While Medicare costs seem to always be increasing, the good news is that the coverage gap, part of Part D, is going down.
The coverage gap, also known as the “doughnut hole” is a temporary limit on what Part D, the drug plan, will cover for prescription drugs. In other words, the doughnut hole is defined as the period where you pay for your drugs out of pocket.
Not everyone will enter the doughnut hole. The doughnut hole begins only after you and your plan have spent a certain amount on covered drugs. In 2017, that doughnut hole or gap starts when total drug costs reach $3,700. If a beneficiary is in that hole, they get a 60 percent discount on brand-name drugs and a 49 percent federal government subsidy for generic medications.
In addition, there also is catastrophic coverage where the government starts picking up most drug costs when out-of-pocket expenses for a patient are over $4,950.
It is always a good idea to check into your health insurance options periodically. It is important for you to understand your coverage and how it changes.
There are a number of opportunities to enroll in Medicare. Being aware of all the possible enrollment periods can help you avoid penalties.
There are multiple enrollment windows in addition to the initial seven-month initial enrollment period. If you missed signing up for Part B during the initial enrollment window, you are not working or are not covered by a spouse’s health insurance through work, you may sign on for Part B during the general enrollment period from January 1 to March 31. If you sign up during that period, you coverage begins July 1. However, you will pay a life-penalty of 10 percent for each 12-month period you did not sign up for Part B.
If you are currently working and are covered by an employer’s plan, you may sign up later without penalty during a special eight month enrollment period applicable if you lose employer health care coverage. If this special enrollment period is missed, you need to enroll in the general enrollment phase.
The open enrollment period, from October 15 to December 7 every year, permits you to change Part D plans or Medicare Advantage for the next year. Note that you may now change Medicare Advantage plans outside of the open enrollment period if you choose a plan with a government awarded five-star quality rating.
Ideally, it is best to sign up for Medicare early, but you can certainly wait until your 65 birthday. It is important to remember though that signing up late may incur penalties that increase your monthly payments permanently.
If you already receive Social Security benefits, you are automatically enrolled in Parts A and B. You can opt out of Part B, since is has a monthly cost. However, if you choose to keep it, the premium cost will be deducted from your Social Security benefits.
If you are not on Social Security, you have to sign up for Parts A and B yourself. Starting three months before your 65 birthday, there is a seven-month period referred to as an initial enrollment window that begins. This window closes three months after your birth month. To make certain you get coverage for when you turn 65, you need to sign up in the first three months.
You may be able to delay signing up for Medicare is you are still working and your employer is providing health insurance or if you happen to be on a working spouse’s health insurance plan. If you lose coverage provided by an employer, you must sign up for Medicare within eight months to avoid serious penalties when you enroll.
Each year the government releases the costs for Medicare premiums for the coming year. While Part A, hospital insurance, is free for most people, the premiums for Part B — doctor visits, tests and procedures — and Part D, drug coverage, are paid for by the beneficiaries.
The amount payed in premiums is based on your income tax return from two years prior to the current fiscal year. There are five income thresholds on which premiums are calculated from. If your income is above a certain threshold then your Medicare premiums may also be higher. It is best to check annually, with a knowledgeable insurance agent, for any changes in the income thresholds. This is important to remember because if your increases you will likely pay more in premium for Parts B and D.
For example if your adjusted gross income as a single taxpayer, plus tax exempt interest, is over $85,000 or your income as a married couple and filing jointly is $170,000, Medicare premiums for Parts B and D can come with a surcharge.
In 2017, higher wage earners’ premiums range from $187.50 a month to $428.60 a month for Part B. For Part D coverage, high earners pay an extra charge from $13.30 to $76.20 in addition to regular premiums.
Since these numbers change based on the wages you earn and any changes in the health insurance coverage requirements, it is best to speak to a health insurance carrier to determine what you may be paying for premiums each year.
Selling Medicare Supplement plans is a booming business. Medigap plans were enrolled close to 12.6 million American seniors in 2016, up six percent from 2015.
The sale of Med Supplement plans or Medigap is doing well with not signs of slowing down. In fact, the most recent Healthcare Business Strategy report, authored by Mark Farrah Associates’ (MFAs), Medicare Supplement plans paid out $21.7 billion in claims in 2016 and earned $27.9 billion in premiums.
The most popular Medigap plan was Plan F, which is considered to be one of the most comprehensive policies available on the market today. According to MFAs figures close to 7 million people enrolled in Plan F representing 55 percent of the market. However, in 2020 Plan F will no longer exist as an option for newly eligible Medicare recipients thanks to the Medicare Access and CHIP Reauthorization Act of 2016 (MACRA). A second Medigap plan that grew in popularity was Plan G, registering a jump of 364,000 members in 2016.
American seniors could always rely on the Medicare program to help them stay healthy, while allowing them to choose plans that suit their lifestyle and budgets. However, the future of Medicare is uncertain. While on the campaign trail, Trump stated that he would not cut Medicare or Social Security. However, the budget director Mick Mulvaney, told a conservative radio host that he is looking for ways to reform Social Security, Medicare and Medicaid, working around President Trump’s campaign trail promise to leave the programs untouched.
Medicaid may face significant changes and become a block-grant program where each state gets a fixed sum of money from the federal government, which may be a smaller amount than what they receive now. At present, the amount of money a state qualifies for is based on how many people are enrolled in Medicaid.
Currently, according to figures presented to the Senate Budget Committee by Mulvaney, the national debt has risen up to $20 trillion, and without reining in social programs such as Medicare and Social Security the debt will continue to grow. Mulvaney advocates core fundamental changes, such as increasing the retirement age and trimming Medicare benefits for wealthier recipients under the age of 55 to help reduce the burgeoning debt.
Last week, President Trump’s proposed budget landed on Capitol Hill. The plan cuts Medicaid, welfare, food stamps and the social security disability program. Trump’s budget, however, faces opposition from both parties and will likely not become law.
Posted on Friday, June 16th, 2017. Filed under
Medicare.
Right before the House vote on the new health care legislation, the Senate approved a $1.1 trillion spending bill that will finance the government until September and prevent a government shutdown. The approval of the spending bill allowed the House to safely pass the American Health Care Act (AHCA).
While House Speaker Paul Ryan is hopeful that the Senate can pass a bill meant to replace the Affordable Care Act (ACA) in a couple months, this is highly unlikely. The Senate, which moves more slowly than the House, will now begin work on creating a health care plan that will be acceptable by all the factions of the Republican party. This could mean that the Senate will need to write a new bill all together.
Because the members of the GOP are divided on the issue of a new health care bill it may prove to be a challenging task to pass it. Furthermore, the Senate needs a 51-vote majority to pass the bill, which allows them only two defections. The Senate is expected to take until August to push a bill through with the needed support. When the Senate produces a new or updated bill it will return to the House for a vote.
Until the Senate and House agree on a new health care bill, the ACA remains in place. Thus, those selling and buying health insurance will be adhering to the rules and regulations already in place.
On May 4, Congress approved legislation to repeal and replace major parts of the Affordable Care Act (ACA). The latest version of the American Health Care Act (AHCA) rolls back the expansion of Medicaid and allows states to opt out of covering patients with pre-existing conditions. The bill now faces uncertainty in the Senate.
The proposed AHCA would end Medicaid’s status as an open-ended entitlement. The bill will also repeal taxes on the super rich, insurers and drug companies. Furthermore, under the new bill, states could adjust coverage for essential medical services such as maternity and emergency care. The latest AHCA seems to be a patchwork of provisions.
The bill will most likely be amended by the various Republican factions within the Senate. In addition, the Senate Republicans have been working on their own version of the health care bill, which will consider the ideas already in the House bill. Once the Senate passes its new or updated version of the AHCA, that bill will return to the House for another vote.
However, the biggest unanswered question with any replacement of the ACA is that no one can calculate how many people would be covered under a new health care bill. By May 22 the Congressional Budget Office (CBO) will release its report on the cost and potential coverage of the new AHCA. The analysis of this bill will be complicated by the fact that it leaves a lot to the states. It will be up to the Senate Republicans to consider the implications of the upcoming CBO report.
Generally it is a good idea to get drug coverage when you are first eligible because if you do not, you may pay a late enrollment penalty. You can only avoid a late fee if you either take advantage of the Extra Help program or have other credible prescription drug coverage from a union or employer.
If you do not know if you are going to be assessed a penalty, Medicare will let you to know what the penalty is and what amount you need to pay for your premium. Typically, the penalty is then paid as long as you have a Medicare drug plan. Therefore, it is important to know the deadline of enrollment and do so on time in order to avoid penalties.
There are two ways for you to obtain prescription drug coverage. One way to do this is through a Medicare Prescription Drug Plan Part D, which adds drug coverage to the original Medicare; some Medicare Private Fee-for-Service plans; Medicare Medical Savings Account plans; or some Medicare Cost plans. The second way to get coverage is through a Medicare Advantage Plan Part C where patients get all of Medicare Part A (hospital), Medicare Part B (medical), and Part D (prescription drugs) in this plan. Those who enroll must have Part A and Part B to be in a Medicare Advantage Plan (MA-PD).
Here are the four ways to join a drug plan:
Note: Joining a Medicare drug plan, may impact your Medicare Advantage Plan (Part C) and you will revert back to Original Medicare if you join a Medicare Prescription Drug plan (Part D) and if your Medicare Advantage Plan included coverage for prescription drugs.
Posted on Friday, April 28th, 2017. Filed under
Medicare.
It is important to understand that not all patients have an annual deductible, so the observations in this post refer only to those who do pay a deductible. Once that deductible limit has been reached, what usually happens is that the patient then has to pay a co-insurance or co-payment for every prescription. Co-payments are typically a fixed dollar amount. Co-insurance payments have the individual pay a percentage of the total cost of the drug.
Medicare Part D also has what is referred to as catastrophic coverage. If a patient’s annual out-of-pocket reaches $4,950 (2017), only a small co-payment or co-insurance amount is paid for all covered drugs for the balance for the year.
If you qualify as low income Medicare Part D has an Extra Help provision that may help an individual or family reduce drug costs even more. Those who qualify do not pay more than $3.30 per covered generic drugs or $8.25 for a brand name covered drug.
Want to find your level of possible Extra Help? Visit the Medicare website at: https://www.medicare.gov/your-medicare-costs/help-paying-costs/extra-help/level-of-extra-help.html
Posted on Friday, April 21st, 2017. Filed under
Medicare.
Medicare Part D costs vary greatly from one individual to the next. Expenses, per person, change in response to the drug used, the drugstore filling it out, the type of plan and if the person qualifies for Medicare’s Extra Help program. The Extra Help program helps people with low incomes pay prescription drug program costs like premiums, deductibles and co-insurance fees.
Medicare Part D costs vary because all the Part D plans have their own terms and rules for the policies offered. All plans are required to offer minimum coverage that then can be built on with additional offers. For example, some plans will provide tiered systems where only some brand-name drugs are less expensive.
Nonetheless, there are some common features to be found in all Part D Medicare Plans. For instance, most individuals pay a monthly premium that increases with the person’s salary. All patients do not pay the monthly premium and this is applicable when it comes to deductions. Many Part D Medicare plans charge an annual deductible prior to coverage becoming effective. Deductibles are different for each plan. For 2017, Medicare has stated the maximum deductible is $400.00.
Posted on Friday, April 14th, 2017. Filed under
Medicare.
