AARP's Stake in the Medicare / Fiscal Cliff Debate

AARP Is Highly Influential
Everywhere you go, the AARP is there.  On TV, in the mail.  Medicare beneficiaries are flooded with advertisements.  In addition, it is a highly influential lobbying group in favor of retired people.  This article in the Washington Post points out that the current fiscal cliff debate may affect the AARP's bottom line.

4.95% Commission to the AARP
Perhaps the most revealing statement is the fact that the AARP receives 4.95% commission, in effect.  So, when you purchase a policy "endorsed" by a group that is purportedly supposed to be an advocate for retirees, the AARP has another motive, pure profit.

Bottom Line: The "Advice" Can't Be Totally Unbiased
This post doesn't suggest that the AARP is representing something that is factually wrong.  However, it points out that, on balance, any party may have motives to sway a consumer, under a different guise, to purchase a particular product.

Maximize Your Medicare Doesn't Have Extra Strings Attached
Maximize Your Medicare: Understanding Medicare, Protecting Your Health, and Minimizing Costs is free of any other motive than providing comprehensive information to Medicare beneficiaries.  Hospitals that care about their patients should be providing samples to their most important customers. Physicians can help themselves and their patients by supplying copies, especially to those turning 65, when insurance can be purchased without restriction.  The recent developments regarding the fiscal debate are making protecting yourself, by yourself, even more important.

This Happens: Medicare Advantage Cost Sharing Worse Than Original Medicare

Medicare Advantage Plans Are Approved by the CMS

Every year, Medicare Advantage plans of all types are approved by the Center for Medicare and Medicaid Services (CMS).  Every plan must be at least as good as original Medicare, i.e. those plans which include prescription drug benefits needs to be at least as good as Medicare Part A, Part B and Part D.  

"At Least As Good" Means....

Here is the issue.  When the CMS approves plans, these plans must be at least as good as original Medicare, which is defined as the actuarial equivalent.  What does that mean?  It means that statistics are used to determine that the Medicare Advantage plan is at least as good as original Medicare, on average.  That does NOT mean that your Medicare Advantage plan is better than original Medicare for each particular benefit.  You can (rightfully) ask:  What in the world does THIS mean?

Example: Skilled Nursing Facility Care

I am not going to point out insurance companies; it is not the point of the blog, or the book Maximize Your Medicare, to point out specific companies or specific policies.  However, here is a real-world example.

Original Part A Skilled Nursing Facility Care:

0-20 days:  $0.  Medicare pays.

20-100 days:  You pay the first $148 per day in 2013, Medicare pays the remainder.

100+ days:  You pay 100%

Medicare Advantage Example:

0-20 days:  $50/day copay.

20-100 days:  $150/day copay.

This Happens

If you stay at a skilled nursing care facility for 100 days, it is entirely possible that you will pay $1160 more than under original Medicare.  

Get Maximize Your Medicare, Get Informed

These small details seem insignificant, right?  Tell that to the subscribers of this plan in 2013, who are admitted to a Skilled Nursing Facility. I cannot fix this, and neither can you, other than to become informed every year, to check every year, to protect yourself to the best of your ability.  

You want $9.99 of value?  There it is, free, and there are many, many more examples of this in Maximize Your Medicare.

Medicare 2013 Premiums Announced

Medicare 2013 Cost Sharing
The Center for Medicare and Medicaid Services (CMS) has released the cost sharing details for 2013.   The tables in this blog will be updated in very short run.  Here are the highlights.

Part A Deductible: The deductible will increase from $1156 to $1184.  This is the amount per benefit period.  A very important explanation and illustration of what this entails is included in the book, Maximize Your Medicare.

Part A Hospital Stay:  The copay for days 61-100 have increased to $296/day.
Part A Hospital Stay:  The copay for days 101-150 have increased to $592/day.
Part A Hospital Stay:  The copay for days 151+ remains at 100%.  Medicare pays $0.

Part A Skilled Nursing Facility:  The copay for days 20-100 have increased to $148/day.

Part B Premium:  The base rate will increase from $99.90 to $104.90.
Part B Annual Deductible: The annual deductible will increase from $140 to $147.

Note:  Your rate may be higher than this if you make over $85,000 per year.

The table of premiums, copays, and coinsurance can be found here.