Medicare
Medicare is the Federal health insurance program for Americans age 65 and older and for certain disabled
Americans. If you are eligible for Social Security or Railroad Retirement benefits and are age 65, you and
your spouse automatically qualify for Medicare.
Medicare has two parts: hospital insurance, known as Part A, and supplementary medical insurance, known as Part B, which provides payments for doctors and related services and supplies ordered by the doctor. If you are eligible for Medicare, Part A is free, but you must pay a premium for Part B.
Medicare will pay for many of your health care expenses, but not all of them. In particular, Medicare does not cover most nursing home care, long-term care services in the home, or prescription drugs. There are also special rules on when Medicare pays your bills that apply if you have employer group health insurance coverage through your own job or the employment of a spouse.
Medicare usually operates on a fee-for-service basis. HMOs and similar forms of prepaid health care plans are now available to Medicare enrollees in some locations.
The best source of information on the Medicare program is the Centers for Medicare and Medicaid Services in the United States Department of Health and Human Services.
Some people who are covered by Medicare buy private insurance, called "Medigap" policies, to pay the medical bills that Medicare doesn't cover. Some Medigap policies cover Medicare's deductibles; most pay the coinsurance amount. Some also pay for health services not covered by Medicare. There are 10 standard plans from which you can choose. (Some States may have fewer than 10.) If you buy a Medigap policy, make sure you do not purchase more than one. You need to shop carefully before deciding on the best policy to fit your needs.
Medicaid
Medicaid provides health care coverage for some low-income people who cannot afford it. This includes
people who are eligible because they are aged, blind, or disabled or certain people in families with
dependent children. Medicaid is a Federal program that is operated by the States, and each State decides
who is eligible and the scope of health services offered.
General information on the Medicaid program is given at the Centers for Medicare and Medicaid Services in the United States Department of Health and Human Services.
Disability Insurance
Disability insurance replaces income you lose if you have a long-term illness or injury and cannot work.
This is an important type of coverage for working-age people to consider. Disability insurance does not
cover the cost of rehabilitation if you are injured. Check your major medical insurance to see if it is covered
there.
Some employers offer group disability insurance and this may be one of the benefits where you work. Or you might be eligible for some government-sponsored programs that provide disability benefits. Many different kinds of individual policies are also available.
Hospital Indemnity Insurance
This insurance offers limited coverage. It pays a fixed amount for each day, up to a maximum number of
days. You may use it for medical or other expenses. Usually, the amount you receive will be less than the
cost of a hospital stay.
Some hospital indemnity policies will pay the specified daily amount even if you have other health insurance. Others may coordinate benefits, so that the money you receive does not equal more than 100 percent of the hospital bill.
Long-Term Care Insurance
Long-term care insurance is designed to cover the costs of nursing home care, which can be several
thousand dollars each month. Long-term care is usually not covered by health insurance except in a very
limited way. Medicare covers very few long-term care expenses. There are many plans and they vary in
costs and services covered, each with its own limits.
