Filling The Many Gaps In Medicare

If you’re on Medicare or nearing eligibility, you know this insurance does not cover all of your out of pocket expenses. You can shore-up some gaps with a Medicare Supplement or Advantage plan, but they may not be enough either.

This is especially true if you’re on a Medicare Advantage policy. These policies have much more out of pocket exposure. Should you have a illness or injury resulting in a hospital stay, you can rack up big bills. That’s where hospital indemnity plans can help significantly.

Medicare eligibility can be a great thing, but it’s important to know its limitations. This is especially true if you choose a Medicare Advantage plan over a traditional supplement. If you closely inspect your chosen Advantage plan, you will see there can be significant out-of-pocket costs if you have a hospital stay, accident or prolonged illness.

All Medicare Advantage plans have large daily copays if you’re admitted to the hospital. And these amounts can be even higher if you’re receiving care out of your insurance plan’s network. A hospital stay of just a few days can result in thousands of dollars you might owe before your plan pays the full amount. And your cost sharing will grow larger if you have a deductible that must be met first. You will also have doctor’s copays and coinsurance to pay as well.

Under Observation are the two worst words you can hear when you’re on Medicare. In a nutshell, it means Medicare is not paying for your stay. It’s a loophole in the system that allows doctors to place a patient “Under Observation” while confined in a hospital – and it happens more than you might think. When it does happen, Medicare will not pay the bill at all. This means your Medicare supplement or Advantage plan will not pay either.

An Under Observation stay of just a couple of days can cost thousands. If you’ve ever encountered this – or know anyone who has – you know owning a hospital indemnity insurance plan can be a financial lifesaver. Having an insurance policy covering the hundreds of dollars per day (you choose how much) can eliminate the high costs associate with an Under Observation hospital stay.

Hospitals have several reasons why they label a stay as Under Observation, but as you might imagine it’s to protect themselves while staying in the good graces of the Medicare system. As these stays have become more commonplace, it’s a good idea to have a backup to your Medicare insurance. And to avoid the shock of a very large, unforeseen expense after your release home.

Hospital Indemnity plans can do a lot – and they are especially useful if you chose a Medicare Advantage plan over  Medicare supplement insurance like, Plan F, G or N.  Advantage plans usually have significant of out-of-pocket exposure. If you look closely at your insurance coverage, you’ll see there are large copays for you first few days in a hospital. There are also deductibles, coinsurance and copays for procedures. When you add this all up, you get your maximum out of pocket exposure.

Your out of pocket exposure will differ whether you’re in network or out of network. (It’s less for in-network claims.) However, when examining your Scope of Benefits, you’ll see your maximum out of pocket exposure is usually somewhere between about $3,500-$10,000 in any given year. A good Indemnity plan will significantly reduce or eliminate those amounts.

Hospital indemnity plans aren’t just for those on Medicare. The Affordable Care Act has created significant changes in the health insurance marketplace. It’s not uncommon to see plans with high deductibles, large coinsurance amounts and significant out of the pocket exposure to the insured. Simply put, many ACA plans don’t offer benefits right away.

Whether you’re Medicare eligible or on a high deductible health insurance plan, it’s nice to know there are policies for sale that will provide benefits right away. So what do indemnity health plans cover? Quite a bit, actually – things like:

• Deductibles, coinsurance and office copays
• Lump sum hospital payments
• Under Observation Stays for those on Medicare
• Emergency room visits and ambulance rides
• Outpatient rehab and surgeries
• Skilled nursing care
• Mental health benefits
• Accidents, illness and injury
• Cancer, heart attack and stroke benefits

These are just a few of the benefits hospital indemnity plans provide. You can tailor these plans in several ways to fit your needs and budget. Many also offer separate riders like dental and vision coverage.

Furthermore, some indemnity plans are available on a Guaranteed Issue basis. This applies more to those on Medicare nearing their 65th birthday, but our clients are pleased when policies offering great benefits can be purchased without medical underwriting.

When you’re planning your Medicare enrollment, you’re just marching down the cafeteria line. You get your government run Medicare Parts A & B, then you have to work on the best and most affordable ways to supplement this coverage. We’re here to guide you through this process and to fill any and all gaps in the way the best suits your needs and budget. Certainly, a hospital indemnity plan is worth consideration.

Ready to get started? Contact us today!