Dear Len & Rosie,

I am well educated but I cannot, for the life of me, figure out the Medicare system. I turned 65 last year and before my birthday I attended a free luncheon where I signed up for a Medicare plan. Since then I have received medical care and am now $6,000 in debt for “out-of-pocket expenses” that my new plan does not cover. This part of the plan was not properly explained to me because this financial liability comes as a total surprise. What do I do now?

Jacob

Dear Jacob,

You are not alone in your surprise and confusion. With the recent launch of a new generation of Medicare insurance offerings authorized by the federal government, the Medicare system has suddenly become very perplexing and, in cases like yours, very expensive.

In the recent past the Medicare system was much easier to understand. Your primary medical coverage was provided by traditional Medicare and you had the option of adding a Medicare Supplement Insurance policy to cover the “gaps” that Medicare didn’t pay for. This system is called Medicare + Choice.

The supplements are regulated by the government and the benefits are standardized. In other words, insurance companies cannot mess with the benefits of the supplemental plans. If you buy an “F” plan, for instance, it will have the same features regardless of which insurance company you buy it from. Simple to understand and no surprises. These plans also give you the flexibility to chose any doctor and any hospital, some with no co-pays, as long as they are Medicare licensed.

Now enter the Medicare Advantage plans, which is what you signed up for at your “free lunch” (There ain’t no such thing as a free lunch.) You surrendered your traditional Medicare coverage to an insurance company that is now your primary insurer. Most Medicare Advantage plans are HMOs. You are restricted to a list of doctors and hospitals that the insurance company approves.

The plans are not standardized and each one is different, making it extremely difficult to do comparative shopping between plans and across insurance companies.

Most importantly, as you now know, you must read the fine print very carefully.

It is your responsibility to understand what you are buying. The plans include co-pays, deductibles and out-of-pocket expenses that are often glossed over in the free-meal sales presentations. Many plans put a cap on out-of-pocket expenses that will limit your annual financial liability, but some plans do not, so beware.

From what you’re telling us, it‚s likely that your plan has no limit to your out-of-pocket costs.

For our money we would stick to straight Medicare, a supplemental plan, and a separate prescription drug plan. It’s more flexible, as you can choose any doctor or hospital you want and you’ll know what your monthly medical expenses will be without getting any unpleasant surprises.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at 996-4505, or at www.lentillem.com. He also answers legal questions each weekday, noon-12:45 p.m., and Sundays, 4-7 p.m., on KGO Radio 810 AM.