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Post by anitya on Sept 23, 2022 22:23:23 GMT
I am trying to understand billing practices of hospitals.
My Dad recently had a pre planned outpatient surgery. He spent 6 hours at the hospital (2 hours pre-op prep, 45 min surgery, 2 hour post op, 1 hour waiting after discharge was signed off because the people that need to wheel him out to the front door could not be located.). The hospital billed $75k ( does not include surgeon, anesthesiologist, and other OT staff charges). Insurance - Medicare approved is $15k. The patient responsibility is zero.
Why do the healthcare service providers bill such high charges knowing very well the insurance negotiated charges are 1/5 of the billed? Is it to just shock everyone to buy insurance?
Seems pretty scary that a patient has to pay an artificially inflated bill or jump through a lot of hoops if for whatever reason the insurance co does not pay. Even though my insurance premiums are auto charged to my credit card, the insurance co messes up every few months and does not charge (and doubles up the next month).
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Post by habsui on Sept 23, 2022 22:46:29 GMT
The answer is that different insurance companies may pay different amounts, e.g. in this case another insurance company may have paid 16K. Thus, providers charge ridiculous high amounts to cover the highest insurance company amount (don't just charge 15.5K if you could have gotten 16K).
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Post by anitya on Sept 24, 2022 1:07:04 GMT
I doubt any insurance company would pay $50k, let alone $75k, in this instance. Any insurance company inept to pay $50 or $75k (when other insurance co are paying $15-16k) will likely not be in business for too long to accept any charges from service providers and likely would be a worthless insurance.
In other words, I do not think insurance companies are the suckers in this game. I am trying to figure out who is this nonsense being targeted at and how is it meant to benefit the service provider (or how is it meant to fleece the victim).
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Post by bizman on Sept 24, 2022 4:29:28 GMT
I'm not an expert here, but my basic understanding follows. I believe I understand the prescription drug side of the house better than the hospital bill side, so I'll start there.
Pharmacy Benefit Managers (PBMs) like CVS Caremark, Express Scripts, and others are situated between insurance companies and/or employers and the drug companies and patients. Of the list price of a drug, I've heard about half goes to the drug companies (despite their popular demonization) and half is split between the insurance companies and the PBMs. There will be a deal with one drug to get on the formulary of a health plan in a situation where more than one prescription drug is available for an indication, and the PBM and the insurance company choose the one that gives the best deal to them.
Some think PBMs are great and are saving money, but my opinion is less kind. I think they are just like a sports book taking a fat vig. Given the choice, I'd rather have drugs cost 50% less and all the proceeds go to the drug companies, but that's just me, I know I'm weird. Plus I am oversimplifying and there probably is a cost reduction independent of the huge rents the PBMs extract for themselves.
With hospital and surgical bills, it's more complicated. There is very little transparency of hospitals on surgical and hospital costs. Every insurance company has a different deal with the hospitals in their network. There are big discounts the hospitals have to give to have the insurance companies allow them to be covered. Different hospitals can charge wildly different amounts for the same procedures, and said hospitals can charge one insurance company a wildly different amount than another.
It is a real mess, and one would not design a program from the ground up as is. But vested interests being what they are, fundamental change is hard.
It is also hard, in my opinion, because while drug companies are demonized in the public imagination, hospitals, doctors and nurses are largely put on a pedestal and given a pass for reasons both romantic and practical. We tend to see health care workers as heroes (which they are) plus who wants to negotiate on price before an emergency heart bypass operation. Like with how people have tended to idealize teachers and no one is ever against increasing the budget for teachers salaries (I overstate for effect), there is little pushback there. Again, except for the drug companies. And, of course, third party payment screws up any industry. If I'm not paying for a car, I want a Cadillac. It's human nature.
This is all a very crude and cynical take rather crudely stated, but it is my basic understanding. Knowledge is power, transparency is fought tooth and nail, and when one's life is on the line, shopping for a bargain takes a back seat. And many of the incentives are poor. Other than that though, it's a great system (lol), and I rather like the care I get, even though it is expensive. Such is life. Trying to make sense of the way these billings are done is not something that is likely to lead to inner peace. It is designed to be inscrutable.
Edited to add: I forgot to mention that the system is even more screwed up because Medicare and Medicaid pay less than the system's costs, so costs are shifted to the private pay pre-age 65 cohort of the population to make up for that. I think hospital administrators must drink heavily. It is a very messed up system.
2nd edit: Additionally, in effect American patients are paying the R&D costs for the world, as we are the last (or one of the very last) not to have socialized medicine. We could cut our costs with price controls, but then 90% of the life changing new meds and breakthroughs would go away. I'm done now.
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Post by anitya on Sept 24, 2022 5:48:49 GMT
Thanks.
Many in Europe (e.g., Norbert), Australia (e.g., my family in Australia in the profession) & Thailand (e.g., Admin) claim they get world class care (including surgery and hospital care) under their private insurance, which presumably costs 1/3rd or less than our insurance.
I can believe that the drug companies only get half of what we pay for drugs and the middlemen get the rest. Our claim that we are subsidizing the rest of the world is without merit. Pricing (or price differentiation) is simple economics. I am sure the rest of the world would like to remind us that the drugs would cost us even more if those drugs are not sold to them (albeit at a lower cost). Some assert that many of the world class drugs- procedures discovered/ invented in the US are needed in the US because of our life style.
It would be great if we can get answers for the questions I posed in the OP.
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Post by Norbert on Sept 24, 2022 10:15:07 GMT
Don't understand US hospital billing practices, excepting for HMOs like Kaiser Permanente.
I do know the French system. Private insurance is optional; I'm just a member of the national HC system, without any additional insurance.
In general I'd say that a cash-paying foreigner visiting France would pay about 15% of what he'd pay in the US, depending on the clinic he chooses.
A friend visiting NYC dropped in at at NYU to have a sore finger examined. The doc looked at it for five minutes. She was handed a $800 bill. That's absurd. Plus the advice was wrong.
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Post by yogibearbull on Sept 24, 2022 13:34:33 GMT
It almost seems funny that insurance cut down the hospital bills to 10-20% (i.e. by 80-90%). This seems routine game in the US. I don't fall for some hospitals' suggestions to pay 10-15% of estimates upfront because I know that total bill may be just that much and my portion much lower.
I once almost walked out of a surgical facility because it wanted me to prepay, or at least have my credit card on file. When I was told that was the office policy, I said it was MY PERSONAL POLICY for security reasons not to have my credit cards on file at odd places. Doctor was called, he took one look at me and told the office staff to just let go and proceed/process.
But think of those who don't have insurance and aren't poor (the hospitals cannot really deny based on finances although they can treat minimally and refer/transport to elsewhere).
BTW, in many countries, costs may be low but advance payments may also also required. US visitors should be aware of that. Also, get the US insurance denial first or ASAP.
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Post by johnsmith on Sept 24, 2022 14:03:46 GMT
Who is the victim? - American People, particularly those without good insurance.
A hospital will usually bill 5X - 10X usually more than what their costs are. Why? - From what i understand there are 2 reasons - Almost all insurance co / hospital contracts say that the hospital can't charge the insurance companies more than they would charge for cash. So even though a cash paying client is less hassle (assuming they can pay or pay upfront; lower billing, collection, administrative charges), they can't be charged less otherwise all the other 90% of insurance patients will have to be billed less. - Medical debt - a lot of the medical bills (non-insurance) because the bills are so highly inflated end up as medical debt, the medical debt buying industry will pay anywhere from 1% - 10% of actual bill, so by inflating those bills, the hospital may still collect anywhere from 25% - 100% of actual cost.
Actual experience: someone I know needed to go to the emergency room, the doctor who looked and worked on them charged $1200 for the 20 minutes they spent giving local anaesthesia + stitching up a wound. The bill actually said that if the bill was paid within 30 days, the actual charge would be $120 and if paid after that it would be $1200.
Reason - anyone who couldn't pay the $120, it would end up going to medical debt collection and the doctor would probably be able to get 10% of the "actual bill".
American healthcare if vastly over-priced 3X - 5X compared to even other "first world" countries. The amount spent on healthcare is ~20% of GDP with vastly bad outcomes, so Americans are not getting great value for all that money.
From what I have read: primary care healthcare is really really poor in the US (Cuba has better primary healthcare); while specialty care for cancers etc is 10 - 20% better than the best "first world" countries.
Costings estimates for a doctor's office (you can play with your own numbers):
From what I have heard, a doctor's office needs to hire 2 people ( est. $55000 each) simply to deal with insurance related issues (getting healthcare bills paid, meds approved etc)
Rent - $5000 or $60000 annually approx. Utilities - $12000 annually Recepitionist - $55000 annually 1 Nurse - $75000 annually 2 people for insurance - $110000 annually
Total cost - $312, let's round it up to $350,000 just to be conservative.
A primary care doctor works 2000 hours a year - fully booked they can see (each patient 10 minutes (6 patients), US average is 5 minutes/12 patients).
10 minute scenario
12,000 patients - $30 cost per patient (for those with insurance included) Cash patients only - $20 cost per patient (don't need to hire $110K for people to deal with insurance related stuff)
5 minute scenario 24000 patients - $15 per patient Cash Patients only - $10 per patient
Everything over that goes to Doctor less liability insurance, taxes etc.
Cash clients are 33% - 50% cheaper to service but they don't get any of the benefit; in a rational market place they would be getting a discount.
Why is this? healthcare is a special market where the patients have 0 ability to bargain and providers have 100% pricing power. This has been exacerbated by a law which prevented Medicare/Medicaid the largest purchaser of drugs, no ability to negotiate drug prices, they have to take the list price that manufacturers list.
Why is this so? From what I understand because a person in Congress years ago put that rule in and then when they left, they went to work for the PhRMA lobby group; sounds like corruption? IMO yes.
Sounds like Pharma Co.s got a huge buyer (medicare/medicaid) neutered and then because of this rule are gangbanging the US govt. (and the people) for private profit. (nationalise losses, privatise profits)
PS: Veterans Affairs, that can negotiate prices, typically pays 25% of what Medicare/Medicaid end up paying for prescription drugs.
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Post by anitya on Sept 24, 2022 20:34:10 GMT
I personally am not bothered by what primary care physicians or specialists in general charge, especially after seeing what a coder at Google or Facebook gets paid or the billing rates of the consulting company I used to work for but think about how many years of training is required to practice medicine. Yes, they can be better. Yes, it can be surprising like when I found out my mother’s dermatologist sees 60 patients a day and she billed $300 for a 5 minute consultation but in the large scheme of things these charges are not going to have a lingering effect on a patient.
The hospital billing practices still stump me. I even talked to doctors in the US about it and they do not have any intelligent answers or they do not want to let me on to their trade secrets - say, professional courtesy!
The uninsured patient answer does not cut it for me after Affordable Care Act. Now, if somebody can not afford insurance, the Govt pays for it. After the Act, my premiums jumped 3x, which I do not like but I am not going to risk being saddled with a $100K bill if I have an emergency. So, I hold my nose and buy insurance even though I have been lucky not to have to use it. Yes, there are still uninsured poor who have religious or political reasons, illegal immigrants, etc. but they are not impacting the hospitals in the rich neighborhoods in the Bay Area. If I know for certain I will not be billed more than the Medicare or insurance negotiated charge, I might be willing to take a chance and go the self insurance route, rather than incur $16k for insurance. (That is, premium plus deductible before the insurance co will start paying.) I am essentially buying exorbitant insurance to get the insurance negotiated rates should I need expensive care. Is there a government sanctioned collusion (or price fixing) between hospitals and insurance companies here? It is strange that a lot of hospitals and large scale providers are run as non-profits. Go figure.
We too often talk about how the rest of the world is a basket case but I think we need to look at ourselves sometimes. All the inefficiencies we accept are also different forms of inflation.
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Post by anitya on Sept 25, 2022 0:12:08 GMT
May be I should try Kaiser Permanente next year so the insurance co and provider are the same which would avoid any gotchas.
Does anybody in this forum have experience getting any material services from Kaiser?
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Post by bizman on Sept 25, 2022 0:12:27 GMT
Excellent points by all. I think even Charlie Munger has said that he thinks we eventually should go the socialized medicine route. Hopefully somehow we can find a way to keep most of the good parts while getting more value out of the system. All of the time, man hours, and money spent on the insurance end of things seems relatively wasted. Though I suppose in some sense all that hoop jumping is meant to be able to ration care indirectly.
As much as I don't love the idea, perhaps the government running the system in the spirit of the Post Office is the best we can hope for. Though despite the reported better experiences overseas, a bunch of eminent bureaucrats building a new system from the ground up doesn't fill me with big hopes of efficiencies and happy outcomes. And I've heard that in addition to all their other troubles, the UK is struggling with their National Health Service at the moment?
Maybe AI or something can massively improve efficiency. We can only hope.
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Post by habsui on Sept 25, 2022 15:47:36 GMT
Excellent points by all. I think even Charlie Munger has said that he thinks we eventually should go the socialized medicine route. Hopefully somehow we can find a way to keep most of the good parts while getting more value out of the system. All of the time, man hours, and money spent on the insurance end of things seems relatively wasted. Though I suppose in some sense all that hoop jumping is meant to be able to ration care indirectly. As much as I don't love the idea, perhaps the government running the system in the spirit of the Post Office is the best we can hope for. Though despite the reported better experiences overseas, a bunch of eminent bureaucrats building a new system from the ground up doesn't fill me with big hopes of efficiencies and happy outcomes. And I've heard that in addition to all their other troubles, the UK is struggling with their National Health Service at the moment? Maybe AI or something can massively improve efficiency. We can only hope. One does not have to go the route of socialized medicine (if it means a single payer system, potentially run by the government). In Europe, there are several countries where independent insurance companies are regulated. So you can pick your insurance company but the base services and costs are regulated. You can buy additional services on top of that (e.g. single rooms in hospitals). I have had experience with this in Switzerland and Germany. While the costs are much better, the service level is about the same (but not better). It has its own problems, and is better only wrt costs. Healthcare in the US is good. It's the costs that are the problem. People on Medicare (more socialized than many other countries) do not see the cost problem as much.
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Post by Fearchar on Sept 25, 2022 16:30:24 GMT
It's sad, but I've read of guys with chest pains.
Due to potential costs, they don't go to the Doctor or Hospital and instead die of heart attacks.
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Post by liftlock on Sept 25, 2022 19:24:01 GMT
18 months ago I received x-ray guided spinal injections for back pain at an outpatient facility which I suspect was doctor owned. I was there about 3 hours and attended to by 3 or 4 different health care professionals, admins, nurses and technicians etc.. The outpatient facility billed Medicare $60,000 for the procedure and Medicare allowed $659.00. I am not an expert on Medical billing practices. However, there appears to be little incentive for medical service facilities to charge patients or insurance companies reasonable or morally defensible amounts. It's probably a waste of a provider's time and resources to determine what each insurer might allow for a procedure. The simplest solution is for providers to set their fees high enough so that they never run the risk of under billing what an insurance company might allow for a procedure. Those without health insurance are left holding the bag of excessive charges which they may be legally responsible for. We can thank the US Congress for passing laws that try to control health care costs through private insurance companies.
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Post by anitya on Sept 26, 2022 3:04:16 GMT
liftlock , There was an episode of Last Week Tonight about Medical debt. It may still be there on Youtube - check it out. It was scary to see how many people's lives are turned upside down from medical debt. Strangely, the amount collected by the providers by selling the debt to debt collectors is so small, if the providers billed the same amount to patients I wonder if a large percent of those debts would not have been paid by the patients directly to the providers. This issue is probably very impersonal to all of us in this forum but it is hard to take life for granted or assume all my good fortune is a result of the choices I made. I like small government but I think Congress could try to do more in this area - am always hesitant to wish for Congress' involvement but I think this problem is out of control.
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Post by anitya on Sept 26, 2022 3:19:03 GMT
Thanks for all the replies.
Please share your experience in getting any material services from Kaiser Permanente. I am seriously considering switching to them during open enrollment so the insurance company and provider are the same.
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Post by Deleted on Sept 26, 2022 5:32:03 GMT
anitya, I don't want to get into any personal details, but will say that (in the Sacramento area) I switched from Sutter to Kaiser in 2017 thinking that I would get "better" medical attention/support at the primary-care level ... and that thought has been confirmed since then, I'm very glad that I made this change. I have had no trouble accessing doctor(s) (or a 24-hour advice nurse) in person or email or video or phone ... and, I don't feel rushed during the consultation! I easily get all the routine stuff done (usually via computer or smartphone) ... schedule appointments, review medical history and test info, order medicines with postal delivery, get shots, etc. etc. If you review how and why Kaiser was started and now operates, you may very well like what you learn. en.wikipedia.org/wiki/Kaiser_Permanente--- Frank
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Post by Norbert on Sept 26, 2022 6:44:10 GMT
Our family used Kaiser for 20 years while living in Marin County. It's a bit like the French system: you choose a primary contact MD, who will advise and approve/suggest any necessary tests and specialists. The selection of your primary contact is an important decision.
Aside from the birth of my daughter, we never really tested Kaiser in terms of operations or major health issues. Once an expensive outside test was required and the specialist I consulted didn't hesitate.
We were impressed overall and heard only good things from friends.
I never saw Kaiser as being a combination insurer/provider. They simply provide complete health care for a fixed monthly price. So, they have low overhead because of reduced accounting/billing complexity.
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Post by anovice on Sept 26, 2022 10:52:12 GMT
May be I should try Kaiser Permanente next year so the insurance co and provider are the same which would avoid any gotchas. Does anybody in this forum have experience getting any material services from Kaiser? Make certain that you are comfortable with an HMO.
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Post by Deleted on Sept 26, 2022 12:15:09 GMT
Before starting Medicare, I switched from a PPO insurance plan to a HMO plan, but with Medicare, I wanted the flexibility of Medicare and Medigap.
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Post by Chahta on Sept 26, 2022 16:54:33 GMT
"Why do the healthcare service providers bill such high charges knowing very well the insurance negotiated charges are 1/5 of the billed? Is it to just shock everyone to buy insurance?"
Because some with high deductibles or no insurance end up paying the high amounts. Sometimes your insurance will reduce the amounts for those still paying deductibles.
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Post by anitya on Sept 27, 2022 7:20:00 GMT
Thanks for the replies. This year for the first time I switched to an HMO plan, Valley Health Plan, and I am not particularly pleased with availability of a good participating PCP, with clean facilities. I should test out various systems before I need serious care or before qualifying for Medicare (not eligible for a few years). I have only heard good things about Kaiser, though it is an HMO plan.
(As an aside, Kaiser seems to have a Medicare Advantage Plan. So, if I were to try living abroad again (temporarily or permanently), signing up with a Medicare Advantage plan seems to help with avoiding Medicare part B premiums, which can also be steep if you end up generating income. I do not like to be constrained how I invest.)
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Post by roi2020 on Sept 27, 2022 8:28:18 GMT
Providence is one of the largest nonprofit healthcare systems with 51 hospitals and more than 900 clinics. Nonprofit hospitals receive tax exemptions in exchange for providing benefits to the community. These benefits often include providing uncompensated care to low-income patients. However, Providence frequently engaged debt collectors to harass low-income patients who qualified for free care. Wages were garnished and "delinquent accounts" were reported to credit agencies. Providence's tactics were predatory and the healthcare system appears to have violated laws in Washington, Oregon, and California. This story was a real eye-opener...
Link
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Post by anitya on Sept 27, 2022 22:29:31 GMT
I have long stopped equating non-profit with good motive / behavior. Executives at non-profits can earn fat salaries and benefits and there can be plenty of waste and inefficiencies.
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Post by anitya on Sept 29, 2022 23:36:30 GMT
Some of you may already know the information in this news item / article but I learned new things and so sharing. (You may need an iPad or other Apple product to access this item.) "Turned Away From Urgent Care — And Toward a Big ER Bill Russell Cook was expecting a quick and inexpensive visit to an urgent care center for his daughter, Frankie, after she had a car wreck. Instead, they were advised to go to an emergency room and got a much larger bill." apple.news/A6IhR4Td4TcWKAvPoG7TLyA
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Post by Norbert on Sept 30, 2022 2:04:48 GMT
Thanks for the replies. This year for the first time I switched to an HMO plan, Valley Health Plan, and I am not particularly pleased with availability of a good participating PCP, with clean facilities. I should test out various systems before I need serious care or before qualifying for Medicare (not eligible for a few years). I have only heard good things about Kaiser, though it is an HMO plan. (As an aside, Kaiser seems to have a Medicare Advantage Plan. So, if I were to try living abroad again (temporarily or permanently), signing up with a Medicare Advantage plan seems to help with avoiding Medicare part B premiums, which can also be steep if you end up generating income. I do not like to be constrained how I invest.) Please be aware that Kaiser will cancel your membership if they know that you have moved overseas. Medicare is, of course, only of value in the US; you'd have to return stateside for any actual treatment.
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Post by anovice on Sept 30, 2022 11:58:39 GMT
Thanks for the replies. This year for the first time I switched to an HMO plan, Valley Health Plan, and I am not particularly pleased with availability of a good participating PCP, with clean facilities. I should test out various systems before I need serious care or before qualifying for Medicare (not eligible for a few years). I have only heard good things about Kaiser, though it is an HMO plan. (As an aside, Kaiser seems to have a Medicare Advantage Plan. So, if I were to try living abroad again (temporarily or permanently), signing up with a Medicare Advantage plan seems to help with avoiding Medicare part B premiums, which can also be steep if you end up generating income. I do not like to be constrained how I invest.) Please be aware that Kaiser will cancel your membership if they know that you have moved overseas. Medicare is, of course, only of value in the US; you'd have to return stateside for any actual treatment. This is a bit interesting. Kaiser says: "If you're outside a Kaiser Permanente area for more than 3 to 12 months (depending on your plan), or you permanently move outside the area, Medicare requires us to disenroll you from our plan." healthy.kaiserpermanente.org/shop-plans/ready-for-medicare/faqsThey are talking about their Medicare Advantage plans as do not sell Medigap policies. You are able to keep a Medigap plan as they cover a portion of medically necessary emergency care outside the United States.
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Post by anitya on Sept 30, 2022 16:42:20 GMT
Please be aware that Kaiser will cancel your membership if they know that you have moved overseas. Medicare is, of course, only of value in the US; you'd have to return stateside for any actual treatment. This is a bit interesting. Kaiser says: "If you're outside a Kaiser Permanente area for more than 3 to 12 months (depending on your plan), or you permanently move outside the area, Medicare requires us to disenroll you from our plan." healthy.kaiserpermanente.org/shop-plans/ready-for-medicare/faqsThey are talking about their Medicare Advantage plans as do not sell Medigap policies. You are able to keep a Medigap plan as they cover a portion of medically necessary emergency care outside the United States. Thanks to both of you. Medigap plan premiums are on top of Medicare Part B premiums which vary by income level, with a current minimum at $170 per month and a maximum of approx $600 per month. Seems like this health insurance ghost follows us for the rest of our lives. If one were to live overseas, is it better to just keep Medicare Part A (to avoid future penalties), decline Medicare part B, and buy private insurance overseas that covers travel as well? P.S.: I was hoping to use Medicare Advantage plan only when in the US and use private insurance when overseas. But if the Medicare Advantage can be cancelled for long absences from the US, that does not really help.
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Post by anitya on Sept 30, 2022 18:23:32 GMT
Somebody in this thread mentioned about getting misdiagnosed (and getting a hefty bill!). In any case, it seems from this article that this is more prevalent than I had expected - ""I Missed It": Doctors (And Patients) Are Sharing Times When A Patient Said Something Was Wrong, And Later Turned Out To Be Right "It taught me a valuable lesson I have never forgotten."" apple.news/A83x6etQARmeo-E267Gsk1QI had been misdiagnosed (with consequences) by doctors in the family but luckily, have not had that problem with outside doctors, except what I was suggesting was caught in the diagnostic tests the doctors were reluctant to order initially.
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Post by marquay on Oct 1, 2022 1:39:03 GMT
If one decides to live overseas, SS benefits will be another factor to consider ...to receive overseas or in US address?
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