A new study from Harvard University found that more than half of Medicare beneficiaries with serious health conditions are struggling to pay their medical bills despite being enrolled in the nation’s most popular healthcare system.
The Harvard study
In a survey of 742 Medicare beneficiaries with serious illnesses, 53 percent of them have a “serious problem” paying their medical bills. Overall, 30 percent of respondents have struggled to pay for their prescription drugs, and about 25 percent have been unable to pay for hospital, ambulance, and ER bills.
Another bill almost none of these respondents could cover without significant help from friends and family is that for long-term care, like in a nursing home, which Medicare does not cover.
Of these respondents, more than one-third have used up their entire life savings to pay for medical bills, and one-quarter are unable to purchase basic necessities like food, housing, and utilities. These respondents consider their medical bills a “major burden” for their family members.
Can a Medigap plan help?
Although Medicare is the nation’s most popular healthcare program, this survey highlights the “gaps” in coverage that can lead seniors into bankruptcy.
While Medicare covers much of the cost of care, if you have frequent doctor visits from chronic illnesses, you might find yourself struggling to pay your copay each time. Many Medigap plans will cover many of the out-of-pocket costs associated with Medicare, like deductibles and copays.
If you want to purchase Medigap’s most popular and comprehensive plan (Plan F), move fast. Medicare is phasing it out at the end of 2019, but those who have already purchased it will be allowed to keep it.
Can a Medicare Advantage plan help?
Another reason for these high medical bills is that Original Medicare doesn’t cap out-of-pocket costs.
Because of this, many seniors are flocking to Medicare Advantage plans, which do cap out-of-pocket costs. The maximum out-of-pocket costs will vary by plan, but in 2020, no plan can charge more than $6,700 within a single calendar year.
Compare Medigap and Medicare Advantage benefits to see which one is right for you.
Note: You cannot have a Medigap and Medicare Advantage plan at the same time. It is illegal for a Medicare broker to sell you one plan while you have the other.
Education is the best protection
Most respondents in the Harvard study reported being unprepared for the kind of healthcare costs they would face in retirement, and only half felt like they’d received proper education on Medicare coverage during enrollment.