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AKAMAI MONEY By
Greg Wiles
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Q. I saw a health insurer advertising Medicare coverage that didn't cost anything. Is there some kind of catch to this?
A. I'm always skeptical when people pay money to place advertisements, have staff available to discuss their offerings and generally spend money to try to get your business while promising it won't cost you anything.
In this case, however, it may be worth checking out what's being offered.
Whether you sign up will depend on your own health situation and needs. You should only switch to one of these plans after a careful and reasoned review of what's available, experts say.
But we need to start with an admission. Medicare is a stupefying thicket of plans and co-payments that most people don't willingly digest.
With that in mind, here are some basics:
Within this category are a range of coverage and the zero-fee plans you are wondering about.
For Honolulu, there are 15 health plans offered; five of these are no-cost premium plans, while others have premiums that go up to $177.30 a month.
You can find these by going to www.medicare.gov.
Which of these plans you choose depends on your own circumstances.
"You don't want people to just look at the premium," said Pamela Cunningham, coordinator for the state Executive Office on Aging's program providing information and counseling on health insurance. "What they really need to do is look at the whole coverage."
People need to determine which is best for them by doing their homework, Cunningham said.
There is a way to compare plans on the Medicare Web site. While you'll be able to get a sense of monthly cost and co-payments there, you'll need to do a little more detective work to determine if a plan is right. That includes asking whether a favored doctor or hospital accepts the insurance.
If you don't have Internet access, you can also call Medicare at 1 (800) 633-4227 to discuss which plans are available. You can also call Cunningham's office at 586-7299 on O'ahu, or a toll-free number from the Neighbor Islands at (888) 875-9229.
Lots of people opt to stay with the Hawaii Medical Service Association for their Medicare coverage because they had healthcare insurance through the insurer when they worked. HMSA is Hawai'i's largest health insurer and has a lengthy list of doctors, hospitals and pharmacies that accept its payments.
"We have a very wide network and lots of choices and very few limitations," said HMSA spokesman Cliff Cisco. "People should look at both the premium price and the benefits."
But HMSA's 65C Plus plans start at about $104 a month, and some people want to explore the no-cost options.
Which brings us back to the original question: Just how can an insurer offer a zero-premium insurance plan?
Here's a simplified answer: Medicare pays for it.
For Honolulu, it works out to less than $732 a month for each person.
Money for these payments comes from the Medicare tax that's deducted from your paychecks and from the $93.50 that's taken out of Social Security benefits each month.
Humana Inc., the second-largest U.S. Medicare Advantage insurer, offers a no-premium Medicare plan in Hawai'i and says it gets the "what's-the-catch" question all the time.
"It's a fair question," said Russell Barbour, Humana director of sales for Hawai'i and Southern California.
"Although it's a zero premium, it's not free by any means."
Barbour said that under the no-premium plan, there are co-pays that include $15 for visits to primary physicians. A hospital stay costs $550 no matter if it's for an overnight visit or for weeks.
Humana also offers a $20-a-month plan that features a little bit more coverage and a different co-payment system. Barbour said company representatives sit and do an assessment of people's needs before making a recommendation.
Other insurers offering zero-premium plans locally include Honolulu-based AlohaCare, WellCare Health Plans and UnitedHealthCare's Secure Horizons plan.
Barbour said Hawai'i sales had been brisk since it introduced the zero-premium plan in January.
"We've seen a steady increase in sales," he said.
Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com
