Health insurance for seniors is getting more and more complicated and expensive. According to a study by Fidelity Investments, a couple who retires in 2022 at age 65 can expect to spend an average of $315,000 in healthcare expenses in the remainder of their lives. That calculates to a 5% increase over 2021.
There were 40 million adults ages 65 and older in the United States in 2010, and there will be 72 million by 2030.
Health care spending accounts for about 18% of total GDP in the United States, with about 5% going to health care for people 65 and over — and that share of senior health insurance is expected to double by 2030 and triple by 2050.
So how will you manage the costs of your care as you enter your golden years? Most senior health care costs are paid for by government programs like Medicare, Medicaid, the Veterans Administration, or by private health insurers.
There are many options out there, so there isn’t one answer for the best health insurance for seniors. Let’s take a look at options for seniors and some things to consider as you decide on the best health insurance coverage for you.
Medicare Options for Seniors
Medicare, the most popular option, is a Federal insurance program for adults 65 and older.
It includes four parts. You are eligible when you turn 65 or have a qualifying disability before age 65. Parts C and D are optional for enrollees.
- Medicare Part A provides hospital insurance. It’s free if you’ve worked 10 or more years and paid Social Security taxes, and all you have to do is fill out an application.
- Medicare Part B is medical insurance that covers doctor visits, annual checkups, mental health care, x-rays and similar medical services rendered outside of a hospital. You are automatically enrolled when you are eligible for Social Security. Part B is not free – the annual premium and deductible will vary from year to year, and there are coverage limits.
- Medicare Part C is also known as Medicare Advantage. This option allows you to get Medicare coverage through private insurance companies that offer qualifying plans. Part C plans must include Part A and B benefits, and may provide better coverage than traditional Medicare. Costs vary by state and provider, so shop around before selecting the Part C plan that meets your needs.
- Medicare Part D is a prescription plan that is available to anyone enrolled in Traditional Medicare or a Medicare Advantage plan. Although optional, it is highly recommended as it can offer significant benefits in managing your prescription drug costs. It comes with a monthly premium based on the amount of coverage the plan offers.
Your own costs as a Medicare patient will depend on a few factors:
- What kind of care do you utilize and how often do you need care?
- What type of Medicare coverage do you use?
- Does your doctor charge only what Medicare will pay or does he/she charge more?
- Do you have other insurance to fill in the gaps and provide for things that Medicare doesn’t cover?
Medicaid for Seniors
Medicaid is medical insurance specifically designed for low-income seniors.
You are only eligible for Medicaid if you have “spent down” available assets. You might want to consult with an elder law attorney or financial advisor for advice on how to qualify for Medicaid.
It is often utilized in conjunction with Medicare, and may cover some medical services and prescriptions not covered by Medicare. Medicaid also covers costs associated with long-term care, nursing home care, skilled care at home, and hospice care.
Medicaid is run by the states and partially funded by the Federal government, so before applying you’ll want to check on the rules governing coverage in your particular state.
Insurance for Military Families
The Federal government also provides medical benefits for active duty service members, veterans and spouses.
Veterans Administration benefits are available to all veterans, at any age, who were honorably discharged. You qualify for VA benefits if you meet one of the following:
- Served at least 2 years on active duty
- Have a service-related disability
- Have served in various war theaters
If you are 65 or older, you may use your VA benefits to complement the care you receive under Medicare.
If you are currently on active duty, you and your family may receive TRICARE benefits. Retired personnel may enroll in Medicare Parts A and B and Tricare for Life, which provides so-called “Medigap” coverage.
Private Health Insurance
If you are 65 or older and still have yet to retire, you may continue to receive health insurance through your employer’s benefits package. Some employer plans continue to provide benefits after retirement as part of a pension.
After retirement, you may purchase individual health insurance from an insurer who offers individual plans. Private health insurance may be paired with Medicare to boost the coverage you receive.
- Medicare Supplemental Insurance (Medigap). A Medigap plan covers expenses not covered by Medicare, including help with coinsurance and deductibles. You must be enrolled in Parts A and B to qualify. Medigap insurance does not include dental, vision and other supplemental health benefits.
- Supplemental health insurance (not Medigap). Private insurers also offer plans that cover services not included in Medicare. This includes such products as dental, vision and life insurance. It can be purchased at any time, but some plans have age restrictions, so shop around to find an appropriate plan that you qualify for.
- Long-term care insurance. About 86% of assisted living residents in the United States pay for their care through private long-term care insurance or personal savings. In addition to assisted living, a long-term care policy may help with costs of in-home care, nursing homes or hospice care.
What’s the Right Health Insurance Plan for You?
If you’re shopping around for a plan to sign up for in the coming year, you want to think about your own health care needs, and the specific features of individual plans you’re considering.
Here are some important questions to ask yourself when choosing a health plan:
- How much can I afford to spend out-of-pocket on health care?
- What pre-existing conditions do I have?
- Do I want more coverage than Medicare alone can provide?
- Do I already have group insurance — for example, through employment, union membership or some other affiliation?
Here are some criteria to look for when comparing the different health specific plans:
- Monthly premiums
- Co-pays and deductibles
- How much of your doctor and hospital bills the plan covers
- Choice of doctors and hospitals
- What if you have an emergency?
- What if you need a doctor after hours?
- Limits on medical conditions covered
Do you have questions about choosing the right health insurance plan for you? Do you need to learn more about insurance for long-term care needs such as assisted living?
Contact Culpepper Place of Olive Branch. We can provide helpful information on health insurance options for seniors, as well as information on paying for assisted living.