How to take a health car

Medigap

A Medigap policy, also called Medicare Supplement Insurance, is an add-on to your original Medicare coverage that takes care of all of those coverage gaps. In case all of these letters weren’t confusing enough, Medigap coverage comes in Plans A, B, C, D, F, G, K, L, M and N. But the good thing about these letters is that all Medigap policies are standardized. You don’t have to compare coverage details as you would for a Medicare Advantage plan. If you want Medicare Plan F, you can compare different companies that offer the plan. It’s an apples-to-apples comparison. Of course, you'll owe a premium for a Medigap policy on top of your other Medicare premiums. (For more, see Medigap Vs. Medicare Advantage: Which is Better?)

Medicare Advantage

There are all kinds of problems with Medicare. The one you should be most worried about is the coverage gaps. Part A has that $1,288 deductible and Part B requires that you pay 20% of your expenses regardless of how high your medical costs soar. That could be a lot of money.

Because of those gaps, most Medicare recipients purchase additional coverage to close the gaps. Medicare Advantage, also known as Part C, helps to plug those holes. After you have enrolled in Parts A and B, you can apply for Part C, which will cover what A and B – and often D – don’t. These Medicare Advantage plans are similar to private health insurance. You can purchase an HMO or PPO plan, and most will have some sort of limit on how much you pay out of pocket annually.

Like any plan, you have to compare your options and decide which is best for you. Medicare helps you by standardizing the plans. Each company must offer everything covered by original Medicare (Parts A and B) with the exception of hospice care. Most will also offer some sort of prescription drug coverage, but not all do. You can use Medicare’s Plan Finder to find options in your area.

Long-Term Care Insurance

Ongoing care for an illness or just for somebody suffering the effects of aging can be expensive. Nursing home facilities alone can cost between $150 and $300 or more per day. Long-term care insurance covers all or a portion of these charges once you reach 65 or suffer a disabling condition earlier in life. Most agents recommend getting long-term care insurance once you reach your mid 50s.

Although you may be in fine health in your 50s, the longer you wait, the costlier the policies. As with most insurance products, there are different types of policies when it comes to long-term care insurance. The key is to find a policy with a rate that covers most costs and also adjusts upward with inflation.

A common policy would charge about $5,100 for a couple and pay a maximum of $200 per day with a 3% compound inflation rider. With the average cost of nursing home care about $250 per day for a private room, this policy wouldn’t cover all of your costs. (For more, see Choosing Long-Term Care Insurance: Which is the Best?)