Medicare Advantage: A Safety Net for Turbulent Times

The world has changed in ways we never could have anticipated a year ago. As we approach the holiday season and take time to reflect on how far we’ve come and where we intend to go, it’s pertinent for us to also examine medical needs and how to protect ourselves for the future.

One of the biggest questions surrounding healthcare this year is how to protect yourself from excessive medical costs that could result from a COVID-19 related hospital stay. Without health insurance, a hospital stay could result in a significant unexpected expense. This is especially alarming considering the increase in COVID-19 related hospitalizations and the fact general medical expenses are on the rise. With around 65% of all bankruptcies being related to medical debt, it’s more important now to make sure your medical costs are covered.

Both Medicare Advantage plans and Affordable Care Act compliant individual and family plans offer a financial safety net called an Out-of-Pocket-Maximum. Also referred to as a Maximum-Out-of-Pocket or MOOP, these benchmarks represent the hard limit on what you’ll pay for medical care in a given year. Should you have a catastrophic year the MOOP will be the accumulation of any medical deductible, co-pay and coinsurance that you have paid. After you reach it your insurance company will pay 100% of your medical costs for the rest of the calendar year. You will need to speak with your experienced insurance broker regarding the Out-of- Pocket-Maximum specific to your plan.

While it’s estimated that less than 5% of people actually hit their Maximum-Out-of-Pocket in a given year, the MOOP still serves to provide peace of mind for life’s unexpected twists and turns.

As an example, let’s say Cathy, who has chronic asthma, is diagnosed with COVID-19 and is experiencing trouble breathing. Her husband Chuck takes her to the emergency room where she is immediately placed on oxygen and undergoes a series of tests and diagnostic radiology to confirm her limited lung function. Cathy spends three days in the Intensive Care Unit and another two days in a private room under observation. After she is released from the hospital, Cathy needs to see doctors several times a month to monitor her condition and ensure she’s recovering well. These visits often include a number of tests and imaging to ensure her lungs are regaining strength. A awhile later, Cathy is finally starting to regain her strength when a bill arrives in the mail for what could be more than double the cost of her house!