Health insurance can be very confusing. Most people have questions such as:
Most of us assume we will sort out the answers when we need medical care. But it is good to be clear about what your health insurance covers before you need it. It’s also good to know how it works, your rights, and your duties.
Medicare is a federal government program. It provides healthcare coverage for people 65 and older. It also provides coverage for people of any age who have certain disabilities or end-stage kidney disease.
Medicare is divided into 2 parts: Part A and Part B. Each part covers different services. Both parts pay some of the costs for needed medical services. Both parts pay toward home healthcare if certain conditions are met.
People who get Social Security or Railroad Retirement when they turn 65 are automatically enrolled in Medicare Part A. If you will not get Social Security at age 65, you need to apply for Medicare 3 months before you turn 65.
Medicare Part A covers:
Medicare Part B is optional. If you want Part B, you must pay a monthly premium. You must also pay an annual deductible. After the deductible is met, Medicare B will pay 80% of Medicare-approved charges for covered services. You are responsible for copayment of the other 20%. Medicare Part B covers:
Medicare does not cover routine physical exams other than the one-time “Welcome to Medicare†exam. You will pay for other routine physical exams.
Medicare has helped many people pay for healthcare after they retire. However, it does not cover all types of medical services and equipment. Some examples of healthcare not covered by Medicare are:
Medicare has a program called Medicare Part D that helps cover prescription medicines.
Rules about what Medicare covers can be confusing. The rules can also change. The monthly payment for Medicare Part B can change every January. The deductible and your copayments may also change. Your local Social Security office can answer questions about Medicare.
Medigap is health insurance. Its formal name is Medicare supplement insurance. It helps cover the difference between what Medicare pays and what you owe for medical services. You can buy it from a private insurance company. In general, if Medicare does not pay anything for a service, then Medigap will not either.
There are many Medigap plans. The plans differ in cost. They also differ in how much they pay toward medical costs and under what conditions. In general, the more a Medigap plan agrees to pay, the more it costs. You must weigh the risk of paying medical costs yourself against paying for Medigap insurance.
You may be able to choose from up to 12 different Medigap policies (Medigap Plans A through L). Medigap policies must follow federal and state laws. A Medigap policy must be clearly identified as "Medicare Supplement Insurance." Each plan has a different set of basic and extra benefits. Most experts agree that you don’t need more than 1 Medigap policy.
Long-term-care usually means medical and physical care. For example, you may need help with bathing, dressing, and eating for an extended time. Most insurance policies limit the number of years or the amount they will pay toward long-term care. Some long-term-care policies pay only if you are in a nursing facility. Other plans will also pay for care given in your home. Before you buy long-term-care insurance, it is important to know:
You can buy long-term-care insurance before or after age 65. Some long-term-care policies are not sold to people who have reached a certain age (for example, age 75). Some policies are not sold to people with certain illnesses, such as Alzheimer's disease. The younger you are when you buy long-term-care insurance, the lower the payments are. However, you may pay for it for many years before you need it.
Medicaid provides medical insurance for people with low incomes or limited assets. Federal and state governments pay for it. The states set the rules about what is covered.
Medicaid may be called Medical Assistance or Title 19. You may qualify for Medicaid if your medical costs are higher than your income.
It costs a lot to live in a nursing facility. It can cost $50,000 to $75,000 a year. The cost depends on your medical needs. It also depends on where you live and the type of room you have. You may not be able to afford nursing facility care for very long. When you have spent all of your money, you can get help from Medicaid.
To get Medicaid, you must prove that you have few assets. The level of assets allowed varies by state. It also depends on whether you are married. If you are married, the spouse at home is allowed to have about $60,000 in assets, not counting a house. If you are single, you must have few or no assets. Even with Medicaid, part of your income will go toward the cost of your care.
Long-term-care insurance may stop paying after a number of years. It depends on the policy. You will then need to spend your own money until you qualify for Medicaid.
You can have both Medicare and Medicaid. In fact, some people in nursing facilities have Medicare, Medigap, and Medicaid. Each pays for different costs.
Medicaid rules change. And Medicaid programs can be different from state to state. Check with your state social services agency for more information.
First you need to learn what Medicare covers and does not cover. Then you will know what to look for in other health insurance plans.
For more information, you might want to talk with:
The following agencies can help you understand health insurance and your options:
There may be a local Social Security office you can visit. The national Social Security phone number is 1-800-772-1213. The Web site is http://www.ssa.gov.
The Medicare phone number is 1-800-MEDICARE (1-800-633-4227). The Web site is http://www.medicare.gov.
Through these agencies you can:
If you get health insurance through your employer, check with your employer about what is covered by your employer's plan.
