On average, more than $7500 is spent on health care for each American each year. About 85 percent of Americans are covered by a medical care plan that will pay a portion of these costs. Those without a plan must pay even more. You can obtain protection as an individual or as a member of a group. A group health plan is sold collectively to an entire group of people rather than to in dividuals. The medical care plan offered by many companies is an example of a group plan. Each of the three types of losses resulting from illness or injury can be addressed in multiple ways. Of course, you can pay all of your own expenses. T
1. Covering Your Direct Medical Care Costs
Direct medical care can be covered by an HMO, traditional health insurance, or a high-deductible health care plan (each is defined later). These three types of plans can cover as much as 90 to 100 percent of one’s costs and comprise the plans typically offered by employers. Purchased individually, these plans can cost $400 or more per month for an individual and $700 or more for family coverage. Low-income individuals and families may qualify for Medicaid, a government health care program funded jointly by the federal and state governments. Finally, people age 65 or over can enroll in the Medicare program, which is the federal government’s medical care program for the elderly.
2. Covering Your Rehabilitative and Custodial Care Costs
The elderly, people with chronic disease, and accident victims often have needs that go beyond direct medical care. At one extreme is the need for a stay in a nursing home and at the other might be a short period of time during which a patient receives rehabilitation. Medical care plans tend to cover only “medically necessary” care, not these rehabilitation and custodial needs. Long-term care insurance provides reimbursement for costs associated with intermediate- term and custodial care in a nursing facility or at home. Medicaid also provides protection here but only for low-income/ low-wealth individuals. Those in the greatest need for assistance tend to be those in the middle-income range. They lack the financial resources to pay for nursing home care (perhaps $5000 per month) and have too high of an income to qualify for Medicaid
3. Covering Your Lost Income
Anyone with a job can lose income when they become sick or are injured. Many employers offer sick days and other time off that can be used as necessary. Some employers may provide a disability income insurance plan that will replace a portion of income for a period of time. The employee may be required to pay all or a portion of the premium for such coverage. If your employer does not offer a plan, you can buy one on your own. Workers who are eligible can collect Social Security Disability Income Insurance benefits if their disability is total (meaning they cannot work at any job) and will last one year (or until death if expected within one year). The amount of these benefits is based on the worker’s average lifetime earnings and, thus, might be lower than necessary to fully support young workers. Finally, older workers who have built up considerable funds in a tax- sheltered retirement account may be able to utilize those funds to replace lost income when disabled.
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