How a one month delay cost a breast cancer survivor thousands in unnecessary healthcare charges
How could delaying your Medicare enrollment cost you more money?
Well, in several ways….
But for Madelyn*, her delay cost her thousands in medical costs she could have avoided.
Madelyn recently contacted My Medicare Partners, looking to switch her Medicare Supplement plan from a Plan N to a different option which provided more coverage.
Madelyn was responsible and thought ahead last year when she first enrolled in her Plan N Medicare Supplement (also known as MediGap) Plan:
- she enrolled during her Initial Election Period (also known as the Initial Enrollment Period, or IEP) in a timely fashion, six months before she turned 65
- she chose a MediGap plan, which provided her with more coverage than a Medicare Advantage plan that she was also investigating.
- She even took advantage of the no-cost preventive care provided by her Plan N supplement and got her yearly mammogram.
And that’s when she got the news that no one ever wants to hear: Just months before her 65th birthday, she was diagnosed with breast cancer.
While she should have been celebrating her birthday with loved ones, she was instead feeling ill from treatments and was facing a mountain of medical bills.
While Madelyn was thankful to have healthcare coverage, she couldn’t help wonder if there was something that provided more coverage than her Plan N. She knew she definitely did not want a Medicare Advantage plan which would limit her to doctors only in her county and would require her to get referrals before every specialist visit.
But Madelyn had heard that Plan F and Plan G may offer more coverage than a Plan N, so she began to do research.
You see, a Medicare Supplement Plan N still leaves folks on the hook for out of pocket charges – like the Medicare Part B deductible ($183 in 2017, annually) and excess charges.
Like any reasonable person, Madelyn wanted to go to the best of the best for her cancer treatments. So she chose a world-renowned hospital and traveled to begin her healing process.
The trouble was, Madelyn’s providers did not accept Medicare assignment, meaning that they did not contractually agree to accept Medicare’s approved amount for services.
Not only did it take time for her claims to be submitted to Medicare and maybe be covered – Madelyn also had to pay for any excess charges accrued.
Excess charges are the amounts a provider who does not accept Medicare assignment may charge to a patient, above the amount determined to be “reasonable and customary” by Medicare, so long as those charges do not exceed 15%. The patient must pay these excess charges out of pocket.
Plan N MediGaps do not cover excess charges.
And while Madelyn lives in a state which does not allow providers to charge excess charges, the state in which she was receiving her cancer treatment did allow excess charges. She was shocked to learn this, since the agent who originally enrolled her in the Plan N told her that excess charges would not apply. The agent must have forgotten that patients have to abide by the rules of the state they’re treated in, not the state they reside in.
In Madelyn’s case, her treatment ended up costing her about $10,000 – but Medicare’s approved amount for her procedures was only $7,500. This allowed the facility and providers to charge Madelyn a 15% excess charge; she would have to pay 15% of the approved amount ($1,125) out of her own pocket.
She expected everything to be covered by her Plan N but instead found herself on the hook for $1,125 – and that’s just one of her bills! She could have also avoided these charges by seeing a Medicare-approved facility, but the hospital she choose does not accept Medicare assignment.
Unfortunately for Madelyn, by the time she called My Medicare Partners, she was aged 65 and 8 months. Why does this matter?
Her Initial Enrollment Period had ended just weeks before, and outside of her IEP, she would have to pass medical underwriting. Madelyn would no longer qualify for a different Medicare Supplement plan due to her diagnosis and recent hospitalizations.
Outside of the IEP, insurance companies may choose to deny coverage to Medicare Supplement applicants based on certain health conditions and medications.
Your IEP for Medicare Supplement plans begins six months before you become eligible for Medicare, which for most folks, is when they turn age 65. The IEP continues through the month of your 65th birthday and ends six months after the month of your 65th birthday.
In other words, had Madelyn called just two months earlier, she would not have to answer any medical questions, and the insurance company would not be allowed to deny her coverage, also known as “guaranteed issue.”
However, outside of the IEP, the insurance companies could refuse her coverage altogether. Madelyn was stuck with her Plan N.
Now, it’s important to understand that any coverage is better than no coverage, and Madelyn still has a rich plan. However, a Plan N is not the best solution for her. Had the agent who originally helped Madelyn shown her other Plan options, she’d be in a much better place financially. But because the agent didn’t think about the excess charges, Madelyn is now locked into this plan for several years, unless she chooses to return to Original Medicare or Medicare Advantage,
Madelyn and others can avoid excess charges and other out of pocket costs by enrolling in a Medicare Supplement Plan F or Plan G, both of which cover excess charges. Medicare beneficiaries can also confirm whether or not their providers accept Medicare assignment before enrolling. If their provider does not accept Medicare assignment and they are enrolled in a Plan F or a Plan G, the patient will not be subject to the excess charges.
Unfortunately, Madelyn will have to remain in her Plan F until she can pass medical underwriting, which could take a few years. Luckily for her, she still has an excellent plan – but her costs could have been better controlled through a different Medicare Supplement plan.
Enrolling in the right MediGap plan, on time during your IEP, could save you thousands. An experienced agent will be able to guide you to the right plan to meet your needs and your budget. Contact us today! Also, learn more about Medicare & Breast Cancer in our recent post.
* Name changed to protect anonymity