Health Insurance

What kinds of health insurance are there?
There are essentially two kinds of heath insurance: Fee-for-Service and Managed Care. Although these plans differ, they both cover an array of medical, surgical and hospital expenses. Most cover prescription drugs and some also offer dental coverage.

1. Fee-for-Service
   These plans generally assume that the medical professional will be paid a fee for each service provided to the patient. Patients are seen by a doctor of their choice and the claim is filed by either the medical provider or the patient.
    
2. Managed Care
   More than half of all Americans have some kind of managed-care plan¹. Various plans work differently and can include: health maintenance organizations (HM0s), preferred provider organizations (PPOs) and point-of-service (POS) plans. These plans provide comprehensive health services to their members and offer financial incentives to patients who use the providers in the plan.

What is 'long-term care'?
Because of old age, mental or physical illness, or injury, some people find themselves in need of help with eating, bathing, dressing, toileting or continence, and/or transferring (e.g., getting out of a chair or out of bed). These six actions are called Activities of Daily Living–sometimes referred to as ADLs. In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care.”

Long-term care isn’t a very helpful name for this type of situation because, for one thing, it might not last for a long time. Some people who need ADL services might need them only for a few months or less.

Many people think that long-term care is provided exclusively in a nursing home. It can be, but it can also be provided in an adult day care center, an assisted living facility, or at home.

Assistance with ADLs, called “custodial care,” may be provided in the same place as (and therefore is sometimes confused with) “skilled care.” Skilled care means medical, nursing, or rehabilitative services, including help taking medicine, undergoing testing (e.g. blood pressure), or other similar services. This distinction is important because generally Medicare and most private health insurance pays only for skilled care–not custodial care.

What are the types of disability insurance?
There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD):

1. Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.
    
2. Long-Term Disability policies (LTD) have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

Disability policies have two different protection features that are important to understand.

1. Non-cancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits.
    
2. Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you.

In addition to the traditional disability policies, there are several options you should consider when purchasing a policy:

• Additional purchase options
  Your insurance company gives you the right to buy additional insurance at a later time for an additional cost.
   
• Coordination of benefits
  The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies.
   
• Cost of living adjustment (COLA)
  The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA.
   
• Residual or partial disability rider
  This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled.
   
• Return of premium
  This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy.
   
• Waiver of premium provision
  This clause means that you do not have to pay premiums on the policy after you’re disabled for 90 days.

Snapshot of Medicare:

Eligibility: 
A person is first eligible for Medicare on the first da of the month in which they turn age 65.  If their birthday is on the first of the month. they become eligible the first day of the month before.

The Initial Enrollment Period is a 7-month period that begins 3 months before the month you turn age 65, includes the month you turn 65, and ends 3 months after the month turn age 65.

A Special Enrollment Period is available if a person or spouse is currently working, and is covered by a group health plan through the employer or union.  This period is available anytime a person has the group health coverage and lasts during the 8-month period that begins the month after the employment ends.

Medicare enrollment can be completed at www.medicare.gov.

Medicare Part A
Covers inpatient hospital, skilled nursing care, some home health services, and hospice services.  Once qualified, benefits are automatic and, typically, no premium is required.

Most people will not have to pay for Part A because they paid Medicare taxes while they were working.

            Medicare A Co-Insurance:
            $1184 deductible/$0 coinsurance for days 1-60 ( per admission)
            $296/day for days 61 - 90
            $592/day for up to 60 additional "lifetime reserve" days after 90 days
            All costs beyond 150 days , or once lifetime reserve days used past 90 days.

            Medicare A Skilled Nursing Care:
            pays 100% up to 20 days
            $148/day co-pay for patient for days 21 - 100.

Medicare Part B
Covers outpatient care, doctors' services, home health care, a some preventive services.  Normal monthly premium is $104.90 but may increase due to income.

            Medicare B Deductible:
            $147/year

            Medicare B pays 80% of eligible expenses

Medicare Part C:
Allows private health care organizations to offer health insurance plans with benefits equal to those offered under Medicare A and B, but may offer additional services.
            - Health plan options approved by Medicare and run by private insurance companies
            - Medicare Advantage ( MA ) Plans are part of the Medicare program
            - MA plans cover all Original Medicare  ( A&B ) benefits and may include Rx benefits
            - MA plans may offer additional benefits, such as routine physicals, eye exams and preventive benefits
            - Individuals continue to pay Part B premium through Social Security.

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Medicare Part D
Is the Medicare prescription drug plan run by private insurance companies.

Most 2013 Medicare Part D plans are broken down into four main parts:

Part 1 - The initial $325 deductible.
Some plans do not have an initial deductible and provide first dollar coverage.

Part 2 - Coverage
The plan provides the Medicare Part D Beneficiary with co-insurance or medication co-payment.  Usually, coverage extends to a point where the total retail cost of the medication reaches $2,970 - however, some plans lower this limit.

Part 3 - The Coverage Gap or Donut Hole
After total spending on drugs by the beneficiary and the plan reaches $2,970, the beneficiary pays for 79% of generic drug costs and 47.5% of brand name drug costs.  This Coverage Gap is to be eliminated by 2020.

Part 4 - Catastrophic Coverage
When a person has spent more than $4,750 for prescription medications, they will be protected by Catastrophic Coverage where the cost of medications is substantially reduced.  It will be a co-pay of $2.65 for generic drugs and $6.60 for brand name drugs or a co-insurance of 5%, whichever is greater.



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Medicare Supplements:
They work only with Original Medicare (Parts A & B) and are sold by private insurance companies to fill "gaps" in original Medicare coverage.  Does not cover Medicare benefits, but works with Original Medicare coverage.

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