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Medicare is not free: Learn the cost of it

Yes, the Medicare coverage that covers the seniors of this country doesn’t come free. The recipient of the benefits has to share the cost with the provider to receive the coverage. Medicare actually pays 50% of the health care cost. The rest needs to be met by the beneficiary as out-of-pocket expenses. Further, seniors who don’t meet the Medicare contribution criteria of forty work quarters are required to pay monthly premium even for the Medicare part-A.

Though you have paid for the coverage throughout your employment years you are still required to bear some out-of-pocket expenses in the form of deductible and co-insurance to avail the Medicare services. In the year 2008, a recipient was required to contribute $ 1,068.00 as deductible for per benefit period, whereas an inpatient was required to make contribution of $ 267.00 per day for the hospital stay. Moreover, not all services are covered under the program. Hence, you need to aware yourself about the Medicare exclusions.

The plan wouldn’t cover the followings,

•    Outpatient prescription drugs
•    Hearing aids and specs
•    Certain preventive healthcare &
•    Long term care

In addition to the cost sharing for the Medicare part-A, you are required to pay monthly premium along with deductibles and co-insurances for the Medicare part-B benefits. The Medicare part-B requires the beneficiary to pay $135 deductible and 20% co-insurance for the covered services.

So, how would you arrange for these expenses since you have retired and the income has stopped? Many opt for the supplemental health plans and MediGap. Now, we would look into these alternatives and there benefits.

Supplemental health plans

The supplemental health plans would complement the Medicare by covering services that are not covered under it. The major forms of supplemental plans available in the market are,

•    Policy covering specific health coverage
•    Hospital indemnity plans, and
•    The accident policy

You have to make the choice depending upon your requirements. But remember that a supplemental plan under no circumstances would replace the Medicare program.

Medigap

Medigap is the Medicare supplemental plan, which would cover the gaps in the Medicare program. There are twelve forms of Medigap insurance available to choose from. For a covered service both Medicare and Medigap would pay their shares. Hence, it would help you in reducing the out-of-pocket expenses. However, you may need to make a careful choice since the price of the plan may vary widely between the providers.

Health insurance provisions for the seniors

As we grow old we become more prone to diseases that would need medication and long term care, like- heart related problems, rheumatism, diabetes and the like. The health care cost would certainly grow with our age. The Medicare and the Medicaid programs are there to look after the healthcare needs of the elderly but the government plans may not always suffice. Therefore, you may need to think ahead of securing a peaceful life. But, how?

Plan early for your late age

You can start early by investing in the retirement plans considering both the cost of living and healthcare cost for the old age. At a younger age you would be charged lesser for premiums worth the same amount of coverage than at later age. Another idea is the implementation of the 401k plan.

Supplementary policies

The supplementary plans would act as the supportive coverage to the benefits available through Medicare. A supplementary policy may cover 50% to 80% of the remaining expenses after the Medicare benefits are given out. However, not all plans are equally effective. Therefore, make it a point that you would read the fine prints before accepting one.

A supplementary plan definitely justifies its value when it comes to paying thousand of dollars towards the medical and prescription drugs bills.

A systematic approach can definitely help you in staying fully covered. You have earned your retirement and, therefore,  have every right to enjoy it to the fullest without worrying about mounting medical expenses.

Should you buy discount health plans?

Though their sales pitch sounds similar to that of a health policy but discount plans are not health insurance. Therefore, beware! If you are offered a plan that is too good to be true then you might have been tricked into a discount plan by a shrewd agent.

As the name suggests a discount plan would only trim the total bill a little when you’ll still be responsible for the rest. The total expense will not get covered by the discount card provider. Often the sellers of the discount plan wouldn’t disclose these facts to you.

Discount plans are useful for people who can’t find coverage otherwise but can afford paying for the expenses. Also, one can save money by using the discount plans, but again, they are not health policies.

Why you should be careful?

With discount plans you are not paying premiums, instead you would be paying the membership fee to continue getting the benefits with the listed healthcare providers and drug stores. Often times it’s been seen that the lists are not updated, many of the providers might have left the network or are otherwise not informed about being associated with it. As a result, you may end up with a useless membership card for which you have paid over months and, worse, unpaid medical bills.

So, what options do you have?

If you don’t want to purchase a discount plan but a proper health insurance, check their background. You also need to be careful with glossy sales pitches.

• Ask the representative clearly about the benefits and costs.
• Take all the time to review their proposal. Read the fine prints as well.
• Check for the hidden costs. Compare the expenses of buying discount plan vs. health insurance.
• You may also check the company up with the Better Business Bureau for complaints against it.
• If you are not satisfied with the explanation given by the sales representative, consider calling up another coverage provider.
• Also, you may contact the Department of Insurance and ensure that the company is legally doing business in your locality.