Shirley Zerkel: Comments from Gary Russell on medical coverage

From Shirlee Zerkel, April 7, 2007
Subject: More Gary Russell views on medical coverage

Gary Russell states:

You are welcome to post my comments to the blog. Below is an excerpt from other information that I have sent that I think provides the whole picture. As you know you can't have a hospital stay without also having medical charges which are typically substantial. When the entire costs of the hospital stay (hospital and medical) are taken into account there typically is no difference in what a member with or without Medicare Part A eventually pays. Also there is information on the blog in your April 3 article about the total cost of $93.5 for Medicare Part B and $67 for STRS Ohio for a total cost of $160. There is a significant reimbursement of Medicare Part B premium. STRS reimburses a 30 year retiree $52.83. Therefore the correct total cost is $107,67 for a 30 year retiree with Medicare Part B in the Aetna or Medical Mutual Plus Plan. Below is the excerpt that you might find helpful: If the medical charges on a hospital stay are large enough that they account for the deductible and the 20% coinsurance up to the out-of-pocket maximum, then the end result is that the hospital portion of the bell creates $0 in additional responsibility to the member. For example, assume $40,000 in doctor and other medical charges that fall under the Medicare Part B responsibility. Regardless to whether the member has Parts A&B or Part B only, the Part B covered claim is processed as follows assuming Plus plan coverage:

1. $40,000 charge
2. Medicare B does not cover the first $131 as deductible.
3. Balance is $39,869 of which member is responsible for 20% or $7,973.80.
4. Total member responsibility after Medicare B is $8,104,80 ($131 + $7,973.80).
5. STRS Ohio Plan now covers $8,104.80
6. Member responsible for first $500 leaving $7,604.80.
7. Member responsible for 20% up to $1,500 out-of-pocket maximum.
8. 20% of $7,604.80 is $1,520.96 so capped at $1,500.
9. Member's total out of pocket is $2,000 Now the member has met the deductible and out-of-pocket maximums so the hospital charges will be 100% covered regardless of Medicare Part A covering first or not.