Purchasing health insurance: Why is it so difficult?

Why does obtaining health care, and buying health insurance [even Medicare] have to be such a daunting task in this country? Why are there so many different choices of health insurance?

Why can't we just go to a doctor or hospital, and get the care we need without worrying about whether insurance will pay for it, or if not, how we're going to pay for it, and then having to worry about going bankrupt because we can't afford to pay for it ourselves?

My wife is eligible for Medicare Parts A and B in February 2010. I thought that would make life a lot simpler for us, but after reading a great deal of literature, and scouring the internet for information concerning enrollment in Medicare, and purchasing a Medigap policy, to fill in the gaps for what Medicare doesn't cover, I discovered quite the contrary.

First off as a little background, for those unaware, Medicare enrollment is open to everyone regardless of pre-existing conditions, on your 65th birthday, or after 29 months of being deemed disabled. Purchasing a Medigap policy is also available to everyone regardless of pre-existing condition provided you enroll within the first 6 months of being eligible for enrollment in Medicare.

Medicare is pretty simple, there is only one choice, and the price is set by the government. Unfortunately that isn't the case for a Medigap policy. There are 12 different Medigap policies to choose from, A thru L (not all of them are available in every state), each offering slightly different coverages, and at widely differing prices, even differing greatly for the save coverage plan.

So the first question that comes to mind is if each separate Medigap policies offers identical coverage, then why do the prices vary so much? Well, one reason is there are 3 different methodologies for pricing policies, community rated, initial age and attained age.

Initial age policies are priced based on your current age, and only increase due to inflation. These policies usually range in price from $5,000 to $6,000 per year. Attained age policies start out cheaper, ranging in price from $2,000 to $3,000 per year, but increase with inflation, along with an age factor. Community rated policies are simply rated by the community, and increase based on community factors. [Note: I couldn't find any community rated policies to compare pricing.]

But even that doesn't explain all the differences, as policy pricing can vary widely even under the same plan and pricing methodology.  Doesn't make sense to me. Why can't there just be one policy that covers everything Medicare doesn't? That would seem to be the logical approach.

Then to make things even more complicated, there are Medicare Advantage plans (Part C) which are a combination of Parts A and B, and sometimes Part D. This does appear to be the best deal, as there are typically no premiums, beyond the Medicare premium, but it is an HMO policy, so you don't have the flexibility of original Medicare, and there are usually co-pays when you need any type of care.

But that raises a few other question. What happens if you enroll in a Medicare advantage plan, and then change your mind after a year? Can you go back to original Medicare, and then purchase a Medigap policy without restrictions? I'm not 100% sure, but from what I have managed to glean from all the information available, I don't think you can. So you really need to be sure you'll be happy with that type of plan. Of course you could always move out of your coverage area, and then be able to go back to original Medicare, and purchase a Medigap policy without restriction. [I think]

And what if you're in original Medicare, and want to switch Medigap coverage, can you purchase a different policy during the open enrollment period without restriction? Again I don't think so, but again you could move out of you coverage area, and then be eligible [I think].

So basically, unless you feel like moving all the time, once you make a decision on coverage, you're stuck with it, like it or not.

Another separate issue is, I'm still working, and my employer provides health insurance for my wife and me. It is a high deductible policy, but they do give me the deductible, which is very nice of them.  So it seems I could really make out if I enroll her in a Medicare Advantage plan with the provider who currently provides our health care.

But can I just keep the employer policy, and use Medicare as the secondary? Or do I have to drop one or the other? Again I don't know, but we plan on going there today to find out. And how will that effect future health insurance options when/if I retire [or get layed off]? And when I stop and think about it, I wonder what the chances are they'll be able to address my questions, and concerns?

And that's only just some of the questions. There are a lot more, but I would need a lot more time to list them all, and I'm not going bore everyone with that.

I just wish this was a lot simpler. It just boggles my mind, why the system is like this, and I always considered myself a pretty smart guy. It's no wonder most people are confused.

Why do we really feel the need to make obtaining health care so difficult in this country? Is it a vast conspiracy by health insurers and the US government to prematurely cause the deaths of the elderly and so many others, by denying them easy access to health care, thereby increasing profits?

To me, it appears it is, otherwise it would be simple, just like it is in virtually every other country in the world.