Prescription Insurance Policies

Some health insurance policies do not provide for
prescription coverage and a separate policy must be
purchased for prescription medications.

This is an area where it pays to do some homework and
research and find the best policy for you.

Prescription coverage insurance is not a necessity;
like health insurance coverage, it is a calculated
risk, although the risk is not as high.

Usually you can buy prescription insurance at any
time, so if the doctor determines that you need an
expensive maintenance drug, you may opt in at that
time.

It is important to know that if you presently have
prescription insurance you can usually only change it
at a specific time of the year, although you can add
new prescriptions, you can’t change plans.

The person who seldom takes prescription medications
probably does not need prescription insurance;
however, a person who takes maintenance drugs for high
blood pressure, diabetes, depression, heart disease or
immune disorders most likely needs insurance against
the high costs of drugs.

Prescription insurance policies usually have "tiers",
which usually means that a generic drug is at a low or
no co-pay, a tier 2 level may be the brand name
genuine, and a tier 3 may be a brand new expensive
drug that the co-pay could be a set high-percentage of
the cost.

In choosing prescription insurance, you should first
list the prescriptions that you take and the retail
amount of them. If you chose not to purchase
insurance, this would be your monthly cost.

Find out from the provider what the monthly premium
for you would be, then what the prescription co-pay
amount would be and add these two figures together.
Which is the less expensive alternative?

Medicare

Medicare is a governmental program which provides
medical insurance coverage for retired persons over
age 65 or for others who meet certain medical
conditions, such as having a disability.

Medicare was signed into legislation in 1965 as an
amendment to the Social Security program and is
administered by the Center for Medicare and Medicaid
Services (CMS) under the Department of Human Services.

Medicare provides medical insurance coverage for over
43 million Americans, many of whom would have no
medical insurance. While not perfect, the Medicare
program offers these millions of people relatively low
cost basic insurance, but not much in the way of
preventative care. For instance, Medicare does not pay
for an annual physical, vision care or dental care.

Medicare is paid for through payroll tax deductions
(FICA) equal to 2.9% of wages; the employee pays half
and the employer pays half.

There are four "parts" to Medicare: Part A is hospital
coverage, Part B is medical insurance, Part C is
supplemental coverage and Part D is prescription
insurance. Parts C and D are at an added cost and are
not required. Neither Part A nor B pays 100% of
medical costs; there is usually a premium, co-pay and
a deductible. Some low-income people quality for
Medicaid, which assists in paying part of or all of
the out-of-pocket costs.

Because more people are retiring and become eligible
for Medicare at a faster rate than people are paying
into the system, it has been predicted that the system
will run out of money by 2018. Health care costs have
risen dramatically, which adds to the financial woes
of Medicare and the system has bee plagued by fraud
over the years.

No one seems to have a viable solution to save this
system that saves many people throughout the country.

Health Savings Accounts

If you are considering changing your health insurance
policy, you should be aware of the alternative of a
Health Savings Account (HCA).

Health Savings Accounts started to become available
(and legal) in 2004, allowing people with
high-deductible insurance policies to set aside
tax-free money to fund medical expenses up to the
maximum deductible amount.

If you don’t have to use the funds, it rolls over
every year. Once you reach age 65, you no longer are
required to use it for medical expenses, although you
certainly can; you can withdraw funds under the same
conditions as a regular IRA.

Although you will be penalized if you use the funds
for non-medical expenses prior to age 65, you can use
the money for vision care, alternative medicine or
treatment and dental care.

For 2008, an individual may fund up to $2,900 tax
free. The maximum deductible would be $1100 and the
maximum out-of-pocket cost would be $5,600.

For a family, the maximum tax-free contribution is
$5,800 with the maximum deductible of $2,200 and the
maximum out-of-pocket cost would be $11,200.

Health Savings Accounts are certainly a viable way to
shelter income while providing catastrophic insurance
coverage in light of the high cost of low-deductible
health insurance plans.

For healthy people, it deserves some research. Consult
with your insurance agent for all of the details
involving this approach to managing your insurance
needs.