In America today, we have seen a great deal of confusion about healthcare for the elderly. It is my objective to clear up some of the complexities of Medicare, which is simply health care for the elderly or disabled. To qualify for eligibility, you must be over the age of 65, disabled under Social Security for two years, or have end stage renal disease.
Medicare Part A is hospital insurance and pays some of the cost of skilled nursing care, hospice care, and home health care. This coverage costs about $400 each month unless you have paid Medicare taxes for 30 quarters (7½ years). Once these taxes have been paid, there is no monthly cost associated with this coverage.
Medicare Part B covers physician’s services, most outpatient hospital services, and other related services. The monthly cost for this coverage is just under $100. With this coverage, certain deductibles, coinsurance and copayments may also apply.
Medicare Part D covers prescription drug coverage. The costs vary by provider but average about $25 per month. You may enroll for the first time or change carriers once each year between November 15 and December 31.
About twenty percent of the population works for an employer that supplements Medicare coverage in retirement. Often, a retired employee has personal coverage as well as coverage for their spouse until the retired employee dies. At this point, the supplemental coverage has to be replaced by the spouse. This is important to note, as I frequently deal with a surviving spouse who is unaware of this loss in coverage. Failure to recognize this change often causes out of control medical expenses and confusion to the spouse about the reason for the increase in these expenditures.
The rest of the elderly population can satisfy supplemental medical coverage with Medicare Advantage plans or Medicare Supplement plans. The Medicare Advantage Plans are part of a network of physicians where participants are restricted to the health providers in the network. The Medicare Advantage Plans have less cost and are most often available in large metropolitan areas. The disadvantage is limited physician selection. The Medicare Supplement Plans are best for those away from metropolitan areas or those who want to select their own health provider.
Because there are substantial numbers of people born between 1946 and 1964 (baby boomers represent 78 million people) that will be entering the Medicare window in the next twenty years, it is expected that either health care benefits will be greatly reduced or costs will increase significantly. It will become increasingly difficult for elderly people to find and afford adequate health care. It is likely that many will be forced to live with their infirmities. This is why it may be important for those in all age groups to begin eating right, exercising and setting up disciplines for a healthy lifestyle.
Robert Ostrander, CFP®
SWS Advisors, Inc.
Tags: health, healthcare, medical, MEDICARE, retirement
GREAT ARTICLE! I tweeted it! Thanks,
Karin