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TELL STATE INSURANCE DEPARTMENT IF DOCTORS PUSH PREPAYMENT PACT

For retirees, there's good news and bad news on the health-care front.

First, the bad news: Medicare beneficiaries in at least 15 states have complained to the Health Care Financing Administration that they were pressured by doctors to sign prepayment contracts for annual physicals and other services. Some patients felt coerced to sign.Under the deals, beneficiaries pay $300 to $400 up front for physicals and other services not covered by Medicare. The doctor then does not charge the patient for Medicare deductible and co-payments during the year.

Though certain prepayment plans are legal under Medicare rules, HCFA considers them a form of Medigap insurance, which is regulated by states.

If state insurance regulators agree, they will almost certainly ban such service contracts because they don't conform to Medigap policies allowed by law.

If you're offered such a deal, turn it down (and tell your state insurance department about it).

Your Medigap policy or retiree health plan from your former employer might already cover physicals, deductibles and co-payments, says Bonnie Burns of California's Health Insurance Counseling and Advocacy Program.

If so, she notes, "a service contract would be totally unnecessary and duplicative."

Moreover, the contract won't pay if you switch doctors or are referred to a specialist.

The good news: Residents of the Golden State now have a more affordable long-term-care insurance option, thanks to a partnership between the state and several insurance companies.

Similar to programs in Connecticut, Indiana and New York, the California plan allows individuals to keep assets equal to the amount of the insurance payout and still receive nursing-home benefits from Medi-Cal (California's version of Medicaid).

Say, for example, that you buy a policy covering $33,000 in long-term-care expenses, enough to pay for at least one year in a nursing home. After those benefits were depleted, you wouldn't have to spend your assets down to the poverty level before qualifying for Medi-Cal. Instead, the state program would kick in when you had $33,000 in assets remaining.

The average annual premium for a 65-year-old buying a one-year $33,000 policy is expected to be $764 for a basic policy and $940 for one with a home-care benefit.

For more information, call the Partnership for Long-Term Care at 800-434-0222.

Illinois, Iowa, Maryland, Michigan and Washington are considering similar programs.