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
Nice try. Unfortunately, the table left me more puzzled than before I had seen it.
Medigap insurance benefits differ from customer to customer. The bottom-line number on premiums doesn’t help make comparisons on how much a patient pays for office visits or whether — and how much — the plan pays for prescription drugs. A plan that’s great for a patient with no more worries than high blood pressure could be miserable for someone with diabetes or Parkinson’s disease.
Making intelligent comparisons actually requires delving into Medigap contract descriptions, navigating from brands that may be familiar — like Blue Cross/Blue Shield, Medica and HealthPartners — to rivals that may be doomed to obscurity.
Maybe I don’t get out enough, but I’ve never heard of the fine folks at Loyal American Life Insurance, Royal Neighbors of America or Continental Life of Brentwood, Tennessee. Each is on the long list of Medigap providers named on the state commerce table.
Besides, how many oldsters are comfortable enough at a computer keyboard to crawl through what details are available online? My own brother, age 63, is a smart guy with his own small business. He has a hate/hate relationship with computers. He’s not alone. I’ve spent hours helping friends, about my age, who consider the PC an enemy and the Internet terra incognita.
Blue Cross and Blue Shield of Minnesota knows its audience. Anyone with that company’s Medigap insurance could make sure their doctor is covered by the plan with a quick trip to the World Wide Web. Not good enough. The company has killed a forest, publishing a 683-page “provider directory” on paper. Don’t lose it, gramps.
So what’s a person to do when shopping for Medigap insurance?
That’s where the e-mails, phone calls, letters and brochures come in.
Medica has sent me an invitation to a Medigap seminar. Actually, to my choice of 21 — 21! — Medigap seminars, being held from Anoka to Chaska and almost everywhere in-between. HealthPartners has done the same. No word on refreshments. Milk and cookies? A complimentary jar of Geritol?
Who knows? I’m not going. In retirement, I have other claims on my time. Like searching for my keys, lying to my dentist about how often I floss and falling asleep in my favorite chair.
Besides, if I attended a seminar held by, say, Medica, I wouldn’t be able to stand the suspense. I would spend the whole seminar wondering which company — of the 19 competing in Minnesota — would be best for me. In Medica’s opinion, that is.
Skepticism doesn’t deter insurance sales reps. Blue Cross/Blue Shield and HealthPartners not only sent Medigap “literature” but made telephone calls to ask if I had questions.
I’m risking repetitive stress injury from hitting the “delete” button on e-mails from prospective Medigap providers.
Finally, I just gave up. Through a referral from a friend, I contacted an insurance broker. In theory, at least, she represents every company selling Medigap insurance in Minnesota. At last, an honest broker. Someone who doesn’t care what I buy. Or so I imagine.
After spending considerable time sifting through the choices — based on my medical history — I picked a policy and she signed me up.
Did I make the right choice? Can’t say.
The broker was an amiable, helpful guide, but she works on commission. Do all companies pay the same commission, or does the one I picked pay more than the others?
I didn’t ask. I know that I have no way of confirming her answer. Any more than she can verify that my driver’s license offers my accurate accounting of my weight. (It doesn’t.)
After weeks of reading and pondering, I ended up making a faith-based decision on which plan to buy. And each and every year, during open enrollment period, I will get to go through the process again.
There’s a better way. Expand Medicare benefits, supported by higher premiums, to put the Medigap industry out of business.
Sadly, it won’t happen. Not in a land where too many people hate Big Gummit and trust the invisible hand of the marketplace — even when that hand makes you wary of just where it’s reaching.
Mike Meyers, a former Star Tribune business reporter, is a writer in Minneapolis.