Picking Right Medigap Plan Daunting Task

Last year, the supplemental health insurance policy that Martha, 80, buys from Medical Service Corp. to fill major gaps in coverage left by Medicare, cost her $68 a month.

On Jan. 1, the cost shot up to $83 a month.

For Martha, a retired teacher who lives in Spokane on Social Security income and a small pension, the additional $15 may be a budget breaker.

She is considering her next move. A zero-premium managed care plan (or so-called Medicare HMO) is one option.

More on that in a minute. But meantime, in Medical Lake, William H. Allison is insured by Group Health Northwest of Spokane. With Medicare picking up the cost, the region’s largest HMO offered its “standard” Medigap plan (as supplemental Medicare insurance is often called) at no charge - or “zero premium” - last year.

But this year, Group Health decided that wasn’t good enough. So now, Allison and his wife are paying $19 each - $38 a couple.

Even so, he says, “I’m not complaining.”

A month ago, though, he was tearing his hair out. Due to a mailing snafu, some Spokane County customers of Group Health received notices of new rates that were intended for subscribers in surrounding Eastern Washington counties and parts of Idaho. There, the new rates are $65 to $75 - three to four times higher than in Spokane.

Initially, Allison was outraged, and wrote to the newspaper, prompting this column. Notified of the mix-up in mail and the reduced premium rate, he now says, “I am very pleased with Group Health. Still, I can’t help worrying about others on Social Security, especially elderly women.”

A 2.1 percent increase in Social Security this year allows Allison and his wife $36 more a month, too little even to cover the $38 hike in their health insurance, much less a slew of other cost hikes.

Back to Martha. “This is too much,” she says of the $15 hike by MSC. “For those of us who can’t work and must rely on Social Security, an increase this size, piled atop higher rates for all the other insurance and services we have to pay, is prohibitive. We have to lower our standard of living.”

Accordingly, she may have to switch to managed care, which is normally cheaper. Some plans are even premium-free. “But I can’t be sure I’d get to keep my doctor, which would be a big step down for me,” she worries.

What should she do?

“She has the best plan that we have at that price,” I was assured by MSC customer service representative Cheryl F., who ticked off the benefits and costs of a raft of other plans offered by MSC.

Martha could opt for MSC’s managedcare plan, Classic Care. It’s still a zeropremium plan. But here again, ancillary charges may come into play, depending on health needs and lifestyle.

Or she can shop for another insurance company. The task is daunting.

In Eastern Washington alone, Medigap carriers include, in addition to MSC and Group Health Northwest, QualMed, Health Care Inc., Blue Cross of Washington & Alaska, and Regents Washington.

Further complicating matters, Medicare has designed 10 standardized supplemental policies that insurance companies can offer, says Jim Stevenson of the Washington State Insurance Commissioner’s Office. Within these plans, companies are not allowed to vary benefits. But prices vary considerably.

In addition, there are managed care or Medicare-HMO plans in variety. Medicare-HMOs must meet or exceed standards for basic benefits. But fringe benefits and costs may vary widely.

Moreover, benefit packages and prices are always changing.

“The best advice for anyone trying to compare benefits or find the best policy,” says Stevenson, “is to call SHIBA (the Statewide Health Insurance Benefits Advisors) and walk through the options with an expert.”

A statewide referral hotline (1-800-397-4422) puts people in touch with their closest SHIBA advisor. In Spokane, call 458-2509.

, DataTimes MEMO: Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review