One of our favorite holidays of the year is here: National Insurance Awareness Day!
We’re sure you’re already aware of insurance, but we want to help you understand insurance better — specifically health insurance.
Because health insurance in the U.S. is largely tied to employers, many people go their entire lives without ever truly shopping for insurance. Once they’re eligible for Medicare, they finally get to choose which plan type and plan to use. But because they’ve never done it before, it feels especially overwhelming! So let’s go over the basics.
How to calculate your potential health care costs
Many people rely on monthly premiums to gauge how expensive their health care is, but that’s not a good indicator. Remember to pay attention to the out-of-pocket costs, like copays, coinsurance, and deductibles too. These, along with maximum out-of-pocket amounts, will give you a complete picture of how much your annual costs would be if the unexpected happens.
Getting the plan with the lowest monthly premium sounds good now, but it could leave you on the hook for potentially hundreds of thousands of dollars out-of-pocket later. Plans with higher monthly premiums generally provide more financial protection.
No matter what, make sure you can afford to spend both your deductible amount and your maximum out-of-pocket amount each year, and don’t buy a plan that has too-high numbers in either category.
How much does Medicare cover?
Original Medicare covers roughly 80% of health care costs, and there is no designated out-of-pocket maximum each year. The other 20% of expected costs is made up of copays, deductibles, and other out-of-pocket costs. That’s why many people opt for Medicare Supplement Insurance — a policy designed specifically to fit with Original Medicare.
A Medicare Supplement plan will help pay (or fully pay, depending on the plan) your out-of-pocket costs AND it may provide a maximum out-of-pocket amount. This is a huge relief and gives immeasurable peace of mind for many people.
What else should I know about health insurance?
Health insurance, as with any insurance, is important to have in place before the bad thing happens. It’s hard to think about bad things happening, but unfortunately, they are a part of life.
We spend each and every day guiding and educating people about the importance of health insurance. Our licensed insurance agents work one-on-one with our clients to help them compare plan types, policies, costs, and more. When it comes time to shop for insurance, you don’t have to do it alone.