Cancer statistics are telling: The median age for a cancer diagnosis is 66, and the highest age category for diagnosis is between ages 65-74 (27.6%), with men being diagnosed more frequently than women. But the good news is the rate of new cancer diagnoses and death are trending down.
Still, a cancer diagnosis can be life-changing. And the last thing you want to think about is how your health insurance will cover your diagnosis - whether it’s for surgery or treatment.
In a study by Fidelity Investments, a 65-year old couple retiring in 2019 can expect to spend $285,000 on health care and medical expenses throughout retirement unless a critical illness occurs or the wrong insurance plan is selected.
Rest assured, your cancer treatment costs will be covered, but the coverage depends on the type of Medicare plan you have - standalone Medicare coverage (Part A, Part B, and Part D), Medicare coupled with a Medicare supplement plan, or a Medicare Advantage (also known as Part C) plan.
Original Medicare is a combination of Part A (hospitalization) and Part B (medical) and Part D (prescription coverage). It provides cancer benefits if you're diagnosed before you age into Medicare or after you have enrolled.
Relating to cancer, here’s what Original Medicare covers:
You pay your Part A deductible for common cancer treatments like:
You pay your Part B deductible and 20% of outpatient medical services for treatments like:
You’re responsible for your prescription drug copays until you reach the catastrophic coverage limit, which will then cover 95% of your prescription costs, including:
Original Medicare pays for a broad spectrum of covered cancer services but it can have its limits. Let’s look at an example:
In 2020, Medicare Part A pays the full cost for a semiprivate room and board, general nursing and miscellaneous services up to 60 days in the hospital. Up to that point, you are only responsible for a $1,408 deductible. The rest of your hospitalization costs are covered.
However, if you are in the hospital for 61-90 days, Medicare payments are reduced, and you have to pay $352 a day for treatment. If you’re in the hospital for more than 91 days, the benefits are further reduced and you’re responsible for paying $704 a day.
While Medicare has extensive coverage for cancer treatment, there are a few benefits that are not covered by Medicare which include:
As a reminder, if you have standalone Original Medicare with no supplemental coverage, you're also responsible for your deductibles and coinsurance, which is a set percentage you have to pay for hospital stays, medical treatment and prescription drugs.
Medicare Advantage is required to cover the same amount as Original Medicare, but can offer extra benefits and services. Medicare Advantage plans are offered through private health insurance companies - most plans have deductibles, copays and out-of-pocket limits. Once you've reached your out-of-pocket pocket limit, your Medicare Advantage plan will cover all additional medical costs during your plan year.
Keep in mind, you could be limited to doctors within a specific HMO or PPO network, which can be a problem if you are in the middle of a medical regimen or often travel out-of-state. So if you like your current cancer doctors providing your treatment, this may be a downside.
You’re also required to get a referral to see a specialist, which means you are required to pay for two doctor visits instead of just one.
Two important things to note about Medicare Advantage:
If you have cancer, it’s wise to shop around for Medicare Advantage plans and compare plan benefits with Original Medicare to determine what your out-of-pocket costs will be under each plan.
Consider the pain point of having to see different doctors if you’re required to stay within a specific Medicare Advantage network. In the end, nothing is permanent. If you enroll in one plan and find it’s not working for you, you can switch to a different coverage during the open enrollment period on October 15 - December 7 each year.
Medicare supplement plans, also referred to as Medigap plans, fill gaps in coverage that Original Medicare doesn’t pay for, such as a Part A deductible or Part B coinsurance. Medicare supplements also help pay for extended sickness and treatments for diseases like cancer.
There are 11 different Medigap Plans to choose from (in most states), but some plans are no longer available for new enrollments as of 2020. Still, it’s important to compare Medicare supplement plans because different insurance companies can charge different amounts for the same plan.
For example, some plans might only cover 50% of Medicare Part B coinsurance, resulting in a lower monthly premium, while other plans will pay the entire amount of coinsurance, and have a higher monthly premium.
Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies. So it comes down to what you can afford to pay on a monthly basis and what out-of-pocket costs you can afford for your cancer treatment.
If you have cancer and are aging into Medicare, it’s important to start the application process early. You have a seven-month period to enroll, which includes:
Many people will automatically be enrolled in Medicare Part A and Part B - especially if they’re receiving Social Security retirement benefits when becoming eligible for Medicare coverage.
If you’re still working and receive health insurance through an employer, it’s a good idea to enroll in Part A to receive extra benefits through Medicare in addition to your employer health insurance. You can enroll in Part B after you’ve retired.
If you’re already on Medicare and want to change your coverage, you have some options.
Medicare Open Enrollment (October 15 - December 7) You can sign up, switch, or leave Medicare Advantage and Part D prescription drug plans..
General Enrollment Period (January 1 - March 31) You can enroll in Parts A, B, or both.
Medicare Supplement Enrollment You’re eligible to enroll in a supplemental plan for exactly six-months after your Part B coverage begins with guaranteed coverage.
For example, you have until November 30 to enroll in a Medicare supplement plan if your Medicare Part B coverage began on June 1. If you miss this six-month window, the insurance company has the right to ask medical questions on its application and can deny you coverage if your health conditions make you ineligible.
If you enroll during the enrollment period and are approved, the insurance company can refuse to cover out-of-pocket costs for any pre-existing health problem for up to six months. It is known as a “pre-existing condition waiting period.” After six months, the Medigap policy will cover the pre-existing condition.
You generally don’t need to renew coverage each year, no matter what type of Medicare plan you have. But benefits may change, so it’s still smart to review your plan each year to make sure it’s the best. For example, a pharmacy or provider network may change, causing your costs to increase.
Need more information about Medicare and cancer? We have licensed Medicare agents available to walk you through your plan options that may cover your specific cancer treatment and care.
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