The Facts About Senior Health Insurance Plans
Medicare may not be enough to cover your health care needs as you age. But how do you know what kind of health plan will work for you?
Choosing among senior health insurance plans can be a daunting task. There are government plans and private plans, HMOs, PPOs, and POSs, deductibles, and co-pays. Knowing more about what these terms mean can help you pick the plan that’s right for you and your family.
Preparing for Your Senior Health Plan Search
Before you begin looking for a senior health insurance plan, ask yourself these questions:
- How much money can I spend on health care? Knowing this will give you an idea of how much you can pay in premiums, deductibles, and co-pays for your senior health plan.
- What pre-existing conditions do I have? Certain health problems might make it harder for you to get an individual senior health insurance plan.
- If I’m over 65, do I want more than Medicare? Even if you qualify for Medicare, the federal senior health plan that helps pay for hospital bills and medical treatment, you may want to consider a supplemental plan to help with non-covered expenses.
- Do I belong to an organization or work at a business that offers health insurance? Group insurance often is much cheaper than getting a senior health plan on your own, and you can get sometimes it through membership organizations like AARP.
Types of Senior Health Plans and Providers
More than half of the people covered by health insurance in the United States belong to managed care plans. With these plans, you face lower co-payments if you use in-network providers — doctors or hospitals that are part of the plan. Managed care plans include:
- Health maintenance organizations (HMOs). These types of plans require you to receive all of your medical care from providers in the HMO’s network, except in medical emergencies.
- Preferred provider organizations (PPOs). These plans allow you to choose doctors and hospitals outside of your network, but you pay more for your care due to higher deductibles and larger co-payments.
- Point-of-service organizations (POS). In this type of plan, your primary care physician manages your care. You are allowed to choose doctors and hospitals outside your network, but you’ll pay more for their services.
As you assess your senior health plan options, consider the following:
- How much will you pay in premiums each month?
- How much of your doctor and hospital bills will the plan cover?
- How much will you be expected to pay in co-payments and deductibles?
- How restricted will your choice of doctors and hospitals be?
- What happens when you need a doctor after business hours or have to go to an emergency room?
- Are there any limits on the medical conditions covered by the plan, or on what the plan will pay for certain illnesses?
If you’re eligible for Medicare, you can get supplemental health insurance, commonly referred to as MediGap, that helps pay for medical treatment not covered under the government plan. The National Association of Insurance Commissioners has made it easy for seniors to choose between MediGap plans by creating 12 standardized plans. Different insurance companies may offer the plans, but each of the 12 plans will be the same no matter which company you choose.
Senior Health Plan Terminology You Should Know
Health insurance terms can be confusing. It’s important that you fully understand what payments you’re responsible for and what the insurance will cover. Here are some examples:
- Co-payment. This is the fixed amount a plan requires you to pay for certain services. For example, you might need to pay $10 or more for a visit to a doctor.
- Deductible. This fixed amount of money is what you have to pay for medical services before the plan kicks in. For example, you might have to pay the first $200 for a hospital visit before the insurance company starts paying.
- Maximum plan dollar limit. This is the most a plan will pay out during a year’s worth of coverage. Also be aware of a plan’s lifetime limit, the maximum amount it will pay over the course of your life, often set at $1 million, though some plans offer higher coverage.
- Premium. The premium is the annual amount you pay upfront (or monthly) to have health insurance.
Additional Senior Health Insurance Resources
For more information or for help finding legitimate health plans, you can contact any of these resources:
Most state governments also have insurance commissioners or agencies dedicated to regulating the insurance industry. You can find a list of state insurance offices through the National Association of Insurance Commissioners.