2nd Quarter 2015 Benefits Corner


By Al Horan

Al Horan Captioned Q2 2015As we know, the future of the Health Care Reform Act is under attack. With the change in the composition of Congress and the anticipated ruling by the Supreme Court on the legality of the Federal government subsidizing premiums, the Act may not survive, at least, in its current form. However, irrespective of what happens with the Act, there still remains the other looming problem of setting allowable Medicare charges that are representative of market conditions.

If Congress elects to “kick the can down the road” or if they elect to permanently fix the Medicare problem, the key to either solution is how the change will be perceived by the medical community. If doctors, in particular, do not view the change as equitable we could very well see more physicians unwilling to accept Medicare patients, especially new patients. If the pool of Medicare physicians shrinks, those doctors who remain will be overworked. This problem becomes exacerbated as “baby boomers” become eligible for Medicare.

As I pointed out in previous articles, the medical community attempts to recover the difference between their normal charges for services and the Medicare allowable charges by shifting the shortfall to non-Medicare patients. Even though the Health Care Reform Act limits the profits of insurance carriers, it does not address the shifting of non-recoverable charges for Medicare patients to non-Medicare patients. While this is a complex and far reaching problem, unfortunately it will take all parties, especially Congress, to arrive at an equitable solution for all concerned. This is easier said than done.

One of the defensive measures taken by some physicians is to accept Medicare patients but refuse to accept assignment of their benefits. Another measure taken by some physicians is to register with Medicare as “private contract” physicians. When benefits are not assigned, the medical provider can charge up to 115% of the Medicare allowable charge. The added 15% is not reimbursable by Medicare. However, in the case of Chevron’s supplemental Medicare plans, the plans pay the coinsurance applied to the covered charge that remains after Medicare’s payment, after the deductible is met.

In the case of the “private contract” physician, Medicare will not provide reimbursement for any of their charges. The patient is fully responsible for the entire charge. In the case of Chevron’s supplemental Medicare plans, reimbursement is based on the prevailing charge for the service or supply, less an amount equivalent to what otherwise would have been payable by Medicare. Prevailing charges are determined by taking into account pertinent factors including, but not limited to, 1) the Medicare-approved amount for such service, 2) the complexity of the service, 3) the range of services provided, and 4) the prevailing charge level in the geographic area where the provider is located and other geographic areas having similar medical cost experience.

As you can see, there are lots of permutations to the complex issue of current and future health care. Until such time as a practical solution is arrived at we should be mindful of and respect the time that is made available by our physicians and other health care providers. One simple way of making our visit meaningful and brief is to have our concerns and questions in written form before seeing the provider. Many times I will ask the medical provider if the problem that I am experiencing is age related or if it is extraordinary. Once I am able to frame the origin of the concern, I can then ask about the short term and long-term affects and practical ways of dealing with it. Very often, I find that the most effective way of mitigating the effects of aging is through diet and exercise.

We’ve all heard and read about how important diet and exercise are. But the biggest hurdle faced by most individuals is to make permanent changes in their diets and to make time to regularly exercise. Also it’s important to recognize that even with changes in lifestyle some people will turn to food if they are bored, stressed or tired. In order to avoid these lapses we should first recognize what triggers this behavior and then develop alternative means of coping, e.g. talk about the issue, take a nap, go for a walk, read a book, etc. To make the changes work, we should ask ourselves if we are eating because “we love to eat” or are we eating because “we eat to live”. 

As we have all read, exercise is important because it has beneficial effects on controlling weight, stamina and frame of mind. However, only 25% of seniors exercise on a regular basis. One of the biggest problems faced by senior citizens is the risk of falling. I’m sure that most of us know someone who experienced a major change in his or her life because of falling. There has been an increase in the number of seniors who fall and suffer serious injuries.

In 2012 more than 2.4 million seniors were treated in emergency rooms for injuries that resulted from falls; and in the decade ending with 2012 more than 200,000 died after falling. As a group, geriatricians generally agree that some older individuals possess an exaggerated sense of what they can do, even with hazards lying in wait, i.e. staircases, throw rugs, slick bathtubs, etc. The risk of falling can be exacerbated by some medications like hypertension drugs and antidepressant drugs, which can cause dizziness. One of the biggest concerns about falling is breaking a hip. Twenty-five percent of individuals who break a hip die within one year of falling and eighty percent have severe mobility problems. (Generally, these statistics apply to persons who were frail or sick before falling.) Because of mobility problems many elders lose their independence and must rely on family and friends for help.

The general underlying problem that causes many falls is balance. Balance involves vision, muscle strength, proprioception (the body’s ability to know where we are spatially) and attention to one’s surroundings. These elements deteriorate as we age. Preventative measures include enrolling in a balance class, being hydrated and being aware of our surroundings. Balance classes are becoming available for older individuals through community recreation centers and fitness facilities. By regularly exercising we stand a better chance of surviving a fall without experiencing a major injury. Exercise classes that include balance drills (i.e. standing on one foot, etc.) or the regular practice of tai chi has been found to be beneficial.     

The overall goal of most senior citizens is to be reasonably healthy and to maintain their independence. The cost of long-term care is expensive and at least 70% of seniors will require some form of long-term care. The average annual cost of a nursing home is $75,000 and the average stay is 2 ½ years. Most long-term care services are not covered by Medicare or Supplemental Medicare Insurance. Medicare however does cover up to 100 days of skilled nursing services or rehabilitative care following a three-day inpatient hospital stay. Long-term care costs are covered by Long Term Care Insurance. (Chevron makes available Long Term Care Insurance through Genworth Life Insurance Company until age 80. For further information about this coverage please phone Genworth at 1-800-416-3624 or visit their website at www.genworth.com/chevron.) If an individual does not have Long Term Care Insurance, they will be required to pay the full cost of nursing home care, unless they qualify for Medicaid. Medicaid is available to individuals who qualify for financial aid. Generally, to qualify for financial aid an individual must be at or near the poverty level of income and they must have limited assets. For more information about nursing homes and to inquire about Medicaid assistance, please visit Medicare’s website at www.medicare.gov or phone them at 1-800-633-4227. 

If you have any questions please let me know.


Al Horan, Benefits Chair:

Phone: 972-964-1787

Email: awhoran@verizon.net