Before You Explain My Health Insurance,

Explain What You’re Talking About

I am trying to decide whether to change my health insurance. Before I can make that decision, however, I need to understand what everyone is talking about.

I currently have Medicare, a supplement through LifeShield, prescription coverage through Wellcare, and separate vision coverage through VSP. My dentist operates outside this collection. I pay that bill myself, with some assistance from a financing arrangement that makes the payments smaller without making the dentistry cheaper.

Most of my doctors are with Renown here in Reno. Now Kaiser Permanente is entering the local market through its relationship with Renown and Hometown Health, giving me another option to investigate.

It might be a good option. It might not. I am trying to arrange a meeting with my senior insurance adviser to work through it. But before we compare the choices, I would appreciate a little translation.

Knowing the Words Isn’t the Same as Understanding Them

I spent much of my working life around technology, where we have a well-established habit of explaining things using words our audience doesn’t understand. Sometimes we improve the explanation by turning those words into initials.

This saves time for the speaker. The listener may need considerably longer.

Insurance has developed much the same habit. People discuss Parts A and B, Part D, Plan G, Medicare Advantage, supplements, networks, deductibles, and formularies as though everyone arrived with the same instruction manual.

I recognize many of the words. That doesn’t mean I understand how they fit together—or which ones apply to me. Some friends have done considerably more homework and understand this better than I do. But becoming an informed customer should not require becoming an insurance specialist.

To be fair, explaining a complicated system simply is difficult. You can leave out so much detail that the explanation becomes misleading. But you still have to build a foundation before adding the next floor, and you have to do this using language that is understandable. Otherwise, the customer is nodding politely while wondering what happened three sentences ago.

First, There Are Parts. Then There Are Plans.

Here is the foundation I wish every Medicare conversation started with:

• Part A helps cover inpatient hospital care and certain other services.
• Part B helps cover doctors, outpatient care, equipment, and preventive services.
• Together, Parts A and B are called Original Medicare.
• Part D helps cover prescription drugs. With Original Medicare, you can obtain it through a separate drug plan.

Then there is Part C, better known as Medicare Advantage. This is an alternative way to receive your Medicare benefits through a private insurer. It combines Part A and Part B benefits and usually includes prescription coverage. It may also offer dental, vision, and hearing benefits—with details and limits that need examining.

If you’re wondering why I explained D before C, it is because understanding the choices matters more than reciting the alphabet.

A Medicare supplement, also called Medigap, serves a different purpose. It helps pay certain costs that Original Medicare leaves to you. It works alongside Original Medicare, rather than providing the Medicare Advantage alternative.

And then, apparently deciding we hadn’t used enough letters, the system gives supplemental policies names such as Plan G and Plan N.

A Medicare part and a supplemental plan are different things. Plan G is not another part of Medicare. That distinction may be obvious to someone who works in insurance. It is considerably less obvious to someone trying to buy it.

Now Explain What I Pay

Once we get through the alphabet, we arrive at the money vocabulary:

• A premium is what you pay to maintain the coverage, whether you use it or not.
• A deductible is an amount you may have to pay for certain covered services before the insurance starts paying its share.
• A copayment is a set amount for a covered service, such as a doctor visit. It generally applies each time you receive that service.
• Coinsurance means your percentage share of the allowed cost of a covered service. Despite the name, it does not mean two insurance companies are involved. Supplemental insurance may help pay that share—which adds another layer to understanding who ultimately owes what.

Here is a simplified example. Suppose a covered service has an approved price of $200. If your deductible has been met and your coinsurance is 20 percent, your share would be $40 before any supplemental coverage applies. A copayment works differently: the policy might specify a fixed dollar amount for that visit.

The actual arrangement depends on your coverage and the service. Which means “What does it cost?” requires more than looking at the monthly premium.

A Medicare Advantage plan advertised with a zero-dollar premium does not mean zero-dollar healthcare. You generally still pay your Medicare Part B premium, and you may pay when you receive care.

An out-of-pocket maximum limits certain expenses you pay during a year. But the scope matters. Medicare Advantage’s medical limit does not include everything you spend, such as premiums or your prescription-drug expenses. Drug coverage has separate rules and a separate limit. Original Medicare alone has no annual out-of-pocket limit, which is one reason supplemental coverage deserves attention.

I would like to know both what a reasonably healthy year might cost and what happens during a bad one. At my age, planning only for the first seems a little optimistic.

“Covered” Is the Beginning of an Answer

Then someone tells me a service is covered. Wonderful. Now, how much will I owe, where can I receive it, and does somebody have to approve it first?

A network is the collection of doctors, hospitals, and other providers participating in a particular insurance plan. A referral is a direction or order from a doctor to see another provider. Prior authorization means the plan requires approval before it will cover certain services or medications.

Those are different requirements. Having a doctor recommend something does not necessarily mean the insurance company has approved paying for it.

Prescription coverage brings another word: formulary, meaning the plan’s list of covered drugs. Finding your medication on that list is a start. You still need to check its cost, any restrictions, and which pharmacy you can use.

Even dental coverage needs translation. A benefit can sound generous until you discover its annual limit and what it excludes. I already have enough experience with dental bills to want the details.

The paperwork after treatment can raise another set of questions. A statement shows what the provider charged, a much smaller amount approved for payment, what insurance paid, and what I might owe. With Original Medicare, this is called a Medicare Summary Notice, and it is not a bill. My supplement may pay some or all of the remaining amount. So even after reading the statement, I may still be waiting for the answer to my original question: “What do I actually have to pay?”

Can I Keep My Doctors?

This is where the discussion becomes personal again. Almost all my doctors are with Renown, and I have checked that they are included in the program I am considering. Before enrolling, I still want confirmation for the specific plan and coming coverage year.

“Accepts Medicare” and “participates in this Medicare Advantage plan” are different questions. With Original Medicare, you can generally use doctors who accept Medicare. With Advantage, the particular plan’s network and rules matter.

I also have previous experience with Kaiser that does not make me eager to sign up. That is part of my decision, alongside the costs and benefits. Confidence in the people organizing your care has value, even when it doesn’t appear in the comparison chart.

I Want an Explanation Before a Recommendation

I have not decided whether to keep my current arrangement or change it. I want my adviser to help compare the whole package: premiums, prescriptions, doctor access, approval requirements, and what I could owe if my health takes an unfortunate turn.

I also want to understand my options if I change my mind later. Returning from Medicare Advantage to Original Medicare does not automatically guarantee that I can buy the supplemental policy I want on acceptable terms.

None of this means one approach is right for everyone. Different health needs, finances, and preferences can reasonably produce different choices.

But the government and insurance industry have created a system in which the customer must assemble a great deal of information before making a consequential decision. They owe us explanations that begin where we are, rather than where they assume we ought to be.

I am willing to do some homework. I would just appreciate understanding the assignment.

When you chose your coverage, what finally made the decision clear—or are you still wondering whether you chose well?