The cost of medical care can be financially crippling for many Americans. This is one reason why many people experience extreme stress thinking about how they will be able to afford necessary medical care.
Adding to the complication is the fact that the US insurance system is very opaque. People may struggle to understand and navigate the ins and outs of Medicare, Medicaid, Medigap, and long-term care insurance.
Medicare is a government-sponsored insurance program that covers almost all Americans over the age of 65. In some instances, such as when a person is disabled, it may also cover individuals under the age of 65.
Often, people think that Medicare is just one large program without any differentiation. But this is simply not true. Medicare is a little bit more complicated than that.
Many people don’t know this, but there are four parts to Medicare. However, two parts receive the most attention: Part A and Part B.
Part A is hospital coverage, and the majority of individuals receive this coverage at 65 without having to pay. In some cases, Part A will also cover home health care and hospice care.
Part B, on the other hand, covers medical insurance and is a fee-based program. Those with higher incomes will be expected to pay a higher monthly premium for Part B. In addition, you can only enroll in Part B during designated enrollment periods. Otherwise you’ll have to pay a late enrollment penalty.
Medicare Advantage Plans, also known as Part C, combine the features of Part A and Part B into a package that is provided by private insurers. These plans usually offer extra coverage and could lower one’s out-of-pocket costs.
Someone with a Medicare Advantage Plan cannot also get a Medigap policy because many of their benefits are the same. One of those benefits includes extra days in the hospital after all of the days covered by Medicare are used up.
Lastly, Part D refers to prescription drug coverage. Depending on a person’s own medical needs and financial circumstances, they may choose to opt-in or opt-out of Part D coverage. Overall, anyone that qualifies for Medicare A and B is usually eligible for Part D.
However, you can also get it as a stand-alone plan or built into Medicare Advantage. Like Part B, you have to get the prescription drug coverage during the enrollment period, or you’ll have to pay a late fee penalty.
Medicaid is actually not the same as Medicare. Unlike Medicare, which primarily covers people over the age of 65, Medicaid mostly covers younger Americans. This program helps to ensure that lower-income Americans receive necessary medical coverage and do not fall through the gaps.
Medicaid helps in making medical care affordable to all that qualify for the program. In fact, many people do not pay any copay or deductible when they are on Medicaid.
It is worth noting that, unlike Medicare, which is a federal program, Medicaid is administered by each state. As a result, eligibility requirements may vary dramatically from state to state, and different states may cover different procedures and treatments.
Therefore, it is important to check with your own state’s Department of Health and Human Services so that you have a clear idea of what Medicare is or is not in your community.
Medigap is another insurance program, but it’s a little different than the ones mentioned above. Unlike Medicare and Medicaid, which are either state or federally managed, Medigap is sold by private companies.
This extra insurance program can cover costs not picked up under the more traditional Medicare Part A and Part B and help ensure that people will not face crippling out-of-pocket medical bills.
The Medigap plan is a for-pay plan. Although it helps fill the gaps found in traditional Part A and Part B Medicare, it does not cover everything. For example, Medigap plans do not cover dental and vision insurance, or long-term care costs.
If you are interested in long-term care insurance, then this is coverage that you will need to purchase separately. Make sure to weigh all of the options that are available on the market.
It is also important to remember that these programs are different from the Medicare Advantage Plan, which includes supplementary drug coverage.
When you are thinking about the different insurance options out there, it is critical that you consider both your current and future needs, from a medical perspective. In addition, it is also important to demonstrate a small amount of flexibility.
Another insurance program that individuals should consider is long-term care insurance. Long-term care insurance plans help patients and their family members balance the large bills that are often associated with nursing home or skilled home health care.
Without insurance, the costs of these services can be out of reach for everyday Americans. Studies suggest that up to 50 percent of Americans will need long-term care and that the cost of this care may approach, on average, $150,000. The average American simply cannot afford these types of bills while still making other essential payments.
Long-term care insurance can help make this type of care much more affordable. There is a variety of long-term care policies on the market, and many people are now using whole life insurance policies as potential substitutes for this program.
It is essential that you talk through the pros and cons of each of these policies – including yearly premiums and caps on potential out-of-pocket costs – before you decide what facility to select for yourself and/or a loved one. No one wants to make the wrong decision in a high-pressure situation.
The aging process can be challenging for many Americans. As people age, they may encounter a wide range of health problems. Some of these issues are difficult enough that a patient will have to go to a long-term care facility.
Before you face any of these questions, it is important to sit down with both family members and trusted financial advisors to make an informed and intelligent decision about what care to receive and how to go about paying for this care.
One important thing to have in place is Medicare or Medicaid coverage. If you have Medicare Part A and B, and they’re not sufficient in meeting all of your needs, consider looking into Medicare Advantage Plus or a Medigap program to get you some of these essential needs.
Before deciding on your ideal insurance plan(s), think carefully and realistically about your health care challenges, as well as your financial health. The goal is to ensure that you get the absolute best care that you need without breaking the proverbial bank. Comparison shop carefully, but not merely by looking at your wallet.