Retirement and Insurance

Retirement and Insurance

medicare supplemental insurance

When you get involved with medicare supplemental insurance, you should be sure you understand enough about the plans to be able to choose the right one for you.

Some Basics of the Medicare Supplemental Plans

One thing to remember is that you are still operating within the Medicare program. When you buy Medicare Supplemental insurance, it doesn't mean you are replacing or canceling your membership in Medicare Part A and Medicare Part B. The Medicare rights and protections are still yours. 

These plans are standardized, making the benefits from one plan to another, the same for all insurance companies (although some may offer more innovative benefits). That means the Plan C from any one company will hold the same medical coverage that a Plan C from another company holds. The only difference is seen in the specific company. It reflects their pricing and quality of service. 

After 2006, the Medicare Supplement plans did not include prescription drug coverage. The optimal time for purchasing a Medicare Supplement is during your Open Enrollment Period. This period is 6 months long. It will begin on the 1st day of any month in which you're age 65 or older, and/or enrolled in Medicare Part B. Once the 6 month period begins, it cannot be changed. However, in certain situations you will still have the right to purchase a Medicare policy outside of your current Open Enrollment Period. 

Some states make these plans available to people under 65. For those who apply before age 65, your Open Enrollment Period will begin on the 1st day of your enrollment into Medicare Part B.

Medigap Explained

Medigap is more or less extra health insurance you purchase from private companies to help pay for costs not covered by your original Medicare, like deductibles, co-payments, and if you should travel outside of the United States. Medigap policies DO NOT cover any long-term care, like dental care, hearing aids, vision, eyeglasses, private duty nursing, or stays in nursing facilities. Most of the plans don't cover prescription drugs. 

You pay one monthly premium for your Medigap policy. If you should use any health services that are not covered by Medicare, then your Medigap policy could save you some money over time. It is a personal decision as to whether or not a Medigap policy fits your needs.

Medigap policies are available only to those who have Medicare Part A (hospital services) and Medicare Part B (doctor services). People who carry the Medicare Advantage Plan are not eligible for Medigap plans, and shouldn't need one.

Medicare Insurance Explained

Medicare Insurance is a federal health insurance program. It is aimed at people 65 and up, some younger people who have disabilities, and people suffering from End-Stage Renal Disease (ESRD), which is permanent kidney failure that requires either dialysis or a transplant.

• Medicare Part A is 'Hospital Insurance'. Part A covers skilled nursing facility care, some home health care, hospice care, and stays in the hospital as an inpatient.

• Medicare Part B is 'Medical Insurance'. This covers outpatient care, preventative services, medical supplies, and certain doctor's services.

• Medicare Part C is 'Medicare Advantage Plus'. This type of plan is offered by private companies who contract with Medicare to give you all of your Medicare Part A and Medicare Part B benefits. It includes Health Maintenance Organizations (HMOs), Special Needs Plans, Private 'fee for service' plans, Preferred Provider Organizations, and the Medicare Medical Savings Account Plans. Anyone enrolled in the Medicare Advantage Plan, their services are covered through their plan, but are not paid for under the Original Medicare. Most of these plans offer coverage for prescription drugs.

Short term and Long Term Care Insurance Explained

Short term care insurance differs from traditional health insurance. It is designed for covering long-term services and supports. That includes both personal and custodial care (within a variety of settings like a community organization, some facility, or your home).

A long-term care policy will reimburse policyholders for a daily amount up to a pre-determined limit, to pay for services assisting them with their daily life activities (like dressing, eating, and bathing). You can choose from are whole range of care benefits and options that will allow you to receive the services you need, and where you need them.

They base your long-term care policy cost on -

• Your age at the time of policy purchase
• The maximum amount a policy pays per da
• Maximum number of day/years a policy pays
• Maximum amount per day x number of days = lifetime maximum amount he policy pays
• Any optional benefits you select, like benefits that will increase with inflation

If you're already in poor health and receiving long-term care, 'you may not' qualify to get long-term care insurance. Most individual policies will require medical underwriting. There are some cases, however, when you can purchase limited amounts of coverage at higher 'non-standard' rates. There are some group coverages that will not require any underwriting.

Nursing Home Insurance Explained

Nursing Home Insurance is another way of saying long-term care insurance. Only it is used to cover time spent in a nursing home. People are becoming more and more aware of how easily nursing home care can totally wipe out a senior's savings. Most of the time Nursing Home Insurance is advertised as a protection against long-term care costs, specifically in the case of residential nursing facilities.

The truth is, this insurance is quite expensive, and usually only delivers limited benefits, carries lots of restriction and conditions, and may in the end only cover a small percentage of costs, or even nothing at all, of the total overall long-term care costs. 

Deciding whether or not to buy nursing home insurance is a tough questions. Some experts agree that it might not be a good idea unless the monthly premium amounts to 5% or less than your monthly income. When you go to calculate this 5% number for future years, keep in mind the fact that your premiums will probably rise, and you income will most likely drop.