A person considering a degree or career in healthcare management may wonder, “Do most senior citizens have supplemental insurance?” It is important to know the answer to this in order to make projections for the future and to understand the level of demand for different types of insurance packages. Knowing whether or not most senior citizens purchase supplemental insurance to add to their Medicare is also helpful from a financial planning standpoint.
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What Medicare Covers
Original Medicare, or Medicare Part A, covers a senior citizen’s healthcare expenses, such as visits to a primary care doctor or specialist, laboratory tests or hospitalization. It also covers a person’s stay in a skilled nursing care facility, surgical procedures, and outpatient procedures. Senior citizens with Medicare may also receive home healthcare services, such as a visiting nurse to change wound dressings or colostomy bags. Durable medical equipment, ambulance services and mental health care are covered under Medicare Part B.
Why a Senior Citizen Would Need Supplemental Insurance
Medicare Part A does not cover all of a senior citizen’s healthcare expenses. For example, it provides no coverage for dental care or dentures, vision care, hearing care or hearing aids. Medicare also does not pay for routine foot care or long-term care. Prescription drugs, for the most part, are not covered by original Medicare. Those fall under Medicare Part D, which has to be purchased separately as a type of supplemental insurance. This means that a senior citizen who needs prescription medications, dental care, vision care or hearing aids would benefit from a supplemental insurance plan.
Who Is on Medicare
More than 60 million Americans are on Medicare. Of those, about two-thirds have original medicare. About one-third use a Medicare Advantage plan. According to the Kaiser Family Foundation, 81 percent of enrollees of original Medicare have some kind of supplemental insurance. Of all people on Medicare, 30 percent have employer-sponsored insurance, 29 percent have Medigap insurance, and 22 percent have Medicaid. About 19 percent of people on Medicare do not have any supplemental insurance.
Popularity of Supplemental Insurance
Employer-based supplemental insurance has long been the most popular type. However, fewer employers are offering healthcare coverage to their retirees. This means that in the future, fewer people will be able to depend on employment-based healthcare coverage during their retirement years. This leaves people to purchase Medigap insurance. The Medigap insurance varies by state. It covers the cost-sharing parts of Medicare A and B and may provide coverage for Medicare parts C and D. The cost varies by state, income, age and level of coverage. Low-income senior citizens are left to apply for Medicaid as their supplemental insurance. In order to qualify for Medicaid, seniors have to spend down their savings and may need to sell assets.
Healthcare managers, insurance planners, financial planners and friends and family members of senior citizens all have a vested interest in knowing whether or not this population has supplemental insurance and to what extent they have it. As healthcare costs continue to soar well past the rate of inflation and insurers cover less and less of those costs, people will continue to be challenged in paying their health expenses. Knowing the answer to, “Do most senior citizens have supplemental insurance?” is an essential part of planning ahead for the future.