Choosing Supplemental Health Insurance For Senior Citizens

Considering Medicare Supplement Insurance Options

Medicare is the health insurance program provided by the federal government for Americans or permanent residents who are 65 years of age or older. Americans under the age of 65 are eligible if they have disabilities or certain diseases. This program covers most health care needs; but not all. Medicare supplement insurance also known as Medigap insurance can cover the gap between Medicare coverage and the insured payment of deductible, coinsurance, and copayment charges.

These policies are offered by private insurance companies licensed to operate in each state and regulated by its department of insurance. Medigap benefits are defined by the federal government. Such policies only offer policy coverage deemed medically necessary by Medicare and are annually automatically renewed. Payments are typically based on a Medicare approved charge. A Medicare supplement policy is not necessary for those who have other types of policies that provide coverage.

Medicare supplement insurance can help fill in some of the gaps that Medicare will not pay. These Medicare supplement insurance plans are twelve in number and they are standardized. Each plan offers a different combination of benefits. Plan A has the fewest and is the least expensive. Plan J has the most and is the most expensive. All companies that offer supplemental insurance must offer Plan A, but do not have to offer the other plans. Plans F, J, K, and L offer a higher-deductible option. All plans are not available in every state.

All Medicare Supplement plans have certain basic benefits in common. Beyond that additional benefits are provided under Plans B through J. Nursing home care is available in plans C through J. This covers actual billed charges for post-hospital care eligible under Part A. Also available on plans C through J is emergency foreign travel coverage. This most of the charges that Medicare would have provided in the United States. Care must begin during your first two months outside the United States.

In Plans B through J there is provision for a Part A deductible that covers the Part A deductible amount per benefit period. Available on plans C, F, and J is a Part B deductible that covers the amount. There is full coverage in plans F, I, and J and 80 percent coverage in Plan G for Part B excess doctor charges for such fees that are limited to 15 percent above the Medicare standard. However, if most of your doctors take Medicare assignment, you may not need this coverage. Plans D, G, I, and J offer coverage for at-home recovery costs for short-term at-home assistance. This is limited to certain number of visits by a provider who is qualified and payment is also limited. Plans E and J cover preventive medical care deemed to be appropriate by your physician and beyond Medicare covered preventive services to a certain amount. High deductibles are required for Plans F and J in exchange for a lower premium. Note: in addition to the high deductible, there will be a deductible for foreign travel emergency.

The basic benefits offered by plans K and L are for similar services as plans A through J. However, the cost-sharing for the basic benefits is at different levels and includes different annual out-of-pocket set amounts. The out of pocket amounts are applicable for the deductible, copayment, and coinsurance amounts. Beyond that, the company will cover the costs for the rest of the year.

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Within each standardized insurance plan, the benefits are the same from one company to the next; but, the premiums can vary significantly. The optimal time to purchase is during the first 6 months following your enrollment in Medicare Part B. This is the only time insurers have to accept you regardless of preexisting health conditions. Whether you have to file a claim form depends on your doctor or other health care provider. They might file the forms for you, or else you will need to file the forms yourself.

Premiums increase to adjust to inflation and due to the methods used to calculate them. On the first day of January, Medicare benefits are adjusted to keep up with inflation. Because all these insurance benefits are coordinated with Medicare, premiums for supplemental plans will change accordingly.The three different methods used to set premiums are use the attained age, issue age and community rate base. The attained age method premiums rise as you get older. These increases are in addition to those due to the annual adjustments to inflation. The issue age premiums are based on the age at time of purchase. They will not increase with age; but, they will rise to accommodate inflation adjustments. Community rate premiums are the same for those residing in the same geographic area. The optimal policy choice taking this into account would be deciding the benefit combination most suitable, then purchasing by looking at the policy with the lowest premium using the issue-age or community-rate method of calculating the premium.

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