1
NO ONE TOLD ME
Glen didnât retire until he turned 70 in 2010. He and his wife, Margie, were covered until then by his employerâs health plan. Glen read the annual Medicare & You guide put out by the Centers for Medicare & Medicaid Services (CMS). His clear understanding from the guide was that he had been automatically enrolled in Medicare since he turned 65.
This was not true. Glen made a big Medicare mistake by not asking anyone to confirm his understanding. In fact, Glen had no Medicare coverage as of 2010. Neither did Margie. But they didnât know this.
âNo one told meâ is a scary cautionary Medicare tale that could be the subtitle of this book. It is repeated in countless calls for help from people like Glen and Margie (not their real names) to Medicare consumer counselors and call-center staffers around the country. And it is voiced even by people who consider themselves otherwise smart and well informed.
As it turns out, there can be little about Medicare that is automatic or clear or, especially in the midst of a medical emergency, logical or perhaps even fair. Despite widespread contrary beliefs, people are free never to get Medicare and can simply pay their own health bills without insurance. However, if you forgo Medicare and later change your mind, there can be steep late-enrollment penalties and many months may pass before Medicare insurance takes effect.
Even for people who want health insurance, Medicare usually isnât even required at age 65 or, indeed, at any later age, so long as a personâor their spouseâis still working and has group health insurance coverage from a current employer. Social Security is supposed to send out Medicare cards to some people when they turn 65. Maybe it did send out a card to Glen. Maybe he thought this meant he was covered. But this doesnât always happen, especially when a person has not yet started taking their Social Security retirement benefit.
There are three really big deals about getting Medicare right:
1. Enroll at the right time. Medicare has a bewildering mix of enrollment periods. You need to use the right one.
2. Choose the right mix of Medicare coverage. There are only two main paths here. One is Original Medicare (Parts A and B), perhaps with a Medigap supplemental policy, plus a Part D prescription drug plan. The other is a Medicare Advantage plan, usually including a Part D plan.
3. Understand what these various parts of Medicare cover and how to use them.
For nearly four years, Glen and Margie had no health problems serious enough to have caused them to file a claim with Medicare and learn about their earlier mistake. But then, in 2014, Margie got sick and was diagnosed with terminal cancer. They then began trying to file claims for what eventually would be enormous medical expenses. Thatâs when they found out that neither of them had Medicare coverage. Glen called the nonprofit Center for Medicare Advocacy seeking help.
Glen had missed his original window to sign up for Medicare after he retired in 2010. Margie may have assumed she was automatically covered by Medicare as well. The details arenât clear, although it became clear in hindsight that they never really understood that there is no family coverage under Medicare, as is routinely the case with employer health insurance.
Glen and Margie needed to file individually for Medicare. When they realized their error in 2014, they had missed one of the many enrollment periods available during the year, and were told they had to wait until the beginning of 2015 to file for Medicare. Under its rules, their coverage would not become effective until July 2015.
Glen and Margie had to face her cancer with no insurance whatsoever. Instead of being able to focus on Margieâs care and spending as much quality time with her as possible, Glenâs life instead included the prospect of crushing medical bills and the need to worry about how he would pay for his wifeâs care. Medical expenses are, sadly, a leading cause of personal bankruptcy.
After the center said it had no immediate solution to their problem, Glen broke off contact. More than a year later, the center reached him again. âHe is a defeated man,â a staffer recalled. âThings had turned out terribly. He did, indeed, lose his wife.â
And he still didnât know if he had Medicare.
CAROL
The Medicare rules say that private Medicare Advantage insurance plans must cover at least the same things that Original Medicare (Parts A and B) covers. Many people naturally assume this means the two approaches to Medicare are the same.
Big mistake.
Carolâs husband, Ernesto, had a Medicare Advantage plan in Texas, when he was diagnosed in June 2014 with pancreatic cancer. Little more than six months later, Ernesto would be dead following complications from surgery. During this time, when Carol wanted to spend as much time as possible with her partner, she instead had to fight insurance company rules and respond to unexpected surprises about what his Medicare Advantage plan did not cover.
Her problems stemmed from the fact that Medicare Advantage plans restrict coverage to those doctors, hospitals, and other caregivers who are in the planâs provider network. Original Medicare, by contrast, insures covered medical services from any provider who accepts Medicare. When Carol was forced to take over as the main caregiver for her husband, she didnât know about these restrictions. Even after she learned about some limitations, new ones kept cropping up.
âThe gastroenterologist who diagnosed my husband met with us, explained the diagnosis, and called MD Anderson [the University of Texas MD Anderson Cancer Center] to refer him to a specialist. He was told that neither the doctor nor the facility accepted Medicare Advantage. Medicare, yes; Medicare Advantage no,â she recalls. His insurer said it could not help her find a center with pancreatic cancer expertise, and that Carol would have to make these calls herself, which she did. âAll the time I took to figure out how to track down information, and to do it, took time away from being with my husband.
âWe even found that the local oncologist we chose told us that he would accept the plan and was âin-network,âââ she adds, âbut for the entire six months he saw my husband for chemotherapy and related studies,â the benefit statements from the insurer showed he was not. Inaccurate billing statements flew back and forth, making it impossible for Carol to keep up with expenses and payment schedules.
âIn the meantime we paid bills, got refunds, and completely lost trackâif there really was a trackâof where we were on the maximum out-of-pocket payments,â she says. âIncidentally, this was not how I wanted to spend my time, and was not what either my husband or I needed in order for him to continue to live well and enjoy life as long as he possibly could.â
Carol, not surprisingly, thinks that no one should ever get a Medicare Advantage plan. But millions of people do and find no problems with their coverage and service. However, if a serious medical issue arose, they may be no more equipped to deal with possible shortcomings in their planâs provider network than was she. âIt can be difficult in the midst of a crisis to figure out what you can control and what you cannot,â she cautions.
âMy husband and I shared a great life,â Carol now says. âHe lived well up until the moment he died, and even his manner of dying was a gift to me. Mostly what I relive are warm and appreciative memories. Occasionally, of course, the bad stuff surfaces. . . .â
PHYLLIS
Let this story be your cautionary guide for the more practical roadblocks that Medicare may erect. Phyllis is pretty much always the sharpest tack in the box. While she loved being a partner in a big corporate law firm, she finally retired from the firm when she turned 75. Like many sharp tacks, however, Phyllis was no match for Medicare. And when she explained her problems to me, she repeatedly used the phrase âNo one told me.â
Fortunately, Phyllisâs efforts to properly enroll in and use Medicare have not had disastrous consequencesâno financial or health care catastrophes. She got covered in time, seems to have avoided late-enrollment penalties, and more or less got the coverage she wanted. But as she makes clear, these results are due primarily to her remaining healthy and needing to take a grand total of one prescription medicationâan inexpensive blood pressure pill.
Phyllisâs employer did provide her notice of the impending end of her employer health coverage. But its statement did not explain the specifics of her existing coverage and the things she would need to replace with Medicare.
Phyllis never would assume what a legal client needed or how opposing lawyers might behave. But she, like too many other Medicare newcomers, did assume that Medicare was a relatively straightforward process.
âI absolutely didâ make that assumption, she recalls. âMy assumption was that thirty days or so before I needed Medicare, I could go and applyâ and everything would be taken care of.
At the outset, she didnât know she needed to contact Social Security and not Medicare to enroll in Medicare. She didnât know about prescription drug coverage or that it was called Part D of Medicare. She didnât even know that Medicare Advantage plans existed. And she didnât know that her cell phone needed to have a full charge before calling Medicare for help, because her wait times often would be so long that her phone would run out of juice while she was still on hold!
No one told her. âI had Part A,â because she already was receiving Social Security retirement benefits. âI thought all I needed was Part A. I thought I could get Part B automatically. I didnât know I needed to apply to Social Security for Part B.â
Phyllisâs first phone call with the Social Security Administration (SSA) began to make her see that thirty days was a laughably short time frame, even for someone as skilled as she in figuring out how things worked. Social Security, it turns out, does a lot of Medicare enrollment work and is the official Medicare traffic cop when it comes to determining if people have enrolled for various parts of Medicare on a timely basis.
Adding Part B, which covers doctors, outpatient and medical equipment expenses, along with Part A hospital insurance, would provide her with whatâs called Original Medicare coverage. It also would qualify her to purchase other types of Medicare insurance, including a Part D drug plan and either a Medigap policy or a Medicare Advantage plan.
After waiting on hold for more than an hour, Phyllis was told by the SSA representative that she could apply for Part B online. She was uncomfortable with that, so the rep provided her detailed instructions about how to download and complete a Part B application form. This guidance included how she should address and mark the envelope to make sure it went to the right place. She did this weeks in advance of her employer coverage ending. After waiting and waiting for a response, she finally called the local office again, waited on hold for more than an hour a second time, and was told no one at that office had ever seen her application form.
During the first of what became three trips to a Social Security office, Phyllis tried to sign up for Medicare. The office was located in a congested area, with street parking whose meters permitted no more than two hours of parking time. So, Phyllis thought it would be prudent if she scheduled an appointment. The Social Security website provides information on how to do this, but she was told by someone in the local office that it did not do visits by appointment.
Being a walk-in, as she later learned, guaranteed long delays. And when she wanted to go refill her parking meter and avoid a possible parking ticket, she was told she would lose her place in line if she left the office. Phyllis found another Social Security office farther away, where parking was not a problem.
While she was signing up for Part B, no one told Phyllis about the need for Part D prescription drug coverage or even about the existence of Medicare Advantage plans, which are formally designated as Part C of Medicare. They have become an increasingly popular alternative to Original Medicare, and now are the choice of more than 30 percent of Medicare users. More than 40 million people have Part D drug plans. But the first that Phyllis learned about signing up for a Part D plan was shortly before being dinged with a late-enrollment penalty. Four months after signing up, she had still not seen any evidence that she actually had a Part D plan, and acknowledged that penalties might still be possible.
Phyllis wound up with Original Medicare, the hoped-for Part D plan, and a Medigap policy. This is one of two classic paths into Medicare. The other involves a Medicare Advantage plan, usually bundled with Part D drug coverage. She later admitted she chose her Medigap insurer because it was the only company that answered the phone when she called.
âAll my assumptions were wrong,â she says. Although her coverage didnât begin until August 2015, Phyllis quickly realized she might have made key mistakes, and began a new round of research to get ready for Medicareâs annual open enrollment period, which runs each year from October 15 to December 7.
Open enrollment is the annual equivalent of a Medicare do-over. It permits people to choose new plans, usually with no adverse coverage or pricing consequences. Itâs a great deal, but like much else about Medicare, people often donât understand how it works.
No one told them.
Read on, and consider yourself told.
2
LIVING LONGER IS GREAT; PAYING FOR IT ISNâT
As the nation becomes older and grayer, the idea of a golden age for Americaâs senior citizens has become the stuff of dreams. Instead, we have two major retirement crises. One is the financial crisis. It gets daily attention. Most workers have saved far too little to afford even modestly enjoyable retirements. Record numbers of people in their late 60s and 70s are continuing to workâsome because they like to but most because they canât afford to stop. Our second crisis, and it fully merits this label, is the retirement health care crisis. Despite vibrant images of aging from companies who peddle financial, health, and lifestyle products to seniors, the health profile of a typical aging America is less glamorous. Aging in America is a tough contact sport.
The health needs of rising numbers of baby boomers will be an increasingly expensive personal and national burden, not only driving many families into bankruptcy but also threatening the finances of our national government. We face bruising entitlement wars. Can we put a lid, even a porous one, on the funds we spend to take care of the people we know and loveâour parents and grandparents, our uncles and aunts? Then there are the people we donât knowâan enormous number of impoverished Americans who live largely unseen, often by themselves, in decaying housing and nursing homes that far too often cope with infirm seniors by drugging them into docility.
Standing in the breach to protect these people, as well as the interests of taxpayers, is an enormous bureaucracy called the Centers for Medicare & Medicaid Services (CMS). Since Medicare and Medicaid were created in 1965, they have led to a degree of centralized control over the nationâs health care system that on a bad day (and there are many of them) rivals the worst excesses of any five-year plan in the former Soviet Union. While CMS oversees the health needs of only older, poor, and disabled Americans, these groups represent such a large share of the nationâs heal...