Rideshare drivers have insurance options

 

Rideshare drivers have insurance options.

When you are driving for Uber, you are covered by their insurance. While the app is turned off, you are covered by your personal insurance. However, while the app is on and you are waiting for a client, you are covered by neither.

In some cases, personal auto insurance policies are being cancelled. This happens when the insurance companies become aware that the driver works for Uber or Lyft. Therefore they are left with no personal auto coverage.

Consider this:

A person pulls up an app on their phone, types in the position where they are and need to be taken and orders your car. You drive to fetch them.

While you are driving you glance at your phone to ensure that you are driving in the right direction. You hit a car whilst your attention is on your phone. It is not a big accident however bad enough that the other driver calls the police. You have to cancel your pick-up.

The police arrive. Your info is recorded plus the fact that you were driving for a company called Uber. You submit your claim.

your insurance company calls you. Your claim has been repudiated because you were engaged in “rideshare” a business activity. You are now responsible for your own car repairs plus the damage caused to the other driver’s car. Fortunately nobody was injured.

To add insult to ‘injury’, your car insurance policy has been cancelled.

You contact Uber to find out if their insurance policy is going to cover the damage. Unfortunately not says the receiver of your call. They state that as you did not have a passenger in the car, they are not liable for damages.

Uber, Lyft and Sidecar would prefer that you think of them as technology companies. Uber wrote in a legal finding with the CPUC (California Public Utilities Commission):-

Uber operates no vehicles and does not hold itself out or advertise itself as a transportation service provider. In fact and law, Uber does not provide transportation services of any kind and does not own, lease or charter any vehicles for the transportation of passengers. On the contrary, Uber is a technology company that licenses the Uber App to transportation service providers. The transportation service providers pay a fee to Uber to use its software technology; the passenger of the transportation service provider pays the transportation service provider for transportation received.”

Insurance Riders

Insurance Riders

You’ve worked out how much life insurance you need.   A collection of life insurance policy add-ons, called Insurance riders, must be considered. Insurance Riders can give policyholders additional benefits.

They increase peace of mind, that if something goes wrong, there is a Plan B.  When you buy life insurance, available Insurance riders vary by insurance company.   Costs also vary and depend on many factors, including your age, health and type of policy.

1.  Waiver of Premium Insurance Rider:

A waiver of premium rider usually associated with life assurance may be inserted into a policy at an extra cost.  The policyholder must have been disabled for a specific period, for example, six months.  Other requirements may be necessary such as the state of health of the policyholder and must be below a certain age.

2.  Disability Income Insurance Rider:

This is one of the most common riders and one that may be particularly important to younger policyholders (typically, those under 40).

This rider generally cannot be added after you reach age 45, although some insurers make it available through age 50. (https://us.axa.com/insurance/disability-income/insurance-riders.html) You collect a regular income from the insurance company if you become totally disabled and can’t work.  The policy specifies the amount of the income and whether it’s paid for a certain amount of time or for the length of the disability.  Some disability income riders pay out only if you become disabled from an accident while others pay on accident and sickness.

3.  Guaranteed Insurability Insurance Rider:

This rider provides specific dates on which additional life insurance policies can be bought.  Usually, the older the insured gets, the fewer dates the policy owner has to purchase more life insurance. (http://www.lifeinsurancewiz.com/LifeInsurance/LearningCenter/guaranteed.htm) This rider lets you purchase additional life insurance at a later date without undergoing a medical exam or providing any evidence

This rider lets you purchase additional life insurance at a later date without undergoing a medical exam or providing any evidence of your insurability.  Because you never know how your health could change, it makes sense to consider this rider.

4.  Term Conversion Insurance Rider:

Provides coverage for a certain period of time, such as 10, 15 or 20 years.  Permanent life insurance, such as whole life or universal life, provides coverage for your entire life, so your beneficiary receives a benefit no matter when you die.

This insurance rider lets you convert term life insurance into permanent life insurance without undergoing a medical exam.  It is especially attractive to young people starting careers and families who need life insurance but don’t have enough money yet to secure all the coverage with permanent life insurance, which has higher premiums than term life. There will be a deadline for when you must

There will be a deadline for when you must convert if you want to change the term policy to permanent life insurance without providing health information.  Understand the convertibility features before you buy.

5.  Accelerated Death Benefit Insurance Rider:

Accelerated Death Benefit Rider has become standard in the insurance industry and is usually included automatically for free or offered at nominal cost.  The rider lets you collect a portion of the policy’s death benefit if you become terminally ill with a short life expectancy, such as one year.  The policy spells out how much of the death benefit is available before death.  Usually its capped at $250 000 to $500 000.  You can use the proceeds for anything, such as paying medical bills or living expenses.  Even though the insurer offers the rider free, the company may charge a fee if it is exercised.

6.  Critical Illness Insurance Rider:

A rider added to a life insurance policy to protect the insured against financial loss in the event of a terminal illness.

The insurer pays a lump sum if you’re diagnosed with any of the critical illnesses specified in the insurance policy, such as cancer, heart attack, coronary artery bypass, major organ transplant, stroke, kidney failure. (http://www.moneycontrol.com/glossary/insurance/critical-illness-rider_333.html).   Instead of reimbursing you for medical expenses, the way health insurance does, the rider provides money to use for any purpose during the course of the treatment.

Instead of reimbursing you for medical expenses, the way health insurance does, the rider provides money to use for any purpose during the course of the treatment.

7.  Child Protection Insurance Rider:

No one wants to consider the possibility of losing a child, so all emotion must be set aside when considering a child protection rider.  Although the death of a child typically would not result in income loss, as would the death of a spouse, the tragedy still would have financial consequences which could be an additional hardship for a bereaved family.  This term life insurance rider provides coverage for final expenses in case the unthinkable happens.  The coverage generally can be purchased in units –  for example $1000.  Basic information about the child’s health is required for underwriting.

 This term life insurance rider provides coverage for final expenses in case the unthinkable happens.  The coverage generally can be purchased in units –  for example $1000.  Basic information about the child’s health is required for underwriting.

8.  Accidental Death Benefit Insurance Rider:

If you die from an accident, this rider provides an additional benefit on top of the policy’s regular death benefit. The option is often referred to as double indemnity when the additional payout equals the original death benefit.  Sometimes the rider also includes additional payment for dismemberment.  You would collect money if you lost a limb or your sight.  Life insurers will consider your occupation and hobbies when determining premiums.

9.  Return of Premium Insurance Rider:

If you live to the end of the term, in exchange for paying the premium, in most circumstances you get all your money back. Some companies use a separate rider where others, like ING, write the return of premiums benefit into a basic policy.  You pay a higher premium for the opportunity to get your money back.  The big question to consider.  How does paying the extra cost for the return of premium rider compare to investing that money and buying a basic term policy instead? To find the answer, subtract the annual premium for a basic term policy from the annual cost of a return of premium policy.  The difference is how much you would have to invest each year during the insurance term.  Then calculate what annual rate of return you’d need on that money to beat the amount you’d get back from a return-of-premium policy.

Conclusion:

There is no one-size- fits- all answer to whether any of these Insurance riders are right for you.  You’ll need to weigh policy options to find the best package for your needs. (http://www.foxbusiness.com/personal-finance/2011/05/25/useful-life-insurance-riders/)

Remember – money from the return of premiums is tax-free, but your own investment returns are taxed.  In some cases (depending on age, sex, tax bracket and other factors), you’d need to get more than a 7% rate of return on your investment to beat the return of premium policy

Kidnap and Ransom Insurance

Kidnap and Ransom Insurance

Kidnap and Ransom insurance is meant to guard people as well as companies operating in high-risk areas around the world.  Locations most often named in policies include Mexico, Venezuela, Haiti and Nigeria, and certain other countries in Latin America.

Private corporations pay millions of dollars in ransom money every year and scores of insurance companies sell kidnap and ransom insurance policies to reimburse those entities for ransom payments.  An entire criminal industry surrounds the extortion of multinational corporations through kidnap for ransom – a criminal industry that insurance companies are financing by paying ransoms to hostage takers in direct opposition to US government policy.

Seventy one percent of the kidnapping victims were male.  Sixy nine percent of the victims were considered middle class.  These victims were shop owners, students and mid-level professionals.  Security intelligence and other research into the kidnap-for-ransom industry in Mexico have found that organised crime groups are now targeting these middle- class workers in an attempt to expand the number of potential targets.  The kidnappers charge a lower ransom demand, usually around $7, 669 (100, 000 Mexican Pesos), but are able to target a greater number of people.

Between 2007 and 2012 Senior military officers with the Eritrea’s military kidnapped and held for ransom about 30, 000 children between the ages of 16 and 17.  All students in Eritrea are required to serve at a military camp in order to graduate from high school.  The officers would call the victims’ family to demand a ransom payment of $7, 500 in order to release the victim.  If the family were unable to pay the ransom demand, the children would be sold to Bedouin traffickers.  Researchers studying kidnap and ransom at Tilburg University in the Netherlands estimated that about $600 million has been paid out in kidnap and ransom money to the military.

Kidnap and Ransom insurance policies cover the perils of kidnap, extortion, wrongful detention and hijacking.  Kidnap and Ransom policies are indemnity policies- they reimburse a loss incurred by the insured.  The policies do not pay ransom on the behalf of the insured.  Typically, the insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy.

Losses typically reimbursed by Kidnap and Ransom insurance include:

1.  Ransom monies – Money paid or lost due to kidnapping.

2.  Transit/Delivery – Loss due to destruction, disappearance, confiscation or wrongful appropriation of ransom monies being delivered to a covered kidnapping or extortion.

3.  Accidental Death or Dismemberment – Death or permanent physical disablement occurring during a kidnapping.

4.  Judgements and Legal Liability – Cost resulting from any claim or suit brought by an insured person against the insured.

5.  Additional expenses – Medical care, PR Counsel, wage and salary replacement, relocation and job retraining, and other expenses related to a kidnapping incident.

Intended Audience:

The policies may be written to cover high profile families, non-governmental organisations and multinational organisations.  Some policies include kidnap prevention training.

Underwriting Considerations:

The major factors insurance underwriters weigh when considering a kidnap and ransom policy include the country of residence of the insured, the type of industry of the insured, revenue of the insured, and the travel patterns of any employees who may be covered in the policy.

Problems with Kidnap and Ransom Insurance:

One of the known paradoxes of Kidnap and Ransom Insurance policies is that those who have them are often not aware, as it can be provided by an employer hoping to protect the company and its assets.  It is believed that an employee with knowledge of his K & R policy might begin to act differently, or even collude in his own kidnap for fraudulent purposes.

Kidnapping in the US;

The risk of kidnap in the US and Canada remains relatively low, and the incidents which do occur are largely a by-product of other crime, including robbery and spousal abuse, or child custody disputes.  The threat of kidnap in North America is heightened by the operations of the violent drug cartels in neighbouring Mexico.  In line with this, the US border states of Arizona, New Mexico, California and Texas are reported to be the most affected by the “spillover”, due to their geographical proximity and the fact that drugs are trafficked directly into these states.

Reports in 2012 highlighted the latest area to be exploited by cartels to facilitate their operations along the borders:  the fracking boom in Texas. According to reports, cartels are taking advantage of activity surrounding the Eagle Ford Shale Play by stealing lorries belonging to energy companies, bribing truck drivers and contractors and possibly even “cloning” vehicles to resemble company lorries, all used to transport drugs.  In addition to this, the new roads which have emerged along the oil and gas fields are “inadvertently” circumventing the US border patrol’s highway checkpoints.  Cartel operations in the vicinity of the US border have previously led to a surge in reports of kidnaps, as well as extortion, violent home invasion, and also murders, and with cartels moving further into Texas, there is a substantial risk that there will be a further increase in such criminal activity in the state.

 

 

Corporate Average Fuel Economy

The National Highway Traffic Safety Administration (NHTSA) is part of the Department of Transportation. One of its main functions is to administer CAFE.

Administering Corporate Average Fuel Economy (CAFE).

The Corporate Average Fuel Economy (CAFE) are regulations in the U. S. first enacted by the U. S. Congress in 1975 in the wake of the Arab Oil Embargo and were intended to improve the average fuel economy of cars and light trucks sold in the United States. Historically, it is the sales-weighted harmonic mean fuel economy, expressed in miles per U. S. gallon (mpg) of a manufacturer’s fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8, 500 pounds (3, 856 kg) or less, manufactured for sale in the United States. If the average fuel economy of a manufacturer’s annual fleet of vehicle production falls below the deferred standard, the manufacturer must pay a penalty, currently $5.50 per 0.1 mpg under the standard, multiplied by the manufacturer’s total production for the U. S. domestic market. In addition, a Gas Guzzler Tax is levied on individual passenger car models (but not trucks, vans, minivans, or SUVs) that get less than 22.5 miles per U. S. gallon.

Historically, it is the sales-weighted harmonic mean fuel economy, expressed in miles per U. S. gallon (mpg) of a manufacturer’s fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8, 500 pounds (3, 856 kg) or less, manufactured for sale in the United States. If the average fuel economy of a manufacturer’s annual fleet of vehicle production falls below the deferred standard, the manufacturer must pay a penalty, currently $5.50 per 0.1 mpg under the standard, multiplied by the manufacturer’s total production for the U. S. domestic market. In addition, a Gas Guzzler Tax is levied on individual passenger car models (but not trucks, vans, minivans, or SUVs) that get less than 22.5 miles per U. S. gallon.

Started in 2011 the CAFE Standards are newly expressed as mathematical functions depending on vehicle “footprint”, a measure of vehicle size determined by multiplying the vehicle’s wheelbase by its average width. A complicated 2011 mathematical formula was replaced in 2012 with a simpler inverse-linear formula with cut off values.

CAFE footprint requirements are set up such that a vehicle with a larger footprint has a lower fuel economy requirement than a vehicle with a smaller footprint. CAFE has separate standards for “passenger cars” and “light trucks” despite the majority of “light trucks actually being used as passenger cars. The market share of “light trucks” grew steadily from 9.7% in 1979 to 47% in 2001 and remained in 50% numbers up to 2011. More recently, coverage of medium duty trucks has been added to the CAFE regulations from 2012 and now in 2014, heavy duty commercial trucks have also been added.

President Barack Obama announced plans for a national fuel-economy and greenhouse-gas standard that would significantly increase mileage requirements for cars and trucks by 2016. Obama called it “an historic agreement to help America break its dependence on oil, reduce harmful pollution and begin the transition to a clean energy economy”.

The new requirements mark the first time there has been a nationwide standard for emissions of greenhouse gases. They require an average mileage standard of 39 miles per gallon for cars and 30 mpg for trucks by 2016. This is a jump from the current average for all vehicles of 25 miles per gallon.
Furthermore, Obama said “In the past an agreement such as this would have been considered impossible. It is no secret these are folks who have been at odds, even decades. The status quo is no longer acceptable.”

The new standards cover the model years 2012 to 2016 and are expected to add about $600 to the cost of a new car, the White House said. Administration officials hope the added costs will be recouped by savings in gasoline costs from the higher mileage requirements.

Auto manufacturers have fought past attempts to raise mileage standards but came to the table this time out of fears of patchwork of national standards, particularly because California has been trying to create a more aggressive benchmark for decreasing greenhouse gases. Obama’s moves give the companies certainty in what they must achieve for all models nationwide.
The policy for autos will link together the corporate average fuel economy, or CAFE, standard and the Environmental Protection Agency’s greenhouse-gas standard. That way industry will not have to worry that the administration will regulate those on separate tracks. The standards will be gradually increased each year until they hit Obama’s target in 2016.

The White House predicted significant environmental benefits from the program, with a projected savings over the life of the program of 1.8 billion barrels of oil, and reductions of 900 million metric tons of greenhouse-gas emissions. White House officials called it the equivalent to taking 177 million cars off the road or shutting down 194 coal plants. Obama called the tailpipe emission announcement historic because it avoids a patchwork of standards and has won agreement from so many stakeholders, including automakers, state governments, the Department of Transportation and the EPA.

The U. S. Environmental Protection Agency (EPA) measures vehicle fuel efficiency. Historically, the EPA has encouraged consumers to buy more fuel efficient vehicles, while NHTSA expressed concerns that smaller, more fuel efficient vehicles may lead to increased traffic fatalities. Thus higher fuel efficiency was associated with lower traffic safety, intertwining the issues of fuel economy, road traffic safety, air pollution and climate change. The EPA says fuel economy last year (2013) rose one-half-mile per gallon over the 2012 model year,use automakers have improved gas engines and transmissions and added turbochargers to give smaller motor more power. Although last year’s gain fell short of the 1.2 mpg improvement from 2011 to 2012, fuel economy is up almost 5 mpg since 2004. The EPA is predicting slower growth for this year, but officials still expect the industry to meet government standards that require the fleet to average 54.5 mpg by 2025.

Chris Grundler, head of EPA’s office of transportation and air quality, said the auto industry is ahead of what the EPA expected at this point and he expects improvements to vary from year to year depending on the new models that are introduced.

For example. the aluminium Ford F-150 pickup could raise the average mileage by itself because the F-150 is the top-selling vehicle in the nation. The truck’s reduction in mass is likely to yield significantly better mileage and reduced emissions over the current trucks.

Mazda led all automakers with an average 28.1 mpg. Honda was second at 27.4 mpg, Chrysler, General Motors and Ford were at the bottom of the rankings, because they sell more pickups and SUVs. The midsize Mazda 6 already meets its fuel economy targets for 2019 mainly by reducing wind drag and using lighter weight materials and a turbocharged engine.

Bancassurance

In the United States, Bancassurance was banned until the repeal of the Glass Steagall Act in 1999.  It has not caught on as a practice for most forms of insurance.

There is no simple way of entering into bancassurance which is “best” for every insurer and every bank. The company’s internal and external environmental analysis and the goals of the company have to be clear and concise before a strategic plan is agreed upon.

The simplest form of bancassurance is that one party’s distribution channel can have access to the clients of the other organisation. When a bank and the insurance company enter into a distribution agreement and the bank automatically passes ‘warm leads’ from its client base to a competent, friendly insurance company, a very profitable relationship can result from such an agreement.

BIM (Bank insurance model) is a relationship between a bank and an insurance company. Using the banks sales channel, the insurance company uses the bank’s sales channel to sell insurance products to on-sell its particular policies to the bank’s client base. Bank staff and bank employees, even tellers become the point of contact and sales to the bank’s clients. Commission is shared between the bank and the insurance companies, however, the policies are managed by the different insurance companies.

Insurance companies ensure that the staff in the banks involved in the sales of insurance products are provided with product information, sales training and marketing campaigns and the BIM model has shown to be a very effective distribution channel.

Many feel that banks have too great a control over the financial industry as well as creating too much competition with existing insurance companies. In China, bancassurance products have exploded across several product lines. However, in certain countries, bank insurance is largely prohibited. Most sales in U.S. Banks are life insurance, property insurance and mortgage insurance.

Traditional Insurance models (TIM) have to have larger sales teams and also work with third party agents and brokers. BIM (known as the Bank Insurance Model), is very popular in European countries such as Spain, France and Austria,and is also crossed with TIM for what is known as HIM (Hybrid Insurance Model). HIM is a combination of TIM and BIM.

Privatbank Assurance is pioneered by Lombard International Assurance which is a globally used wealth management company. This concept combines private banking and investment management services. Lombard applies expertise to create innovative wealth structuring solutions to meet the unique needs of high net worth clients using life assurance in conjunction with sophisticated financial planning.

Insurance activity in a bank is integrated with the usual bank processes and is referred to as “Integrated Models”. The bank collects the premium, normally by a direct debit order from the client’s bank account at that particular bank. The workflows between the bank and the insurance companies is automated and the bank received commission for these transactions. For more sophisticated products, the bank’s staff has the support of specialised insurance advisors.

Certain life insurance products can only be sold by financial advisors who have obtained a minimal qualification and this is referred to as “Non-Integrated Model” so due to these rules, branch staff have been limited by regulatory constraints. Banks set up a team of financial advisors who are authorised to sell regulated insurance products. Mailing and telesales is the means by which the advisors target the bank’s clients. These financial planners are employed by the bank and they usually receive a salary plus commission from the bank.

Good reasons for banks to enter into bancassurance:

Due to the intense competition between banks, there is an increase in administration and marketing costs. As well as shrinking interest margins, there are limited profit margins in traditional banking products. New products such as bancassurance can increase production and therefore enhance profitability

Income that is generated is increased in the form of commissions from the insurance company.

The bank’s fixed costs are spread with the help of the insurance company bearing some of the costs.

The bank staff have more products to offer clients so this increases the productivity of the staff and in turn the efficiency of the bank.

The return on traditional deposit accounts has been of such a nature that customer preferences are changing and they are regarding insurance products and mutual funds in a more favourable light with regard to medium-term and long-term investment.

The main core of profitability for banks has been savings held as deposits for clients. By entering the life insurance business, the banks have found a way to offset some of their losses.

Favourable tax treatment of life insurance which is there to encourage private provision for protection and retirement planning make the purchase of insurance products more attractive to clients, thereby assisting the banks to increase profitability.

For example, the client wants to fund future education costs. He/she takes out permanent assurance. Simultaneously the policyholder can take out a mortgage loan and the bank can have the client assign the policy to the bank as beneficiary which results in a more widely based relationship with the customer.

The benefits of bancassurance for insurance companies:

Source of new business – previously unreached clients.

Source of new business – wide range of products (including banking products).

Both bank and insurers gets exposure to the other’s distinctive management style and thus the great opportunity to learn and make improvements in their own operations.

Government Health Program

The Federal Employees Health Benefits (FEHB) forms part of the Government Health Program. It is a system of managed competition through which employees health benefits are provided to :

Civilian Government employees
and
Annuitants of the United States Government.
The Government contributes 72% of the weighted average premium of all plans. The FEHB program which forms part of the Government Health Program allows some insurance companies, employee associations and labor unions to market health insurance plans to governmental employees.

“Open Enrollment” period:

In the Government Health Program, the employee will be fully covered in any plan he or she chooses without limitations regarding pre-existing conditions. Upon a life-qualifying event such as marriage, divorce, adoption or the birth of a child, changes may be made, even though open enrollment is closed. Part of the premium is paid for by the U. S. Government Agency the employee works for, but does not exceed 72%.

In 2010 about 250 plans participated in the Government Health Program. Employee unions that offer plans are:
National Association of Letter Carriers.
National Insurance Companies, such as:

Aetna
Blue Cross and Blue Shield Associations.

Indian Health Services (IHS)

Part of the Government Health Program is the IHS which is responsible for providing medical and public health services to members of federally recognized Tribes and Alaskan Natives. IHS provides healthcare at 33 hospitals, 59 Health Centers and 50 Health Stations. 34 urban Indian health projects supplement these facilities with a variety of health referral services.

The IHS which forms part of the Government Health Program employs approximately 2, 700 nurse, 900 physicians, 400 engineers, 500 pharmacists and 300 dentists as well as other health professionals totalling more than 15, 000 in all. The IHS is one of two federal agencies mandated to use Indian preference in hiring.

Veterans Health Administration (VHA)

Forming part of the Government Health Program, is Veterans Health Administration. To be eligible for VA care benefit programs you must have served in the active military, naval or air service. Veterans who enlisted after September 7 1980 or who entered active duty after October 16 1981, must have served 24 continuous months or the full period for which they were called to active duty.

Preventive Care Services:

The following is offered in VA care :
Counselling on inheritance of genetically determined disease
Immunization
Nutrition education
Physical examinations
Health Care Assessments
Screening tests
Health Education programs

Furthermore

Ambulatory (outpatient) and hospital (inpatient) diagnostic and treatment services:
Medical
Surgical (including plastic/reconstructive surgery)
Mental Health
Dialysis
Substance Abuse treatment
Prescription drugs (when prescribed by a VA physician)

The Military Health System

Part of the Government Health Program is the Military Health System that provides healthcare to active duty and retired U. S. Military Personnel and their dependents. Its primary mission is to maintain the health of military personnel so as to enable them to carry out their military missions, and to deliver health care during wartime.

The Military Health System has a $50 billion budget and serves about 9.6 million beneficiaries, including active duty personnel and their families and retirees and their families. MHS employs more than 137, 000 in 65 hospitals, 412 clinics and 414 dental clinics.

The U. S. Patient Protection and Affordable Act, enacted in 2010, has provisions intended to make it easier for uninsured veterans to obtain coverage. Under the Act, veterans with incomes at or below 138% of the Federal Poverty Line ($30, 429 for a family of four in 2010) would qualify for coverage as of January 2014. This group constitutes nearly 50% of veterans who are currently uninsured.

Medicare

Part of the Government Health Program is Medicare, a national social insurance program administered by the U. S. federal government since 1966. It currently uses 30 private insurance companies across the United States and guarantees health insurance for America’s aged 65 and older who have worked and paid into the system, younger people with disabilities and people with end stage renal disease.
Benefits

Part A: Hospital Insurance
Part B: Medical Insurance
Part C: is a public supplement option
Part D: covers many prescription drugs

Part A:

This covers in-patient hospital stays including semi-private room, food and tests. The maximum length of stay is typically 90 days. The first 60 days would be paid by Medicare in full except for one copayment of $1, 216 at the beginning of the 60 days. Days 61-90 require a copayment of $304 per day.

Medicare penalises hospitals for re-admission. Medicare will take back from the hospital these payments, plus a penalty of 4 to 18 times the initial payment. The highest penalties on hospitals are charged after knee or hip replacements, $265, 000 per excess readmission. The goal is to encourage better post-hospital care.
The beneficiary is also allocated “lifetime reserve days” that can be used after 90 days. These lifetime reserve days require a copayment of $592 per day and the beneficiary can only use a total of 60 of these days throughout their lifetime.

Part B

Part B helps pay for some services and products not covered by Part A, generally on an outpatient basis.
This coverage begins once a patient meets his or her deductible of $147 (2013), then typically Medicare covers 80% of approved services, while the remaining 20% is paid by the patient. This section covers:

physician and nursing services
x-rays
laboratory and diagnostic tests
influenza and pneumonia vaccinations
blood transfusions
renal dialysis
outpatient hospital procedures
limited ambulance transportation
immunosuppressive drugs
chemotherapy
hormonal treatments
durable medical equipment
prosthetic devices
cataract surgery and spectacles
oxygen for home use

Part C

A Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organisations, Preferred Provider Organisations, Private Fee-for-Service Plans, Special Needs Plans and Medicare Medical Savings Accounts Plans.

Part D

Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-For-Service Plans and Medicare Medical Savings Accounts Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.