Medicare Specialist

QUESTION:

You often mention what you refer to as the Maximum Out of Pocket, or MOOP. I know you’ve gone over it in other columns, but I still have a hard time wrapping my head around it. Is it the same as a deductible? Do both Advantage Plans and Supplements have a MOOP. If so, how much are they?

ANSWER:

First, I want to establish that the MOOP, which is only applicable on Advantage Plan HMO’s and PPO’s, and a deductible are quite different. When a service is subject to a deductible, the insured is responsible for 100% of the billable amount. For example, if you had a CT scan that was billable at $1,100 to your insurance company, your annual deductible was $1,200, and you hadn’t met any of it yet, you would get a bill for the entire $1,100, which would leave $100 of the deductible remaining to pay before it was satisfied.

The MOOP is the maximum dollar figure that those who have Advantage Plan HMO’s or PPO’s can be billed for covered medical services in a calendar year. In 2021, the lowest available MOOP on any plan available in PA is $4,000. The largest allowable MOOP is $7,550 and many, if not over 50% of all plans, utilize the higher figure. Advantage Plans have co-pays and coinsurance to determine what a patient must pay for certain medical services. Co-pays are a set, fixed amount for specific medical services. Here are some random examples: $5 for a PCP visit, $20 for outpatient rehab, $25 for an X-Ray, $40 for a Specialist, $90 for the Emergency Room, $200 for an MRI or CT scan, $225 for an outpatient surgery, $300 for an inpatient hospitalization.

Coinsurance is a percentage of the allowable billable amount to the insurance company that the insured is responsible to pay for specific services. Coinsurance on Advantage Plans are generally 20% for the following: Part B drugs which include Chemotherapy or others that are infused or injected, Dialysis, Durable Medical Equipment, and Diabetic Supplies. What services are subject to co-pays and coinsurance, and how much they cost, are published in the Summary of Benefits that one should receive after initially enrolling in the HMO or PPO. And every year, your company is mandated to mail what is known as the Annual Notification of Change (ANOC), about a 100-page publication. It must be postmarked by October 1st, prior to the start of AEP. It has all changes to your plan from the current to the following year. The problem with the ANOC is its sheer size. It’s also not very user friendly and sometimes hard to find the new benefit schedule. We make our Advantage Plan clients aware of their changes every year in an easy-to-read recommendation letter and spreadsheet that we also send out in October.

Now let’s discuss how to calculate when you’ve met your MOOP. Every time you’re subject to a co-pay or coinsurance, that dollar amount counts towards the MOOP. Let’s use a knee replacement, very common for someone on Medicare to go through, as an example. We’ll start from beginning to end and assume this was the first health issue of the year. The initial visit to your PCP to complain of knee pain had a co-pay of $5. The PCP ordered an X-ray that had a co-pay of $25. After getting it back, he or she suggested seeing an orthopedic surgeon, which you did, and resulted in a co-pay of $40. The PCP ordered an MRI which has a co-pay of $200. The MRI revealed a need for the knee replacement, an inpatient surgery with a co-pay of $300. After a successful procedure, the surgeon prescribed six weeks of physical therapy which came to 18 sessions at $20 per ($360 total). After the last physical therapy visit you had a followup with the surgeon and another co-pay of $40. The grand total of those charges comes to $970. If you had a MOOP of $7,550, you would still potentially be exposed to $6,580 more in bills.

How could you ever get there? The most common way is paying coinsurance for either Chemotherapy, which can be billed at $5,000, 10,000, or more; infusion such as Remicade for those with severe arthritis or Chrone’s that people get every four to six weeks is billed around $2,000 per infusion ($400 coinsurance); or shots for Macular Degeneration that are generally given once a month also have a $400 coinsurance per injection. Let’s say the person who had the knee replacement early in the year was then diagnosed with Cancer and needed eight Chemo treatments billed at $8,000 per infusion. The coinsurance would be $1,600 each and the $7,550 MOOP would be reached after only four treatments. Now, for the rest of the year, all covered services, including the last four chemo treatments, would be no cost. Any more visits to the oncologist or to the PCP, CT scans, tests, procedures, etc., related or unrelated to the Cancer would all be $0 until January 1st, when the MOOP resets and starts over again.

Please be advised that prescription drug costs don’t count towards the MOOP! Part D coverage, although provided by the same Advantage Plan, is in essence a separate plan with its own cost sharing and regulations. Those who take expensive brand name medications could easily spend another $2,500 to $3,000 out of pocket on drugs. There’s no MOOP on Part D, be that on plans provided with an Advantage Plan or Stand Alone plans those on Supplements buy. Both have different stages where drugs vary in cost and there’s never a time when they’re provided at no charge. There isn’t a MOOP on Supplements either and on the plans we recommend, letters G and N, it isn’t necessary due to there being very little out of pocket costs. The only medical bill those who choose G can incur is the annual Part B deductible of $203. Once satisfied, every other Medicare covered service is paid at 100% for the rest of the calendar year. Let’s take the knee replacement surgery example. If one had already met their deductible prior to starting the process of seeing the PCP, there would have been no charges from start to finish. Same goes with Chemo. Anyone on Plan N would have only paid $20 co-pays when they saw their PCP, surgeon(s), or oncologist for both the knee replacement and Chemo. The only charges after the same deductible have been met for Plan N as opposed to Plan G are $20 for a PCP or Specialist office visit, and $50 for at Emergency Room. There are no co-pays for rehab, chemo, blood work, CT scans, etc.

Keep in mind that better medical coverage and lower out of pocket costs on Supplements generally come with higher premiums. Supplements also don’t provide comprehensive cosmetic dental, vision, and hearing, as well as Over the Counter benefits like select Advantage Plans do.

If you have any questions regarding this topic or any other related to Medicare or would like to make an appointment for a no cost consultation, call one of our offices or email me personally at aaron@getyourbestplan.com.