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Can Medicare Really Help Seniors Avoid Medical Debt

man tripping on insurance documentsOne of the fears of retiring individuals is how they will ensure that their funds will outlast them. Given their age and physical condition, they are unable to earn money to help them finance their needs. This puts them at a risky situation.

Of all the expenses that retirees are faced with, the most important tip to keep their retirement fund from retiring is to make sure that their health care costs are covered. Otherwise, they can put themselves in danger of medical debt.

The thing about getting old is the deterioration of your physical body. Even those who have the most robust body when they were young will eventually have their strength fade away. This is a fact regardless of your lifestyle. Among the things that you need to prepare for in retirement, is your ability to pay for these costs. They will come. That is certain for everyone.

Health care costs endanger retirees to be in debt

But while there is a need to prepare for health care costs, we are sometimes taken off guard by how expensive it is to get medical treatment. This is how a lot of us end up in medical debt. conducted a survey back un June 2013 and it showed the following statistics:

  • An estimate of 56 million Americans (64 years old and below) is expected to struggle in paying off their medical bills. 35M will be contacted by collection agencies, 17M will have a lower credit rating and 15M will use up their savings to try and stay out of medical debt.

  • 10 million citizens below 65 years old will not be able to afford paying for basic necessities because of health care expenses.

  • 1.7 million will declare bankruptcy because of unpaid medical expenses.

If this true for the younger ones, how more perilous will it be for retirees. Those within the ages 19 to 64 years (the main respondents of the NerdWallet study), are all still within the working age. The chances of them being able to earn income to pay off what they owe puts them in a better position than their elders.

The same study also noted that the main reason why medical debt is more likely to happen is because of the rising cost of health care. While some people should be responsible enough to save up for this, the high cost can sometimes make it inadequate. This is what is really causing the indebtedness of a lot of people. In some cases, consumers are opting out of getting medical treatment or following on their medical doses because it is just too expensive for them.

In fact, the National Conference of State Legislatures (NCSL) reported that health spending in the country last 2013 was estimated at $2.9 trillion. While the growth compared to the $2.8 trillion in 2012 is relatively small, the amount in itself is staggering. The report published on showed that the average spending in 2011 was $8,680 per individual. The report believes that this will go higher once the actual 2013 figures come in.

So what are the chances of our elders to avoid medical debt when health care costs continue to rise? How can they hope to give themselves the right treatment as their bodies age?

Facts about Medicare that can help avoid health care debt

This is where Medicare actually steps in to provide help with medical bills. One of the things that you need to accomplish before you retire is to understand how this government program can benefit you once you reach retirement. In most cases, people are scared that the coverage of this program will not live up to the health care benefits that you got through your employer.

Well there is only one way to find out and that is what this article will try to help you with.

So how does Medicare help seniors and will it keep them from medical debt? Here are important facts that you need to know about it.

  • While it is run by the federal government, the doctors, hospitals and laboratories are mostly private. They only enter into Medicare contracts and that is how 75% of your bill with them gets paid by the government. If your family doctor has a contract with Medicare, then you are free to continue consulting with them while letting the government pick up most of your tab.

  • Medicare, is not really free. It is, in essence, still a health insurance that you have to pay for on a monthly basis – just like the health insurance provided by employers. Unless you are eligible to get low-income assistance from the state, then this is something that will still go out of your pocket. Visit to know more about the costs that you need to pay off.

  • The great thing about Medicare is you get a lot of options. You have the traditional plans that allow you to go to any doctor in the country or state. There is also the various Medicare Advantage health plans that are oftentimes similar to private health insurances. Sometimes, you can choose from 50 health plan options. This makes it ideal to have a plan that will suit your personal health needs. For instance, Part A means you are covered for hospital stays, home services and hospice care. Part B covers the professional fee of the physician, outpatient expenses and any medical equipment that you will have to pay off. You can combine these and end up with the Traditional Medicare or just get one for your use. Part C, or more commonly known as the Medicare Advantage combines Part A, B and in most cases, D. Part D covers payments for prescription drugs. There is also the Medigap that covers the out-of-pocket expenses of Traditional Medicare.

  • Medicare will not charge higher premiums for existing ailments – which means you can choose to get covered for almost any health related concern.

  • There is a requirement to work long enough to be able to qualify for this health insurance. Also, you cannot avail of this when you decide to retire early. It has to be when you reach the age of 65. That means you may have to deal with a couple of years without health coverage – unless you go for a private insurance plan.

In essence, Medicare is a monthly premium that you have to pay off so you can prepare for the health expenses that you will have in the future. It is a good idea to get this so you can avoid medical debt. Any out of pocket expenses will not be as damaging as it should be if you opted out of this government program.

How to finance your medical expenses and avoid credit

Getting ready for retirement requires you to go through a lot of tasks and it all begins with knowing. If you know that your family has a history of hereditary ailments, you may want to make sure that you are prepared for this. Apart from learning about Medicare, here are a couple of tips that can help you deal with the unexpected medical costs that can put you in debt.

  • Know your other options. Apart from Medicare, if you know that you will need more coverage, research on the right health insurance that can give you what you need. In most cases though, Medicare can supply what you generally need.

  • Get your dietary intake straightened out. Prevention is better than cure and most health related problems can be dealt with by eating right. If your family has a history of diabetes, then ease off the sweets. If you have a history of heart ailments, then stay away from food that will endanger your heart.

  • Live a healthy lifestyle. Lastly, make it a point to take care of your body. Exercise, sleep well and prepare yourself for old age. You only feel weak when you stop doing something.

Are You Ready For The Revolution In Healthcare?

Stethoscope strangling money as in medical bills
If you’re not already aware of this, you should know that the Affordable Healthcare Act has already brought some revolution in healthcare and will soon bring even more.

What’s happened to date

There have already been changes made in the way we receive healthcare. The health insurance companies can no longer deny to cover you because of a pre-existing condition. You can receive wellness screenings and preventive care at no additional cost. And lifetime dollar limits are a thing of the past.

With more to come

Beginning next year all Americans will be required to have health insurance. This is called the “individual mandate” and is expected to create 30 million new customers for the insurance companies through state health exchanges. The Affordable Care Act also has incentives for the states to expand Medicaid coverage to help subsidize the cost of many of the individual policies that result from these exchanges.

Premiums may increase dramatically

One of the changes confronting the insurance industry is that they will now have to cater more to individual customers than on selling group plans to employers. The problem is that the insurance companies have no idea as to how expensive it will be to provide coverage to these new customers, many of whom have not been insured for a number of years and may not even be working. The net/net of this is that some people could be required to pay dramatically higher premiums, at least initially.
Some insurers will disappear

Some of the insurance companies may have trouble getting into the new exchange market. As a result, you won’t find them listed among the choices you will have in your state’s exchange. Insurance companies will have to be certified by the National Committee of Quality Assurance or some other certification agency. If they can’t obtain the necessary certification, they’ll simply not appear in the insurance exchanges.

New names

Another thing that has happened as a result of the health care legislation is that there has been a feeding frenzy as bigger group insurance companies have bought up smaller carriers that cater to individuals. This could cause some people to become confused. The companies that purchased smaller companies and left them with their names intact are now “rebranding” them. The effect of this is that you may think your insurance company has disappeared. The upside is that it should make health insurance more portable. If you go into an exchange and buy an insurance company’s brand and then lose your job, you should be able take your health insurance with you, in effect, because you’ll see it’s name listed in the exchange.

Or you might not feel a thing

You already have health insurance from your employer? In this case, you may notice hardly anything happens next year. This is because the biggest changes have already occurred to the health insurance companies such as the free preventive care and no lifetime limits on coverage. Some of these companies may decide to drop their plan to force their employees into the individual exchanges but it’s believed that this is unlikely to happen with the vast majority of employers.

The market will become more concentrated

Insurance companies that don’t pursue individual customers might survive for two or three years. However, after that it’s likely that they will disappear. The market today is already very concentrated and it’s bound to become even more so.

What should you do?

If you have employer-sponsored health care insurance, your should probably just sit tight and see what happens. It’s possible that you won’t see any changes at all. On the other hand, if you currently don’t have health insurance, you need to learn what you can about your state’s insurance exchange and what you will need to do to become insured.

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