Misconceptions About Obamacare And Medicare


Slide4I have written about it in the past but there is still much confusion over Obamacare and the effect it will have on Medicare.

In this post I want to discuss, again, some of the common misconceptions about Medicare and the Affordable Care Act.

MISCONCEPTION #1:

OBAMACARE ELIMINATED MEDICARE ADVANTAGE

The PPACA did not eliminate the Medicare Advantage.   It would not be good politics for one Democratic president, B. Obama, to eliminate a signature program of another Democratic president, B. Clinton while the former president is still alive.

Medicare Advantage, also known as Medicare C, is a program that was started by the last Democratic President, Bill Clinton.  At that time it went by the name Medicare Choice.

Obamacare did not outright eliminate Medicare Advantage.  What it did was create new payment systems for private insurance companies who manage Medicare Advantage plans.

It also created a star-based rating system that the Department of Health and Human Services can use to compare plans.

MISCONCEPTION # 2:

OBAMACARE REMOVED MEDICAL UNDERWRITING FROM MEDIGAP

Every week I have to break the bad news to someone that Medicare Supplements are not subject to the new guaranteed issue rules.  People who want a plan to pay for expenses that Original Medicare does not are only guaranteed coverage during the 7 months surrounding their 65th birthday or if they qualify for a Special Election Period.

Unfortunately, many Americans are not significantly sick when they turn 65 and elect to post-pone getting Medigap.

If they get sick when they are 75 and then look for something to supplement Medicare, they will be required to medically qualify for Medigap.  If they are unable to pass medical underwriting, they must do without any help with Original Medicare.

HINT:  One strategy that may be available, if they live in an area that offers one, is Medicare Advantage.  Each year Medicare offers a 6 week opportunity for people with Original Medicare to switch to a Medicare Advantage plan for the following year.  If you elect this option, there are several things that you need to remember.

  1. Although you may enroll in October, your coverage with Medicare Advantage will not start until the following January.
  2. Most Medicare Advantage plans limit “non-emergency” benefits to health care that is only provided by “network providers.”   That means that you cannot make a claim with original Medicare if you elect to use a hospital or doctor for “non-emergency” health care.

MISCONCEPTION # 3: 

“FREE” MEDICARE COVERS ALL ESSENTIAL BENEFITS

I understand how people can get the wrong idea.  After-all the politicians and media made a bunch of noise in 2010 about how “Obamacare” improved Original Medicare.

However, after all the facts are considered, the changes to Medicare may be positive ones but are not as good as they were advertised.

The “free” part of Medicare is Medicare Part A.  (Whether it is actually “free” is a matter of debate.  It is too complicated to discuss at this time.  I will have to address the issue of “free” Medicare after the confusion of Obamacare is over.)

Medicare A is a fine program to help people who have to be hospitalized.  However, it does not help with all the medical bills listed by congress in the PPACA.

People who want partial coverage for prescription drugs, doctor visits and all of the other out-patient Essential Benefits have to buy Medicare B and Medicare D plans.

If you are enrolled in Medicare and want a health insurance portfolio that will pay all of your medical bills, with the exception of prescription drugs, you will also want a Medigap plan.

Unfortunately, there is no supplement, that I am aware of, that will pay the portion of your pharmacy bill that is not paid by Medicare D.  Even the “best” Medicare D plans have some form of “cost-sharing.”

As long as you have, at least, Medicare A, you are specifically exempt from the “Shared Responsibility Payment” (a.k.a. Obamacare’s Penalty) for not buying an Essential Benefit Plan.

In other words, you are not required to buy another government approved health insurance policy in 2014.   Just know that if you are relying only on the “free” part of Medicare, you are not covered for the same things that other Americans who buy Essential Benefit Plans.

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