| The lowdown on Medicare coverage |
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You can buy a Medigap plan from a private
insurance company or you might be able to get this
supplemental insurance from a former employer (your
own or your spouse's) as a retiree benefit. There
are also several government
programs that can help you obtain Medigap coverage
if you meet certain income requirements or other qualifications.
A Medigap policy is private health insurance
that's designed to supplement the original Medicare
plan and help pay some of the health care costs that
aren't covered -- such as co-payments, co-insurance
and deductibles. Each Medigap policy only covers one
person, so if you and your spouse both want coverage,
you each must buy separate Medigap policies.
Each standardized Medigap policy, however,
must offer the same basic benefits, no matter which
insurance company sells it. Premiums will vary depending
on the plan you choose and the company you buy it
from (the typical premium is about $150 per month),
but usually the only difference among Medigap policies
sold by different insurance companies is the cost.
The best time to buy a Medigap policy
is during your "Medigap open-enrollment period." In
all states, there is an open enrollment period that
lasts for six months and it begins on the first day
of the month in which you are both age 65 or older
and enrolled in Part B (some states have additional
open enrollment periods). For more information about
buying a Medigap policy, call your State Health Insurance
Assistance Program.
All Medigap policies must follow federal
and state laws that are designed to protect consumers
and every Medigap policy must be clearly identified
as "Medicare Supplement Insurance." Furthermore, Medigap
insurance companies can only sell you a "standardized"
Medigap policy. There are 12 such policies identified
by letters (i.e., Medigap Plans A through L), except
in Massachusetts, Minnesota and Wisconsin, where Medigap
policies are standardized differently. Also, in some
states, you might be able to buy another type of Medigap
policy called "Medicare Select," which is a Medigap
policy that requires you to use specific hospitals
and, in some cases, specific doctors to get full benefits.
Where to get more information
It's all rather complicated, but you don't have to go it alone.
"There are a number of programs out there that can help people make decisions with regard to Medicare, and they are generally referred to as State Health Insurance Assistance Programs," says Precht of the Medicare Rights Center, noting that these services are often underutilized. "They, of course, can have different names in different states, but they're generally run out of a state's department of insurance or a state's department of aging, and they offer services that can often provide one-on-one counseling with respect to the coverage choices you'll need."
Human resource departments and union
offices are also good sources of Medicare-related
information, as is the "Medicare & You" handbook,
he says.
Finally, long-term care insurance is another insurance option people might want to consider in addition to the optional Medicare Advantage and Medigap plans discussed above.
"Medicare doesn't cover long-term care -- that is, help with the daily activities of living if you are disabled or have dementia -- basically, all of the day-to-day care you'd need toward the end of your life either at home or in a nursing home," says Precht. "Medicare will only cover your medical care then, but it won't pay for the sort of 'custodial care,' such things like feeding, dressing, bathing, etc."
Being prepared with long-term care insurance could prove financially beneficial to you and your heirs. But this separate insurance is best purchased with the assistance of a financial adviser.
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