Understand What Your Health Insurance Covers

It is very important that you understand exactly what the benefits of your health insurance policy are so you do not end up with any unexpected out of pocket expenses. If you have not looked at your summary of benefits page of the policy in a while, or if you recently purchased a new policy to reduce premiums, now would be a good time to review it. This holds true for major medical insurance policies as well as traditional Medicare supplement (Medigap) plans or Medicare Advantage plans.

Let me explain why this is so important. A recent scenario involved an elderly couple on traditional Medicare that replaced their supplemental coverage last year to reduce the monthly premium. They purchased a Medicare supplement Plan B policy to replace their existing policy and believed all expenses after Medicare would be paid. Later in the year, one of the policy holders needed skilled rehab therapy in a skilled nursing facility after a hospital stay. Medicare does cover short term rehab care in a skilled facility up to 100 days. The first 20 days are paid in full by Medicare and the remaining 80 days are paid with a coinsurance of $144.50 (year 2012) per day owed by the patient. Well you may be thinking the patient will be covered because he/she has a supplement (Medigap) policy to cover days Medicare approved right…..wrong. Medicare supplement Plans A and B do NOT cover skilled nursing home Medicare coinsurance days. Because the patient had a Plan B supplement policy, he/she is now responsible for the $144.50 per day charge and while residing in the facility for 96 days is now responsible for $10,982.00 ($144.50 x 76 days); remember, the first 20 days are paid in full by Medicare.

I understand that health insurance premiums are high and always increasing and many look for a way to reduce costs or are approached by someone who explains they can reduce costs for them. When shopping around for another policy to help reduce costs, please make sure you understand what caused the decrease in the premium and what all the new benefits will be. If you are reading this article and have a parent with a supplement policy to Medicare or a Medicare Advantage plan, I suggest you review it with them so they understand exactly what is covered and what potential out of pocket expenses they may incur.

If you have any questions about this topic or any other health insurance related issue, please call our office and one of our knowledgeable staff would be happy to answer them.