How Does Health Insurance for Seniors Work in California?
Senior healthcare in California: The California Department of Finance projects that by 2030, there will be about 8.6 million seniors (aged 65 and above) living in California. In 2022, there were nearly 40 million people in California, with over 15 percent of them (≈6,000,000) - seniors. Most seniors suffer from chronic conditions and diseases like Alzheimer's, arthritis, colon cancer, diabetes, heart disease, and stroke. For instance, over 2.3 million California adults have diabetes, which represents one out of every 17 adult residents. About 1.9 million have type 2 diabetes, and one out of every six Californian seniors have type 2 diabetes.
Generally, California seniors consider the following senior health insurance policies:
- Original Medicare versus Medicare Advantage
- Medigap or Medicare Advantage PDP
- Long-term care insurance
| SENIOR HEALTH INSURANCE USAGE IN CALIFORNIA | |
| Original Medicare | 51% |
| Medicare Advantage | 49% |
| Original Medicare Part A and Part B | 41% |
| Medicare Advantage and Other Health Plan Part A and Part B Beneficiaries | 49% |
| Medicare Part D (Medigap) | 67% |
| Medicare Advantage Prescription Drug Plan | 97% |
| Source: Centers for Medicare and Medicaid Services | |
MEDICARE
Medicare is a health insurance program funded by the federal government that offers affordable health care services to seniors (age 65 or older), younger people with disabilities, and people with End-Stage Renal Disease (ESRD). There are different parts of Medicare plans available in California:
Original Medicare: This includes Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). The best time to sign up for Medicare Part A and B is when you turn 65. This is because signing up later can lead to a gap in your coverage or having to pay a penalty.
- Part A: Covers hospice care, inpatient hospital stays, and care in a skilled nursing facility. Medicare Part A is free for individuals who have paid Medicare taxes while working for a certain period. However, individuals not eligible for premium-free Part A would have to pay between $274 and $499 for Part A premium. Late enrollment for Medicare Part A may lead to a 10% increase in premiums, twice the number of years you did not sign up
- Part B: Covers outpatient care, preventive services, certain doctors' services, and medical supplies. Medicare Part B costs about $170.10. The penalty for Medicare Part B late enrollment is 10% of the standard premium for the number of years you did not sign up. Medicare Part A and B do not cover acupuncture, cosmetic surgery, routine foot care, dentures, long-term care, or most dental and vision coverage. Additionally, they exclude eye exams related to prescribing glasses and hearing aids and exams for fitting them. Medicare Advantage (Part C): It is a Medicare-approved plan offered by private insurance companies that bundles Original Medicare and prescription drugs. Medicare Advantage is an alternative to Original Medicare. The insured can get one or the other - not both. Medicare Advantage covers some benefits that Original Medicare excludes, like vision, hearing, and dental services. However, it excludes clinical trials (clinical research studies), hospice services, and medical care outside the United States. There are no penalties for late enrollment in MA. When you enroll for Medicare Advantage, you will be given a red, white, and blue Medicare ID card, which you need to take along with you whenever you need Medicare-covered services. The most common types of Medicare Advantage Plans in California are:
- Private Fee-for-Service (PFFS) Plans
- Preferred Provider Organization (PPO) Plans
- Health Maintenance Organization (HMO) Plans
Speak with a state-licensed health insurance agent to compare the best Medicare Advantage plans in California.
Medicare Part D (Prescription Drugs): Also known as Medigap, it supplements Original Medicare. It covers the cost of prescription drugs like drugs used for HIV/AIDS treatments, antidepressants, immunosuppressant drugs, anticancer drugs, antipsychotic medications, and anticonvulsive treatments for seizure disorders. Medicare Part D excludes nonprescription drugs, benzodiazepines, drugs used for anorexia, weight loss or weight gain services, and fertility drugs. Also, it does not cover drugs used for cosmetic purposes or hair growth, prescription vitamins and mineral products, and barbiturates. The cost of Medicare Part D varies depending on your plan. However, you might pay an extra amount in addition to your premiums if your income is above a certain limit ($91,000 for individual coverage or $182,000 for joint coverage). The penalty for late enrolment is a 1% payment of the national base beneficiary premium of $33.37 multiplied by the number of months you did not sign up
If you have questions about Medicare and coverage, contact Medicare or your local California Department of Aging (HICAP). To get the best medicare plans in California and to help you enroll for Medicare coverage, you can also speak to a licensed health insurance agent who can provide answers to your Medicare-related inquiries. In addition, an insurance agent can help you find a doctor within the health plan that can provide medical advantage coverage.
MEDIGAP
California Medigap, which is also called Medicare Part D or Medicare supplement insurance, is a private health insurance plan offered to the users of original medicare. The purpose of medicare supplemental insurance is to address gaps in coverage for some out-of-pocket expenses that Original Medicare excludes. Only individuals enrolled in Medicare Part A and Part B are eligible for Medigap supplemental benefits. As of 2022, about 26 insurance companies were licensed to sell Medigap in California. Medigap covers copayments, coinsurance, and deductibles and excludes eyeglasses, hearing aids, private-duty nursing, long-term care, and dental and vision services.
Note: If you have Medicare Advantage instead of Original Medicare, you cannot purchase Medigap. If you are looking for additional prescription drug coverage for a Medicare Advantage plan, you need Medicare Advantage Prescription Drug Plan (MA PDP).
LONG-TERM CARE (LTC) INSURANCE
California long-term care insurance provides coverage for health care services provided to individuals when they are unable to perform some basic "activities of daily living" (ADL's). ADL's include eating, continence, bathing, dressing, or moving from a bed to a chair. A typical long-term insurance policy usually provides home care and facility coverage. You would have to select a maximum daily benefit when purchasing a long-term care insurance policy. There is usually no minimum daily benefit for facility care, but the minimum home care daily benefit you can select in California is $50 per day. There are eight (8) insurance companies approved by the CDI to sell LTC in California. Most of these insurance companies only sell three (3) categories of long-term care insurance policies, which are:
Home Care: It covers adult day care, homemaker services, personal care, respite care, home health care, and hospice services but excludes care in residential care facilities (RCF)/residential care facilities for the elderly (RCFE) or nursing facilities.
Comprehensive Long-Term Care: A typical comprehensive long-term care policy must cover at least eight benefits:
- Nursing home benefit
- Assisted living care in an RCF/RCFE
- Personal care
- Adult daycare
- Respite care
- Home health care
- Homemaker Services
- Hospice service
Nursing and Residential Care Facility: It covers assisted living care in an RCF/RCFE and skilled, intermediate, or custodial care in a nursing home or other similar facility. A nursing and residential care facility policy does not cover home care
| Types of Long-Term Care Insurance in California | |
| Individual long-term care insurance | This is a contract between an individual and a health insurance company. Individual long-term care insurance policies are usually guaranteed renewable, so the insurance company cannot cancel your individual long-term policy unless you fail to pay your premiums. However, your insurance company can increase your premiums with approval from the CDI |
| Group long-term care insurance | This is a contract between an insurance company and a group like employees or members of a trade or professional association. Members of a group long-term care insurance are usually given a certificate and not a policy of insurance |
The Long Term Care Insurance Guide provides more information on how LTC insurance works in California. Alternatively, you can speak to a California-licensed long-term care insurance agent who can explain what LTC insurance entails in a simple but comprehensive manner. They can help you compare quotes from several health insurance companies and ensure you get a suitable and affordable health policy.
NOTE: Long Term Care (LTC) may be also obtained through an optional coverage of Life Insurance. If your life insurance policy has a Long Term Care Rider, you can use a portion of your death benefit to cover the expenses of long term care specialists. If you are in the process of shopping for life insurance, ask your life insurance agent about adding the LTC Rider to the policy.
