I’m Over 65 and Counting the Money

Bookmark and Share

Not long ago, I retired from the clinical practice of psychiatry. One
of the factors that comforted me in making that decision was that I
was eligible to receive Medicare, so I wouldn’t have to try to obtain
some sort of expensive private health insurance or COBRA to tide me
over. Actually, I was 66, as I had to wait until my wife turned 65
this past July, for the same reason.

This transition would be easy, simple, and cheap, I thought. So, many
months I tried to look into Medicare to confirm that assumption. Even
at first glance, there was Medicare Part A, Medicare B, Medicare
Advantage, Medicare D, and Medicare Supplemental Insurance. Not so
simple, I was quickly finding out, and really not so cheap.

When we attended a Medicare educational seminar, which I had
originally thought would not be necessary, it was crystal clear that
most of the attendees could not understand their choices, charges, or
costs, despite the very clear and unbiased presentation. Even a
retired teacher, who helped choose health care plans for his school,
called me for advise after he turned 65. Why me? I was the director
of our medical school managed care mental health contracts and even
wrote a book about that experience (The Ethical Way: Challenges &
Solutions for Managed Behavioral Healthcare
, Jossey-Bass, 1997). So I  should know about health care insurance. Right? I thought so, but here  I was, almost as confused as the rest. The advice of the seminar
leader seemed best to me: if you can afford it, choose the best. But
what was the “best”?

Knowing about for-profit managed care companies, I knew that I wanted  to avoid them — and the possible authorization problems — if I could.  In the end, we followed the example of my wife’s cousin, a physician  who worked in the actuarial side of health insurance. The choice  did include the managed care behemoth and AARP-related,

So far, we are paying more for our insurance costs than we did before
Medicare. A medication that I thought was covered, was not. So I
paid for that. I know, I know. You can look up what drugs are covered
before choosing the Medicare D company, but this was such a common,  generic medication, I just assumed it would be covered.

Then, my first monthly prescription drug summary, which covered the
month before I even got that non-covered medication, arrived in the
mail. The “out-of-pocket costs” for me were $154.50, out of the
“total drug costs” of $232.33. With my monthly payment for Part D
Prescription Drug Coverage, was Part D even worth it financially
right now? I mean, that coverage was optional, but then again, I
could need coverage for more expensive medication sometime later this  year. A psychiatrist colleague wrote me that I’m not alone, that “90%  of folks don’t pick the Medicare D plan that would be best for them.”  Where did I go wrong? This is embarrassing, indeed.

But I did have to buy Part B. I also bought supplemental coverage,
not yet needed, fortunately. And, at least, Part A for
hospitalization was free. Whoops. I almost forgot to mention the not-
so-pleasant visit that I had to make to our local Social Security
office for this transition.

All this stuff could be found in the literature you receive, either
online or in the mail. I just received the 2013 version of “Medicare
& You” from the Center for Medicare and Medicaid Services. It’s 140
pages! On the same day, I received the 2013 booklets of the AARP/
MedicareRx Plans, which included the Abridged Formulary, the 2013
Evidence of Coverage, and the 2013 Annual Notice of Changes. Over 100  pages combined! I’m still not so sure that I understand them. And I don’t have beginning Alzheimer’s or any sort of common memory problems of the over 65. At least yet. Maybe some anxiety over all of this, but enough to account for all the confusion and possible mistakes? What have I gotten us into?

Just think. I’m just over 65, in pretty good health, not on any
expensive medications, and, I’m told, I should have enough savings for
the next 30 years (though that is by no means guaranteed). And I’m a
psychiatrist, knowledgeable about health insurance, but I’m still
anxious and confused. Now, we hear about proposed changes that may be  necessary for Medicare’s viability, at least if you believe the
politicians. So far, all those changes seem to promise less, and be
even more complex.

We have two children and four grandchildren so, of course, we worry
about their future and whether they will have the societal
benefits they may need as they age. I’m also liberal in outlook, took
care of the under-served all my career, have been an advocate of a
Canadian-style payer system (not too unlike what I thought Medicare
was), and have been an activist to reduce global warming. I want to fulfill Erikson’s highest psychosocial stage of development, to be as
generous to the next generation as I can.

Hence, the question and moral dilemma that seem to be forming. What
can I do to help Medicare? And Social Security (which I haven’t begun
to draw from)? Would I be willing to take less and/or pay for more?
Would that be more of my “fair share”? What if that jeopardized our
long-range, uncertain financial planning? I think there are other
ways I — and we — can contribute. Stay tuned.

Steve Moffic, M.D., 66, recently retired from clinical practice. He identifies himself as a “psychiatric gadfly.”


21 Responses to “I’m Over 65 and Counting the Money”

  1. Leslie Kernisan, MD

    Steve, thank you for this wonderful post. I had no idea it was quite so complicated to get set up with Medicare. My own limited experience evaluating health insurance options has been that it’s generally quite perplexing, and especially excruciating to try to work one’s way through some common future possibilities and what the financial implications would be in each case. It is telling that even those of us with advanced degrees feel this way. I hope eventually we will find ways to make these kinds of choices easier and more transparent.
    best, leslie

    • Bouchra

      I don’t know where you got your figures, but as smooene who has had private medical insurance and now am on Medicare, private does much better. Yes, it is higher priced, but Medicare is far from being free either. We pay a monthly premium for it that totally exceeds $150 a month each and the coverage is horrible. I used to be part of an employer based plan where I paid less than that, and got excellent coverage. The only thing I ever had to pay was a small co pay for doctor and prescriptions.I think the best plans are those offered by employers because they are group plans. Medicare SHOULD BE the largest group plan but the group it covers are those who have the biggest health problems so it is a lot of money.Medicare recipients can get better coverage for less money if they take out a private plan where they can become of a group comprised of all ages. That is actually what Obama was attempting to do with the uninsured in the country. The problem is .those uninsured did not have to pay anything for it at all so that only means that the premiums will go up for everyone else to pay for them.I would happily pay my $150 per month to a group plan to get better coverage.

      • Steve Moffic

        Thank you for bringing in another type of insurance in this discussion. As far as health goes, it looks we are moving toward auto insurance in some ways, especially the necessity to purchase it. However, I’m personally much more willing to take less in auto insurance than I am with my health insurance. I like my car, but I like my life much more, although I want to do what I can to protect myself financially in either case. So interesting, that in our country, we seem to have had better insurance coverage for automobiles than for people.

    • Janice

      It is my understanding of the qisetuon is Group term life insurance versus Individual term life insurance.As most subject matter experts would say, depends.Group insurance is generally the best vehicle for those whom are sick. They find themselves insurable at a group rate and cannot be denied coverage in most jurisdictions (Called GI). The negative is that your coverage level is determined by an amount set by your employer and not your individual financial situation.Individual term insurance is a good financial vehicle for those needing higher short term protection without the high premiums. Also with the knowledge that the term insurance is not portable and will be less affordable when you reach a higher age.

    • Lidia

      This is the percfet post for me to find at this time

  2. Jae W. Oh MBA CLU(r) ChFC

    I am the son of a deceased medical doctor. I am a financial person now (MBA UofChicago, BA UofMichigan) and now I have written a book, called Maximize Your Medicare (www.maximizeyourmedicare.com). It is written for Medicare enrollees, and medical professionals alike.

    The rules are complex. Once you know the rules, that doesn’t mean that you are a master (think of the chess analogy: difficult rules even if learned, doesn’t make you Bobby Fischer).

    Advertisements are watered down for a reason: to avoid litigation. They are factually correct, but do not explain the implications of the choices being made. That of course is the problem: the implications reveal themselves…in accordance with Murphy’s Law. The book explains this and how to think about the matter in advance.

    The negative feedback loop on the medical system and the economy is stunning. Patients choose to avoid recommended medical procedures, until it is too late. They are inadequately protected, often due to the lack of correct information. That leads to unpaid bills (left with hospitals and doctors), and lower consumption by patients in the general economy. The vicious cycle has begun.

    The book has been reviewed by a hospital CEO and you see the review on Amazon.com or the website. It isn’t a glorified advertisement: great care has been taken to avoid this, and I don’t have a personal license in your area (most likely).

    Given the nature of your posts, I thought it would be useful to provide this information. The leverage of a single book is enormous. A retired medical doctor has donated multiple copies in his local senior center. Perfect (absent its disappearance from waiting rooms, a la Good Housekeeping).

    For the two MDs specifically, you can send me an email, and I will direct you correctly. I have done so for my family friends in the medical community due to the service you have done for our society, and to me personally. I have no financial motive: I will be sending you to a place with which I am not affiliated. That is an open invitation to you here.

    Have a nice day,


    • Seba

      The simple aswenr is Freedom of Choice. First of all you must understand that there is a great deal of fraud involved with Government run Medicare. Scam artists regularly milk Medicare out of BILLIONS of dollars. Private insurance companies are out to make a profit and therefore investigate the claims much better.It should also be noted that Medicare has approx $1100 deductible each year for hospital coverage and $162 per year for Outpatient deductible. After that the member is responsible for 20% co-insurance. Add to that the fact that there is no routine dental coverage, no routine vision coverage and no prescription drug coverage.Private plans are requires by law to follow federal guidelines that either meet or exceed original Medicare coverage. Most of them far exceed these guidelines. Many plans offer dental, vision part d coverage and even health and wellness, transportation and/or fitness classes (health club memberships)The private insurance companies receive a set monthly per member fee as determined by our federal government and not a percentage. If this amount is less than the cost of care for a certain individual the insurance company is liable to pay with no additional reimbursement.Insurance is actually defined as pure-risk but closely monitored by underwriters. They have an idea of what health care costs but there are so many variables that there is no clear cut number that can actually be obtained. It is all based upon estimates.Private insurance competes for more business and thus offers additional benefits and lower co-payments in order to entice more people to join their plan. We can all keep blaming the big bad insurance companies or give the reigns over to the government who will dictate what we deserve and what they feel we need. What a novel idea. Our government thinks they are more intelligent than we are and has decided that we are too stupid to decide what is best for ourselves.With all of that being said. Everyone still has a choice to have original Medicare or choose a private plan. Medicare advantage is growing at an incredible pace and there are over 11 million seniors and growing who have made this choice. I will side with Seniors on this one. They know what works because they use these programs every day. Not everyone will ever have the same opinion but the overwhelming majority of seniors will tell you quit screwing with my Medicare They like what they have

  3. Steve Moffic

    Thank you, Jae and Leslie. Jae, please let me and others know more about acquiring that information, if we would like to do so. Both of your comments helps confirm that my confusion and concern about Medicare reflects a real challenge. As far as I know, the Canadian Medicare system, which covers everyone, is much, much more simple for both the public and the professionals to understand and use. In the meanwhile, like Jae, what we seniors learn in using and studying Medicare should be passed on in any way possible, especially to those who will soon become seniors. We cannot rely on an organization like AARP, as they have a conflict of interest in being too tied into a certain way of delivering Medicare. In the meanwhile, I’m personally trying to do as much as I have control over to stay as healthy as I can and use Medicare as little as possible.

    • Leonardo

      Every state will be slightly dieerffnt, but I’ll give you the proverbial swine slap across the face about why Medicare is generally the worst thing invented by modern liberalism in this nation, in only ONE word: Access.In my state, there are 1,127 primary care Medical Doctors, and 130 Osteopaths in family practice. That’s 1,257 doctors that handle routine care (non-emergency care, not otherwise in a named specialty).Of that 1,257, less than 11% accept Medicare assignment. CMS provides these figures, so my point is irrefutable. As others have noted, Medicare pays a fraction of an already deep discounted rate that is substantially below what providers call usual and customary (a fancy phrase for retail prices ).When a doctor refuses to sign up for Medicare assignment, they still get paid for treating Medicare patients, but they get EVEN LESS than the already bottom dollar (read: guaranteed loss) reimbursements of the doctors that willingly accept Medicare assignment. This is not my opinion. This is verifiable, irrefutable fact, and the source is CMS. Nobody knows better how bad Medicare is than Medicare itself.Of the several hundred doctors I advise in my practice, more than 95% go out of their way to refuse Medicare patients. Some go as far as sending out birthday letters prior to age 65 politely asking the patient to find another doctor (if you schedule an appointment after age 65, they aren’t always so polite some instruct their staff to refer Medicare patients to CMS for the very short list of doctors willing to work for the absolute lowest wage a doctor can possibly earn).What this means to you is this: More than 89% of primary care doctors do NOT want Medicare patients, because they are guaranteed to lose money on those patients.What this also means to you is this: Private insurance subsidizes Medicare in an off the books fashion, via cost-shifting. Take away private insurance, and not only would Medicare go broke virtually overnight, providers would vanish faster than a modern liberal can fail at math (and they fail 100% of the time faster than any other group).Doctors aren’t going to work for free. Neither will nurses, and other support staff (and you can’t force them outside of a chattel slavery system of forced labor). They will all seek other ways to earn a living. This will lower access even further from the abysmal point it is now, and lower access ALWAYS equals higher costs, lower quality, and more early deaths among those modern liberals who failed at math so fast.Other points of interest: Largest and fastest growing form of crime in the USA is identity theft. Among that large group of crimes, the single fastest growing aspect is medical Identity theft. A Medicare card has a street value of $500 to $700 ten times that of a stolen credit or debit card.The second most profitable crime in America today? Medicare fraud. The source for that is the same government that built the failed collectivist system. The smart criminals are leaving the drug trade and turning to Medicare fraud. The numbers are staggering. A mid-level drug trafficker might make $300,000 a year, taking extraordinary risks. The same crook can make $30,000,000 stealing from Medicare, and never get shot at.Talent and capital go where it is rewarded, and stay where it is well treated. This axiom applies to the talent that goes into medicine, and it also applies to talent when it comes to criminals seeking to profit from the system that has ZERO financial incentive to fight fraud (ONLY a for-profit enterprise will root out the thieves, and find ways to detect them before they cause real damage the government just asks for more funding to replace what was stolen).

    • Miguelangel

      Both really.Group life is uslualy very inexpensive, say $6.50 for 100,000 face. Term cannot uslualy compare with the cost of group live.The real benefit is that if you have term, you own the policy. As long as you make payments, you have coverage for the term. Group uslualy is lost if you leave the group, cease employment relationship, business closes, lays off, changes benefits, or benefit providers. Group may give you rights to convert group policy to yourself in the form of whole life (expensive) policy upon termination.You have no control with Group. You have control with Term.My recommendation would be to price compare. If Term policy is within say 35% of the group cost, buy all term and for the face amount that your responsibilities to your family are. If group is dirt cheap, buy all you need through the employer. Then in addition, purchase Term in around 1/2 to 3/4 of your needs. This way if you lose employment, you still have protection for your family. Regardless of possible changes in your health, you have the bases covered.Hope this helps.

    • Jae W. Oh MBA CLU(r) ChFC(r)

      I realize I had not answered the question posed by Dr Moffic. My email address is jae at maximizeyourmedicare dot com. I will answer immediately.

  4. Jae W. Oh MBA CLU(r) ChFC(r)

    Greetings: a copy of my latest blog post. I thought that it would be useful here.

    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/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. For the numerically challenged, (20 days x $50/day) + (80 days x $2/day) = EXTRA $1160.

    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.

    Here is the link: http://maximizeyourmedicare.blogspot.com/2012/11/this-happens-medicare-advantage-cost.html

    Hope this is informational.


  5. Aco

    I have had Medicare since about 1999/2000. Medicare pays 80% of what they consider is resoanable cost. Believe me that isn’t much. For example: Suppose I have a bill of $1000. Medicare determines that resoanable cost is $400; they pay 80% of that. And even though I have a private insurance which supplements Medicare, Medicare still sets the resoanable cost which means in my example that my private insurance will pay 20% of $400. Whoever performed the service (doctor, hospital, whoever) is out $600. When my doctor retired about five years ago I called four places which wouldn’t take me on as a patient because I have Medicare.Even though private insurance companies are in it for profit, because they charge much higher premiums than the government does for Medicare, they can afford to pay more out because of those higher premiums. It’s truly a case of you getting what you pay for.Because I don’t work, Medicare is primary and my Blue Cross/Blue Shield is secondary so Medicare sets the reimbursement rate. Secondary insurers REQUIRE that a person be entitled to Medicare if they are eligible to cut down on the costs of the secondary insurance.If I didn’t have Medicare and I wasn’t eligible for it, my Blue Cross/Blue Shield would be reimbursing my doctors and hospitals at a much higher rate than what Medicare does.Now why doesn’t everyone in the United States have Medicare? The insurance companies wouldn’t stand for it and the medical community would be backing them up. Our representatives and senators wouldn’t dare extend Medicare to all Americans!Frankly I think Medicare should be extended to everyone with increased premium rates and higher payments to providers of services and it could be administered through the private companies. But who am I?

  6. Jae W. Oh MBA CLU(r) ChFC(r)

    WOW. This has turned into quite a political discussion. I am not attempting to solve this. What I AM trying to do is help those deal with the state of play, as it stands now. My latest blog post is here:

    This Happens: Misinformation from the Social Security Administration
    No Nice Way to Put It: This is Scary
    A retiree (female) with superior group health insurance has a spouse (male). That spouse (male), currently working, elects to accept his retiree-spouse (female) group insurance plan. The retiree (female) turns 65, but that plan has no existing benefits for retirees at age 65. The retiree (female) correctly signs up for Medicare Part B and a private insurance plan. The working male, however, decides differently. He (male) switches to his employer’s plan (he is also 65 years old), since the employee (male) is still actively working.

    The Working Spouse Retires
    The working spouse (male) retires late in the same calendar year, and attempts to enroll in Medicare Part B, under the belief that he has qualified for a Special Election Period (SEP), because he has discontinued enrollment in his group plan. That seems logical, right? Nope.

    Since the working male was utilizing his retired wife’s group health plan, the husband’s participation in the wife’s retiree group health plan doesn’t count for Medicare as continuation of creditable coverage. Medicare rules that he has passed his first eligibility date under Medicare, and he has to wait for the General Election Period, and Medicare eligibility will begin only on the next July. And, he is told that he will have to pay a 10% penalty for every 12 month period that he did not enroll for Medicare Part B. That penalty will have no expiry, i.e. it will last forever.

    Postlogue: All is Well That Ends Well???
    Yet another twist…the husband elected his employer’s group plan beginning the 1st of the month after he turned 65. That is within his Initial Coverage Election Period (ICEP). That means that his employer group plan DOES qualify for creditable coverage. Therefore, when he retired, he WAS eligible for a SEP. Tragically, he has been wrongly informed by the Social Security Administration. He elevates the matter to Medicare, which rules in his favor. He goes to the Social Security Administration office (again), and puts Medicare personnel in contact direct with SSA, and Medicare informs SSA of Medicare’s ruling. SSA relents, and allows immediate enrollment in Medicare Part B. The most overused three letters in the English alphabet certain do apply here. OMG.

    Moral of the Story
    The bottom line here is that if you are turning 65, you will need to have some very extenuating circumstances to justify not enrolling in Medicare Part B. Nevertheless, they do exist, and the man has taken extraordinary risk here. I had to personally oversee all of the activity in bold above, until its final, and correct resolution. In short, I have reasons for recommending that people enroll in Medicare Part B as soon as eligible, and here is a very strange situation, with the same conclusion. You want $9.99 of value? Descriptions of situations like this, to avoid outcomes like this, are included in “This Happens” throughout Maximize Your Medicare.


  7. Sinan

    Group life, or individual term? Well, it depneds on A LOT of factors. In some cases, someone who wouldn’t get term insurance at any cost, can get added to a group life policy because of the group. But when you leave your employement, you would have to convert it to private insurance.IN other words, there’s no answer to your question, without a LOT more information.

    • Tom

      HMO’s suck for doctors, but are cheap for you if you get a good one, you just have to be chsooy about the doctor, the doctor has to be in network. if you can afford it, go with PPO, POS, QPOS, etc. because doctors get paid better, and you wont have to pay them as mucha as a result. Talk to some doctors around that you like, and ask them, some doctors will not charge you much if you have an HMO, but some will, and other way around with PPO and such.

      • Steve Moffic

        Tom, you are correct that there are different types and aspects of HMO and managed care coverage, so looking into it from different perspectives should help. However, a major limitation is that doctors can drop out of networks at any time. The new networks under ACOs will be more hospital based, so that choices may have to be made based on the insurance and/or managed care company, the hospital network, and the doctors involved. How this will play out, time will tell, but it sure is more complicated than the old days of just picking a physician in private practice.

  8. Steve Moffic

    I suppose all this flurry of recent facts, figures, and finances substantiates my concern that I discussed in the blog. Medicare is confusing and can be more costly than anticipated for some (like me). The fact that seniors may like Medicare in general proves nothing; perhaps it was better than what they had before, obviously true for the astronomical numbers of the uninsured. It would be interesting to make a comparison of Medicare in the USA with the kind of Medicare Canada has for all. Thanks all for your comments. I’m learning a lot.

  9. Jae W. Oh MBA CLU(r) ChFC(r)

    Here is a prime example of why I wrote Maximize Your Medicare (www.maximizeyourmedicare.com)

    Example of What Insurance Company Messages DON’T Tell You
    Take a look at this article on a blog, as presented by UnitedHealthcare.

    MOST ANNOYINGLY, this is an exact quote:
    “Many Medicare Advantage plans cover only treatment and care that you receive from providers within their contracted network. (Most plans cover emergency care nationwide.) You may get care outside your plan network, but you will probably pay more. Some Medicare Advantage plans, such as private-fee-for-service plans, provide nationwide coverage as long as the provider is willing to accept the plan’s terms, conditions and payment rates.”

    Let me interpret this for you:
    a. If you are require medical attention from a provider that is out of network, then you will most likely face much higher out-of-pocket expenses than if you had received this attention from a provider in-network. If you are far away from home, this will probably occurs, since Medicare Advantage plans (that we may sold to you) are generally based on location.
    b. The out-of-pocket maximum costs that you may incur this year has notably increased since last year if you require attention from out-of-network providers.
    c. PFFS works, but you need to get approval on a case-by-case basis, and the provider can refuse if he/she/it chooses, on a case-by-case basis.
    d. You may not know this until you find out, after you have incurred these expenses.

    Calling the Blog “Medicare Made Clear” Seems Aggressive….

    Addl comment:
    The issue is that we live in a litigious society, and that fear of lawsuits deters companies from fully explaining these details. The information does exist in the fine print, but scenarios and examples are not provided. The book aims to fix this, in language that everyone can understand.

    Interesting blog,

  10. Steve Moffic

    Yes, indeed, Medicare Advantage is a for-profit business and runs like any such business. Buyers beware! You get what you pay for. It is cheaper, but you get less. The principles of managed care is not the problem; it is the operation when profits are put first. If these were not-for-profit companies, as many once were, the temptation to put profits first would not be so prominant.

  11. Steve Moffic

    Oh, and I forgot to add some recent personal experiences over the Christmas Holidays. My wife and I saw several versions of the Christmas Carol. I kept thinking that Scrooge, at least until he changed for the better, reminded me of someone or something. Finally, I realized that it was the for-profit managed care companies, counting their money as they provided as limited services as possible. Maybe, though, they can change for the better, like scrooge, if spiritual politicians with power will help them mend their ways. Even put some of the enormous profits they made put into more access and resources.