Insurance Guy Knowledge is the only wealth that increases with sharing!!

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.