: How to protect against big medical bills?

Postby MN Finance » Tue May 07, 2013 10:43 am

Sanbalto wrote:I hope you don't take this wrong way, but I think the the idea of trying to "hide" your money away from creditors to be morally questionable and part of the problem in our country. If you have plenty of money, you should pay your bills. Especially when you think that if you don't, fellow Americans will end up paying for you.

Good luck.


Let's not get a bunch of posts taking the moral high ground. This poster has every right to attempt to minimize the impact on her own life and not end up destitute herself because of issues that might arise with her spouse totally out of her control.
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Re: How to protect against big medical bills?

Postby Sanbalto » Tue May 07, 2013 10:59 am

MN Finance wrote:
Sanbalto wrote:I hope you don't take this wrong way, but I think the the idea of trying to "hide" your money away from creditors to be morally questionable and part of the problem in our country. If you have plenty of money, you should pay your bills. Especially when you think that if you don't, fellow Americans will end up paying for you.

Good luck.


Let's not get a bunch of posts taking the moral high ground. This poster has every right to attempt to minimize the impact on her own life and not end up destitute herself because of issues that might arise with her spouse totally out of her control.



Fair enough. Aside from the recommendations I made, she could consider an offshore trust to protect their assets.
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Re: How to protect against big medical bills?

Postby dhodson » Tue May 07, 2013 11:09 am

actually if thats the concern then why arent there more recommendations for a more inclusive health care policy?
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Re: How to protect against big medical bills?

Postby Sanbalto » Tue May 07, 2013 11:21 am

dhodson wrote:actually if thats the concern then why arent there more recommendations for a more inclusive health care policy?


I suggested supplemental insurance. I guess I should have said secondary insurance. But i agree with you, more health insurance is the best bet. But they may need to wait until next year when Obamacare kicks in, given his prexisting conditions and the ability to take advatage of the new insurance market.
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Re: How to protect against big medical bills?

Postby kramer » Tue May 07, 2013 11:31 am

For the record, smokers have lower lifetime health care costs than non-smokers. Obese people consume less lifetime health care than non-obese. And obese smokers have lower lifetime health care costs than any of these categories. Of course, lowering lifetime health care costs is probably not the goal here. . .

http://www.washingtonpost.com/wp-dyn/co ... 03803.html

Similar to the finding that prevention rarely saves money is the calculation that people in good health probably rack up higher lifetime medical costs than their less-healthy brethren.

The reason? Healthy people tend to live longer.

The Framingham Heart Study has followed more than 5,000 people in a town outside Boston since 1948. An analysis published in 2003 found that obese women smokers lost 13.3 years of life, and obese men smokers lost 13.7 years, compared with normal-weight nonsmokers. This loss of longevity can make a big economic difference because people who miss old age miss the high medical costs associated with it.

In the journal PLoS Medicine last month, Dutch researchers led by Pieter H.M. van Baal used mathematical modeling to compare the medical expenses (starting at age 20) of healthy people, obese people and non-obese smokers.

Up to age 56, an obese person's annual medical costs are higher than a smoker's, mostly because of problems that often come along with obesity, such as diabetes, arthritis and lower back pain. Healthy people have the lowest annual cost.

But over a lifetime, the researchers calculated, healthy people incur the most cost, followed by the obese and then smokers, who die the earliest.
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Re: How to protect against big medical bills?

Postby BL » Tue May 07, 2013 11:33 am

Medicare supplement type insurance is needed. Not sure if your state offers something or whether he is covered through your work. Federal law goes into effect next year.
Car liability and umbrella insurance for extra liability in case of alcohol-related auto accidents.
Does he have access to all of your investments or can you restrict them somewhat?
You may need some legal advice.
Best wishes on a difficult situation.
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Re: How to protect against big medical bills?

Postby frugaltype » Tue May 07, 2013 11:37 am

Congratulations, you have done a fine job so far, and it is very lucky that your husband lets you manage your finances.

Unlike another commenter, I see nothing wrong in trying to protect yourself financially from an irresponsible spouse.

As to the comments on prescription costs, I pay about $600 a month when I'm in the Medicare doughnut hole. Some of this stuff is very expensive and does not have alternatives. Does your husband qualify to have a Medicare Plan D? If so, I imagine that would cut your prescription costs spread over a year, and they will get lower in future years as the prices in the doughnut drop as they will be doing (can I say that?)

What about a Medigap policy? Does he qualify for that? (I don't know how Medicare for disability works.) If so, I would certainly get one, that would give you a lot of protection.

Perhaps a real financial person or attorney here can tell you how to separate your assets so some of them are yours and untouchable. I don't know if a spouse's assets can be gotten at if they are in just that person's name.
Last edited by frugaltype on Tue May 07, 2013 2:59 pm, edited 1 time in total.
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Re: How to protect against big medical bills?

Postby frugaltype » Tue May 07, 2013 2:58 pm

I just noticed that you said he has manic episodes. Is this despite being on medication? Perhaps the management of that has to be addressed.
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Re: How to protect against big medical bills?

Postby jeffyscott » Wed May 08, 2013 10:28 pm

frugaltype wrote:What about a Medigap policy? Does he qualify for that? (I don't know how Medicare for disability works.) If so, I would certainly get one, that would give you a lot of protection.


Another option could be a Medicare advantage plan, unlike traditional Medicare these have maximum out-of-pocket limits.
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Re: How to protect against big medical bills?

Postby DiscoBunny1979 » Wed May 08, 2013 11:28 pm

I"ll take a stab at this. . .

The issue isn't necessarily about medical care or insurance. The issue I read is that " I managed to save up about 1.5 million dollars and we are debt free. Our modest home as well as 2 new cars are all paid off." This issue becomes what is separate property versus what is joint property. I would imagine the OP needs to disclose where they live, and if in the United States, whether they live in a community property state or not. If the OP has earned all this money, was the majority of the money earned pre-marriage, or is all this money sitting somewhere jointly held? Are the cars in joint names? How is the home titled - joint tenants or tenants in common?

The prior poster commenting about divorce is not necessarily far off the mark. However, that could incur time in court to determine division of assets. Short of divorce, the ability to identify in a post nup what is community property versus joint is important - especially if sued for any reason. A post nup can also include who pays for what bills, who owns what with community earned wages, and how medical expenses or insurance will be paid/obtained. A post-nup is one of the ways to protect what's yours versus what's his.

After a post nup, I would suggest that a will and living trust probably are just as important. That's because in a situation whereas assets need to be protected, it would be important to determine the equity ownership in the house. For instance in California, where community property rights exist, if one is sued, but both are joint owners, the entire equity in the house is in jeopardy. To protect one spouse's interest in their 50% of the house, titling the property as tenants in common rather than joint tenants splits the ownership of the property 50/50 whereas only the interest in the property of the spouse being sued is at stake. The only thing that needs to be done is a will or living trust that dictates each other halves going to the person of their choice. This requires a different lawyer to represent the interests of each spouse. You both can not necessarily use the same lawyer as that would be a conflict of interest.

In terms of medical insurance or gap insurance or something else to protect assets . . . I would suggest that joining a Medicare Advantage plan would eliminate some problems depending upon the plan. Some of these Medicare Advantage plans also include a free yearly membership to a gym - what a deal. The real problem with old age, in my opinion, is not the paying of monthly prescription bills. That's probably a simple part. The difficult part is whether in the future custodial care is needed, especially if it's NOT after surgery or a hospital visit because medicare doesn't pay for custodial care services. That's probably the highest cost and where one's entire life savings could be in jeopardy. That's why in the beginning I suggest a plan in terms of post nup and evaluate who owns what.
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Re: How to protect against big medical bills?

Postby CaliJim » Wed May 08, 2013 11:31 pm

Do smokers and drinkers have larger or smaller medical bills over a lifetime than more healthy folks?

I read somewhere that people who die sooner rather than later actually spend less on medical and long term care than people who are long lived.
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Re: How to protect against big medical bills?

Postby pshonore » Thu May 09, 2013 8:35 am

DiscoBunny1979 wrote: The real problem with old age, in my opinion, is not the paying of monthly prescription bills. That's probably a simple part. The difficult part is whether in the future custodial care is needed, especially if it's NOT after surgery or a hospital visit because medicare doesn't pay for custodial care services. That's probably the highest cost and where one's entire life savings could be in jeopardy. That's why in the beginning I suggest a plan in terms of post nup and evaluate who owns what.
It doesn't always pay after a hospital stay either as this link points out. Hopefully that will change.
http://c-hit.org/2013/05/03/seniors-sue ... erage-gap/
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Re: How to protect against big medical bills?

Postby apk » Thu May 09, 2013 8:58 am

I think a Medicare Advantage cap is limited to Part A and Part B -- the medical costs. If the MA plan also covers prescription drugs, that part of the plan is unlimited. For example, if the cap is set at $4,500, that covers medical costs, not prescriptions. Prescription costs is open-ended.

You might try NeedyMeds.com. This is non-profit. It lists companies you can apply to for help paying for prescriptions.
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Re: How to protect against big medical bills?

Postby Grt2bOutdoors » Thu May 09, 2013 9:25 am

OP - the husband has "agreed" to let you manage the finances? May I suggest you look into obtaining a court-appointed "financial conservatorship and/or guardian with power of attorney rights" to manage the finances and to potentially "reverse" manic-driven spending sprees? I have relatives who've been through the wringer with these episodes, the quickest way to reverse the damage of buying ten cars (yes, 10 of them) and then parking them in various locations other than your residence is to have this legal document that allows you to reverse the damages and the dealership can not refuse the court order. This will involve getting a lawyer, but is still far cheaper option especially since it appears that husband has been medically diagnosed with condition and is under treatment for it. You know that manics agreements get thrown right out the window when they have lapses. If you don't have this type of legal arrangement, you really should look into it. Also, if you remain married, you should have a will and a special needs trust set up in case you predecease husband - otherwise husband potentially will be destitute in later life due to condition.
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Re: How to protect against big medical bills?

Postby mur44 » Thu May 09, 2013 9:45 am

Consider getting the best health insurance so that your Out-Of-Pocket (OOP)
is close to zero (0). You can do this by buying supplemental (Medigap) plan
for him as he is on SSD. You can purchase Medicare Part D plan.

Medicare gives good protection in terms of how much a provider can
charge for his/her services.
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Re: How to protect against big medical bills?

Postby johnep » Thu May 09, 2013 10:07 am

Unless medicare is different for disability it should cover most medical expenses. I have medicare A, B, D and Medigap plan F for my wife and it provides much greater coverage than my employer's spousal coverage which was very good. Even a major extended illness should not require that large of out of pocket expenses as I understand it. Also, I expect the impending national healthcare plan should provide good coverage. However I think you are wise to seek ways to protect your hard earned savings and investments. I am not too knowledgeable of trusts but surely there are trusts that can protect your assets in the event of astronomical medical expenses. Congratulations on what you have accomplished and best wishes.
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Re: How to protect against big medical bills?

Postby apk » Thu May 09, 2013 11:03 am

Check with your state SHIP office to find out which, if any, insurance companies offer Medigap policies to people under 65 and disabled. In Indiana, for example, effective June 1, 2013, no insurance company will offer Medigap policies to people under 65 and disabled. They will have to wait until age 65 to be eligible for a Medigap policy in Indiana.
mur44 wrote:Consider getting the best health insurance so that your Out-Of-Pocket (OOP)is close to zero (0). You can do this by buying supplemental (Medigap) planfor him as he is on SSD. You can purchase Medicare Part D plan.
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Re: How to protect against big medical bills?

Postby jeffyscott » Thu May 09, 2013 5:24 pm

apk wrote:I think a Medicare Advantage cap is limited to Part A and Part B -- the medical costs. If the MA plan also covers prescription drugs, that part of the plan is unlimited. For example, if the cap is set at $4,500, that covers medical costs, not prescriptions. Prescription costs is open-ended.


Well, sort of...

Once you've spent $4,700 out-of-pocket for the year, you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

http://www.medicare.gov/part-d/costs/ca ... erage.html
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Re: How to protect against big medical bills?

Postby nonnie » Thu May 09, 2013 9:24 pm

Grt2bOutdoors wrote:OP - the husband has "agreed" to let you manage the finances? May I suggest you look into obtaining a court-appointed "financial conservatorship and/or guardian with power of attorney rights" to manage the finances and to potentially "reverse" manic-driven spending sprees?


OP-- this is the best advice you will get--a financial conservatorship. It is frequently necessary for those with bi-polar disease that isn't or cannot be controlled. The next best advice is to see if you can get a Medigap policy for your spouse and Part D insurance to cover medications. There are several newer bi-polar medications that are not covered but if you shop carefully you may be able to fairly easily find a plan that covers generics at no cost-- lamictal, zyprexa, wellbutrin and many others. If your husband hasn't had a recent medical evaluation-- you most certainly will have to pay out of pocket as almost all prescribing psychiatrists are out of network--it's imperative that you do so. Bi-polar disease can be managed, it takes perseverence-- admittedly something that those suffering from BP disease might not have...
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Re: How to protect against big medical bills?

Postby staythecourse » Thu May 09, 2013 10:41 pm

I'm a physician so I will speak like one for a second.

Smoking and obesity are the two LEADING causes of PREVENTABLE causes of morbidity and mortality in America. In layman's terms that means the are the 2 leading causes that can be prevented that causes sickness and death.

As mentioned check to see if there are generic options for some of the meds. Not sure switching pysch. meds are such great idea though, but then again they can't be doing great if he is still on manic episodes.

One easy way to save money is to research if some of the TABLET meds he is on has higher doses so he can get the higher dose and break them in half. For ex: Instead of taking Lipitor 20mg each day get a 40mg tab and take a 1/2 tab per day. That move alone saves you 1/2 your money on those meds as the same med will last 2 months instead of 1 month.

Another option is get your meds from your home country. Get a good vacation and likely buy a years worth of meds for the same cost as 2 months of meds in the U.S.

Good luck.
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Re: How to protect against big medical bills?

Postby zebrafish » Fri May 10, 2013 12:32 am

So, after reading this thread, I have learned that the OP should stuff her spouse with Big Macs and encourage him to drink and smoke as much as possible to reduce the long term financial burden on herself and society.

:oops:
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Re: How to protect against big medical bills?

Postby frugaltype » Fri May 10, 2013 6:58 am

Medigap vs. Medicare Advantage plans:

This is what I think I know, I may be in error.

I looked at both and ruled out Medicare Advantage plans because I read that they cost the government (i.e. you and me) 17% more than Medigap plans for the same services. I understand that has dropped to 14% because of things associated with the new healthcare plan, and may drop further. I don't like doing business with crooks.

Also, and here I may particularly be wrong, I think some Medicare Advantage plans restrict the doctors you see to in network. My Medigap plan lets me see any doctor I want and so far has cost me zero in fees except premiums, so there doesn't seem to even be a network.

I have a Medigap Plan F, last year's annual premium about $1800. There are a number of Plans of various types. Here's a link to Plan F benefits:

https://www.aarpmedicareplans.com/onlin ... TD%20F.pdf

Roughly, I would start paying stuff after 365+60 days of hospitalization and 100 days of skilled nursing facility care. Before that, not a cent. (Prescriptions are different.)

As has been noted, Prescription coverage is in some Medicare Advantage plans. With Medigap if you want prescription coverage, you need to buy a Plan D. Here's what my Plan D says about costs:

"Once you and your Medicare Part D plan have collectively spent $2,970 in 2013 on prescription drugs, you fall into the “coverage gap.” During the coverage gap, you will pay no more 79% of the total cost for generic drugs or 47.5% of the total cost for brand name drugs, for any drug tier until the total amount you have paid reaches $4,750 in year-to-date out-of-pocket costs. After reaching your out-of-pocket limit, you leave the gap and enter the catastrophic coverage stage. You pay a small copay or coinsurance and your prescription drug plan pays the remainder of the costs for each covered prescription drug until the end of the year with no limit."

Here's an example. I take an expensive generic med. Cost last year to me for it before the coverage gap, in the coverage gap, in catastrophic coverage: $44, $314, $18. Costs for meds vary also by what "tier" they're in. Here are the numbers for a cheap med I take: $8, $9, $2. These are rounded numbers. The annual premium for my Plan D is about $400.
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Re: How to protect against big medical bills?

Postby Dr. Gaius Baltar » Fri May 10, 2013 10:59 am

As others have mentioned, for your spouse, get supplemental health insurance. Original Medicare, Parts A and B, cover approximately 80% of all health care costs, but have no cap, and don't cover prescription drugs. The best route would be to get a Medigap policy, as Medigap policies are more comprehensive than Medicare Advantage. You'd need to find a company that sells them to people who are under 65 (disabled). If you can't get Medigap, get Medicare Advantage from an insurer with a broad network of providers, such as Blue Cross Blue Shield (I don't know if they offer MA plans) which includes out of network coverage. HMOs do not include out of network coverage. If you're getting Medigap, get a Part D prescription drug insurance policy as well. If you're getting a Medicare Advantage plan, get one that has a Part D plan built in.

Do the same for yourself, make sure that you have a comprehensive health insurance policy from an insurer with a large network of providers, and that it includes out of network coverage. In my opinion, the larger the network of providers (particularly hospitals), the safer you are against health care costs that aren't covered by insurance.

The article that you read a few months ago was talking about chargemaster rates which are charged by hospitals. These chargemaster rates apply to people who have no health insurance, or for whom their health insurer has denied their claim. You can find your local hospital's chargemaster rates here. If you are very worried about being charged the chargemaster rates, move to Maryland, where chargemasters do not exist, and all hospital rates are set by a rate-setting commission. Hospital rates in Maryland are the lowest in the country, and if you have no health insurance or if your health insurance has denied your claim for whatever reason, then the hospital will only charge you what Medicare would have paid, which is much much more reasonable (for instance, for a code 292, heart failure, an average of $9453 at Maryland hospitals, whereas in other states there is a huge variation, up to $100,000 in the rarest of circumstances). In all likelihood, however, if you have quality health insurance, you will never encounter a situation where you go to the hospital for an expensive treatment, and then find out that your health insurance has declined to pay, and can't be made to pay. Such things do happen, but I don't think it's the sort of thing that necessitates you going way out of your way to guard against it. If you have quality insurance, then you're likely already doing everything within reason. In my opinion, "quality health insurance" means Blue Cross Blue Shield or one of their regional affiliates (I think they have the largest network of providers), and a POS (Point of Service) or PPO (Preferred Provider Organization) health insurance plan, because unlike HMOs, they provide out of network coverage.

Since your spouse is on Medicare, he will not be subject to any ridiculously high chargemaster rates, likely under any circumstances. Unless he gets on Medicare Advantage in an HMO with a small provider network, that is.

Oh, also, we don't know which health insurance companies are most likely to deny a claim, because they don't release that information except in Vermont. It's considered a trade secret.
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Re: How to protect against big medical bills?

Postby nonnie » Fri May 10, 2013 2:04 pm

The one caveat if her spouse is under 65 (SS Disability) is that not all states sell Medigap policies to those under 65--there was a recent thread on this where a state only sold Medicare Advantage- and that in those that do, the policies can be much more expensive that the cost of a policy at 65. But-- if her state has Medigap policies, that's the way to go.

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Re: How to protect against big medical bills?

Postby Epsilon Delta » Fri May 10, 2013 2:38 pm

If I understand correctly the OP is employed and may have health insurance through her employer. It's worth checking how this interacts with her husband's medicare. When I checked mine a few years ago when my spouse or I became medicare eligible my employers health insurance would function as a medigap policy.
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Re: How to protect against big medical bills?

Postby nonnie » Fri May 10, 2013 3:28 pm

tomd37 wrote:Speaking of Costco pharmacy prices, I have a neighbor whose spouse requires a lot of expensive prescription for her ongoing medical condition. He tells me that Costco has a "price point" at which some of their prices go down. For example, with a price point prescribed quantity of 100 the pricing is less than what it would be for a quantity of 90. Worth checking about.


30 Abilify ( an anti-psychotic RXd for bi-polar) tablets--a one month supply-- can cost up to $1,060.00 at Costco. Very few insurance companies cover this. I have a friend whose teenage son takes it and they pay $800 per month. The newer-- and in this category, most often better-- psychotropic medications are almost never covered by insurance companies and if they are (through exceptions and fighting for it) you're at a 50% or more of cost co-pay.
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Re: How to protect against big medical bills?

Postby jeffyscott » Fri May 10, 2013 6:00 pm

frugaltype wrote:Medigap vs. Medicare Advantage plans:

This is what I think I know, I may be in error.

I looked at both and ruled out Medicare Advantage plans because I read that they cost the government (i.e. you and me) 17% more than Medigap plans for the same services. I understand that has dropped to 14% because of things associated with the new healthcare plan, and may drop further.


No, you are comparing the wrong things, the government does not pay anything toward a supplement. On average, the advantage plans cost the government more than traditional Medicare.
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Re: How to protect against big medical bills?

Postby dm200 » Fri May 10, 2013 6:21 pm

1. Based on my first-hand experience with my Medicare Advantage Plan, I do have the prescription coverage as part of the plan and (as best I read the plan documents) -my benefits would be very good one I pass through the "donut hole" - should I need expensive prescriptions. I suggest investigating MA plans to see what is available in your area and how this would or would not fits your needs and risk toleration.

2. I did not see anything in your post (may have missed it) about whether your husband qualifies or has any coverage under anything you may have for health benefits. I would be VERY careful that you do not fill out any coordination of benefits questionnaire (for him) incorrectly.

3. I wonder if your biggest health-related risk is Long term care (for him). Medicare does not cover it and I doubt (not sure, consult an elder law attorney) he may not easily be eligible for Medicaid. With his health "issues" and risks, he may not qualify for LTC insurance - but check anyway. Consult an elder law attorney to see what can be done to shield/protect you from his long term care (not covered by Medicare) from sucking away all your assets.

4. Consult an attorney experienced in family law to see what steps you might take to protect your income, assets, retirement benefits and plans, etc. in case he files for divorce and goes after anything and everything you have worked so hard for. Do NOT assume this can not happen. Your considerable income and assets are a large target for some "enterprising" ambulance-chasing attorney looking for a big fee for taking things away from you. I believe "prevention" of this may be much more cost-effective than fighting a case.

5. This might be a situation for some kind of "special needs trust", but that is a question for an elder law attorney.

I wish you well in this difficult situation.
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Re: How to protect against big medical bills?

Postby frugaltype » Sat May 11, 2013 9:18 am

nonnie wrote:30 Abilify ( an anti-psychotic RXd for bi-polar) tablets--a one month supply-- can cost up to $1,060.00 at Costco. Very few insurance companies cover this. I have a friend whose teenage son takes it and they pay $800 per month. The newer-- and in this category, most often better-- psychotropic medications are almost never covered by insurance companies and if they are (through exceptions and fighting for it) you're at a 50% or more of cost co-pay.


I grubbed thru info to find that my AARP Plan D covers it at $95.0, $435.19, $45.81 for the three sections of first, donut hole, catastrophic.
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Re: How to protect against big medical bills?

Postby 2stepsbehind » Sat May 11, 2013 10:07 am

On legal aspects, OP you should find out if your state recognizes the doctrine of necessaries. If so, no matter how you title the accounts you likely will be responsible for any medical bills.
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Re: How to protect against big medical bills?

Postby apk » Sat May 11, 2013 12:10 pm

jeffyscott wrote:
apk wrote:I think a Medicare Advantage cap is limited to Part A and Part B -- the medical costs. If the MA plan also covers prescription drugs, that part of the plan is unlimited. For example, if the cap is set at $4,500, that covers medical costs, not prescriptions. Prescription costs is open-ended.


Well, sort of...

Once you've spent $4,700 out-of-pocket for the year, you're out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get "catastrophic coverage." It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

http://www.medicare.gov/part-d/costs/ca ... erage.html


I'm probably doing a poor job in communicating. Here is an example of what I mean: The MA plan has an out of pocket maximum of $4,500. This maximum is for medical (Part A and Part B) only. The Part D (drug coverage) is open-ended. There is no maximum. In this example, let's assume you spend $2,000 on medical care and $4,700 on drugs. Your total cost for the year would be $6,700 ($2,000 plus $4,700).

Of course, this does not include the MA premiums for medical and drugs. That would add to your out of pocket cost.
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Re: How to protect against big medical bills?

Postby dm200 » Sat May 11, 2013 12:43 pm

As an example of actual MA costs, my MA plan has a maximum cost to me for part A and B coverage in 2013 of $3,400. I pay no added premiums to the MA provider - just the normal part B deduction of about $100 per month from SS retirement.
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Re: How to protect against big medical bills?

Postby jeffyscott » Sat May 11, 2013 12:49 pm

No, I understand the limits are separate and the drug part technically has no limit on your costs. I just meant the drug co-pays become pretty minimal at the catastrophic stage, so there is almost a cap on that part. For example in my area the AARP-UHC complete plan covers both drugs and medical with no extra premium and if you get to the catastrophic stage the drug co-pays are $2.65, $6.60, or 5%.

The medical has max out of pocket of $4450 and the drugs have that a sort of max of $4700, so your combined maximum cost is sort of $9150 plus the $103 or whatever the standard medicare premium is (with only the additional small drug co-pays after that).

Medicare, without a supplement, is truly open ended, you pay 20% for most medical costs, without limit. Also, if I understand correctly, a supplement would still leave you with the technically open-ended drug costs.
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Re: How to protect against big medical bills?

Postby nonnie » Sat May 11, 2013 2:08 pm

frugaltype wrote:
nonnie wrote:30 Abilify ( an anti-psychotic RXd for bi-polar) tablets--a one month supply-- can cost up to $1,060.00 at Costco. Very few insurance companies cover this. I have a friend whose teenage son takes it and they pay $800 per month. The newer-- and in this category, most often better-- psychotropic medications are almost never covered by insurance companies and if they are (through exceptions and fighting for it) you're at a 50% or more of cost co-pay.


I grubbed thru info to find that my AARP Plan D covers it at $95.0, $435.19, $45.81 for the three sections of first, donut hole, catastrophic.


I don't take the drug but inspired by your "grubbing thru" :happy I checked CVS Caremark Part D --$30/month premium-and it's $300 a month. I didn't go on to donut hole, etc. Wellcare Part D--approx $50 mo. premium- requires prior authorization and it's a Tier 3 med covered at 25%-- their incredibly unsophisticated website does not let one price meds as far as I can find out.

Please do note that AARP requires *step therapy* for this medication which mandates you try-- and fail-- with other, cheaper drugs first-- not an ideal situation for someone with severe mental health problems.

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Re: How to protect against big medical bills?

Postby apk » Sun May 12, 2013 10:18 am

jeffyscott wrote:No, I understand the limits are separate and the drug part technically has no limit on your costs. I just meant the drug co-pays become pretty minimal at the catastrophic stage, so there is almost a cap on that part. For example in my area the AARP-UHC complete plan covers both drugs and medical with no extra premium and if you get to the catastrophic stage the drug co-pays are $2.65, $6.60, or 5%.

The medical has max out of pocket of $4450 and the drugs have that a sort of max of $4700, so your combined maximum cost is sort of $9150 plus the $103 or whatever the standard medicare premium is (with only the additional small drug co-pays after that).

Medicare, without a supplement, is truly open ended, you pay 20% for most medical costs, without limit. Also, if I understand correctly, a supplement would still leave you with the technically open-ended drug costs.


Your logic makes perfect sense to me. Recently though I experienced a situation in which the drug cost for someone I was trying to help exceeded 10K. She has a MA plan with drug coverage. I spoke with an agent for that MA company. He worked the numbers for her plan and concluded that her cost for drugs would exceed 10K for the year. Most of this cost was for two drugs not covered under the plan's formulary. Both drugs are very expensive.

I then went to the Medicare Plan Finder so see if any of this company's Part D plans were less. They weren't. Each of this company's Part D plans excluded these two drugs from the formulary. All of this company's Part D plans showed the customer share was around 10K. I then looked at some other Part D options for this person. The first three plans that came up all covered all of the drugs needed. Each of these three plans projected an annual cost of around 5K.

I'm guessing, but maybe there is a loophole for drugs not in a plan's formulary? Maybe the customer keeps paying the full cost regardless of the payment stage she is in? I don't know. But if I ever come across this situation again, I will ask the MA agent about it. It certainly seems strange.
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Re: How to protect against big medical bills?

Postby jeffyscott » Sun May 12, 2013 11:04 am

I would assume that if the drug is not in their formulary it is not covered at all, the insurance would pay nothing and it would not count toward any maximums. Sounds like that is more or less the case:

Non-formulary drugs also do not count toward the "true out-of-pocket" ("TrOOP") amount required to get out of the Donut Hole, unless approved by exception or appeal. The obstacles to obtaining non-formulary drugs emphasize the importance of choosing a plan with a formulary compatible with the individual’s needs.

http://www.medicareadvocacy.org/medicar ... d/#covered drugs
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Re: How to protect against big medical bills?

Postby dm200 » Sun May 12, 2013 11:28 am

jeffyscott wrote:I would assume that if the drug is not in their formulary it is not covered at all, the insurance would pay nothing and it would not count toward any maximums. Sounds like that is more or less the case:

Non-formulary drugs also do not count toward the "true out-of-pocket" ("TrOOP") amount required to get out of the Donut Hole, unless approved by exception or appeal. The obstacles to obtaining non-formulary drugs emphasize the importance of choosing a plan with a formulary compatible with the individual’s needs.

http://www.medicareadvocacy.org/medicar ... d/#covered drugs


My MA plan has a formulary, but (if I read the fine print correctly) other drugs might be allowed/paid for if you were on one when you enrolled (for a while anyway) or some other kinds of exceptions. My only experience was for a blood pressure medication my previous doctor had prescribed, and was refilled several times when I moved to a MA plan (different doctors), but at a visit the doctor noted that was not in the formulary and would have to be changed (at some point). This was no big deal, since it probably should not have been prescribed for Blood Pressure anyway. I think (based on this experience) that some drugs might be in the formulary, BUT can not be prescribed for certain conditions.
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