Getting the most out of Medicare

Philip Moeller, co-author of the New York Times bestseller “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” has written a new book. This one deals with the only thing that might be more complicated than Social Security: Medicare.

“Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs,” came out last week. Moeller, a research fellow at the Center on Aging and Work at Boston College, also writes about retirement for Money and writes a column on Medicare for the PBS website Making Sen$e. He spoke with The Washington Post about Medicare, how to best navigate it and big mistakes some people make.

Question: Explain Medicare, Plan D, Medigap and all the other plans that add to the confusion.

Answer: First there is the original or traditional Medicare. Most Medicare recipients are enrolled in this plan. It includes a Part A for hospital expenses and Part B for doctors, medical equipment and out-patient costs. It also requires a 20 percent co-pay. Medigap or Medicare supplemental insurance is available to close that gap.

Part D prescription drug plans are voluntary, but in practical terms, I think Part D plans are essential, must-have protection. Also, if you enroll late you may have to pay huge surcharges for life. The other 30 percent of Medicare recipients get Medicaid Advantage plans, which are offered by private companies approved by Medicare. They provide annual out-of-pocket caps and may have cheaper premiums than “original Medicare.” But most of these plans operate like HMOs or PPOs and require that you go to doctors and hospitals within that plan’s network.

Q: If you give readers one piece of advice about Medicare, what would it be?

A: Don’t underestimate how hard this may be for you. Medicare can be really complicated, and you really need to approach it as a major set of decisions.

There are three underlying points I make in the first chapter. Sign up for

it at the right time. There are several enrollment periods for Medicare. You have to sign up when you’re supposed to. Otherwise you can face penalties, or you might not get it. Sign up for the right combination that meets your needs. And use the products you buy. Medicare is a pretty impressive sweep of insurance protection against illness, but it has wellness programs that you can use at no cost.

Why is Medicare so complicated?

Because the government runs it. I don’t mean that in a nasty way. It has been around since 1965. All Americans rely on it, so you would think it would be transparent and easy to use. I think it’s the desire for equity that causes regulators to adapt layers of complexity in an effort to be fair to people. That’s why I think it’s so complicated.

There is an enrollment period when you turn 65. There is one when you are older than 65 and leave work. There is an enrollment period if you have a change-of-life event. There is open enrollment every year.

Why is there an open-enrollment period every year for people who are already enrolled in Medicare?

It’s a lemon law for health care. It gives you a do-over. People view Medicare as so complicated that once they sign up, they tend to not deal with it again. One reason for that, social science has shown, is when people have too many choices, not only do they not feel comfortable about making the right choice but they don’t feel comfortable about choosing at all. A supermarket set up 30 jams and said if you buy a certain number, you get one free. Nobody buys. But they do it again with six jams, and people buy a lot of jams because it was easier.

You have three real-life examples in the beginning of the book. Talk a little about why you chose those people and those examples.

Those three situations were designed to emphasize three points. The first guy, whose name in the book is Glen, mistakenly never signed up for Medicare at all. (He believed he was automatically enrolled when he turned 65.) When his poor wife had a serious illness, they had no coverage.

The second story, a very nice woman named Carol, illustrates how important it is getting the right kind of coverage. She bought a Medicare Advantage Plan. They can be great deals, but the reason they are great deals is they set up a provider network to lower costs. Most are HMOs. In this case, when her husband was ill with pancreatic cancer, she wanted to get the best cancer care in the country, and her plan wouldn’t cover it. She had to scurry around to find health care. She didn’t think her plan was helpful.

The third story isn’t nearly so personally devastating. Phyllis, a partner in a law farm, didn’t retire until 75. She thought she could navigate any situation. She didn’t realize she didn’t know beans about Medicare — what is Part A, Part B or Part D. (Medicare Advantage is called Part C). She didn’t know that if you sign up with Medicare, you have to sign up at the Social Security office. Social Security has enormous staffing problems. She kept trying to make an appointment. The local office said they don’t make appointments. You have to come and get in line and wait. She almost never got seen before her parking meter expired. I think she will be okay in terms of health care, but it shows you’ve got to pay attention and do your homework.

Many financial planners now include advice about Social Security in their retirement plans for clients. But who do you go to for help in planning for Medicare?

I believe financial planners will develop some health care expertise. It is such a significant financial component. Unexpected health care expenses are one of the biggest wild cards in retirement. As a lot of professionals, such as financial advisers, and customers become more attuned to aging, they will develop a higher health care IQ.

There’s a program, State Health Insurance Assistance Program, that is free, funded by the government, but not run by the government. It has a network of volunteer counselors who help people with Medicare questions. The counselors aren’t perfect, but they try to do a good job. There are some nonprofits, like the Medicare Rights Center, which does a good job and has great tools. Another I turn to for more complex legal matters is the Center for Medicare Advocacy. Those three tend to be the best ones.