Healthcare in New Jersey heading toward a zombie apocalypse. Part V: Elder care

Conservative politicians think Medicare is just people feeding at the trough and far too costly, and many in congress and the White House now seek to implement cuts (zombies). Those more enlightened view it as a right and one earned after contributing to the plan over many years. Regardless there is a misconception in the minds of many that it’s uncomplicated, generous, and virtually free. Not so.

Medicare serves as the basic building block for elder care but because it only pays 80% of the approved cost, you must pay the remaining 20%. Plus, you enter a “donut hole” when your total drug costs reach a certain annual limit (usually $3,750 in 2018) during which you must pay more for the drugs. Many recipients cannot afford these costs and end up owing large sums of out-of-pocket money or forego needed care and medicine. The wealthier recipients can purchase supplementary insurance plans from private providers which reduce or eliminate those out-of-pocket costs and expand coverage.

On Medicare’s 50th anniversary in 2015 more than 55 million people were covered by Medicare – some 15 percent of the population, and the number will grow to 79 million by 2030. New Jersey in 2015 had 1,492,066 individuals enrolled.

Although costs vary, what might a complete package that covers most out-of-pocket expenses for elder health insurance typically cost in NJ? You might be surprised. 

  • Part A Hospital insurance: $0. (Most people don’t pay a premium because they or a spouse already paid for it through their payroll taxes while working. However, If you paid Medicare taxes for less than 39 quarters, the premium ranges from $2,784 to $5,064 annually – particularly expensive for those who often can least afford it.)
  • Part B Doctors’ services and outpatient care: $1,608 annually (actual cost based on income and generally deducted from your Social Security monthly benefit)
  • Part D Prescription Drug Coverage: $600 annually (actual cost based on your income and generally deducted from your monthly Social Security benefit)
  • Because Medicare only pays about 80% of your Part B and D costs many people purchase a Medigap Plan to reduce or eliminate out-of-pocket expenses, and a drug plan for the same reason:
  • Medigap (Plan F): $3,240
  • Drug Plan: $1,080 annually
  • Long-term care supports your personal care needs such as bathing, dressing, using the toilet, housework, taking medication, etc. Research shows that most people over 65 will need this care at some point. Medicare provides only limited help and does not pay for non-skilled assistance with activities of daily living, so those who can afford it buy a long-term plan.
  • Long Term Care: $2,500 annually (Costs vary considerably based on age and amount of coverage desired.)

TOTAL TYPICAL ANNUAL COST: $9,028

The above is just a simplified/generalized version of the plans and just begins to hint at the complexity of the programs. Other plans include “Original Medicare,” “Medicare Advantage,” and Medicare Drug Catastrophic Coverage. For the elderly the plans are particularly confusing and for the poor or those with catastrophic illnesses the outcome can be life-threatening.

Some retirees have the benefit of receiving health insurance premiums paid for in part (or rarely totally) by an employer plan, government/union sponsored plan or other system. These plans typically start with Medicare as the basis and add supplementary programs.

In NJ information on Retired Group SHBP coverage available to qualified retirees from the State, including State colleges and universities, and Participating Local Government Employers, is explained here. Information for Retired School employees is explained here. These plans supplement Medicare services with a variety of private Medicare Advantage plans and Pharmacy plans at different price points with different features. Just as one example, for SHBP retired employees, an Aetna PPO plan for NJ government retirees with a $10.00 Primary Care Copayment for a single person not on Medicare has an annual premium in 2018 of $15,530, and $6,614 for those on Medicare.

If you are confused by the complexity, concerned over the costs, and surprised by the lack of generosity of Medicare join the world of the elderly. It’s all the more reason why Medicare must be preserved and enhanced but not cut. It’s also the reason why “single payer” or a simpler “Medicare for all” or a similar system is very much needed.

P.S.: Medicaid is even more stingy toward doctors and hospitals and has fewer providers who accept it, but both Medicaid and Medicare are a lifeline for a vast number of people in our country.

You can read Part I which provides a broad view of the healthcare crisis and looks specifically at the ACA marketplace and Trump’s injurious “An American Budget” here.   Part II shows how our governor and legislators are fighting back for a State individual mandate and reinsurance program. here.   Part III: Our imperiled Medicaid under attack by Trump and a Republican congress here.   Part IV: Employer-sponsored healthcare here.

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