No one disputes that older and disabled Americans are most at risk for COVID-19. To date, 1.2 million people with Medicare, about 2 percent of them, have been diagnosed with the novel coronavirus. If you have Medicare and get COVID-19, what will you pay out of pocket for that care?
Experts estimate that more than one in four older adults with COVID end up hospitalized, which is where people’s costs can be high. Fortunately, people with Medicare are better off than most working people in terms of out-of-pocket health care costs. What you pay for your care depends upon whether you are enrolled in traditional Medicare or a Medicare Advantage plan and the kind of care you need.
No matter how sick you are and how much care you need, if you have traditional Medicare and supplemental coverage, either through a Medigap policy you buy in the individual market, or a former employer or Medicaid, your out-of-pocket costs should be very small. If you are enrolled in a private Medicare Advantage plan, it’s another story.
Medicare Advantage plans can charge high deductibles and out-of-pocket costs for people with complex conditions. Indeed, they can charge as much as $7,550 out of pocket in 2021, excluding costs for prescription drugs and surprise out-of-network bills. Medicare Advantage plans do not release data on average out-of-pocket costs for people in their plans, which likely means they don’t want you to know how high they can be for people with complex conditions.
The costs for people in Medicare Advantage can be even more significant if they need rehab or skilled nursing services post-hospitalization. People are far less likely to be able to use high quality facilities if they are enrolled in Medicare Advantage than people in traditional Medicare. So, Medicare Advantage enrollees often face the choice of limiting their out-of-pocket spending and using an in-network facility or paying out-of-pocket for these services.
Traditional Medicare offers a broad array of rehab and skilled nursing facilities for you to choose from. And your supplemental coverage should pick up most if not all out-of-pocket costs. It’s possible that you can switch out of Medicare Advantage to traditional Medicare, but it is unlikely that you will be able to buy Medicare supplemental insurance to fill gaps in coverage. Only four states require insurers to sell you these policies except when you first enroll in Medicare.
Medicare Part D drug coverage can mean high out-of-pocket costs, whether you are enrolled in traditional Medicare or a Medicare Advantage plan. In traditional Medicare, you can and should choose carefully among many different Part D plans to find one that limits those costs, although most people do not. It’s not clear that people in Medicare Advantage appreciate that they are locked into the prescription drug coverage their Medicare Advantage plan offers, which can have high out-of-pocket costs. In truth, to save money, if they are opting for a Medicare Advantage plan, they need to choose a Medicare Advantage plan in part based on its drug coverage.
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