Insuring The Elderly: A Comprehensive Guide

In the US, older people can be insured through Medicare, a federal health insurance programme for people aged 65 or older, or those with certain disabilities or illnesses. Medicare offers several different pathways for coverage, including private insurance company options and a public option directly through the programme. For those on low incomes, Medicaid provides free or affordable insurance, and it's possible to be dually enrolled in both Medicaid and Medicare. Outside of government programmes, older people can also be insured through long-term care insurance, or life insurance.

Medicare Advantage Plans

There are several types of Medicare Advantage Plans, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Special Needs Plans (SNPs). HMOs require members to use doctors and hospitals within their network, while PPOs offer more flexibility to access out-of-network care without referrals. SNPs are tailored to meet specific needs, such as for people living with disabilities or certain medical conditions, or those eligible for both Medicaid and Medicare.

It is important to note that plan options and availability may vary by region or county. Before enrolling in a Medicare Advantage Plan, individuals should consider their specific health needs and budget. It is also advisable to check if their medications are covered by the plan and understand the rules set by their employer, union, or other benefits administrator.

Medicaid for low-income seniors

In the United States, Medicaid is a joint federal and state program that provides free or low-cost health coverage to millions of Americans, including low-income seniors. The federal government provides a portion of the funding for Medicaid and sets guidelines for the program, but the specifics of each state's Medicaid program vary.

Medicaid provides health coverage to 7.2 million low-income seniors who are also enrolled in Medicare. In total, 12 million people are "dually eligible" and enrolled in both Medicaid and Medicare, comprising more than 15% of all Medicaid enrollees.

Medicare has four basic forms of coverage:

• Part A: Pays for hospitalization costs
• Part B: Pays for physician services, lab and x-ray services, durable medical equipment, and outpatient and other services
• Part C: Medicare Advantage Plan (like an HMO or PPO) offered by private companies approved by Medicare
• Part D: Assists with the cost of prescription drugs

Medicare enrollees with limited income and resources may get help paying for their premiums and out-of-pocket medical expenses from Medicaid. Medicaid also covers additional services beyond those provided by Medicare, including:

• Nursing facility care beyond the 100-day limit covered by Medicare
• Prescription drugs
• Eyeglasses
• Hearing aids

Medicaid eligibility is determined by both financial and non-financial criteria. Financially, eligibility is based on Modified Adjusted Gross Income (MAGI), which takes into account taxable income and tax filing relationships. Non-financial eligibility criteria include age, residency in the state where Medicaid is being received, and citizenship or qualified non-citizen status.

Medicaid is the single largest source of health coverage in the United States.

Long-term care insurance

Understanding Long-Term Care Insurance

How Long-Term Care Insurance Works

Long-term care policies may limit what conditions they cover. For example, it is not unusual for insurers to deny care for alcoholism, drug addiction, or war injuries. A pre-existing condition may not stop you from getting a policy, but the policy may not cover care related to that condition for some time after it goes into effect.

Generally, you are eligible for benefits once you can no longer perform a set number of "activities of daily living" or ADLs, such as bathing, dressing, eating, using the toilet, getting in and out of bed, and managing incontinence, or if you become cognitively impaired.

Once you are eligible for benefits, there is typically a waiting period of 90 days before coverage kicks in. After this period, coverage is typically capped at a certain amount daily or monthly, up to a lifetime maximum or a certain number of years. Different amounts may be allowed for care in your home, a nursing home, or elsewhere. You pay more for higher benefit levels or for benefits that rise over time to protect you from inflation.

The Bumpy History of Long-Term Care Insurance

The earliest LTC insurance policies, sold in the 1980s, covered only nursing home care. But through the 1990s and early 2000s, insurers started covering home care services, assisted living, adult day care, and other options. Some promised lifetime benefits. Insurers underestimated how much they would pay in claims and overestimated how much they would earn in investments, leading to financial trouble. With the permission of state regulators, they substantially raised premiums on existing customers. Many companies stopped selling traditional long-term care insurance, and today, only a few companies sell the policies with more limited coverage periods at higher prices.

What to Know if You Have a Policy

People who already own traditional policies should know that if they face a premium increase, they have options. One possibility is to pay the increase and keep the benefits you signed up for. Another option is to accept reduced benefits at your old premium rate. Dropping a policy and seeking out new coverage when you are older and less healthy will almost certainly cost you more. As long as you keep paying, insurers can't legally drop you.

To Buy or Not to Buy: Making Choices

Unlike health, home, or auto insurance, this is a policy you buy only once. So before you make a choice, including whether to buy a policy at all, consider your budget, assets, overall financial condition, ultimate financial goals, the full range of insurance options, your age, and health.

Long-Term Insurance Providers in 2023

When shopping for long-term care insurance, consider the reputation of the provider, the cost of premiums, and how the plan or provider will meet your needs. Here are some long-term care insurance providers in 2023:

• Mutual of Omaha
• Brighthouse Financial
• Lincoln Financial Group
• New York Life
• Nationwide
• Genworth Financial

Medicare Supplement Plans

Medicare Supplement Insurance, also known as Medigap, is extra insurance that can be purchased from a private health insurance company to help cover out-of-pocket costs in Original Medicare. This includes deductibles, copays, and coinsurance not covered by Parts A and B of Original Medicare. Medigap policies are available in all 50 states and can vary in terms of premiums and enrolment eligibility.

To be eligible to buy a Medigap policy, you must already have Original Medicare, which includes Part A (Hospital Insurance) and Part B (Medical Insurance). There is a six-month "Medigap Open Enrollment" period, which begins the first month you have Medicare Part B and are 65 or older. During this time, insurance companies cannot deny coverage due to pre-existing health conditions. After this period, Medigap policies may be more difficult to obtain and could be more expensive.

Medigap policies are standardized, meaning that policies with the same letter offer the same basic benefits, regardless of location or insurance company. There are 10 types of Medigap plans offered in most states, named by letters: A-D, F, G, and K-N. The only difference between plans with the same letter sold by different companies is the price. Some states offer another type of Medigap policy called Medicare SELECT, which can be switched to a standard Medigap policy within 12 months if desired.

Medigap coverage typically has no network limitations and can be used anywhere that accepts Medicare. Some Medigap plans also cover foreign travel emergency services. Once enrolled, Medigap plans renew every year as long as the premium is paid and the plan is still available.

Prescription drug plans

There are two main ways to get Medicare drug coverage:

• Medicare Drug Plans (Part D): These plans add drug coverage to Original Medicare, some Medicare Cost Plans, some Private Fee-for-Service plans, and Medical Savings Account plans. To join a separate Medicare drug plan, you must already have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance).
• Medicare Advantage Plan (Part C): This is where you get all your Part A, Part B, and drug coverage through a single plan. However, not all Medicare Advantage Plans offer drug coverage, so it's important to verify this beforehand.

It's important to consider enrolling in a Medicare drug plan when you're first eligible. If you decide not to get drug coverage initially and don't have other creditable prescription drug coverage or get Extra Help, you'll likely have to pay a late enrollment penalty if you join a plan later.

When choosing a Medicare drug plan, it's essential to consider the specific drugs covered by each plan, as they can vary. Additionally, the costs of these plans can differ, so it's worth comparing options to find the most suitable and affordable coverage for your needs.

Medicare Supplement Insurance (Medigap) policies may also be an option to explore, as they can fill in some of the gaps in Original Medicare coverage. However, it's important to note that typical Medigap plans usually do not cover prescription drugs.

By adding a Medicare Prescription Drug Plan, older individuals can gain peace of mind, knowing that their prescription drug costs will be covered, and they can avoid potential financial penalties in the future.

Frequently asked questions