The first part of our insurance introduction is commonly the last for folks. I say that not to be insensitive or to make a joke in poor taste, but after enrolling in Medicare, folks shouldn’t have to make many more major decisions about their health care coverage.
To avoid a misunderstanding, let’s begin with a distinction between two separate programs that often get confused. Medicare is for individuals that are 65 and over or those that have been diagnosed with end-stage renal failure, or have been receiving disability payments for 24 months. Medicaid is a government run program that is based on income of the household. That is not to say that people cannot be enrolled in both programs as 4.6 million low-income seniors are “dually eligible” for both Medicaid and Medicare.
An important part of Medicare that we need to discuss is Medicare Part D. Medicare Part D is for the prescription drugs. This is offered by private companies and has a premium that is paid monthly. An annual open enrollment is offered each year from October 15 through December 7. During that time any one that is eligible can change to any plan without underwriting. These plans can change dramatically from one year to the next so it is very important to review these plans each year. The companies can change their “formulary” each year so a drug can be removed and it won’t be covered, deductibles and co-pays can and often do change.
When looking at Medicare we want everyone to know that all medical expenses are not fully covered under this program. This is where we get into Medicare Supplements and want you to know that all companies that offer supplements are required by law to offer the exact same coverage based on the letter of the supplement. For example, Company A and Company B are both required to have identical coverage for the Medicare Supplement Part Z plan. However, the parts of the coverage can vary in deductible and premium. So we like to look at two key differentiating factors when working with folks. First, the plan design they would like based on deductible and what is covered with each company. Next, we look at premium stability as rates will rise with age and companies can also raise rates annually in addition to the age increase. We try to partner with companies that have a more stable rate history for our clients.
In addition to using Medicare supplements to fill in coverage gaps, another line of coverage that we feel needs to be addressed is Long-Term Care insurance. As life expectancy lengthens, the need for this coverage is increasing due to the higher likelihood of its use. Many folks think that Medicare will pay for the expenses incurred in assisted living facilities or private nursing. That may be true to an extent, but certain things have to happen first, and then these services will only be covered for a certain amount of time. Then, if that type of care is still needed, it is up to the individual to pay these significant expenses out-of-pocket. When compared to Medicaid, Medicaid will pay similarly for this type of care as well, but that program looks at all assets and income to determine coverage eligibility. Long-Term Care insurance is there to help fill this gap and protect assets that folks have accrued during the course of their lives where these other programs fall short.
Here’s a simple tips list to summarize this information:
- Lots of circumstances, but can be done 3 months before to 3 months after turning 65 and avoid all penalties. Enrolling at that time in all coverage may not be the best option. Other coverage can have a factor.
Parts of Medicare:
- A: This covers the “in-patient” parts of healthcare. B: covers the “out-patient” care like durable medical equipment or doctor visits. C: This is an option that is offered by a private company. D: covers the prescription drugs, can have lots of changes on an annual basis. Open enrollment for this is October 15 through December 7 each year. These options all vary if someone is eligible for Medicaid, based on income and assets.
- Offered to fill some or all the gaps of Medicare A and B. Not provided through Medicare but offered through private insurance companies. Each type of plan is identical regardless of company, the only variable for the type of plan is the premium which can vary greatly both initially and at renewal.
- This type of coverage is designed to cover the costs of assisted living facilities, retirement homes, private nursing, and even some coverage for help in living while still at their home. New plan designs and hybrids of this and life insurance are becoming prevalent. There is some coverage for this through Medicare, but it is not comprehensive for the average stay. The only other alternatives to pay for these facilities are personal payment, or Medicaid which is income and asset based coverage.
Senior Market – Beacon Insurance – PDF/Print
For more information, contact Mike Wilken at (308) 646-0683.
Beacon Insurance 16 W 23rd St, Kearney, NE 68847