Update: Fayette Family Medicine Successfully Moved
Fayette Family Medicine has now successfully moved to 2620 Wilhite Drive, Suite 102, Lexington, KY, 40503; to see a Google map (which includes the much-celebrated “Street view”), click here. Dr. Skaggs is currently accepting some new patients, though availibility is limited. If you would like further information, please contact Dr. Skaggs here.
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New Insurance Options for Medicare Patients
Very soon you may have options to purchase insurance products that will take over administration of your Medicare benefits. To make an informed decision about whether to purchase (or “join”) such a plan, you should understand the market forces driving their development.
Traditional Medicare is funded by taxes paid by current taxpayers, who anticipate that when they reach 65, they will benefit from Medicare, and will get back what they paid in. The federal government wears two hats: it collects the taxes AND pays out the benefits.
The force driving new Medicare Managed Care-type plans starts with the fact that the federal government is worried that what it collects in taxes is not enough to pay for what it predicts it will have to spend to provide that care. Increasing what it collects or decreasing what it pays is very difficult, because both of those options are VERY unpopular with voters.
MEDICARE’S ANSWER:
Hire someone else to provide Medicare benefits.
If Medicare can get XYZ Insurance Company to agree to take 90% of PREDICTED cost to provide your care, then Medicare can breathe a sigh of relief, knowing that it has spent all it has to spend, and now it is XYZ’s problem to figure out how to provide your care for 90% of predicted cost.
WHY ON EARTH WOULD ANY INSURANCE COMPANY GO FOR THIS?
Because they GET THE MONEY NOW. And it is a lot of money. And they may not have to pay it out for your care for a long time (or ever if you have the good grace to die before they have to spend anything on you). The goal of XYZ (and all insurance companies) is to be profitable. If they take less than what it will cost to provide your care, how will they make any money?
THIS IS THE PART YOU CARE ABOUT:
To be profitable they must spend less than they collect. So now they have the ugly job that Medicare didn’t want: Collect more, and spend less. Ways to collect more: Charge you premiums (membership fees); charge you co-pays and deductibles.
Ways to spend less: Pay the doctors (and hospitals, labs, etc) less; restrict services available; set obstacles that must be surmounted to obtain services (require referrals, precertifications). Why would doctors agree to accept lower payment than Medicare would provide? Some may not, and then those doctors will be “out-of-network,” and XYZ Insurance will refuse to pay for services provided by out-of-network doctors.
You should realize that if you purchase one of these Medicare managed care insurance products you may no longer be able to see your doctor, even if she/he is a Medicare provider. This is most likely to affect you when it comes to specialty referral. If only one group of, say, orthopedic surgeons, signs up to participate in a plan, then every patient with that plan has to go to that group, and if that means that you have to wait two years to get an elective knee replacement, well . . . that’s another way to reduce the services that XYZ Insurance has to pay for. You can see why the insurance company might be motivated to sign up fewer doctors. They only have to have one of each type of specialist, even if there is no way that all the needed service can practically be provided by that one specialist.
Plans currently recruiting doctors in Lexington are offering payment schedules that range from 100% of Medicare rates for some providers down to 75% of Medicare in some cases. The insurance companies involved do not reveal which (if any) doctors have signed on, and under Anti-trust laws, the doctors cannot reveal this information to one another. You may or may not be able to learn what doctors participate before you buy.
By now you may wonder why any patient would agree to sign up for one of these plans. It remains to be seen what will be offered, but obviously there must be features offered that would be attractive, such as some sort of prescription coverage, coverage for services not paid by Medicare, or other services like nutrition and fitness education, newsletters, or “Nurse Line” phone services.
BOTTOM LINE: You should be absolutely certain you understand what you are buying and what it will cost you. Make sure that you can get back out, and go back to traditional Medicare, if it turns out that what you buy is not what you thought.
