Retirees Forced to Use Unsecured Loans to Cover Health Care

How Medicare works

Many older Americans are finding unsecured loans more helpful in handling health care costs than Medicare. Medicare rules these days are difficult to understand. Most people in today’s world are not retiring at 65. That opens the door for a lot of confusion regarding the rules of how Medicare pays out. Senior Americans can’t get into the Medicare system when they want. The simplest way to opt in is doing so when you turn 65 years old and people already collecting Social Security are automatically put into the system. But the new wave of seniors who continue working past their 65th birthdays are having problems with enrollment.

Over 65-years old and still employed

Those who continue to work and stay with their employer’s health care plan end up with limited options regarding Medicare. There are strict deadlines for enrollment and fines to be aware of. Worst case scenario is going without coverage at all until Medicare begins. Barbara Gardner of Austintown, Ohio, continued on her employer’s health care plan after her 65th birthday. She said, “My employer’s plan offers much better coverage.” Though in the beginning her decision made sense, she is now having a difficult time with coverage. According to Medicare rules, people must enroll within eight months of leaving employment. Because of this, Gardner’s next opportunity to sign up is in January of 2010, but she won’t be covered until July. Her employer’s health care plan is over in March and that leaves four months with no coverage. In addition, there is a penalty for missing the deadline that increases her premiums by 10%. She said, “I don’t know what I am going to do…I can’t afford an individual policy for the four month lapse.”

Experts weigh in on Medicare problems

Gardner is not alone in trying to sort out confusing rules. Medicare experts are saying there is a growing number of seniors who are getting caught in the red tape. The Medicare Rights Center notes that prior to the recession they received a few calls a month from Americans needing explanations. Post-recession they handle numerous calls on a daily basis.

Temporary coverage

For younger Americans getting temporary health care coverage for a few months is as simple as tapping into savings or getting small unsecured loans. For seniors, it isn’t that simple. Representative Kurt Schrader said, “Many seniors are going without coverage because of problems transitioning into Medicare and are unable to pick up temporary coverage because of their age.” Schrader has been instrumental in introducing a new bill designed to make laws simpler for those 65 years of age and older to convert from an employer’s health care to Medicare.

Why some opt for an employer’s coverage

Though it may sound odd, some over-65 employees opt to stay with their current employer’s coverage due to the expense. Even though Medicare Part A is free, Medicare Part B, the part that covers doctor visits and outpatient care costs, charges between $96 and $350 monthly. The premium is dependent on the applicant’s income. A lot of seniors choose to purchase “supplemental” policies that cover anything Medicare doesn’t. These are referred to as Part D plans. There are also charges for Medicare Advantage, which is a plan that includes monthly premiums, copayments and deductibles.

Seniors need to take steps to protect themselves

Many seniors are using unsecured loans to cover health care costs that Medicare doesn’t or to manage before Medicare coverage begins. It is important for everyone to do research when it comes to transitioning from an employer’s coverage and into Medicare. Understanding the rules can save a senior citizen from life without health care when they need it most.

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