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Senior Couple Sitting On Sofa Using Digital Tablet
You’ve spent a career working. Maybe you had health insurance through your company, or maybe, if working for yourself, you had an individual policy. As likely as not, you didn’t fully understood it.
Now, you are retired. If you had group coverage at work, maybe COBRA benefits have expired, or COBRA was just too expensive but you still want to work, or you must work because savings are not what they need to be. You may even see retirement as the opportunity that you have been waiting for: turning a hobby into a business! Or becoming an outside consultant in the field that you’ve worked for many years; maybe even to your former employer.
But there’s that health insurance issue. You know that you need it, but there is no HR Department to handle it for you anymore. Maybe you are too young for Medicare or just don’t yet want to go that route yet. So, you have to figure out health insurance for yourself.
This is the start of a basic guide for seniors about health insurance, excluding Medicare; we’ll discuss Medicare and supplements for Medicare in articles that follow.
There are many variations and varieties of health insurance. They work differently, and may be more or less appropriate depending on your circumstances. Therefore, we’ll divide the discussion into several parts. This article is the general overview.
Health Insurance-Broadly
Most people cannot afford to pay the full cost of needed medical care. Therefore, they have health insurance to help defray some of the cost. In the U.S., health insurance is obtained mainly through and from private insurers. There are some situations where an individual or business can obtain it through an association or an affinity group (for example, someone owning a barber shop may be able to access health insurance through an association of barbers). Yet even then, the entity that is financially responsible for paying claims is usually (and, ideally, should be) a licensed insurance company. We will discuss some of the pitfalls of association-based insurance in a later article. Suffice it to say for now that sometimes crooks invade the health insurance market and establish organizations that appear to offer health insurance.
Main Kinds of Health Insurance
The most comprehensive kind of health insurance is the traditional kind called “major medical insurance.” In general, it provides benefits for:
• Hospital expenses. This typically includes room and board in a semi-private room
• Various hospital charges like laboratory fees, X-rays, and medications
• Surgical expenses such as use of the surgical suite
• Physician’s, surgeon’s, and nursing charges
• Anesthetics
• Therapies of various kinds (physical, speech, etc.)
• Some outpatient services. The nature and extent of them depend upon policy specifics
Even the broadest of major medical policies don’t pay all charges that a hospital or physician may render. We will discuss some of the factors that enter into the amount paid in a later article.
Another version of health insurance is called “specified expense coverage.” These policies cover named illnesses that occur while the policy is in force. They reimburse the insured for costs incurred in the treatment of those specified illnesses and often, supplies needed by the insured resulting from it. Examples of these kinds of policies are dental coverage, vision coverage, prescription drug coverage, and what used to be commonly called “dread disease coverage.”
There also exists a category of health insurance policies called, “dread disease” insurance policies. They are often sold as individual policy (separate from or in addition to a major medical policy). Perhaps the most well-known of the dread disease policies is a “cancer policy.” The diagnosis or other conditions needed to trigger payment under a dread disease policy may be so restrictive and limited to make it disproportionately costly. Instead, a more generic supplemental policy that pays a per day benefit that can be used for any purpose may be a good alternate choice. Many supplemental policies are advertised widely and most are available despite your retirement.
In future articles we’ll discuss alternative “delivery systems” of health insurance, such as “point of service”, “health maintenance organizations”, and others. These are available not just to seniors, but to everyone.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
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