Ask anyone in this country about health insurance, and you’re sure to hear how confusing it is. From questions about carriers and deductibles to information on Medicare and long-term care, it’s hard to know what’s correct and who to listen to. In anticipation of Medicare’s open enrollment period starting October 15, and the Affordable Care Act’s open enrollment period starting November 1, we asked Maura Carley, President and CEO of the patient advocacy firm, Healthcare Navigation, and author of Health Insurance: Navigating Traps & Gaps, to answer your pressing questions.
Q: How can I figure out what kind of health insurance I need and how much? How do I know how large a deductible to take?
A: Ask yourself how much you can afford. Will you get a subsidy? If not, what will your monthly costs be? Evaluate that against what you think your needs will be. Are you relatively healthy? If you know you will likely use many services, you may want a lower deductible. But if you do choose a higher deductible plan, you have to be comfortable knowing that if something happens that you don’t expect, you will be paying up to that amount. How big a financial risk are you willing to take? It’s a personal decision.
Q: Does Medicare cover everything?
A: No, and people really need to be better educated about that. Medicare doesn’t cover routine dental visits, long-term care and medical services provided outside of the U.S. except under rare circumstances. For a complete list of what Medicare doesn’t cover, read GP.com’s article on the holes in Medicare coverage.
Q: What’s the difference between Original Medicare, Medicare Supplement and Medicare Advantage insurance?
A: There are essentially two ways to get Medicare coverage: Original Medicare or a Medicare Advantage Plan, which are available to people 65 or older. Some people who are under 65 can also qualify for Medicare. Medicare has four parts:
- Part A – Hospital Insurance
- Part B – Medical Insurance
- Part C – Medicare Advantage Plans
- Part D – Prescription drug plans
Original Medicare covers services like doctors visits, lab tests emergency services, and surgeries, as well as some other services. Medicare Advantage Plans may differ from Original Medicar, but must give you at least the same coverage as Original Medicare except for hospice care. Original Medicare does cover hospice care. Medicare Advantage plans may also include vision, dental, hearing and other services. Most Medicare Advantage plans include Medicare prescription drug coverage (Part D). Medicare supplement (Medigap) insurance is sold by private companies and can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles. To learn more about the differences between the three visit Medicare.gov.
Q: How do I know how much financial cushion I will need when I retire?
A: There is no magic number. Most people who retire are going to be on Medicare. Medicare is more complicated than it used to be because both Parts B and D are based on income, it’s almost a 50-year program that has changed and evolved, and there are different enrollment rules for the different parts of Medicare. Medicare.gov has a great deal of information on costs and coverage and Medicare Advantage and Part D Prescription Drug Plans. Every state insurance department website has information on companies that sell Medicare supplements (these are private products sold to help with deductibles and coinsurance associated with original Medicare) in that state and the cost of the premiums.
Q: Do I need long-term care coverage?
A: I think everyone should consider long-term care. Americans are living longer, and modern medicine is keeping us alive in ways that we couldn’t have imagined when we were younger. Most people are going to need long-term care services at some point. Much of this care is often provided by other family members but we don’t always have family nearby. Medical coverage will routinely provide some coverage for skilled services in the home after a hospitalization, for example. Medical coverage will typically have an exclusion for “custodial” services, which are the services needed because you can no longer live independently. Long-term care coverage exists to cover those types of services. If you have no income or assets, you will ultimately qualify for Medicaid which also covers long-term care services. That usually means you have to spend everything you have before you qualify for Medicaid. Medicaid provides comprehensive coverage but your choice of doctors is reduced, so if you value choice, Medicaid is not a desirable option. Your care needs may go on for years. I’ve seen some affluent people who didn’t consider getting long-term coverage. They considered themselves “self-insured,” but ultimately regretted when they had to pay out-of-pocket for everything.
Q: Open enrollment for Medicare starts October 15. What happens if you miss the open enrollment period?
A: The annual Medicare enrollment period is October 15th through December 7th. This is when you can change your Part D or Advantage Plan for January 1, 2019. Those on Medicare Advantage Plans can also decide to return to Original Medicare between January 1st and February 14th, but we advise trying to make a sound decision by December 7, 2018 for January 1, 2019. If you have retiree medical benefits through a former employer, the employer determines the schedule of benefit renewals and changes. The Annual Enrollment Period pertains to Advantage Plans (an alternative to original Medicare) and Part D plans. This annual enrollment for Medicare is entirely separate from enrollment associated with Medicare Part A and B.
To find out more information, see these resources: