Other Types of Health Insurance Plans
Medicare and Medigap
Medicare is the federal (national) 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 (see Medicare to find and compare the plans in your area).
The best sources of information on the Medicare program are the handbook Medicare & You (pdf), and the Medicare website. You may also contact your local Social Security office for information and materials (this link also provides contact information if you are outside the U.S.).
Some people who are covered by Medicare buy private insurance, called "Medigap" policies, to pay the medical bills that Medicare does not cover. Some Medigap policies cover Medicare's deductibles; most Medigap policies pay the coinsurance amount. Some Medigap policies 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 Medigap policy to fit your needs. To help you make the right choice, review this guide: Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare (pdf). To find the health insurance companies in your state that sell Medigap, and to help you compare their health plans, see Medicare.
Disability insurance replaces income you lose if you have a long-term illness or injury and cannot work. Disability coverage is an important type of insurance 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 disability policies are also available.
To help you decide if you need disability insurance coverage, review the online (PDF) Guide to Disability Income Insurance, from America's Health Insurance Plans. This publication explains disability insurance and sources of disability income. It will also help you compare your choices of disability policies.
Hospital Indemnity Insurance
Hospital indemnity 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 health care 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. Other hospital indemnity insurance plans 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 long-term care insurance plans and they vary in costs and services covered, each with its own limits.
More detailed information is given in the online (PDF) Guide to Long-Term Care Insurance from America's Health Insurance Plans.