Besides planning for an income during retirement is there anything else you should think about? What if you get hurt? Do you still need health insurance coverage? You learned that most people get their health insurance through an employer program or state program, but can you still get this coverage during retirement?
Another big consideration when retiring is where you will get your health insurance. When you leave your employment, your health insurance will stop. So, what are your options? The two options available are Medicare and Medicaid. Click the tabs below to learn more about each, and then answer the questions.
Medicare is the federal health insurance program that you are automatically enrolled in at the age of 65. Medicare also provides coverage for someone under the age of 65 who has a disability. Anyone who works has Medicare taxes taken out of their pay, and employers must pay Medicare taxes. If you work, 1.45% of your pay is deducted for Medicare taxes.
Medicare coverage is split into parts. Part A covers hospitalization and there are no extra premiums charged. Part B covers outpatient services such as doctor appointments. You must pay a monthly premium for Part B coverage, which will be taken out of your monthly Social Security payments. If you do not collect Social Security yet, the premiums will be billed to you. You can also purchase supplemental coverage from private insurance companies to add on to your Medicare plan; coverage and costs vary for those.
Medicaid is a federally funded insurance program run by your state, which provides healthcare coverage to people with limited income and reduced assets. Medicaid covers basic medical care and long-term nursing home care for adults, their children, and people with disabilities. An advantage of Medicaid is that it provides health coverage to people in the low-income bracket when they would otherwise have none.
Use your knowledge about Medicare and Medicaid to help Ellie's grandmother with her health insurance questions.
Ellie's grandmother just turned 65. She is not sure what health insurance is provided and if there is anything she has to do. What advice would you give her?
When Grandma turns 65, she will automatically be enrolled in Medicare. This insurance will provide hospitalization and doctor coverage. She can also purchase extra medical insurance form private insurance providers to supplement Medicare.
