Medicare is a federal health insurance program for those who are 65 years or older or have certain disabilities. The foundation of this form of insurance begins with Original Medicare. Original Medicare refers to to Parts A and B. Medicare Part A is known as Hospital Insurance, and Part B is referred to as Medical Insurance.
Because Original Medicare covers 80% of medical costs, most Medicare beneficiaries look for additional coverage to supplement the remaining responsibility. Fortunately, there are a few different ways to manage your healthcare once you qualify for Medicare. In order to get the best overall care, however, it is important to become familiar with all of the available options.
One possible option for Medicare beneficiaries is a supplement, or Medigap, plan. Medicare Supplement plans are offered by health and life insurance companies, which have received prior approval from the Center for Medicare and Medicaid Services. In addition to paying to the Part B premium, those enrolled in these plans must pay a separate premium to the insurance company.
The goal of these plans is to help with the medical costs not covered by Original Medicare. Supplement plans cover copays, deductibles, and other out-of-pocket costs. They are also guaranteed renewable, as long as you have a standardized Medigap plan. Guaranteed renewable means that you can keep you plan, regardless of future health problems, as long as the insurance premiums are paid.
Most supplement plans are accepted nationwide, and many of them offer emergency care when you are outside of the U.S. So, if you decide to spend your retirement traveling, you have the comfort of knowing that your health insurance travels with you.
However, there is some important information you should know before enrolling into a supplement. First, supplement plans are only an choice for those who are 65 years or older. So, unfortunately, if you become a beneficiary before then, these plans are not an option for you. Like life insurance, supplement plans also include underwriting.
This means that applicants must meet certain health standards in order to be approved. For example, those with End-Stage Renal Disease do not qualify for supplement plans. Another thing people should consider is their need for additional coverage. Medigap plans do not typically have benefits such as vision or dental.
Prescription drug coverage is no longer included as well. This is important because there is a penalty for Medicare beneficiaries who do not have drug, or Part D, coverage. The penalty is calculated by multiplying 1% of the national base premium by the number of full months you went without creditable coverage. Also, you will be responsible for this penalty for life. Therefore, if you choose a supplement plan, you must also select a separate drug plan.
Choosing the best type of plan for your Medicare coverage can be an overwhelming project. There are so many different aspects to consider. Beneficiaries must think about their financial abilities, medical needs, and so much more. Fortunately, you do not have to make these decisions blindly.
There are several different resources available to help you. The Centers for Medicare and Medicaid Services and Medicare.gov have an ample amount of information on the various options available. You can also get answers from an insurance agent or any insurance companies in your particular area. No matter what you decide, the key to make sure that you have made the best choice for you.