The Stano Law Firm - Understanding Health Insurance: Medicare

A common misconception is that health insurance will pay for long term care. However, most insurance policies are not built this way, including Medicare, Medicare Supplements, HMOs, employer supplied insurance and disability insurance.

Medicare, for those 65 and older with disabilities and/or End Stage Renal disease covers much of your healthcare, but not all. This leaves costs that you will be responsible for. Medicare was implemented in 1965 to help with short-term, acute care and short-term, rehabilitative stays. Medicare supplements and long term care insurance can cover some of the costs that Medicare will not pay for.

Medicare Part A is insurance for inpatient hospital care, skilled nursing, hospice care and some home health care. At the age of 65, most people are automatically enrolled in Medicare Part A with usually no premium or monthly payment.

Medicare Part B is insurance for doctor services, outpatient hospital care and other medical services not covered by Medicare Part A. Medically necessary services and supplies are paid for as needed. The premiums for Medicare Part B change annually.

Unfortunately, Medicare A carries very high deductibles. For example, in 2013 the costs of an inpatient hospital stay may be broken down as follows:

Days 1-60 you automatically pay $1184 deductible.
On Day 61 you pay your deductible of $296 per day through Day 90.
On Day 91 you pay your deductible of $592 per day through Day 150.

This adds up to a substantial out of pocket expense for a Medicare recipient. You will also be responsible for amounts associated with Medicare Part B.