Category: Insurance

Establishing a national health insurance plan for senior Americans has followed a sometimes-wayward path through U.S. history.

President Teddy Roosevelt first began discussing the idea of implementing a system of health insurance in the United States more than a century ago. President Harry Truman called for developing a health insurance fund in 1945.[i]

President John F. Kennedy pushed unsuccessfully to create a national health insurance program for senior Americans.

In 1965, President Lyndon B. Johnson signed legislation that established Medicare. More than 58 million people now receive health insurance through Medicare.

Medicare Covers About 80%

Original Medicare—which includes parts A, B, and D—does not cover all medical expenses.[ii] Typically, those on Medicare still must pay 20% of the cost of their doctor’s visits and for other medical procedures.

Medicare.gov provides more in-depth explanations of payment schedules and treatment coverage.

Most people who have Medicare Part A (hospital insurance) don’t pay monthly premiums.[iii]

If you didn’t pay Medicare taxes for at least 30 quarters (7½ years) of work, you’ll have to pay $422 for Part A. If you paid Medicare taxes for 30-39 quarters, your standard Part A premium will be $232 a month.[iv]

A Quarter of Medicare Recipients Have Supplemental Insurance

Nearly 12 million people on Medicare—about one in four—have supplemental Medigap coverage.[v]

Medigap often covers all or most of the difference in health-care costs—that 20% not covered by Medicare.[vi] Policy and coverage choices include plans A, B, C, D, F, G, K, L, M, and N. Private companies provide the government standardized coverage.

Medigap covers copayments, coinsurance, and deductibles.[vii] Some policies provide coverage of services that Medicare doesn’t cover.

Medicare pays its portion of covered approved health-care services first before Medigap insurance pays its share.

Here are eight facts about how Medicare and Medigap work:

1. You have to have Medicare Parts A and B.
2. Medigap coverage is not Medicare Advantage, which is offered by private companies contracting with Medicare.[viii] Medicare Advantage includes:

• Health Maintenance Organizations
• Preferred Provider Organizations
• Private Fee-for-Service Plans
• Special Needs Plans
• Medicare Medical Savings Account Plans

3.  Medigap only covers one person per policy. You and your spouse have to get separate policies.

4. Any state-licensed insurance company may offer Medigap coverage.

5. Renewal of standardized Medigap coverage is guaranteed. Your provider cannot cancel your policy if you’re paying your premiums.

6. Some Medigap policies sold before January 1, 2007 provided prescription coverage. Those sold after that date are legally prohibited from providing drug coverage. Medicare’s Part D    plans cover prescription drugs.

7. You are not permitted to buy a Medigap policy if you already have a Medicare Advantage Plan, unless you’re dropping the plan to go back to Medicare.

8. If you’d like more information about your financial options or to learn more about your financial needs, we’re happy to help. Contact us at 800.929.1001.

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[i] https://www.medicareresources.org/basic-medicare-information/brief-history-of-medicare/

[ii] https://www.investopedia.com/terms/m/medigap-insurance.asp

[iii] https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance

[iv] https://www.medicare.gov/your-medicare-costs/part-a-costs

[v] https://www.gomedigap.com/blog/medicare-supplement-trends/

[vi] https://www.investopedia.com/terms/m/medigap-insurance.asp

[vii] https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap

[viii] https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-advantage-plans