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Managing Medicare's Costs

Ways to manage three important gaps in Medicare coverage

When Congress designed Medicare’s original benefits more than 50 years ago, it chose not to cover dental care, routine vision care and hearing aids. That decision may have been financially shortsighted. The reason is that Medicare pays much larger amounts to treat serious illnesses caused or aggravated by the lack of dental, vision, and hearing coverage.

A prime example is dental care. If Medicare were to pay 80% of the cost of an annual dental exam and a teeth cleaning, it would in many cases avoid substantial expenditures later. The Mayo Clinic says that untreated dental problems can lead to, among other things, cardiovascular disease and head and neck cancer — costly illnesses that Medicare does cover.

For its part, routine vision care is essential to detect and treat eye diseases before they progress very far. While there are no cures for some eye diseases, early detection and treatment can slow their advance, reducing the need for costly treatments later. Harvard University ophthalmologists estimate that 40% to 50% of all blindness can be avoided or treated through routine exams and early detection.

As for hearing aids, there’s mounting evidence that people with hearing loss are at an increased risk of having dementia. And health care costs for people with dementia are greater than for any other disease. Dr. Frank Lin, an otologist at Johns Hopkins University, is an expert on the relationship between dementia and poor hearing. Lin is the lead author of a six-year study of almost 2,000 seniors ages 75-84 that found that as people’s hearing worsened, they began to have substantially higher rates of cognitive impairment.

Congress periodically debates whether to include dental, vision, and hearing aid benefits in Medicare’s coverage. In the last two years alone, five bills have been introduced to improve Medicare’s coverage of these three services, but none of them has made it out of committee.

Given the focus on cutting Medicare’s costs, it’s unlikely that they will be covered in the foreseeable future. That leaves it up to seniors to find the best way to pay for these services. Here are some suggestions:

Dental care

Except for people who qualify for Medicaid, the only two ways for seniors to get subsidized dental coverage are from an employer retiree plan or a Medicare Advantage plan. But both types of coverage have trimmed their benefits in recent years, and a majority of retirees do not have any dental insurance.

If you want to find an Advantage plan that has dental benefits, your best chances will be in plans that have quality ratings of at least four stars. That’s because Medicare pays quality bonuses to these highly-rated plans, and the plans in turn are required to reinvest the bonuses in extra benefits.

A survey by the Kaiser Family Foundation found that Advantage plans that are rated four stars are higher are more likely to provide dental and vision coverage. Also, some Advantage plans offer supplemental dental and vision coverage for an additional premium.

If you cannot get subsidized dental insurance, the other options are to purchase a stand-alone dental plan or to self-insure. One reason to buy a stand-alone dental plan is that you will be more likely to get preventive care. Otherwise, though, these plans are not great deals.

One example of a widely sold stand-alone plan is the Delta Dental PPO Plan B. Marketed by AARP, this plan’s premiums vary by region. In Southern California, as an example, monthly premiums are $49. After you add the plan’s $100 deductible, your annual fixed costs – premiums plus deductible — are almost $700.

But this plan has a maximum annual payout of $1,000. That doesn’t mean, however, that you have a potential $300 upside. You will make additional co-payments along the way to that $1,000 limit — 20% of the cost of dental exams, x-rays, teeth cleanings and fillings, and 50% of the cost of crowns, extractions, and root canals.

This type of benefit design, which combines high fixed costs and a relatively low maximum benefit, is typical of stand-alone dental plans. It is almost impossible for people to come out ahead financially in one of these plans.

The reason to buy insurance is to protect against large losses, and by that standard, stand-alone dental plans are not good insurance. Moreover, many of them have fine-print exclusions for certain procedures as well as waiting periods for expensive treatments, e.g., you must be enrolled in a plan for a minimum of six months to be covered for a root canal.

If you decide to get a stand-alone plan, perhaps because it will encourage you to get preventive exams, ask your dentist for recommendations about plans that he or she accepts. Dental HMO plans will cost you less than PPO’s, where if your dentist is not in the plan’s network, co-payments can be as much as 40% higher than they are for a network dentist.

Another option is to sign up for a discount plan, also called a dental savings plan. Here you pay an annual fee of, say, $150 in order to get bargain-basement pricing for many procedures. Some 60% of dentists are in these plans’ networks, according to Consumer Reports.

Whatever you do, make sure to get your annual exams and teeth cleanings. Larry Coffee, founder of the Colorado-based Dental Lifeline Network, was quoted in a recent Health Affairs article about dental caare for older people as saying that “a cavity is not just a hole in your tooth, it is a bacterial infection.” The article also mentioned that one in five people 65 and older do not have any natural teeth.

Vision care

Medicare has good coverage for diseases of the eye, including tests and treatments for glaucoma, macular degeneration, and cataract surgery. But routine vision tests and prescription glasses are not covered with the exception of a set of corrective lenses following cataract surgery.

Without insurance, eyewear is expensive. Many people buy their glasses at their eye doctors’ offices because it is convenient._ Consumer Reports_ says that people can reduce that cost as much as 40% by purchasing their eyewear at a discount store, and that Costco had the highest satisfaction scores in a survey of almost 20,000 people who had purchased eyewear. Other highly-rated stores were various independent shops and discounter Warby Parker.

VSP is the largest provider of vision coverage — the initials stand for Vision Service Plan. It has almost 80 million members and a wide range of plans that offer discounts. But unless the VSP plan is sponsored by an employer, you may be able to get lower prices at a volume discounter like Costco or Sam’s Club.

Hearing aids

Medicare pays for certain audiology services if they are ordered by a physician or nurse practitioner to evaluate medical problems that may be related to hearing. Tests can be to determine the cause of tinnitus, balance problems and other ailments. Not covered, however, are routine tests to determine whether hearing aids are needed.

The National Institutes of Health says that nearly one-half of those 75 and older have hearing loss and that only one-fifth of the people who would benefit from a hearing aid wind up getting one. Cost is the chief barrier, with a digital hearing aid averaging $1,500 and high-tech devices running as much as $5,000. Military veterans may be able to them through the VA at a fraction of the cost, and some employer plans cover them as well.

If you don’t have coverage for hearing aids, before buying, as always, do your homework and compare prices. The two stores that have the highest levels of satisfaction among hearing-aid purchasers are Costco and Connect Hearing, according to the Consumer Reports Buying Guide. Both stores have in-house audiologists to administer hearing tests and make recommendations. ◊◊

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