After you collect Social Security for twenty-four months or you are 65-years-old, you are automatically enrolled into Medicare Part’s A and B. You must apply for Part D separately. There are four parts to Medicare, Part A, B, C, and D. Part A is free if you have paid into the system for forty years. There is a small premium for part B and D. If you already have health insurance, you do not have to have to apply for part B.
But which type of coverage is better? Medicare? Or private insurance? The answer can vary depending on your insurance policy, but it is not unusual for your insurance premium to rise as you age. According to the Health Affairs Blog, people 65 and older are three times more likely to use medical services, therefore increasing the risk for insurance companies. This was why Medicare was created because insurance became too expensive or companies would not provide policies to senior citizens.
Medicare is an insurance system provided by the government. The money for this insurance comes from people who have paid into the system for forty years or more. It was designed to protect older Americans or those who are disabled. No one can be excluded from receiving Medicare because of their health status. Medicare will cover your hospital bills and only make you pay deductibles for doctor visits and prescription drugs.
A private insurance company’s purpose is to spend as little money as possible per claim. Insurance companies do not want expensive, high-risk clients. Unlike Medicare, private insurance companies are not in the business to help people. Many medical claims are denied and insurance companies do not serve everyone.
Medicare is More Affordable
Since the finances that support Medicare come from a large coverage pool, Medicare is able to offer more bargaining power. Medicare’s cost per person has risen slower than regular insurance company’s per capita. Since insurance companies invest so much in not covering medical care, their administrative costs are much greater than Medicare’s administrative costs.
Medicare’s Goal vs. a Private Insurance Company’s Goal
Medicare was designed to protect Americans from risk and help with medical payments if an illness arises. Insurance companies are trained to save their company money, leaving their customers to pay the balance. For people drawing Social Security who have viewer risks and have a good relationship with their insurance provider, they do not have to register for part B of Medicare. If you have examined your policy, compared it to what Medicare covers, and you see part B will better service your needs, you can apply for part B. If you choose to apply for part B, you should not cancel your private insurance policy until you know when you will begin receiving Medicare benefits.
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