Chapter 2: Who's Paying?
IN THIS LESSON
Who’s paying what?
There are multiple ways & sources to pay for health care services. Either you pay &/or it’s paid from another source.
Out-of-pocket (your pocket)
Private insurance: paid through an employer &/or out of pocket
Public or Government sponsored insurance/benefit: Medicare, Medicaid or Veteran's Benefit
Long term Care Insurance: paid out of pocket
Stay with me…
Why is this important?
Knowing the difference and how insurance works helps you prepare, advocate and make better decisions for your loved-one. You’ll understand what is covered and what’s not (which is just as important). You’ll have an idea how to move forward with their care and plan for the future. You’ll know to seek options for what’s not covered and whether another type of coverage or plan is needed.
Saying it again, Knowledge Empowers. For example…
a personal share
Let me share something that happened with my aunt last year that perfectly illustrates why understanding insurance is crucial for caregivers.
The situation: My aunt had multiple hospitalizations in the latter part of the year. Between all her hospital stays and medical appointments, she definitely hit her insurance deductible and went well over her out-of-pocket maximum.
Quick insurance refresher: If you need a brush-up on terms like deductible and out-of-pocket maximum, check out our Insurance Lingo guide first.
Here's what happened: She was discharged from her final hospital stay near the end of the year. At this point, because she'd already met her deductible and out-of-pocket maximum, any additional medical care would have cost her $0.
The missed opportunity: She needed some expensive follow-up tests and procedures. But she procrastinated and didn't schedule them before December 31st.
The costly result: When January 1st hit, her insurance clock reset. Those same procedures that would have been free in December now cost thousands of dollars in deductibles and copays.
The lesson: Understanding how insurance timing works can save you significant money and help you advocate effectively for your loved one's care.
Key Questions to Ask About Any Insurance
Before you need care:
What's the annual deductible amount?
What's the out-of-pocket maximum?
Which providers are in-network vs. out-of-network?
What's covered for home health, medical equipment, and therapy?
Are there pre-authorization requirements?
During care decisions:
Will this procedure/service count toward our deductible?
Are we close to our out-of-pocket maximum?
Is there a less expensive but equally effective option?
Can we time this to maximize our insurance benefits?
Understanding Your Insurance Calendar
The End-of-Year Rush
What happens: There's always a "mad rush" at the end of the year as people try to get medical care completed before their deductibles reset.
Strategic thinking for caregivers:
Schedule important procedures before December 31st when possible
Front-load expensive care early in the year if you know it's coming
Understand that January bills will be highest due to deductible resets
Planning Around Insurance Cycles
Smart timing strategies:
Coordinate multiple specialists visits within the same benefit period
Schedule preventive care early in the year
Plan elective procedures when you've already met deductibles
Track where you are in your annual out-of-pocket spending
Both payers below are huge sources of payment for our elderly.
The 2 are often confused. Keep going for clarity.
Medicare
Medicare: The Foundation
Who it covers: Nearly everyone 65 and older, plus some younger people with disabilities.
What you need to know:
Part A (Hospital): Usually free, covers hospital stays
Part B (Medical): Monthly premium, covers doctor visits and outpatient care
Part C (Medicare Advantage): Private insurance alternative to Parts A & B
Part D: Prescription drug coverage
Caregiver insight: Medicare has specific rules about skilled vs. non-skilled care that directly impact what help is covered.
Medicare Parts
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Part A
Helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
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Part B
Helps cover:
Services from doctors and other health care providers
Outpatient care
Home health care
Durable medical equipment
Many preventive services (like screenings, shots or vaccines, and yearly “Wellness” visits -
Part C aka Medicare Advantage
A Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage
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Part D
Helps cover the cost of prescription drugs.
Medicaid
What is Medicaid?
The main criteria is lower income
YET
it is not the only criteria and may vary from state to state
While Medicare primarily serves seniors aged 65 and older, regardless of income, Medicaid focuses on providing health coverage to people with limited income and resources.
Medicaid is a joint federal and state program in the United States that helps individuals and families with low incomes cover the costs of medical care. It provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.
Each state has its own set of eligibility requirements and covered services within the broad federal guidelines.
As noted in the read above, Medicaid is state regulated. Use below Medicaid FYI link for your state criteria, application and more
About a 2 minutes watch about: the differences between Medicare and Medicaid and a quick Medicare breakdown
Important Consideration
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Manage Care
Oversees their coverage
Insurance company oversees coverageIf their Medicare or Medicaid is managed by an insurance company, contact the managing insurance company about their benefits
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Supplement
In addition to your coverage
Insurance coverage + SupplementDo they have a supplement to Medicare?
See what’s covered.
Making Insurance Work for You
Advocacy Tips
Speak the insurance language:
Learn key terms and use them in conversations with providers
Understand what's "medically necessary" vs. "convenience"
Know the difference between skilled and custodial care
Ask about coverage before agreeing to services
Document everything:
Keep records of all medical visits and treatments
Save explanation of benefits (EOB) statements
Track your annual spending toward deductibles
Note any claim denials and appeal processes
Getting Maximum Value
Strategic approaches:
Use in-network providers whenever possible
Understand when you need referrals vs. when you can self-refer
Know your insurance company's process for approving medical equipment
Learn about Medicare's appeal process for denied claims
Common Insurance Pitfalls for Caregivers
Mistake 1: Not Understanding Coverage Gaps
The problem: Assuming Medicare covers everything elderly people need.
The reality: Medicare has significant gaps, especially for long-term custodial care.
Mistake 2: Poor Timing of Care
The problem: Not considering insurance calendar years when planning medical care.
The solution: Strategic timing of procedures and services can save thousands.
Mistake 3: Not Advocating for Coverage
The problem: Accepting "no" when insurance denies coverage for needed services.
The better approach: Learn the appeal process and advocate for medically necessary care.
Questions to Keep Asking
Never be embarrassed to ask:
"Can you explain this bill in simple terms?"
"Why was this claim denied?"
"What's the timeline for this coverage decision?"
"Are there alternative treatments that might be better covered?"
"Can we appeal this decision?"
Remember: Insurance representatives expect questions. Keep asking until the answers make sense to you.
Building Your Insurance Knowledge
The truth: Insurance is complicated by design, but you don't need to become an expert overnight. You just need to understand how it applies to your loved one's specific situation.
Your goal: Learn enough to make informed decisions and advocate effectively when needed.
Most importantly: When something doesn't make sense, keep asking questions. The more you understand how the money flows, the better you can plan and protect your loved one's resources.
Your growing expertise: Each lesson builds your ability to navigate these complex systems and make the best decisions for your loved one's care and financial security.
To Do
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You can call the number on the back of the card OR login online for the specifics.
For Traditional Medicare (without an insurance company managing the Medicare), you may want to go to the site and do a search for specific coverage or use the SHIP link in the Resource section below.
Make notes of questions as you review.
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If insurance is managing Medicare or Medicaid that’s who you contact. Note insurance specifics on "Who's Paying Worksheet", in order of primary then secondary. There's also a section for a supplement coverage.
Use the Resource section below for questions to consider when contacting Medicare and additional contacts
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If insurance is managing Medicare or Medicaid that’s who you contact. Note insurance specifics on "Who's Paying Worksheet", in order of primary then secondary. There's also a section for a supplement coverage.
Use the Resource section below for questions to consider when contacting Medicare and additional contacts
Resources
Medicare number: 1-800-MEDICARE (1-800-633-4227)
Use this link for Medicaid specific to your state
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Glossaryof relevant terms and definitions. A useful tool to equip you along your caregiver journeycare insurance
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Use this PDF for guidance and questions to consider when contacting Medicare
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Use this link for the most updated version of the Medicare and You Handbook. 100 plus pages of detailed information about Medicare. Provides the updates, how to sign up, what's covered & more.
Take a look and hold on to it as a reference
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This handout further defines and provides general criteria for Medicare and Medicaid
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aka SHIP helps navigate Medicare:1:1 assistance. Use SHIP locater to find the specifics for your state
Now You Know:
The difference between Medicare and Medicaid
The difference between insurance that is managed vs a supplement to your insurance
What type of insurance coverage your loved-one has
Make note on your checklist