I meet with many folks who are very healthy. They hardly go to the doctor and they’re very comfortable with their plans because they never use them.
But many of them do not know what happens when an accident or a sudden chest pain requires a visit to an emergency room.
If you end up in that situation, you’ll typically find yourself undergoing an outpatient procedure. Yes, you can definitely find yourself being admitted to the hospital from an emergency room visit, but that would likely be an extreme situation.
Advances in technology and healthcare are getting us home quicker than ever.
Consider that most of the surgeries my clients undergo are all still coded as an outpatient procedure. This includes:
- Knee replacements
- Shoulder replacements
- Hernia surgery
- Heart stents
There are major surgeries taking place and people are going home the same day!
Do not be confused! Even if you stay the night in a hospital, you will still be considered an outpatient. It has to do with how the procedure is coded by hospitals, not if you leave or spend the night. We have had insurance companies tell us hospitals are keeping patients under observation lasting 5, 6, and even 7 days and still considering their care as an ‘outpatient’!
It’s safe to assume that if you need to head to the ER, you’ll be undergoing an outpatient procedure.
What will outpatient procedures cost?
Outpatient procedures are covered in Medicare Part B as an 80/20 program. The government – Medicare pays 80% of the bill with you being responsible for the remaining 20%. If you are one of the roughly 19%, or 6.1 million, who stick with basic Medicare have no extra coverage, according to a 2018 study from the Henry J. Kaiser Family Foundation (via CNBC.com, June 2019). whatever the 20% comes to is what you’ll pay. A $10,000 visit to an emergency room you will get a $2,000 bill. That can quickly add up with no cap.
This is one of the biggest risks of being on Medicare without a supplemental plan – there is no out-of-pocket maximum for outpatient treatments.
This is why, every year, 60 minutes runs an episode discussing how chemotherapy is financially breaking seniors in America. Chemotherapy is an outpatient treatment. With the average costs for treatment running in the $150,000 range (according to AARP, June 2018), that would leave the patient with $30,000 in bills!
Medicare Supplement and Medigap Plans
The secondary plans I work with, Medicare Supplement and Medigap Plans, help protect our clients against runaway costs. The most popular ones are the F plan and G plan. These cover ALL your expenses on Part B for outpatient procedures. For the G plan, you are responsible for the Part B deductible ($203.00 for 2021) but that is it! You won’t even have a copay if you are on these plans.
While these plans have higher premiums, they come with peace of mind that you can find yourself in the emergency room, and no matter how bad the circumstance, it won’t be compounded by an added bill you likely could not afford.
HMOs and PPOs
The main part of my business is working with Advantage Plans such as HMOs or PPOs, each with a copay structure. Most of the plans I deal with will range in the per-day cost. I’ve seen them as low as $195 and as high as $500 per day.
So you can put together the craziest scenario of what can happen and most likely to land you in the emergency room – and that is the most you would pay (with the exception of the $90 copay most of these plans have to get into an emergency room). Now add in an ambulance ride (not uncommon). With Advantage Plans, that cost is typically $250.
Quite a bit different than receiving 20% of a bill.
The main risk with a PPO or HMO
Some PPO and HMO carriers have a clause in the contract that you can pay up to 20% of the bill. However, most of these plans do have a maximum out of pocket cost. That range is between $5000 to $7,000 on average a year. That is still a big check to cut if you have a Medicare Advantage Plan that is going to charge 20% for that day.
I highly advise you to check into your outpatient cost per day to avoid a surprise bill.
How do you know what your plan will charge?
One of the things that frustrates me most is the book all seniors receive every year, “Medicare and You” with a comparison of all the plans in the marketplace around you, does not even list the outpatient column!
Your best bet to find the cost (so you can be prepared or determine if you need to make a change during the next open enrollment), would be to go to your evidence of coverage and look up “outpatient procedures.”
The other option is to schedule time to meet with me.
We can go over your coverage together. I can almost immediately tell you what local carriers charge on outpatient procedures. We’ll make sure you understand your coverage and costs. If necessary, I can help you locate a better plan with more protection for you and your finances.
Be well, be safe, and have a blessed day!
Brian Johnson, LUTCF