Just In Case You’re Interested

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“The Coalition for Medicare Choices” concerns Medicare Advantage plans:


“The Partnership to Protect Medigap” concerns Medicare Supplement plans:


Boomers Fear Healthcare Costs In Retirement

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Turns out there is something even more terrifying to boomers than having their adult children move back home. It’s the thought of what their future health-care costs might be.

Nationwide Financial just released a survey. It revealed that 61 percent of pre retirees are “terrified” of the havoc that health-related expenses could wreak on their retirement plans. That’s a 30 percent jump from a year ago when fewer than half of affluent pre retirees expressed the same sentiment.

Those views were gleaned from a survey of 801 Americans over age 50 with at least $150,000 in household income. When asked what their top fear in retirement is, three-quarters pointed to out-of-control health-care costs. Yet, these very same boomers seem reluctant to take steps to address that fear, with 64 percent saying they have not met with an independent insurance advisor to discuss retirement plans.

Of those who have consulted with an advisor, only 22 percent have broached the subject of non-Medicare covered post-retirement medical expenses.

Nationwide Financial noted in a release detailing the study that with much confusion regarding PPACA coupled with rising health-care costs, many workers are worried about how to fund medical expenses in retirement. More are realizing they can’t count on someone else to fix this problem and that they will have to fund their own health-care costs in retirement.

Clueless about Medicare and out-of-pocket costs

The survey also underscored how a large swath of boomers remain unclear or confused about Medicare and what health care will cost them in retirement. On average, pre retirees calculate the annual out-of-pocket cost for medical care during retirement at $4,300. However, according to a 2012 Employee Benefit Research Institute study, out-of-pocket health-care expenses for a 65-year-old couple retiring today and living for 25 years would be $283,000, or $11,320 per year.

When it comes to Medicare, boomers expressed a similar lack of knowledge. Those who plan to enroll in Medicare estimate it will pay for 69 percent of health-care costs in retirement. When queried about how they arrived at that percentage, 61 percent guessed or said they did not know; 22 percent based it on their own research; 14 percent asked friends who had already retired; and only 3 percent said they were told by an independent insurance advisor.

That estimate is far below the 51 percent that Medicare actually covers for health-care related expenses.

Further, Medicare does not cover long-term-care costs.

But boomers do want to learn more about Medicare: nearly two in three said they wished they understood Medicare coverage better, and 70 percent of those who discussed retirement plans with an independent insurance advisor acknowledged it’s important to discuss health-care costs and Medicare when planning for their golden years.

Work longer

So how do they plan to pay for health care in retirement? Possibly by working longer, many said. Two in five boomers indicated they would delay retirement if they had to buy their own health insurance.

Meanwhile, one in four said they will postpone retirement in order to keep their adult children on their employer-based health insurance plan.

About one-quarter (26 percent) of boomers said they do not anticipate retiring, up from 22 percent in 2012. Women are twice as likely as men to think they will never retire (36 percent verses 18 percent).





Drawbacks of Single-Payer Healthcare

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To some, it’s the greatest idea since price supports for agriculture: A government assumes its citizens’ healthcare choices, paying every cost and minimizing all guesswork. To others, it’s an infringement on individual human autonomy, transference of private decisions about health to a taxpayer-funded bureaucracy.

Single-Payer Healthcare

A euphemism for “government-run, single-payer” means that instead of every person in the marketplace paying for his or her own healthcare, there’s just one payer. A monopsony.

(Definition of Monopsony: a market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down. Sometimes referred to as the buyer’s monopoly).

In some parts of the world, such a system has been entrenched for so long that it’s difficult to conceive of any other way. In others, in particular the United States, there’s still plenty of debate on the issue. It’s easy to talk about a fundamental “right to healthcare,” but the issue gets complicated when one realizes that entitling a person to certain time and resources means putting an obligation on someone else to provide the same.

An Old Idea

Advocacy for a single-payer system in the U.S. is nothing new. In the fall of 1945, just after the end of World War II, recently inaugurated President Harry Truman addressed Congress with a plea for a national healthcare system. The American Medical Association opposed the idea, and it eventually faded away.

Incremental steps did continue throughout the decades. Medicare and Medicaid were established in 1965, essentially becoming a de facto single-payer system for certain groups of the population – senior citizens, young children and the poor, respectively.

Brought Back in Recent Times

In modern times, the strongest push to nationalize healthcare in the world’s largest economy happened in 1993. When her husband’s administration was months old, then-First Lady Hillary Clinton spearheaded the Health Security Act. Thus known commonly as “Hillarycare,” the bill required all citizens to enroll in a government-approved health plan and forbade them from ever exiting that plan.

Hillarycare also called for the creation of a National Health Board, a seven-member panel whose duties would include determining what constitutes “an item or service that is not medically necessary or appropriate.”  The bill was a bureaucrat’s dream, as it set criteria for everything from a new tax on cigarette rolling papers, to payment limits on certain drugs. When prominent members of the President’s own party began to question the bill’s feasibility, support continued to weaken. The bill officially died a few weeks before 1994’s midterm congressional elections, which was seen as something of a referendum on Hillarycare.

One fact often used to defend the concept of a single-payer plan is that the U.S. spends more of its gross domestic product (GDP) on healthcare than do other nations.

(Definition of Gross Domestic Product – The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory).

Mexico and Turkey each spend barely a third as much on healthcare, relative to GDP, as does the United States. Among countries that aren’t part of the Organization of Economic Cooperation and Development, the numbers can go even lower. For instance, Equatorial Guinea spends less than a quarter as much of its GDP on healthcare as the United States. But Equatorial Guinea’s 13.4% savings over the United States on healthcare also nets the country 27 fewer years in life expectancy and 12 times the infant mortality rate of the United States.

But it’s probably most instructive to compare United States healthcare expenditures to other developed nations. Canada, for example, has a life expectancy of 81 years while the Unites States sits at 79 years. And Canada’s infant mortality rate per 1,000 live births is five, as opposed to six in the Unites States. Yet Canada spends $2,233 less per capita on healthcare than does the United States.

Is Socialized Really Better?

Just ask citizens of Canada or the United Kingdom, two nations famous for their universal healthcare systems. Many Canadians love to talk of their “free” healthcare system, forgetting that if a free lunch doesn’t exist, then a free colonoscopy can’t either. Neither doctor salaries nor cardiopulmonary bypass pumps are cheap, and the money to pay for them has to come from somewhere.

Canadian healthcare expenditures work out to just shy of $6,000 per capita per year, compared to the top-ranked U.S. with $8,233. In Canada, nearly all of the $6,000 is funded via taxes. Less than half of that comes from income taxes with the bulk of the costs bankrolled by corporate and sales taxes.

Increases in per capita healthcare spending in Canada have kept pace with those in the U.S., expenditures in the former having almost tripled since the mid-70s, going from $39.7 billion to $137.3 billion. The Canadian government not only acknowledges that many of its citizens have to wait a long time for care, but recently spent an additional billion dollars to examine the issue. In the meantime, watching the months pass is an unavoidable component of Canadian healthcare. If you want a new hip or knee, prepare to live with your old one for at least half a year.

Wait times are a fact of life under socialized medicine in the United Kingdom, too. The U.K.’s National Health Service claims that you should not have to wait longer than 4.5 months for your approved service yet recent reports say patients can wait as long as eight months for cataract surgery.

Wait times in Canada are increasing, too; up by 95% since 1993, according to one measure. At least one Canadian doctor has pointed out the absurdity of dogs being able to see specialists faster than humans. In the United States, such wait times aren’t even an issue.

The Bottom Line

It wasn’t all that long ago that healthcare was a market no different than that for furniture or electronics: you paid as you went, usually out-of-pocket. Then rising costs led to the notion of a single-payer. When a party other than a patient or a provider starts making healthcare decisions, it’s easy to lose sight of whose interests should be paramount in a healthcare transaction. Governments and private insurers often have conflicting agendas regarding treatment, but a sick person never does. He or she just has one goal: recuperation.

Something To Know Before It’s Too Late

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It’s logical to think that when you are a patient in a hospital, you are an inpatient.

Not so. You can be in a hospital room, in a hospital bed, wearing a hospital gown and eating hospital food, sometimes for days, without ever being admitted as in inpatient.

How is hospital status determined? Hospitals assign patients either inpatient status or observation status. In general:

– You are likely to be assigned inpatient status when you are sick enough to need skilled, technical care. You must be formally admitted to the hospital by doctor’s orders to have inpatient status.

– You may be assigned observation status when doctors aren’t sure how sick you are or what care you may need, but you are too sick to get care in the doctor’s office.

As an example, let’s say you are having chest pain. You go to the hospital emergency room. Doctors aren’t sure whether you are having a heart attack or not. They decide to keep you in the hospital on observation status to monitor your condition.

You stay in a hospital room for two nights. You are attached to a heart monitor and have your blood drawn for tests every few hours. You receive oxygen and regular nursing care. Maybe you receive other diagnostic tests.

You chest pain subsides and your condition stabilizes. Tests reveal that you are not having a heart attack. You are discharged from the hospital and sent home.

In this example, you were on observation status for your entire stay.

Alternatively, doctors in the example may have determined that you were having a heart attack, or that you had another problem requiring skilled care. At that point your status might have changed to inpatient. The change status could be retroactive to your first day in the hospital, or it could be applied only to the rest of your stay. The hospital determines what your status is based on your condition and the doctor’s recommendation.

Why does it matter? When you are in the hospital on observation status, you may pay more than you would as an inpatient for the same care. In addition, any necessary follow-up care in a skilled nursing facility may not be covered by Medicare at all. (**see end of article for appeal information)

Care you receive while on observation status in the hospital is covered under Medicare Part B (medical insurance). Observation status is viewed as outpatient care for insurance purposes. In the example given above, you would pay coinsurance for the care, services and tests you received while in the hospital. The amount could add up quickly. In addition, you would be responsible for 100% of the cost for any follow-up care or rehabilitation you needed when you left the hospital.

Inpatient care is covered under Medicare Part A (hospital insurance). After the deductible is met, Part A covers the full cost of hospital care and services up to 60 days in one benefit period. (A benefit period begins the day you go into the hospital or skilled nursing facility. It ends when you’ve been out for 60 days in a row). So in the example above, you would pay nothing beyond any outstanding deductible amount.

What can you do? The most important thing for you, or someone on behalf of you, to do is to make sure you ask about your status when you are in the hospital.

Ask every day: Am I an inpatient or an outpatient?

Do not assume that you are an inpatient, only to find out after the fact that you were not. Talk to your doctor or a patient advocate at the hospital if you learn that you are on observation status and are concerned about the cost of your care.

You may be able to appeal (** see end of article for appeal information) to Medicare if you are faced with a large, unexpected hospital bill due to being on observation status. But it may be better to avoid the situation by being proactive and informed.

**Just weeks ago, The Office of Medicare Hearings and Appeals announced that Medicare appeals at the Administrative Law Judge level, the fourth step before a final district court suit, will be suspended for two years! There are only 65 Administrative Law Judges.

The backlog of appeals has caused the Office of Medicare Hearings and Appeals (OMHA) to suspend taking new appeals as of July, 2013. The office says the average weekly influx of hearing requests grew from an average of 1,250 in January, 2012 to more than 15,000 in December, 2013. Currently there are 460,000 pending appeals.

The American Healthcare Association claims the Medicare recovery audit contractors are driving up the appeal backlog by issuing excessive inappropriate denials. This includes thousands of complaints that people were denied for skilled care benefits simply because they had not been admitted to the hospital.