Health insurance is very complex and it changes over time. Many Americans have health insurance through their work but those who do not have other options available. Depending on your state they may have an option through a state Exchange. Since “ObamaCare” was created it has allowed every American to receive healthcare no matter what pre-existing conditions they may have currently or in the past. Health insurance is now required and if you do not carry some kind of health insurance as an individual or business you may get an additional tax. If you do not have a particular level of income you may also qualify for lower cost health insurance.
A number of other coverage falls in the “Health Insurance” bucket. An insurance agent must be licensed in Health to sell both Medicare and Long-Term Care Insurance.
What is Medicare?
Medicare is the federal health insurance program for individuals 65 or older, certain younger individuals with disabilities and individuals with ESRD (End Stage Renal Disease.)
Anyone who has paid into Social Security has been paying into Medicare and this will qualify them for Medicare once they turn 65. There are 4 different parts to Medicare.
Medicare Part A or “Hospital Insurance.” If an individual was needing to be hospitalized, needing Hospice or put into a skilled nursing home Part A will cover certain costs to a certain point.
Medicare Part B or “Medical Insurance.” This can help cover certain doctor services, medical supplies, outpatient care and preventative services.
Medicare Part C or Medicare Advantage. This is a type of Medicare health plan that is not associated with the federal government but offered by private insurance companies as an alternative to Original Medicare. Many Medicare Advantage plans offer prescription drug coverage as well.
Medicare Part D or Prescription Drug Coverage. This adds prescription drug coverage to Medicare. Private insurance companies and other private companies offer this coverage as long as they are approved by Medicare. Medicare.gov has a tab that will allow you to enter in all the prescription drugs you are currently taking and breaking down which “drug plan” is most affordable to you.
What is “Long-Term Care?”
Long-Term Care (LTC) or “Nursing Home” Insurance is an insurance contract with a private insurance company to help off-set the costs of needing a nurse in your home or covering the costs if you are needing to go into a nursing home. As the costs for nursing homes is increasing every year this has been a very popular insurance coverage people are looking into for themselves or their parents. The costs for a nursing home can be in the tens of thousands a month. This can cause someone to use up all of their savings and assets to pay for their stay. It does not appear as though the costs will be going down in the near future because of the age and amount of baby boomers in the US.
Long-Term Care Insurance works as a contract with an insurance company that you pay a premium every year and if you need full-time care due to failing activities of daily living or a brain ailment the insurance company would help pay for the care. If you are over the age of 65 part of Medicare will help cover the costs of a nursing home but only for a short period of time. Once you hit a certain time period the costs to stay in the nursing home will fall on the individual or the insurance company if they have Long-Term Care insurance. There are many different kinds of LTC you can purchase from a number of different carriers so having a discussion with a licensed agent is crucial. Many insurance companies have started to add “Critical Illness” or “LTC” riders to their permanent life insurance policies as well which could also cover some of the costs of a Nursing home or an in-home nurse.
No LTC insurance coverage is the same. Some have different wait periods while others have a max amount of coverage. The qualifications required to receive the benefits can be different with every carrier so you would need to look at the policy documents or talk to an agent to know how exactly your LTC insurance works.
*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.