Missing Money

This column deals with a benefit that 99.9% of eligible beneficiaries either do not know about, or do not take advantage of, and hence, lose a lot of money through no fault of their own.  If you choose not to read it, shame on you.

I recently received my annual letter from my former employer, from which I retired in 1995, to inform me that my retiree health coverage is noncreditable.  What that means is that it is not usable as a replacement for Medicare Part D prescription drug coverage.

The fact is that my prepaid, and therefore premium-free, retiree coverage cannot be used to replace my premium-based Medicare Part D coverage, for which my wife and I pay $1,217 annually.  However, the same letter reminds me that my retiree coverage coordinates benefits with Medicare Part A, B, C and/or D. 

If you are 65 or older and you do not have one of the Advantage plans that coordinates

all Medicare costs,  you  might also have a supplemental plan that has coordination of benefits with Medicare, and that is the reason I wrote this column. 

My supplemental Health insurance plan with United Healthcare guarantees that once I have satisfied the annual deductible of $150 out-of-pocket, any further health care costs will be covered at eighty percent up to $5,000.  My maximum expense is limited to $1,150 of the first $5,000. Beyond that amount different rules and provisions apply, but they don't concern most of us, so I won't go into them here.  Most supplemental health plans are set up in this fashion, so yours is probably similar to mine.

When you visit your doctor, when you are hospitalized, or when you are sent to a clinic for a procedure or test, the bill is first sent to Medicare for payment.  Then it is submitted to your supplemental insurance company for further payment before the unpaid balance is sent to you for payment.

The same billing sequence does not hold true for prescription drugs, though.  They are paid directly from your chosen insurer under Medicare Part D to the supplier of the drugs, and you pay the co-pay amount, usually at time of delivery at the drugstore.  No third party participation takes place.

Why is that important?  It is possible that your supplemental insurer would reimburse you for part of the out-of-pocket costs, and that can be a sizable amount.  If you take any of the non-generic drugs which are always very expensive, you might have to pay up to fifty percent of the cost each time you refill the prescription.  And when you get into the 'donut hole', that stage above the co-pay ($2,850 by 2014 rules; $2,960 in 2015), you pay full cost for those drugs. Your supplemental insurer may cover part of that cost, but you must submit the claim to them to get reimbursed. 

Your next question should be, "How do I do that?"

I'll use my own Medicare Part D provider - Humana Healthcare - and my Medicare supplemental insurance provider - United Healthcare - as my examples, but you should substitute your own insurers. Here is a step-by-step procedure you can follow to claim your reimbursement:

• I call Humana and requested an annual Summary of all Prescription Drug orders.  No matter how many drug stores or mail order providers I used, they will all be summarized at Humana for me in date sequence.
• When I receive the summary in the mail from Humana, I prepare an envelope and a short letter to United Healthcare with my UHC member number, requesting that UHC determine any reimbursement amount and mail me a check for that amount. I send that to United Healthcare.
• When I receive the check from UHC, I deposit it into my bank. It is not taxable income.

It is that easy, but it might be even easier for you.  You might be able to download the annual summary online from your Medicare Part D provider. You should only perform the above steps once per year after the preceding calendar year has expired, so it will likely be done in January or February.

In case you don't think it is worth all that time and effort to collect the reimbursement,

the last time I submitted the Rx summary to United Healthcare, I received a check for almost $2,400, and that was for just one year of prescriptions.  Of course, I have eight prescriptions and two of them are very expensive Stage 3 level drugs.  I usually enter the coverage gap known as the 'donut hole' in June because of those expensive prescriptions.

I'm not going to promise you that you'll get a ton of money back, and some insurers will not go back more than two or three years, but you really should look into it.  You might be pleasantly surprised.

For those of you who are not yet eligible for Medicare, I urge you to find some way to reference this column when you reach age 65, because nobody else is ever going to tell you about this benefit, especially not your health insurer, since it will cost them money

to do so.