Medigap. For the life of me as I reached this critical age, I could not navigate the avalanche of “advice.”
I turn 65 in August. The occasion already has caused quite a stir. I’ve been inundated with cards, letters, e-mails and phone calls from people I’ve never met. The messages center less on congratulations than on commerce.
My next birthday not only is a reminder of advancing decrepitude, it’s a chance to close a sale. For many people my age, or older, shopping for health insurance plans to supplement Medicare will become an annual ritual. Or, should I say, ordeal?
After 30 years of writing about economics, I anticipated no problem in shopping for the right “Medigap” plan — covering most of my anticipated medical expenses without forking over a fortune in premiums. I’d simply build an Excel spreadsheet, plug in half a dozen variables and make an informed comparison.
How could I have been so naive?
The task of picking a Medigap policy is on par with trying to assemble an Ikea bookshelf without instructions — and in the dark. The job got old fast. It proved too knotty for my feeble skills.
I suspect that’s no accident. Whenever a consumer runs across complexity in the marketplace, the confusion works in favor of the seller, not the buyer.
How much money would I save by dropping the premium channels “Showtime” and “Starz” from my cable TV lineup? I haven’t a clue. And that’s fine with Comcast.
Mutual-fund administrators luxuriate at their Palm Beach estates more often than typical investors discover how much of their money gets siphoned away by “management fees.”
Ever wonder what’s covered under the “limited warranty” on a kitchen appliance or living room sofa? To explore the agreement, a buyer would have to consult an optometrist to focus on the fine print and a legal team to interpret the carefully parsed lingo.
Medicare, introduced nearly 50 years ago, covers most — but not all — of the costs of getting sick after reaching age 65. In the days when a doctor’s visit cost $25 and a hospital stay cost a couple thousand dollars, the gap between what Medicare paid and what was left to the patient must have seemed like no big deal.
But in an age of stratospheric health care prices, an entire industry — of eager, aggressive Medigap insurance marketing — has emerged to make billions on the shortcomings of Medicare and the all-too-reasonable financial fears of the aging.
Given that private health insurance companies routinely take 20 percent off the top to pay for administration, wouldn’t it make more sense for government — not private enterprise — to close the gap in coverage? Government insurance programs typically spend no more than 2 percent on administration.
I’d rather pay double the $104 a month I’ll soon be charged for Medicare than be forced to chop through a thicket of Medigap choices provided by health insurance companies. Don’t expect Congress to do anything about that, however.
How big a priority do health insurance companies make of the care and feeding of Congress? They’re among the biggest contributors to political campaigns.
I know a fellow who started out as a reporter 45 years ago but today pockets paychecks as a health insurance lobbyist. He struggles along on $450,000 a year. People paying premiums for health care also are financing his vacations in Tuscany.
Where to turn for help in choosing a Medigap plan?
The insurance arm of the Minnesota Department of Commerce makes an earnest effort. On its website, the agency has posted a table showing the key costs and benefits of 19 — 19! — companies selling Medigap plans in Minnesota. Visit at your peril: http://www.mn.gov/commerce/insurance/images/Medicare-Supplement.pdf
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