Health Insurance Issues for the Elderly

Why this topic is so important. For individuals in the later years of life, health insurance and health related costs are often one of the largest expenses. It is critical that you consider and plan for these expenses and that you become aware of the details of your options. In addition, as a voter you should be aware of how the system works, since national health care is one of the top five political issues. How changes affect Medicare (costs and benefits) may affect you or your friends and family. On average, most of your health care costs will be during the last 20–40 years of life, as your body ages.

It all centers around Medicare. All health insurance decisions for people 65 or older are centered around Medicare, working in the private sector, since in essence it is the core health insurance coverage. Individuals may be covered by other types of coverage after that age. For example, if they are still working they may be covered by group insurance. However, you need to consider all coverage decisions in light of Medicare options and benefits to avoid increased costs or gaps in coverage.

Additionally, if you are retiring before you are 65, remember that many companies do not provide retiree health insurance. Since Medicare also provides no coverage for early retirees, your plans should take into consideration the cost of individual coverage and your insurability.

What is Medicare? Medicare is a Federal health insurance program for people age 65 or older (or for younger people with certain conditions or disabilities). Covered persons are called ‘Beneficiaries.’ Medicare coverage is provided by different ‘Parts:’ Part A: Hospital related costs, and Part B: Doctor related costs.

Parts A and B do not cover all costs; they have deductibles and co-insurances. To help fill in these gaps of coverage, insurance companies market Medi-Gap or Medicare Supplemental (Med-Sup), and Medicare Select policies (managed care). Medicare working with private insurers provides two other options: Part C combines Parts A & B and provides Managed Care type of coverage and treatment (also called Medicare Advantage plans), and Part D is Prescription drug coverage.

Not to be confused with Medicaid. Medicaid is a welfare-type of coverage that is not related to Medicare. It helps provide health and long-term-care benefits to financially needy people of any age with low/no income or assets. Medicaid is funded by Federal, State and Local governments; coverage varies by state. Medicaid will not be addressed here; additional information is available from agencies in your state and at www.cms.hhs.gov/home/medicaid.asp.

When to sign up for Medicare Part B, C, D and supplemental plans? This answer to this question can be complex, but mainly centers around whether you are working after age 65 and eligible for group health insurance, and when that work will end. It is extremely important to be aware of guaranteed enrollment guidelines if you decline any of these plans at age 65, which can be complex. But suffice to say if you don’t take advantage of the normal guaranteed open enrollment around the age of 65, then you might have to wait before being covered by these plans, this is especially important if you have health problems and want to buy a supplemental plan, or have big health expenses during a gap in coverage. It is worth the investment in time to investigate your options at age 65 so that you are not caught without coverage.

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