Self insure vs Medigap when on "traditional" Medicare

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dm200
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Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Sun Aug 27, 2017 9:02 am

It is very common here to see many recommendations to "self insure" for many kinds of risks and potential expenses. Maybe I have missed them, but I don't recall seeing such recommendations to "self insure" for expenses not covered by regular Medicare vs. purchasing a Medigap supplement.

Wouldn't choosing to "self insure" make a lot of sense for many folks to consider? or am I missing something?

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dodecahedron
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dodecahedron » Sun Aug 27, 2017 9:14 am

The problem with complete self insurance is that although traditional Medicare covers 80% of most conventional medical costs there is no out of pocket maximum, so some form of coverage is needed for catastrophic expenses.

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Munir
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Munir » Sun Aug 27, 2017 9:19 am

For older individuals, unless VERY wealthy, the costs of medical care over and above what traditional Medicare covers could be extremely high. I am referring to hospitalization costs- even for minor surgeries or ailments. As an older retired physician who has experienced these costs first hand, I strongly advise a Medigap policy or a Medicare Advantage plan.

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Uncle Pennybags
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Uncle Pennybags » Sun Aug 27, 2017 9:28 am

Self insuring auto collision is OK as there is a limit to one's loss. Medical expenses that are unlimited are another matter. One would also have to invest the self insured premiums and never touch it except for the tax on returns. The time to set up a self insured account is when one is young and healthy not when one is old and sick. How old are you?

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by plannerman » Sun Aug 27, 2017 9:52 am

We have high deductible Medigap plans. So we self insure for out of pocket costs of up to $2200 each per year. These seems like a more rational solution than self insuring for unlimited medical expenses.

plannerman

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dbr » Sun Aug 27, 2017 9:53 am

My personal opinion is that self insuring Medigap coverage would be insane. High wealth would not be a justification because at enough wealth to reasonably self insure Medigap premiums become non-consequential.

I suppose the range of premium in Medigap is possibly somewhere between a few tens of dollars per person per month and a few hundreds of dollars per person per month. There will be retirees at spending levels for whom a question of $500 a year vice $5000 a year will take some study and selection. A person hard pressed to afford the most minimum coverage might be someone who can least afford to pass it up.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Gill » Sun Aug 27, 2017 9:56 am

plannerman wrote:
Sun Aug 27, 2017 9:52 am
We have high deductible Medigap plans. So we self insure for out of pocket costs of up to $2200 each per year. These seems like a more rational solution than self insuring for unlimited medical expenses.

plannerman
Agree. We have the Plan F high deductible at a total cost for two of about $2,300. It is a form of self insurance with plenty of coverage for catastrophic losses.
Gill

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Uncle Pennybags
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Uncle Pennybags » Sun Aug 27, 2017 10:19 am

Gill wrote:
Sun Aug 27, 2017 9:56 am
Agree. We have the Plan F high deductible at a total cost for two of about $2,300. It is a form of self insurance with plenty of coverage for catastrophic losses.
Self insuring can work if there is a known limit on one's loss and one invests the self insured premiums and only use them for medical expenses. My former employer self insured everything so it makes sense for some. They are a DOW stock though and an individual wouldn't have the economy of scale to make it work.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by seine » Sun Aug 27, 2017 10:21 am

Here is an article I read that convinced me to take traditional medicare and self insure for what medigap would cover.

http://www.huffingtonpost.com/david-bel ... 01861.html

I have been on Medicare for a year now and had a fair amount of medical bills, I do not regret self-insuring. Only when you self insure do you start to really understand the Medicare billing. I see these large bills, only to be processed and paid by Medicare at a much lower rate sometime 80% less. And my only responsibility is to pay the small remainder of the Medicare 20% co-insurance.

An example: I had hernia surgery at Northwestern Memorial in Chicago December 2016. Surgeon bill $5,000, my copay after Medicare $182. Hospital facility charge $17,087 my copay was $533. CRNA and other medical persons during surgery $1,812 my copay was $47.
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Watty » Sun Aug 27, 2017 10:24 am

Gill wrote:
Sun Aug 27, 2017 9:56 am
plannerman wrote:
Sun Aug 27, 2017 9:52 am
We have high deductible Medigap plans. So we self insure for out of pocket costs of up to $2200 each per year. These seems like a more rational solution than self insuring for unlimited medical expenses.

plannerman
Agree. We have the Plan F high deductible at a total cost for two of about $2,300. It is a form of self insurance with plenty of coverage for catastrophic losses.
Gill
+1

In addition to the high deductible plans there are about ten different Medigap plans so you also have the option of buying one of the other plans that covers little other than the hospital costs.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by delamer » Sun Aug 27, 2017 10:27 am

Uncle Pennybags wrote:
Sun Aug 27, 2017 10:19 am
Gill wrote:
Sun Aug 27, 2017 9:56 am
Agree. We have the Plan F high deductible at a total cost for two of about $2,300. It is a form of self insurance with plenty of coverage for catastrophic losses.
Self insuring can work if there is a known limit on one's loss and one invests the self insured premiums and only use them for medical expenses. My former employer self insured everything so it makes sense for some. They are a DOW stock though and an individual wouldn't have the economy of scale to make it work.
Even those employers have stop-loss coverage for catastrophic medical claims, just like individuals should.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by kaneohe » Sun Aug 27, 2017 11:16 am

seine wrote:
Sun Aug 27, 2017 10:21 am
Here is an article I read that convinced me to take traditional medicare and self insure for what medigap would cover.

http://www.huffingtonpost.com/david-bel ... 01861.html

I have been on Medicare for a year now and had a fair amount of medical bills, I do not regret self-insuring. Only when you self insure do you start to really understand the Medicare billing. I see these large bills, only to be processed and paid by Medicare at a much lower rate sometime 80% less. And my only responsibility is to pay the small remainder of the Medicare 20% co-insurance.

An example: I had hernia surgery at Northwestern Memorial in Chicago December 2016. Surgeon bill $5,000, my copay after Medicare $182. Hospital facility charge $17,087 my copay was $533. CRNA and other medical persons during surgery $1,812 my copay was $47.
Better hope you never get a "real" disease where each treatment can cost 30K (yes, that will be written down by 50% by Medicare) , you get 6-8
treatments/round , and get multiple rounds of treatment each yr. Even just 20% gets to be a serious number. I'm sure I could understand Medicare billing if I spent more time but I don't care because Medicare covers it or the supplement does.

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Uncle Pennybags
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Uncle Pennybags » Sun Aug 27, 2017 11:34 am

delamer wrote:
Sun Aug 27, 2017 10:27 am
Even those employers have stop-loss coverage for catastrophic medical claims, just like individuals should.
I don't recall them having an "umbrella" policy. At on time they operated the largest fleet and employed the most people in the US of A. They were bigger than any insurer. They were catastrophe immune.
http://techchannel.att.com/play-video.c ... ond-avenue

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dm200
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Sun Aug 27, 2017 11:48 am

Medicare Advantage and Medicare Cost plans seem to cap the upside risks with annual "out of pocket" limits if either of those type plans work (in your area and circumstances).

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by jebmke » Sun Aug 27, 2017 12:00 pm

dbr wrote:
Sun Aug 27, 2017 9:53 am
A person hard pressed to afford the most minimum coverage might be someone who can least afford to pass it up.
I see plenty of low income tax clients at our Taxaide sites who have no supplemental coverage. It is quite common.
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dbr » Sun Aug 27, 2017 12:28 pm

jebmke wrote:
Sun Aug 27, 2017 12:00 pm
dbr wrote:
Sun Aug 27, 2017 9:53 am
A person hard pressed to afford the most minimum coverage might be someone who can least afford to pass it up.
I see plenty of low income tax clients at our Taxaide sites who have no supplemental coverage. It is quite common.
I don't doubt that. Simply not having the money is a pretty good reason to not have something. The question would be what price is being paid for this. It could well be that in the elderly age group, aka those over age 65 and not currently employed with health coverage, that low income individuals have other recourse to what Medigap would cover. One example would be Medical Assistance whether in or out of a care facility.

I am not sure the OP meant to consider those who are "self insured" by necessity rather than by choice.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Uncle Pennybags » Sun Aug 27, 2017 12:34 pm

dbr wrote:
Sun Aug 27, 2017 12:28 pm
Simply not having the money is a pretty good reason to not have something.
True low income people don't worry about health care they have Medicaid.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Abe » Sun Aug 27, 2017 1:14 pm

I have an acquaintance who does not have any assets and does not have any insurance. He has had a lot of medical bills in the last few years. He told me I should drop my insurance because the doctors and hospital will let him just pay a trivial amount each month on his medical bills. I told him that was because he doesn't have anything. That would not work for me because if you have any assets, they will get it. I have Plan F high deductible which has a cap on how much I have to pay out of pocket. My premium is $45.50 per month. Even though I have a fairly high net worth, it's worth it to me to know I have a cap on my medical expenses.
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by clydewolf » Sun Aug 27, 2017 2:27 pm

dm200 wrote:
Sun Aug 27, 2017 11:48 am
Medicare Advantage and Medicare Cost plans seem to cap the upside risks with annual "out of pocket" limits if either of those type plans work (in your area and circumstances).
+1

Some Medicare Advantage plans have no premium beyond the Medicare B premium.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by curmudgeon » Sun Aug 27, 2017 3:24 pm

dm200 wrote:
Sun Aug 27, 2017 9:02 am
It is very common here to see many recommendations to "self insure" for many kinds of risks and potential expenses. Maybe I have missed them, but I don't recall seeing such recommendations to "self insure" for expenses not covered by regular Medicare vs. purchasing a Medigap supplement.

Wouldn't choosing to "self insure" make a lot of sense for many folks to consider? or am I missing something?
I have considered going without a supplement when we hit Medicare age, but the lack of coverage when traveling overseas is an issue for us. Yes, we could buy travel insurance, but I think I would rather go with some form of high-deductible medigap plan.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by GerryL » Sun Aug 27, 2017 4:21 pm

Gill wrote:
Sun Aug 27, 2017 9:56 am
plannerman wrote:
Sun Aug 27, 2017 9:52 am
We have high deductible Medigap plans. So we self insure for out of pocket costs of up to $2200 each per year. These seems like a more rational solution than self insuring for unlimited medical expenses.

plannerman
Agree. We have the Plan F high deductible at a total cost for two of about $2,300. It is a form of self insurance with plenty of coverage for catastrophic losses.
Gill
Ditto. I pay less than $30 a month for an F-HD plan. I estimated that since I rarely have a lot of healthcare bills, I would come out ahead most years. 20% may not seem like a lot, but the question is "20% of what?"

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Artful Dodger » Sun Aug 27, 2017 4:45 pm

curmudgeon wrote:
Sun Aug 27, 2017 3:24 pm
dm200 wrote:
Sun Aug 27, 2017 9:02 am
It is very common here to see many recommendations to "self insure" for many kinds of risks and potential expenses. Maybe I have missed them, but I don't recall seeing such recommendations to "self insure" for expenses not covered by regular Medicare vs. purchasing a Medigap supplement.

Wouldn't choosing to "self insure" make a lot of sense for many folks to consider? or am I missing something?
I have considered going without a supplement when we hit Medicare age, but the lack of coverage when traveling overseas is an issue for us. Yes, we could buy travel insurance, but I think I would rather go with some form of high-deductible medigap plan.
As noted in previous posts, it makes more sense if you want to self-fund, then protect yourself from the truly catastrophic costs. Medicare only covers 60 days in the hospital in full after the $1316 deductible, then you are responsible for a $329 daily copay for 30 days. At day 91, you start to use your 60 lifetime reserve days and are responsible for a $658 daily copay. After that Medicare is done, and you're on your own. A traditional Plan F supplement will cover the $329 and $658 daily copays, and pay 100% of the next 365 days. The high deductible plan F makes you responsible for the first $2200 of Part A & B deductibles and coinsurance, but after that covers the balance of your traditional Medicare costs. In my state, the high deductible plan F is about 1/3 the cost of the full plan F. A 67 year old full plan F premium is $171/month; high deductible plan F is $56/month.

Both plans cover foreign travel emergency at 80% after a $250 deductible to a maximum $50,000.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by mouses » Sun Aug 27, 2017 5:09 pm

Uncle Pennybags wrote:
Sun Aug 27, 2017 12:34 pm
dbr wrote:
Sun Aug 27, 2017 12:28 pm
Simply not having the money is a pretty good reason to not have something.
True low income people don't worry about health care they have Medicaid.
I don't think this is necessarily correct. I have not been following the ACA debate in detail, but I have certainly read about states that have not expanded Medicaid and leave many thousands of people uncovered. Maybe they are the upper financial layer of the poor and so fall into some gap, but nevertheless.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 4:35 am

It is very common here to see many recommendations to "self insure" for many kinds of risks and potential expenses. Maybe I have missed them, but I don't recall seeing such recommendations to "self insure" for expenses not covered by regular Medicare vs. purchasing a Medigap supplement. Wouldn't choosing to "self insure" make a lot of sense for many folks to consider? or am I missing something?
The risk is too high. There is no upper limit in financial exposure with Original Medicare Parts A and B. A has lifetime and per-incident limits. Part B has a so-called 20% co-pay which can add up to tens of thousands of dollars.

Readers should also remember that purchasing a private Medigap supplement is the least popular way of purchasing a Medicare supplement. About a third of us have group retirement insurance through a union or former employer that acts as a Medicare supplement (although that percent is decreasing). Another third choose a public Part C health plan (and that percent is increasing). Only about 20% of those on Medicare use private individually selected and purchased Medigap policies. Typically, with these two more popular choices there is an annual out of pocket upper spending limit, unlike with Original Medicare and most private Medigap policies. That's what makes the first two choices more popular.

To round out the numbers, simplistically the remaining 14% "supplement" Medicare via Medicaid or the VA. People still working after 65 (an increasingly larger but still small percent) get no supplement because their employer sponsored insurance acts as a supplement. Also note that many former employers and unions have given up on regular group retiree insurance and are forcing their beneficiaries to take a Part C plan or a private supplement through what some call a voucher. Therefore some of these percents overlap.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 5:00 am

jebmke wrote:
I see plenty of low income tax clients at our Taxaide sites who have no supplemental coverage. It is quite common.
I am not doubting your personal experience but a person on Medicare having "no supplemental coverage" is not "quite common." Less than 2% of the people on Original Medicare Parts A and B have no other type of financial protection.

About a third of us have private group retirement insurance through a union or former employer that acts as a Medicare supplement (although that percent is decreasing). Another third choose a public Part C health plan and have no need for (and cannot buy a supplement (and that percent is increasing). About 20% of those on Medicare use private individually selected and purchased Medigap policies. To round out the numbers, simplistically the remaining 14% "supplement" Medicare via Medicaid or the VA. People still working after 65 (an increasingly larger but still small percent) get no supplement because their employer sponsored insurance acts as a supplement. (Also note that many former employers and unions have given up on regular group retiree insurance and are forcing their beneficiaries to take a Part C plan or a private supplement through what some call a voucher. Therefore some of these percents overlap.)

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 5:05 am

curmudgeon wrote:
I have considered going without a supplement when we hit Medicare age, but the lack of coverage when traveling overseas is an issue for us. Yes, we could buy travel insurance, but I think I would rather go with some form of high-deductible medigap plan
.

Not all private Medigap insurance includes protection for "overseas" travel. It is typically just a rider on top of one of the 10 Medigap plan templates where available.

Also note that when it comes to the problems of Medicare relative to coverage outside the United States, "overseas" has nothing to do with it. Medicare is no more helpful two feet over the peace bridge in Niagara Falls or at the leather kiosk in Tijuana than it is in Timbuktu.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dbr » Mon Aug 28, 2017 8:38 am

curmudgeon wrote:
Sun Aug 27, 2017 3:24 pm

I have considered going without a supplement when we hit Medicare age, but the lack of coverage when traveling overseas is an issue for us. Yes, we could buy travel insurance, but I think I would rather go with some form of high-deductible medigap plan.
I could be wrong but I don't think any Medigap plan covers medical evacuation back to the US. Routinely avoiding travel insurance may not be a good idea. There are other benefits to travel insurance as well.

The whole philosophy of trying to cost cut insurance of all kinds to the bare minimum seems strange to me, especially on a forum where so much of the conversation is really mainly about taking risk out of one's financial life.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 9:23 am

clydewolf wrote:
Sun Aug 27, 2017 2:27 pm
dm200 wrote:
Sun Aug 27, 2017 11:48 am
Medicare Advantage and Medicare Cost plans seem to cap the upside risks with annual "out of pocket" limits if either of those type plans work (in your area and circumstances).
+1
Some Medicare Advantage plans have no premium beyond the Medicare B premium.
Yes. Some also have additional benefits beyond traditional Medicare as well.

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dm200
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 9:25 am

About a third of us have group retirement insurance through a union or former employer that acts as a Medicare supplement (although that percent is decreasing).
decreasing rapidly, in my opinion.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by pshonore » Mon Aug 28, 2017 9:28 am

dm200 wrote:
Mon Aug 28, 2017 9:23 am
clydewolf wrote:
Sun Aug 27, 2017 2:27 pm
dm200 wrote:
Sun Aug 27, 2017 11:48 am
Medicare Advantage and Medicare Cost plans seem to cap the upside risks with annual "out of pocket" limits if either of those type plans work (in your area and circumstances).
+1
Some Medicare Advantage plans have no premium beyond the Medicare B premium.
Yes. Some also have additional benefits beyond traditional Medicare as well.
And some also have their own set of deductibles, copays and OOPs. Generally the lower the premium, the higher the copays and deductibles.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 9:44 am

dm200 wrote
"clydewolf wrote: ↑
Sun Aug 27, 2017 2:27 pm

dm200 wrote: ↑
Sun Aug 27, 2017 11:48 am
Medicare Advantage and Medicare Cost plans seem to cap the upside risks with annual "out of pocket" limits if either of those type plans work (in your area and circumstances).

+1
Some Medicare Advantage plans have no premium beyond the Medicare B premium.

Yes. Some also have additional benefits beyond traditional Medicare as well."
ALL public Part C Medicare health plans, of which Medicare Advantage is the most common type, have an "additional benefit beyond traditional Medicare." All have at a minimum an annual cap on out of pocket spending. Original Medicare has no such cap and even with most private Medigap insurance, there is no such cap. In my state (Massachusetts) a person who wants Medigap can not even buy a Medigap plan with out of pocket cap on spending (understanding that that the most expensive full blown Medigap plan sort of almost effectively provides such a cap).

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dm200
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 9:48 am

ALL public Part C Medicare health plans, of which Medicare Advantage is the most common type, have an "additional benefit beyond traditional Medicare." All have at a minimum an annual cap on out of pocket spending. Original Medicare has no such cap and even with most private Medigap insurance, there is no such cap. In my state (Massachusetts) a person who wants Medigap can not even buy a Medigap plan with out of pocket cap on spending (understanding that that the most expensive full blown Medigap plan sort of almost effectively provides such a cap).
From plan descriptions, current caps on out of pocket are often in the $5,000 - $6,000 per year range.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 9:52 am

dm200 wrote in response to an earlier comment by me:
About a third of us have group retirement insurance through a union or former employer that acts as a Medicare supplement (although that percent is decreasing).

decreasing rapidly, in my opinion.
I agree, dm200, but I just do not have a source and the statistics are getting quite hard to follow because some retirement groups now "force" their members into special public Part C plans called 'Eggwipes' (employee group something plan--maybe it's 'egg whip') so some people are counted twice -- as having retiree insurance and as having Part C insurance.

In general every other category except Medicaid must be decreasing because we know the choice of public Part C plans has gone from almost zero percent of beneficiaries in 1997, when Part C formally was signed into law by President Clinton, to almost 35% now, a generation later.
Last edited by dennisbyron on Mon Aug 28, 2017 9:55 am, edited 1 time in total.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by BolderBoy » Mon Aug 28, 2017 9:54 am

dennisbyron wrote:
Mon Aug 28, 2017 5:00 am
jebmke wrote:
I see plenty of low income tax clients at our Taxaide sites who have no supplemental coverage. It is quite common.
I am not doubting your personal experience but a person on Medicare having "no supplemental coverage" is not "quite common." Less than 2% of the people on Original Medicare Parts A and B have no other type of financial protection.
I agree with this. When I was working and doing my own billing I saw exactly ONE medicare patient (out of 800) in one year who had no supplement of some kind (many had Medicaid as the supplement) and he was wealthy so self-insured the co-pay. This was typical of what I saw over 10 years in that practice.

Going bare for the copay is pretty unusual.
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Re: Self insure vs Medigap when on "traditional" Medicare

Post by BHUser27 » Mon Aug 28, 2017 10:43 am

I am keenly interested in this thread, as DW will start medicare next year.

From my research and reading this thread, I believe the following are correct:

1) Medigap K and L are the only supplemental plans with an annual OOP limit/cap.
2) *Most* Medicare Part-C plans (i.e. "Advantage", "Cost", "MSA") have an annual OOP limit/cap.
3) Original Medicare "Part A+B" by itself, and/or "A+B+(any non-K/L supplement)" would *not* have an annual OOP limit/cap.

Is this^^^ correct?
Thanks.

PS: *If* an MSA is available in one's state, might it be a good way to add an OOP cap for a lower monthly premium (than full Advantage/Cost plans) as alternative to self insuring?
Last edited by BHUser27 on Mon Aug 28, 2017 11:01 am, edited 1 time in total.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 11:01 am

dennisbyron wrote:
Mon Aug 28, 2017 9:52 am
dm200 wrote in response to an earlier comment by me:
About a third of us have group retirement insurance through a union or former employer that acts as a Medicare supplement (although that percent is decreasing).
decreasing rapidly, in my opinion.
I agree, dm200, but I just do not have a source and the statistics are getting quite hard to follow because some retirement groups now "force" their members into special public Part C plans called 'Eggwipes' (employee group something plan--maybe it's 'egg whip') so some people are counted twice -- as having retiree insurance and as having Part C insurance.
In general every other category except Medicaid must be decreasing because we know the choice of public Part C plans has gone from almost zero percent of beneficiaries in 1997, when Part C formally was signed into law by President Clinton, to almost 35% now, a generation later.
In the private sector, many retirees of corporations that provided significant health insurance benefits to retirees (including those on medicare) no longer have such benefits. Often (perhaps usually) these changes apply to those already receiving the benefits.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 11:02 am

Bhuser wrote:
I am keenly interested in this thread, as DW will start medicare next year.

From my research and reading this thread, I believe the following are correct:

1) Medigap K and L are the only supplemental plans with an annual OOP limit or cap.
2) *Most* Medicare Part-C plans (i.e. "Advantage", "Cost", "MSA") have an annual OOP limit or cap.
3) Original Medicare "Part A+B" by itself, and/or "A+B+(any non-K/L supplement)" would *not* have an annual OOP limit/cap.

Is this^^^ correct?
Thanks.

PS: *If* an MSA is available in one's state, might it be a good way to add an OOP cap for a lower monthly premium (than full Advantage/Cost plans) as alternative to self insuring?
1. Correct. See page 82 of "Medicare and You, 2017." But check when the time comes because these templates change.
2. I believe ALL public Part C Medicare health plans have an annual OOP limit. See page 69 of "Medicare and You, 2017." The requirement that ALL Part C plans have this feature started with the Patient and Protection and Affordable Care Act so it can be taken away in the future (but I believe the opposite will eventually be true; that an annual OOP spend limit will be added to Parts A and B)
3. Original Medicare by itself definitely has no such cap. See page 36 of "Medicare and You, 2017."

We don't have MSAs in my state so I have no personal knowledge of your hypothetical. But of course it would not be "a lower monthly premium" than a zero-premium Part C plan. And according to the "Medicare and You" book, no MSA includes self administered prescription drug coverage whereas almost all other Part C plans do. But "lower monthly premium" should not be the way at anyone looks at this subject anyways. Total monthly cost out of pocket -- premiums and co-pays and fees for things not covered -- is the way to look at it (since you cannot do anything about the 50 years of already sunk cost)

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by sschoe2 » Mon Aug 28, 2017 11:18 am

My mother recently had a stroke and is up on nearly 3 months in the hospital. If she didn't have a medicare supplemental insurance her savings would be gone. She would have had to pay tens of thousands.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by BHUser27 » Mon Aug 28, 2017 11:20 am

dennisbyron wrote:
Mon Aug 28, 2017 11:02 am
1. Correct. See page 82 of "Medicare and You, 2017." But check when the time comes because these templates change.
2. I believe ALL public Part C Medicare health plans have an annual OOP limit. See page 69 of "Medicare and You, 2017." The requirement that ALL Part C plans have this feature started with the Patient and Protection and Affordable Care Act so it can be taken away in the future (but I believe the opposite will eventually be true; that an annual OOP spend limit will be added to Parts A and B)
3. Original Medicare by itself definitely has no such cap. See page 36 of "Medicare and You, 2017."

We don't have MSAs in my state so I have no personal knowledge of your hypothetical. But of course it would not be "a lower monthly premium" than a zero-premium Part C plan. And according to the "Medicare and You" book, no MSA includes self administered prescription drug coverage whereas almost all other Part C plans do. But "lower monthly premium" should not be the way at anyone looks at this subject anyways. Total monthly cost out of pocket -- premiums and co-pays and fees for things not covered -- is the way to look at it (since you cannot do anything about the 50 years of already sunk cost)
@dennisbyron - thank you very much for this concise response. It would seem if one insists on self-insuring, a "zero-premium Part C plan" w/ drug coverage is an obvious choice - yes? And to be clear, "zero-premium" means "no more than Part B premium" - yes?
Last edited by BHUser27 on Mon Aug 28, 2017 11:27 am, edited 1 time in total.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by BHUser27 » Mon Aug 28, 2017 11:23 am

sschoe2 wrote:
Mon Aug 28, 2017 11:18 am
My mother recently had a stroke and is up on nearly 3 months in the hospital. If she didn't have a medicare supplemental insurance her savings would be gone. She would have had to pay tens of thousands.
But to be clear - if she had a "zero-premium Part C plan", or any Medicare Part C plan with a cap, she might have only had to pay $5000-ish. In other words, Medigap is not the *only* way to control annual costs in your mother's situation. (I think).

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dodecahedron » Mon Aug 28, 2017 11:49 am

dennisbyron wrote:
Mon Aug 28, 2017 11:02 am

We don't have MSAs in my state so I have no personal knowledge of your hypothetical. But of course it would not be "a lower monthly premium" than a zero-premium Part C plan. And according to the "Medicare and You" book, no MSA includes self administered prescription drug coverage whereas almost all other Part C plans do.
We do have a zero-premium MSA option here in Upstate NY. No restriction on networks (any doctor who "participates in Medicare" is covered) and no referrals needed. And while it does not include prescription drug coverage, the plan does deposit $1800 per year into an MSA (which would more than compensate for the premium cost of purchasing a Part D.) My understanding, by the way, is that Medicare rules do not allow MSA plans to include drug coverage.
But "lower monthly premium" should not be the way at anyone looks at this subject anyways.
Totally agree that "lower monthly premium" should not be the way anyone looks at this. But having lived with a high deductible Bronze ACA policy since 2014 (and hitting the OOP max due unexpected emergency my first year!) and building up a substantial HSA balance, I feel very comfortable with self insuring the first $6700 of medical expenses annually once I hit Medicare age.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by kaneohe » Mon Aug 28, 2017 12:44 pm

BHUser27 wrote:
Mon Aug 28, 2017 10:43 am
I am keenly interested in this thread, as DW will start medicare next year.

From my research and reading this thread, I believe the following are correct:

1) Medigap K and L are the only supplemental plans with an annual OOP limit/cap.
.........................................................
Be careful what you conclude from this. The others don't have stated annual OOP limits/caps but they can be effectively 0.
E.g. with my plan F, I pay nothing..........either Medicare pays or the supplement pays (assuming it is a Medicare covered cost).
The K/L plans look like they need to have an annual OOP limit because they only pay a fraction of many of the costs while the other
plans pay 100%

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by michaeljc70 » Mon Aug 28, 2017 12:49 pm

sschoe2 wrote:
Mon Aug 28, 2017 11:18 am
My mother recently had a stroke and is up on nearly 3 months in the hospital. If she didn't have a medicare supplemental insurance her savings would be gone. She would have had to pay tens of thousands.
+1. My Grandfather had a torn aorta. The bill was over $500k. And he needed dialysis 3x a week for the rest of his life. Luckily he had coverage for almost all of it.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 2:35 pm

But to be clear - if she had a "zero-premium Part C plan", or any Medicare Part C plan with a cap, she might have only had to pay $5000-ish. In other words, Medigap is not the *only* way to control annual costs in your mother's situation. (I think).
Correct (in most areas) - as long as there are Medicare Advantage, Medicare Cost or, perhaps other plans available.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dennisbyron » Mon Aug 28, 2017 2:43 pm

bhuser wrote:
@dennisbyron - thank you very much for this concise response. It would seem if one insists on self-insuring, a "zero-premium Part C plan" w/ drug coverage is an obvious choice - yes? And to be clear, "zero-premium" means "no more than Part B premium" - yes?
Yes, zero premium means you pay only the Part B premium. In fact there used to be Part C plans that "refunded" all or part of your Part B premium but I do not know if there are any left. But remember this is insurance: lower premiums, higher co-pays. Same old, same old

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by dm200 » Mon Aug 28, 2017 6:34 pm

dennisbyron wrote:
Mon Aug 28, 2017 2:43 pm
bhuser wrote:
@dennisbyron - thank you very much for this concise response. It would seem if one insists on self-insuring, a "zero-premium Part C plan" w/ drug coverage is an obvious choice - yes? And to be clear, "zero-premium" means "no more than Part B premium" - yes?
Yes, zero premium means you pay only the Part B premium. In fact there used to be Part C plans that "refunded" all or part of your Part B premium but I do not know if there are any left. But remember this is insurance: lower premiums, higher co-pays. Same old, same old
Not always that simple a relationship.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Uncle Pennybags » Tue Aug 29, 2017 1:58 pm

dennisbyron wrote:
Mon Aug 28, 2017 4:35 am
Also note that many former employers and unions have given up on regular group retiree insurance and are forcing their beneficiaries to take a Part C plan or a private supplement through what some call a voucher. Therefore some of these percents overlap.
That's what happened to me after the "affordable" care act took effect. My former employer no longer self insures for medical care. I now get spam phone calls, email and snail mail form the insurer.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by mouses » Tue Aug 29, 2017 5:17 pm

kaneohe wrote:
Mon Aug 28, 2017 12:44 pm

Be careful what you conclude from this. The others don't have stated annual OOP limits/caps but they can be effectively 0.
E.g. with my plan F, I pay nothing..........either Medicare pays or the supplement pays (assuming it is a Medicare covered cost).
I have plan F and didn't have to pay a nickel for a hospitalization a few years ago, whew.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by mouses » Tue Aug 29, 2017 5:19 pm

Uncle Pennybags wrote:
Tue Aug 29, 2017 1:58 pm
dennisbyron wrote:
Mon Aug 28, 2017 4:35 am
Also note that many former employers and unions have given up on regular group retiree insurance and are forcing their beneficiaries to take a Part C plan or a private supplement through what some call a voucher. Therefore some of these percents overlap.
That's what happened to me after the "affordable" care act took effect. My former employer no longer self insures for medical care. I now get spam phone calls, email and snail mail form the insurer.
The MegaCorp I worked for did this to its employees long before the ACA was a gleam in anyone's eye.

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Re: Self insure vs Medigap when on "traditional" Medicare

Post by Artsdoctor » Tue Aug 29, 2017 6:48 pm

DM,

A few things to consider.

When you're considering your options, bear in mind that there is some state-to-state variability. What one poster will offer may not apply to you so it benefits you to do your research.

Within 6 months of beginning Medicare, you'll need to decide whether or not you want your Supplement. You can't be turned down no matter what your pre-existing history is.

However, after that 6-month period, the insurance companies offering supplemental plans can price the supplement according to your health record. There are exceptions to this rule (for example, if your previous employer was offering a supplement and they decided to stop it, you'd have your "open enrollment"; if you had an Advantage plan and then moved, etc., etc.). But you can't say that "I'm healthy at 65 so I'll just get my secondary if I get a serious illness." It doesn't work that way.

It is true that there are a lot of healthy seniors out there. But don't forget that the older you are, the more likely you are to have health problems. Some of those problems build on each other: a healthy 65-year-old with a hip fracture is going to generally have an easier and quicker hospitalization than an 85-year-old with the same fracture. These bills can be staggering. You'd be on the hook for 20% of the Medicare allowable.

I don't buy into the argument that "chances are, you'll be fine and won't get your money's worth." Sure, you may have a long healthy life with very few health consequences. Good for you! But that is a gamble I personally wouldn't take, and I know those statistics pretty well.

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