Medicare Coverage
Some of the health care services not covered by Medicare include anything not considered medically reasonable and necessary, based on a subjective interpretation! Other items that are not covered by Medicare are:
- Long-term nursing home stays
- Custodial care in a nursing home
- Private duty home care nurses
- Homemaker services
- Routine dental services and dentures
- Routine physicals
- Prescription medications
- Preventive care
- Vision exams and eyeglasses
- Hearing tests and hearing aids
- Routine foot care
- Physician charges above Medicare's approved amount
- Any care received outside the U.S.
As you can see, many of the services not covered by Medicare are the very types of services those individual's who qualify for Medicare are likely to need.
Comparing Quotes
If you are in the market for health insurance, chances are you are a small business owner or an independent contractor. Whether you are deciding between group insurance benefits offered through a professional group or an individual insurance you would like to purchase directly from the insurer, there are two key factors that should guide your decision: total out-of-pocket costs vs. covered services.
Many people only focus on premiums, but premiums are only part of the story.
One plan may offer lower premiums but have an unrealistically high deductible. Another plan may have a higher premium but offer a more reasonable deductible and cover a broader array of services. It is suggested that you sit down carefully and work out the total costs for each health insurance plan you are considering, including the annual premium amount, the deductible amount, any co-pays, and out-of-pocket maximums.
With health care insurance, you generally get what you pay for. However, whatever plan you choose, make sure it covers the types of services you reasonably expect to need during the coverage period, and that the total out-of-pocket expenses which fit within your budget.
Short-Term Insurance Co-Payments
If you are acquiring short-term health insurance plans, you should know that they almost always function under a fee-for-service model, which means you will have to pay a variable co-insurance rate for health care goods and services received. Each company is different, and even different plans offered by the same company will vary, but generally speaking you can expect to pay coinsurance anywhere from 20%-50%. If your policy has a traditional 80/20 split, the insurance company will pay 80% of the charge for goods or services, and you would have to pay the 20% balance. Most health care providers expect payment of coinsurance at the time of service, although some may bill you after the fact.
2006 Medicare Premiums
There are three main costs associated with Medicare insurance, premiums, deductibles, and coinsurance rates. The premiums are based on how many Medicare-covered quarters of employment you or your spouse have logged. If either of you have logged at least 40 quarters of Medicare-covered employment, you do not pay a monthly premium for Medicare Part A (hospital) insurance. If you have logged 30-39 quarters, your 2006 monthly Part A premium is $216.00. For those with less than 30 quarters of Medicare-covered employment and who are not eligible for premium-free hospital insurance, the 2006 monthly premium is $393. The Medicare Part B 2006 monthly premium is $88.50.
Flexible Spending Accounts (FSAs)
A FSA, or flexible spending account, is a federally approved, employer-administered account to which you can contribute money that you then use to pay for out-of-pocket medical expenses. FSAs are woefully misunderstood and underutilized by American families. FSAs provide benefits a couple of different ways. First, the money you deposit into your FSA does not get taxed. The money is deducted from your pay before your employer calculates Medicare, Social Security, and income taxes.
For someone in the 28 percent tax bracket, every dollar you deposit to an FSA, you can cut your federal income tax bill by $0.28. If you place $3,000 a year into your FSA, that would result in a savings of $840. The other great thing about FSAs is that even though the total amount of the contribution will be deducted from your pay in equal installments throughout the calendar year, you can file claims against the full contribution from Day One as if it were sitting in your account already. For example, if you three family members will need new eyeglasses, schedule your eye exams and purchase your glasses in January. Even if the bill is $1,500 and you've only deposited $150 to your FSA, you can submit your receipts and receive reimbursement from your FSA for the full $1,500. The only time this can come back to bite you is if you leave your job mid-year. At that point, you would need to make an additional contribution to cover the benefits that had been paid to date.
Be careful when you estimate your annual FSA contribution, because if you overestimate and do not use all the money, it reverts to your employer who then uses it to offset the overall cost to provide employee benefits. Also, while FSA contributions can be used to pay for just about any out-of-pocket medical expense from co-pays to over-the-counter medications, FSA contributions cannot be used to pay for family health insurance premiums.