06 January 2012

American Healthcare - A maze needed to piece together by seniors.

First, let me note down a bit of a background. 

My parents are over 65 and they are on Medicare. Due to the language barrier, I had to chip in and lend a helping hand. It's not that they can't speak English, but to navigate through the maze that is Medicare, it seriously takes hours and hours of conversations with agents and customer services, therefore, it's important that they don't misunderstand any details. 

Now, their basic requirement is simple. They are looking for private insurance companies who offer Medicare packages or sometimes called "Medicare Advantage". However, they do not want to pay any more premium in addition to what they already paid to Medicare. This means, we had to search for $0 premium "Medicare Advantage" plans. We found it and it was Humana "Medicare Advantage" - HumanaChoice Regional PPO which covers Part A and Part B of the Medicare, with no prescription drug coverage.  In the profession of Medicare, they call it the "MA" plan. 

**Note: Medicare Advantage plans are regulated by the Centers for Medicare and Medicaid Services (CMS or Medicare) and implemented by private insurance companies (such as Aetna, Humana, and United HealthCare).

The confusion started when we wanted to look into the drug coverage or Part D of Medicare (an optional choice). In order to enroll into Part D, you have to make sure that ever since you were eligible, you never had a period of more than 63 days (I think) of gap in coverage. If you had, then you will incur a penalty at the rate of 1% of national average premium for the time you did not have coverage FOR AS LONG AS YOU CONTINUE the coverage MONTHLY.  Did you understand that? Read it again! (Source: https://questions.medicare.gov/app/answers/detail/a_id/2255/~/late-enrollment-penalty-(lep) )

For instance, national average premium for 2011 is $31.  1% of $31 is $0.31.  If you had no coverage for 24 month in previous years, then you have a penalty of  $0.31*24(month) = $7.68  penalty.  IMPORTANT. This $7.68 will now add to your monthly premium for as long as you continue the converge. IT IS NOT A ONE TIME late payment!!!  If you premium is suppose to be $15 a month, that means now, you will have to pay $22.68 a month, every month, every year from now on!!

Okay. Fine. Better to join early than late or else, the monthly premium penalty will increase month after month and year after year. So we chose Humana Walmart Preferred RX Plan for prescription drug coverage or what the professionals called - "PDP" plan, and this is when all hell broke loose. 

You probably would figure by now, that okay, I have a "MA" Plan that is HumanaChoice Regional PPO, and now a "PDP" plan that is Humana Walmart Preferred RX Plan, I'm good and covered completely in Medicare Part A, Part B and PartD correct? NOT SO!!! 

After hours of conversation and navigates through a maze of representatives, we found out that there is a rule from Medicare, not Humana, that you may not enroll into a standalone PDP plan without being dis-enrolled from a MA plan or a MA Plan with prescription drug coverage (or what the profession calls a MA-PD plan). In our case, by enrolling into a standalone PDP plan, without any acknowledgement, Humana auto dis-enrolled my parents from their MA-plan!! 

The end result is now they are back to traditional Medicare (the red and blue card) + a PDP plan. 

From this lesson, I realized the following

1. We should have known this rule, but then again, there are SOOOO many. 

2. Humana should have given us a huge warning that states - "Are you sure you want to enroll into the PDP plan? If so, you would be dis-enrolled from your Humana Regional PPO medicare advantage plan due to regulation!!?"

3. Medicare system - Made by lawyers and politicians. Way too complicated. 

It's a learning experience and it truly makes you think about the innovations that is desperately needed in the Healthcare industry.



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