Medicare & The Cost of Cancer Treatment
The Cost of Cancer Treatment With Medicare
This video is for everybody on Medicare or soon to be on Medicare. We will detail the strengths and weaknesses of Medicare Advantage plans, Medicare Supplement plans, and Medicare Part D prescription drug plans when it comes to the total cost of cancer treatment with Medicare.
In addition, we will show you what you can do to reduce your financial risk should you ever have to undergo cancer treatment.
Here is a news report on the same subject of the cost of cancer medications: The Cost of Cancer Treatment KETK News
See our other Medicare videos here: All About Medicare
Cancer can present a risk not just to your health, but to your financial stability even with the best insurance.
Cancer is the second-leading cause of death in the U.S. every year.
An estimated 1,700,000 people will be diagnosed with cancer in 2016 alone.
Chances are you already know someone who has battled cancer and are aware of the emotional and physical toll it takes on a person.
When a doctor first mentions the word cancer, a patient’s mind often goes into complete shock. How serious is it? Is it treatable? What do I do? A patient should never have to ask; how much will it cost?
Cancer is one of the most expensive conditions to treat. Even with the best insurance available, a person fighting cancer can experience thousand or tens of thousands of dollars in out-of-pocket expenses battling cancer.
A typical cancer drug can cost $10,000 per month. Some cancer drugs can cost $100,000. In fact, a new drug by Bristol-Myers Squibb that can shrink a melanoma tumor with a 60% success rate cost $141,000 for the first twelve weeks of treatment and $256,000 for a full year.
One of the growing trends in cancer treatment is the inability of the patient to afford the medications they need to save their lives.
The questions we will answer in this video is; how much of those costs will Medicare pay? What can you expect to pay? How much do you need in your financial war chest to make certain your life and death decisions are not based on your budget?
As we go over what you can expect with the cost of cancer treatment, we have divided your financial risk into two different categories; direct costs and indirect costs for cancer treatment.
Direct costs are the bills you receive for medical services, chemotherapy, and other medications.
Indirect costs are expenses you incur to get better treatment or care but are not directly in response to medications or specific services. For example; let’s say that you decide to have some of the top oncologists in the country treat your cancer and visit MD Anderson in Texas or Sloan-Kettering in New York for service. While Medicare may pay for your services, depending on the plan you have, you still need to pay for transportation to get to and from the clinic and for the cost of lodging and meals while you are there. These costs will often be in the thousands of dollars and are indirect costs for cancer treatment.
It is also important to understand which drug treatments may be covered under Medicare Part B for outpatient services or your Advantage plan equivalent, and which are typically covered through the Part D or prescription drug portion of your insurance. This is important because it defines your level of financial risk or obligation, so this is where we will start.
Here is the rule of thumb on cancer drugs and Medicare Part D vs. Medicare Part B.
Please understand, a rule of thumb is a good guide, but not written in stone. There may be exceptions. The rule of thumb is that if the medication is administered to you by a healthcare professional, either at their office or a facility, it is covered as a Medicare Part B expense. If the doctor writes out a prescription for you and instructs you to have this filled at a pharmacy and for you to self-administer the prescription, then that prescription is usually covered under your Part D prescription drug coverage.
No matter which Part D prescription drug plan you have, they are required to have cancer drugs in their formulary. But what they charge is not regulated.
Chemotherapy and many related medications not self-administered are normally covered under Medicare Part B outpatient services. If you have Original Medicare you may already be familiar with Medicare Part B. After the annual deductible, Medicare Part B pays for 80% of your outpatient medical expenses. You or your Medicare Supplement are then responsible for the remaining 20% of expenses. With most Medicare Supplements you will have a very limited financial exposure to Medicare Part B expenses.
If you have a Medicare Advantage plan, you should review your Summary of Benefits that was required to be provided to you prior to signing the policy. In the beginning of the prescription portion you should see something like this:
Every Medicare Advantage plan is different, so please check your specific Summary of Benefits. This is just an example. However, what you will typically find is that you are financially responsible for at least 20% of the cost of chemotherapy and other medications covered under Medicare Part B as long as you seek service in-network.
If you have an HMO, there will almost always be no out-of-network insurance coverage. You can expect to be responsible for 100% of your treatment costs for cancer if it is performed out-of-network and you have an HMO. In-network you will likely be responsible for 20% of expenses. If you have a PPO Medicare Advantage plan, you can expect to have different levels of coverage for chemotherapy and related Medications. In-network you will be responsible for 20% of the cost of chemotherapy. Out-of-network coverage will depend on your plan.
The chemotherapy and other Part B covered drugs are subject to your annual maximum out-of-pocket expense cap. We call this your MOOP. You can find your annual limit on expenses in the beginning of your Medicare Advantage Plan Summery of benefits. It’s usually on the first page of listed benefits. For 2016 a common MOOP is $6,700 for in-network coverage and $10,000 for out of network coverage for many Medicare Advantage plans that are PPOs or Regional PPOs. Some HMOs have a lower MOOP, but no out-of-network insurance coverage.
This is good news because it limits your annual financial risk to whatever your maximum out-of-pocket limit may be. Keep in mind that the MOOP is on a calendar year basis and does not include prescription drugs.
So if you start treatment in October, or November or anytime near the end of a calendar year, you might end up paying your annual MOOP and then paying it again after it re-sets on January 01. You should plan on having the ability to pay that maximum annual out-of-pocket expense twice. It happens often.
If you have Original Medicare with a Medicare supplement, then your maximum annual out-of-pocket expense for Medicare Part B medications will depend on which Medicare Supplement you have. It could be as low as zero.
Chemotherapy and some of the other cancer drugs are covered under Medicare Part B. If you have a Medicare Advantage plan, your first financial risk is the direct cost of chemotherapy and other Medicare Part B services, as you are responsible for 20% of the cost up to your annual maximum out-of-pocket expense in any calendar year.
If you decide to seek out-of-network coverage by traveling to a clinic that specializes in cancer treatment, your financial obligations will include your out-of-network MOOP (which may be $10,000 or more) plus travel and lodging expenses.
If you have a Medicare Advantage plan, expect $14,000 to $20,000 minimum in direct expenses related to Medicare Part B charges for cancer treatment. Expect more if you want the flexibility of traveling to a specialty clinic.
If you have Original Medicare, your out-of-pocket direct expense will be limited to your Medicare Supplement coverage and can be as low as zero. However, you may still have indirect expenses to cover costs of traveling to a specialty clinic.
In both cases, these are direct costs do not include Medicare Part D prescription drug costs which we will cover next.
Because your maximum annual out-of-pocket expense cap resets every January 01, it’s wise to consider two times your MOOP as a possible maximum expenditure for
I would like to note if you are a Florida resident and considering Medicare Advantage plans, there are two Regional MAPD PPOs available to you that allow for in-network coverage at some of these specialty cancer treatment facilities in other states like the MD Anderson clinic. That way you can get service from one of the top cancer treatment facilities in the country and still be limited to your in-network spending cap. This is also the case with select Regional PPOs in other states as well. Please contact me for more information.
Medicare Part D and the cost of cancer treatment
Medicare Part D is that portion of Medicare that covers prescription drugs. These are the medications for which your doctor has written a prescription and expects you to purchase the medication at a pharmacy and self-administer.
If you have Original Medicare you should have a standalone Prescription Drug plan that is separate from your Original Medicare and from your supplement.
If you have a Medicare Advantage Plan you probably have a bundled Medicare Part D plan that comes with your Advantage plan.
In either case, the costs associated with Medicare Part D prescription drugs is completely separate from any other plan. These costs are NOT a part of your Medicare Advantage MOOP limit. To be clear, Medicare Part D prescription drug costs are exempt from and in addition to your Medicare Advantage annual maximum out-of-pocket limit. There is no maximum out-of-pocket limit on for prescription drug costs.
However you have your Part D plan, you will pay coinsurance for your cancer-related prescription drugs. That co-insurance level will be different with each plan. It will also change once you have reached a set maximum of out-of-pocket expenses called the donut hole and after that catastrophic coverage.
I don’t want to get into the details of the donut hole in this video for two reasons. First, the levels of your out-of-pocket expense in reaching the donut hole and catastrophic coverage will change every year until 2020 when the donut hole will be eliminated. Second, if you have cancer the odds are your prescription drug costs will quickly exceed the donut hole and reach catastrophic coverage. Sometimes in the first month.
For 2016 catastrophic coverage is reached when you have $4,850 in out-of-pocket prescription drug expenses.
At catastrophic coverage, you still pay for your prescriptions. But you pay only 5% of their cost or a co-pay depending on the prescription.
According to the Journal of Oncology Practice, in a May 2014 publication, the average cancer patient (not just those on Medicare) pay out-of-pocket between $20,000 and $30,000 for prescription cancer drugs.
According to the Kaiser Family Foundation research on Medicare, it’s common for a cancer patient with Medicare to pay between $7,000 and $12,000 in prescription drugs. Some pay as much for each of several prescriptions. Most of that cost is incurred after they have reached catastrophic coverage triggers.
There is no Maximum annual out-of-pocket limit for Medicare Part D regardless of if you have it inside your Medicare Advantage plan or as a standalone product.
For Part D drug plan info visit: http://www.medicare.gov
Also visit: https://en.wikipedia.org/wiki/Medigap
Get your Medicare Guide to supplements here: https://www.medicare.gov/Pubs/pdf/02110-Medicare-Medigap.guide.pdf
And your Medicare & You Guide here: https://www.medicare.gov/pubs/pdf/10050-Medicare-and-You.pdf
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