As a big business administrator, understanding the downsides of original Medicare benefits helps your disabled and senior staff. The pitfalls of Medicare can cost them their retirement savings and health, if improperly managed. Involving your HR staff in the process helps them see their insurance as a perk of their employment.
Cheap Medicare Can Cost More Than Employer-Provided Plans
Although Medicare does provide healthcare benefits to many disabled, low-income, and senior employees, it can cost those with poor health 2.5 times more than their healthier peers, according to the Kaiser Family Foundation:
“Among beneficiaries in traditional Medicare, those with a Medigap supplemental insurance policy pay more in premiums for this additional coverage, on average, than beneficiaries with employer-sponsored retiree health benefits ($2,166 vs $1,335, on average, in 2010).”
Fewer Physicians Accept New Medicare Patients
Ninety three percent of physicians accept original Medicare benefits, but one of the pitfalls of Medicare is that 21% of physicians will not accept new patients with this coverage. That compares with 14% of newcomers with private insurance.
Original Medicare Benefits Can Have High Out-of-Pocket Costs
Even original Medicare’s premium-free Part A coverage has a $1,364 deductible (2019). Medicare’s Part B coverage can add $185 to the bill.
Meanwhile, the plan’s out-of-pocket coinsurance and copays costs add to the pitfalls of Medicare. Its Part B covers only 80% of medical costs, leaving your employees to come up with the other 20%.
“Out-of-pocket spending tends to increase with age,” according to the Kaiser Family report:
“In 2010, beneficiaries ages 85 and older spent three times more out-of-pocket on services, on average, than beneficiaries ages 65 to 74 ($5,962 vs. $1,926).”
Medicare Costs More for Women
On average, women covered by Medicare paid $673 more for out-of-pocket services and premiums than did men, during 2010. The difference grows with age, and at 85 years of age, a woman on Medicare can expect to pay, on average, $1175, more than a man of the same age. Long-term care facilities cost older women more money.
Original Medicare Does Not Cover Vision, Dental or Hearing
Many of your original Medicare policyholders have likely reached the age where their eyes, teeth, gums, and ears do not function like they did when they were younger, affecting their quality of life and even performance at work. One of the downsides of original Medicare benefits is that vision, dental and hearing require separate coverage.
Employees who cannot pay for treatment for poor vision and hearing may become unable to perform duties safely and efficiently. Likewise, unattended dental problems often mark the beginning of poor dietary habits, other diseases, and declining self-esteem and drive. Your employees with Medicare may not be able to afford the proper treatment that can keep them healthy, happy, and productive.
More Pitfalls of Medicare: Prescriptions
Medicare may limit your prescription drug coverage in some situations. For example, it may not cover prescriptions that you take at home. None of the Medicare Part D plans cover …
Drugs for ...
Most prescription vitamins and mineral products
Drugs for sexual dysfunction
Drug efficacy study implementation (DESI) drugs that the FDA consider safe but not effective
Many bulk chemicals
Devices, such as diaphragms
Ingredients and adjuvants, such as sterile water for injections
Line flush, including normal saline IV flush
Medicare Has No Annual Maximum Out-of-Pocket Spending Limit
Many insurance plans have a maximum out-of-pocket spending limit. If your employee reaches this limit, the plan may pay medical expenses for the rest of the year.
Medicare does not have an annual maximum. It’s up to your employee to cover any out-of-pocket spending beyond that maximum.
Make sure that your HR staff understands the downsides of original Medicare benefits. Your disabled and senior staff will appreciate the knowledge, and it could make your company a healthier, happier place to work.