Medigap Insurance Plans To Help Pay For Medical Expenses That Medicare Does Not Cover

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Medigap Insurance Plans Help Supplement Medicare Part A and Medicare Part B

*While young people are not in the market for Medicare, they have parents and grandparents that are.  So it is important to have an idea of what Medicare involves.

Medicare was designed to help pay for medical costs for people aged 65 older, people of all ages with disabilities, and people with End Stage Renal Disease. However, Original Medicare does not pay for everything and still leaves the member exposed to many out-of-pocket expenses.  Fortunately there are ways to help cover these costs. Private insurers sell Medigap (or Medicare Supplement) plans that fill in the financial gaps that Medicare leaves open.  One thing to note is that all Medigap plans are the same among all insurers. An AARP Plan A is the same as an Aetna Plan A. The difference is how they are priced.

Plan A

Original Medicare typically requires a deductible for inpatient and outpatient services followed by a 20% coinsurance.  Medigap Plan A basically eliminates the coinsurance.

You are still required to pay the deductibles for Part A and Part B, but once the deductible is met, Plan A pays for the rest.  This includes pints of blood.  It pays for the first 3 pints of blood and then picks up the 20% member portion for blood in an outpatient setting.

Medigap Plan A does not pay anything extra for Skilled Nursing Facilities that are not covered by Medicare Part A.

Plan B

Medigap Plan B is very similar to Plan A.  The only addition is that Plan B pays for the patient deductible that the member is responsible for under Medicare Part A.  All other plan provisions are the same for Medigap Plan B as Medigap Plan A.

Plan C

Medigap Plan C has the same provisions as Plan B – which built upon Plan A – but it also pays for two extra things.

  1. Plan C pays for the Medicare Part B deductible.  So with Plan C you will not have a Medicare Part A or Medicare Part B deductible to pay.
  2. Plan C pays for emergency medicare care outside of the United States.  Medicare DOES NOT pay for this emergency service.  You must have a Medigap policy to have emergency insurance coverage outside of the United States.  And then, this only covers the first 60 days of each visit outside of the country.  The medicare care requires a small deductible, and then the Medgap plan pays 80% of charges up to a $50,000 lifetime maximum benefit.

Plan F

Medigap Plan F would be considered the “Cadillac” Medigap plan.  Plan F pays for more services than any other Medigap plan.  It covers everything that Plan C covers, plus the Medicare Part B excess charges that are above the Medicare-approved amounts.

Medigap Plan F still does not cover inpatient hospital stays beyond the additional 365 days after the lifetime reserve days are used.  These extra days are still the responsibility of the member.

Plan F also does not cover more than 100 days of Skilled Nursing Inpatient Care.

If you want to spend the money for the best Medigap insurance plan, Plan F is the way to go.

Plan K

Medigap Plan K is a “50%” plan.  It provides the following coverages for charges under Medicare Part A.

  • 50% of the Medicare Part A deductible, after which it pays for 100% of hospitalization costs.
  • 50% of the Skilled Nursing per day charge for days 21-100.
  • 50% of the first 3 pints of blood in an inpatient setting.
  • 50% of Hospice charges.

Plan K provides the following coverage for charges under Medicare Part B.

  • Portion of preventive benefits not paid for by Medicare Part B.
  • 50% of coinsurance required by the member (10% of charges).
  • 50% of the cost of pints of blood (excluding Part B deductible).
  • 50% of cost of durable medical equipment.

There is also a member out-of-pocket limit.

Plan L

Medigap Plan L is very simple.  You take a look at Plan K and substitute 70% for 50%.  In addition, the member out-of-pocket limit is half of the out-of-pocket limit under Plan K.

Plan N

Medigap Plan N incorporates copays into Medicare Supplement plans. Like Plan F, it pays for virtually all of the Medicare Part A charges. For Medicare Part B charges, it still requires a deductible. However, after the deductible is paid, Plan F pays for the member’s 20% coinsurance, except for a copay charged for office visits and emergency room visits. If the emergency room visit turns into an inpatient stay then the copay is waived.

Medigap Plan N also pays for pints of blood and durable medical equipment after the Medicare Part B deductible is met.

Plan N pays the same foreign travel emergency benefit as the other plans mentioned here.

What is the Cost of Medigap Insurance Plans?

What you pay for a Medigap insurance plan depends on several factors, including your age and zip code.  Contact your Medigap insurance company for more details on the premiums required for each plan.

The amount you pay at the medical service provider depends on if the provider accepts Medicare assignment.  Charges from providers that accept assignment will most likely result in lower costs for the Medicare recipient.

Other Medigap Insurance Information

For more information on Medigap insurance, check out Medicare and AARP.

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How to Find Health Insurance That Is Affordable Under Obamacare

Beginning on January 1, 2014, most of the provisions of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare will go into full effect.  One of these provisions is the requirement that every American have health insurance or pay a fine.  Therefore, it is very important to find health insurance that gives you the coverage you need at a price you can afford.  But how do you do this?  Despite the controversy about the overall cost of the Affordable Care Act, there are some new ways to find affordable health insurance on an individual level.  Here are 4 ways that you can find health insurance that fits your budget and medical needs.

Reformed Group Insurance through an Employer

Obamacare has reformed the group insurance model.  While originally set to be implemented in 2014, the employer mandate to provide health insurance has been postponed until 2015.  Still, once it is put in place, you will be able to find health insurance through your employer that puts limits on what you pay for the plan and what your out of pocket limits will be.

The Affordable Care Act requires that employers with more than 50 full-time employees offer medical insurance to all of their full-time employees.  Full-time is defined as anyone who works at least 30 hours per week.  There are different calculations that go into the full-time definition, but just know that if you average 30 hours per week, you must be offered coverage.

The coverage that you are offered must have at least a 60% actuarial value, meaning that on average, for every dollar that the insurance covers, the insurance plan must pay for at least 60 cents.  One of the ways this is achieved is by limiting the individual’s out of pocket maximum.  In 2014, the limit is $6,350 and includes deductible, coinsurance, and copays.

Also, the employer cannot make an employee pay more than 9.5% of their salary to participate in the plan.  If you make $2,000 per month, the most you can pay for your insurance is $190.  Having said this, there is no cap on the cost of insurance for a dependent.

Still, with these provisions in place, you can find health insurance that is probably cheaper and better than before.

Health Insurance Marketplaces

Obamacare created health insurance marketplaces – originally called exchanges – to help people find health insurance plans quickly and efficiently online.  The marketplaces will make the search for a good plan easier than looking for individual insurance on your own.  Everything will be in one place.

While it will be interesting to see if the actual premiums of the plan are any cheaper than pre-Obamacare, some people will get help paying their premiums by way of tax credits (see here for tax credit eligibility).

If someone can find health insurance and use a tax subsidy, a good plan at a low rate will be available.

Parent’s Plan

The Affordable Care Act requires insurance companies to allow children to enroll in their parent’s insurance plan until age 26.  This is very advantageous because many times the cost to add a dependent to a plan is lower than the cost of an individual plan.  In fact, many times a new dependent can be added at no cost since some plans have one premium rate for all children on a plan.  In that case, someone under age 26 can effectively find health insurance that is free.

Medicaid

When Obamacare was passed, it required Medicaid to be expanded in every state.  This expansion will make it easier for adults to find health insurance through this government program.  The Supreme Court took away the requirement, and as a result, many states will not be expanding this coverage.

However, if you live in a state that is expanding Medicaid, check to see if you are eligible for this low cost way to care for medical needs.

Find Health Insurance at an Affordable Rate

When you try to find health insurance at an affordable rate, make sure to be patient and look at all your options.  Good coverage at a reasonable price is available.

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What is a Health Insurance Broker and Should You Use One?

Buying health insurance can be a complicated process.  There are so many plans, so many insurance companies, so many forms, and so many premiums, that a lot of people will just throw up their hands and not go through with the purchase.  Or they will end up with a plan that is either not in their best interest or costs too much.  One of the ways this can be avoided is by hiring a health insurance broker.  A health insurance broker can simplify the insurance buying process and get you a great plan at a price you can afford.

Knowledge of the Health Insurance Industry

Whenever you try to purchase something intricate about which you have no idea, there is a good chance you will miss something or pay too much.  Like negotiating with an experienced car salesman, there are tricks to the trade in the health insurance industry that many people know nothing about.

However, a health insurance broker knows all of those tricks.  They know how to leverage their client’s situation as best they can to get a good medical plan.  They know what to ask the insurance companies about and what traps to avoid.

Brokers also spend their time networking with industry insiders, such as agents and executives of insurance companies.  Because of these relationships, they are able to talk on a more personal level than an average customer.

It is very hard to get the best deal without expert knowledge of the insurance world, and a broker can bring that to you.

Leverage of Having Multiple Clients

Since a health insurance broker has multiple clients, he or she can use that to help get good pricing for all of them.  Insurance companies want to keep brokers happy so that the brokers keep coming back to them for possible business opportunities.

When individuals go out and look for a good insurance plan on their own, they do not have this leverage.

A Health Insurance Broker Leaves You Free to Do Other Things

Because a broker searches for good insurance plans for a living, they can do the work much more efficiently than an non-expert.  They know exactly who to call and exactly how to read policies and contract.

This leaves their customers to go about their business without worrying about looking up insurance companies and calling agents.  The customer can hire the broker and wait for the broker to bring them the best plan.

How Do Brokers Get Paid?

A health insurance broker gets paid through commissions in the policy premium.  Typically this rate has been around 5%.  However, with limitations on the loss ratio of medical plans, some insurance companies have begun to lower the rate they pay out in commissions.  If you hire a broker, just make sure to find out in advance how much they take in commissions.

Will There Be a Difference if I Use a Health Insurance Broker?

If you try to find low cost insurance on your own you can probably find a good plan at an affordable price.  But it will take you time and energy and you might not find the best plan at the best rate.  A health insurance broker can give you peace of mind that you are getting the coverage you need.

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Options to Access Health Insurance for Young Adults

With the requirement of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, that every American purchase health insurance or face a tax, there are many young adults that will be looking to access health insurance for the first time in their lives.  There are so many options out there, it can be difficult to choose which is the best way to cover them and their families.  With that in mind, here are some of the best ways to access health insurance that is comprehensive and affordable.

An Employer’s Plan

The Affordable Care Act expanded the eligibility requirement of group plans.  Under Obamacare employers must offer medical coverage to all of their full-time employees, defined as employees working at least 30 hours per week.  If the employer refuses, they will pay a fine.

There are some formulas to determine the hours an employee works, but as long as a worker meets the 30 hours per week mark they will be offered the same coverage options as everyone else.

In addition to being offered coverage, the law requires that the insurance be affordable.  An employer cannot charge more than 9.5% of an employee’s monthly salary to access health insurance at the workplace.  If more than 9.5% is kept out of a paycheck, the employer will face a fine.

A Parent’s Plan

Another big advantage of Obamacare is the requirement that children be allowed to enroll in a parent’s plan until age 26.  Before the legislation was passed it was up to the insurance plan to decide how long children could be covered.  Now, a dependent can be enrolled long enough to give him or her time to establish their own means for paying for a medical insurance plan.

A parent’s plan can be an inexpensive way to access health insurance since many employers subsidize the cost of children on a plan.  If another child is already enrolled, then there usually is no extra cost to add another.

Health Insurance Marketplaces

Obamacare established health insurance marketplaces, online sites designed to help individuals and small businesses access health insurance with ease.  The marketplaces, also called exchanges, will offer 4 levels of plan design from various health insurance companies.  The exchanges are the responsibility of each state, and some states have built their own exchange.  Some others are sending their residents to a federal exchange.

If someone does not have coverage offered at work, earns less than 400% of the federal poverty level, and purchases insurance on the exchange, they will be eligible for tax credits to help offset the cost of the premium.

Individual Insurance

If group insurance and the health insurance marketplaces are not a viable option, there is still the possibility of finding individual insurance on your own.   There will be some legwork involved, as it is not necessarily easy to sort through plan designs from different companies.  However, you will have more options as to which level of insurance plan you would like than you will on the exchange. The coverage bar required to satisfy the individual mandate is not very high, and you can find plans that meet the requirements at a low price, albeit without much coverage.

If you do not want to find individual insurance on your own, you can hire a broker to access health insurance for you.

Medicaid

Before 2014, it was hard for adults in many states to qualify for Medicaid.  However, Obamacare expanded Medicaid to make it much easier to be eligible for assistance through this program.  Like the exchanges, Medicaid is administered through the states, so check with your state’s Medicaid office for more information.

No Pre-Existing Condition Exclusions

Being able to access health insurance is much easier post-2013 than it was before due to the fact that insurance companies cannot deny coverage to people due to pre-existing conditions.  This has made it less complicated to find a quality plan at a reasonable price.

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