Thursday, September 6, 2007
Many people approaching the age of 65 are under the illusion that their health insurance problems are almost over. What you should know about Medicare is that you are still going to need your Insurance agent.
Medicare in the United States is a government run health care plan for senior citizens. It is funded by payroll deductions and self employment taxes on workers. It is thought by many to be part of social security because it is for retired people 65 years of age or older. Actually, it is administered and funded separately from Social Security, but does share many of its problems.
What you should know about Medicare is a little about how it works. There are four different “parts” to Medicare. Part A covers hospitalization. Part B covers non-hospital expenses. Part C allows you to arrange some additional coverage outside the Medicare system, and the newest section, Part D, covers prescription drugs. There are an awful lot of rules and regulations involved in all the plans. A person who is first trying to understand Medicare benefits will usually find themselves wishing for a Part E to provide lawyers to wade through all the fine print.
The bottom line is that Medicare does not pay all of your medical expenses. It is filled with deductibles, co-payments, and gaps that result in high out of pocket expenses that most seniors can not afford. It still exists at the pleasure of Congress, and it can be cancelled or altered at anytime. It is also in serious trouble from a funding standpoint. The influx of millions of “baby boomers” is putting a strain on the system. Some estimates predict that it will be bankrupt in another decade unless benefits are drastically reduced.
What you should know about Medicare is that you are going to have to consider supplemental insurance policies to fill the gaps and cover large out of pocket payments. There are several types of policies that are designed to do just this. In fact, one group of regulated supplemental insurance policies is called Medigap Insurance. The name shows the need to “fill gaps” in Medicare.
When you are approaching retirement age, you need a good relationship with a trusted Insurance agent for a number of reasons. If you have done a good job of managing your financial planning, you are going to be ready to reap the results of that planning. If you have not done such a good job, retirement could be a frightening time. Social Security and Medicare do not exist to make retirement a “golden age” for you. That was never their purpose, and under today’s conditions they barely do their real function of providing basic survival. You can not afford to put all your trust in Medicare to provide your health care needs. The time to realize this and to begin planning accordingly is now.
Learn more about California medicare supplement insurance online at UFCAmerica.com.
What is Critical Illness Insurance?
There is a gap in Insurance coverage when a person suffers certain critical illnesses. Their medical expenses could be covered, but they are now ill and unable to work. Critical Illness Insurance fills this gap.
Critical Illness Insurance pays a lump sum cash payment when a person is diagnosed with a covered critical illness and survives a set period of time. The survival period is not a long time, but rather is usually from two weeks to a month. Serious heart attacks, invasive cancers, and strokes are common critical illnesses that are covered by the Critical Illness Insurance policy.
According to one recent study, more people in Canada will suffer a serious critical illness before the age of 75 than will die before that age. This fact illustrates the importance of Critical Illness Insurance as a supplement to Life Insurance and Health Insurance in the overall risk control planning process. While Health Insurance will cover a major portion of the medical expenses incurred in the onset of the illness and even some follow-up care and Life Insurance will provide for the needs of your survivors should you die, it is survival that sometimes causes problems.
A stroke victim, for example, will be unable to work. He may survive for years with a need for in home care and other needs not covered by his Health Insurance. The lump sum cash payout of the Critical Illness Insurance can be used for any purpose at all. This gives the insured the choice of how the funds will be used. They might be used to pay off a mortgage, or provide help with domestic tasks. It could possibly be reinvested in a long term annuity that will provide funds for as long as the insured survives.
The medical conditions that are considered critical and are covered by an individual policy differ from policy to policy. The survival period differs as well. As with all Insurance, it is the responsibility of the purchaser to understand the details of the coverage. Insurance agents are always glad to explain these details and suggest ways to tailor the coverage to your own individual needs.
Critical Illness Insurance has long been a part of the risk management process in the United Kingdom and is starting to grow in popularity in the United States. Improvements in Emergency Medical care and advances in the treatment of many critical illnesses have made survival more and more likely. This trend is expected to continue. A situation is often created whereby a person regrets his survival when he considers the impact on his family. This horrific thought is the driving force behind Critical Illness Insurance and is fueling its increased popularity.
Get Quotes on California health insurance plans at UFCAmerica.com.
What Are Health Savings Accounts?
A very popular Health insurance plan for healthy young people is the High Deductible Health Plan. Its only problem is high deductibles and that is where the Health Savings Accounts come into play.
A Health Savings Account, or HSA, is a tax advantaged savings plan that is designed to set aside money for the payment of certain medical expenses including deductibles and coinsurance payments. In order to enroll in a Health Savings Account, you must be first enrolled in a High Deductible Health Plan.
A High Deductible Health Plan, or HDHP, is what is called a consumer driven health plan. It features very low premiums which makes it very affordable, but also has very high deductibles. What does this combination mean? What it means is that the Insurance is designed for catastrophic medical conditions. Routine medical conditions will be paid by the insured because of the high deductibles.
The Health Savings Account can provide money to use to pay the high deductibles. The accounts can be set up by individuals or by an employer. Employers who offer Health Savings Accounts as part of their benefit package can usually arrange to have the contributions to the plan made on a pre-tax basis. When this is not possible, the contributions are considered as deductible income when taxes are filed.
Like all other plans that allow tax breaks, the Health Savings Accounts are rather strictly controlled by the Internal Revenue Service. Employers are not allowed to discriminate in matched contributions. If they offer them to one employee, they must offer them to all other employees who are signed up in the High Deductible plans. Currently, the maximum yearly contributions to the Accounts are $2,700 yearly for a single person and $5,650 for a married couple.
The money inside the account may be invested in a manner similar to an Individual Retirement Plan and the earnings are not subject to taxation until they are withdrawn. There is no tax or penalty paid on withdrawals that are made to pay medical expenses. Early withdrawals for non-medical purposes are subject to tax and a 10% penalty. When a person reaches the age of 65, withdrawals may be made, free of tax or penalty, for any purpose. The Health Savings Accounts are the subject of much debate within the Insurance industry. Their detractors claim they will cause overall health care costs to rise. Their supporters say this in not true. In a time of rising Health Insurance costs, they are certainly a boon to many individuals who recognize the importance of Insurance in their overall financial planning.
Get Quotes on California health insurance plans at UFCAmerica.com.
