If you’ve been looking at Medicare, you already know there’s a lot more to it than first glances suggest. Between the different plan options and the choices within those, settling on a Medicare plan can be a tough choice. However, it doesn’t have to be. With a little basic understanding, you can steer your way to a decision without pulling your hair out.
What Is Medicare?
Medicare is the federal government’s health care plan for seniors and people with certain disabilities. It was first established in 1965 and is intended to provide universal access to health services for some of America’s most vulnerable citizens. However, since its inception, Medicare has changed, and it continues to do so, making it harder to know which plan is the right plan.
Terms You Should Know
Medicare is like most other government resources: full of terms that sound more like they belong in a thesis than paperwork meant for non-medical people.
A few terms you should know before starting your planning include:
- Coinsurance: Your portion of medical costs. You pay a coinsurance percentage (for instance 20 percent) of your medical charges. You also pay a copay and monthly premium. Medicare or your insurance covers the remaining balance.
- Custodial Care: Care provided to an individual that is not medically necessary. It includes assistance with bathing, shopping, eating, and hygiene.
- Medicare Advantage Plan-- A private insurance plan approved by Medicare. A Medicare Advantage plan is more comprehensive, and there are many options.
- Medicare Part D-- Medicare-sponsored drug coverage.
While there are many other terms, these are important to understand before deciding on a healthcare plan as you enter your senior years.
Advantage Plans vs. Original Medicare
Medicare gives you peace of mind and financial assistance paying for doctor visits and hospital stays. It is available to all US seniors. If your income is less than $85,000, you pay $135.50 in monthly premiums. You also have coinsurance obligations. Part D is an additional premium.
Medicare Advantage plans are charged according to the options you select. In some markets, there are insurance plans available for a $0 premium. The more coverage you want, however, the more you pay. Original Medicare must be accepted by any doctor who receives Medicare payments. Advantage plans operate on a network structure, which BlueCross BlueShield explains may also include benefits for non-network providers. Outside of an emergency, you should use network providers to cut down on costs.
Which Is Right for You?
There is no right or wrong answer for everyone. If you travel often or live away from your primary home part of the year, Original Medicare may be most logical since it travels with you. When you stick close to one locale, an Advantage plan can save you money and may even provide for health needs relating to dental and vision care.
If you choose to register for Original Medicare, you may also have the option to pay for Medigap insurance. This is also a private insurance product. It helps to fill the financial gaps in coverage. For example, a Medigap plan may cost $290 per month on top of your Medicare premium but would eliminate coinsurance and copays. You are left with little to no extra expenses when you visit the doctor or are admitted to the hospital.
Assisted Living and Medicare
A common misconception is that Medicare will help you pay for assisted living, but this is incorrect. While Medicare will cover short-term care in a medical facility, it will not pay for long-term care. There are ways to pay for an assisted living facility if you don’t have the money set aside, including home equity, long-term care insurance, and veterans benefits if you served in the military. Additionally, if you have a life insurance policy, you may be able to sell it to help you pay for assisted living or long-term care. You’ll need to consider your location as well; in areas like Chicago that have a higher-than-average cost of living, assisted living can be pricey.
There is a lot to consider when it comes to Medicare, much more than a single blog post can even hope to explain. If you are still confused, contact your local Medicare office or speak with a licensed Medicare insurance agent. Your health isn’t something you can just ignore, and your insurance is one of the most important assets you can own at any age.
Guest Contributor Bio:
As a senior herself, Sharon Wagner understands that an older body and mind impacts the daily lives of many seniors. She created SeniorFriendly.info to offer advice geared specifically toward seniors to help them make healthier choices and enjoy their golden years.