Actually I might be insulting my fellow seniors with this post. It is actually the thirty somethings that write health care columns for the left wing media that can't seem to understand the difference between a deductible and an annual out of pocket (OOP) limit. We seniors on the other hand have been buying insurance for 50 years and we get it. Typical is a sentence like the following, which appears in today's Detroit Free Press:
“...federal law caps the maximum OOP costs for Advantage plans at $6,700, many... plans have much lower maximum OOP limits. That means coverage kicks in sooner for consumers with big expenses.”
The $6700 or lower number is the most a person on a public Part C Medicare Advantage health plan can spend on medical-service co-pays and co-insurance; it is not a deductible1. the OOP limit does not refer to how much a public Part C beneficiary has to spend before “coverage kicks in.” Coverage under Part C almost always “kicks in” immediately1, with beneficiaries paying – typically -- $15 to $50 co-pays at doctors, $50-$100 at an ER, $250 or more a night in the hospital or for an outpatient procedure (these numbers can vary significantly). Only if something catastrophic happened – with medical-service bills adding up to multiple tens of thousands of dollars -- would the total of those co-pays add up to the maximum OOP.
This is important because Original Medicare – even with most private Medigap plans – offers no such catastrophic protection. The financial exposure of somone on only Original Medicare (which is almost no one) or Original Medicare with most private Medigap plans is unlimited. Also Original Medicare has much higher co-pays and co-insurance (and does have deductibles) than a public Part C health plan. The purpose of Medigap is to fully or partially fill those “gaps.”
Unlike Part C plans, Medigap does not cover additional medical services such as dental or vision or annual physicals although not all Part C plans cover such additional non-Original-Medicare medical services. However there are many situations where Medigap is the better option for supplementing Original Medicare, particularly if it is the only insurance favored providers accept and/or the senior spends many months away from his or her primary legal residence.
1A Part C plan could also have a deductible. This would occur in a Part C plan called an MSA plan that is like a Health Savings Account plan for people not on Medicare.
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