Seniors living on a fixed income can feel frustrated with Medigap premium increases. Unexpected changes in Medigap rates can prove to be difficult to pay for. However, Medigap does offer multiple ways for seniors to save money and lower premiums.
When searching for ways to lower Medigap premiums, seniors can take advantage of household discounts. Check to see if your chosen Medigap carrier offers household discounts. For example, many carriers offer discounts if both spouses have a policy with the company. Savings of even five percent add up to a lot of money over the years. Furthermore, some companies offer this discount option to anyone living with another person, whether they are married or not even if that individual does not have a policy. It is worth asking about to see if you qualify to save money.
Another way to save money is to opt for Medigap Plan G. While Plan F has been the most popular, it is not always the best value. Plan G works just like Plan F, except that you pay the once-a-year Part B deductible ($183 in 2017). It is possible to find a Plan G that can save more than $183 in premiums and after you pay your deductible, you pocket the difference.
Shopping around for reasonably priced policies is the smartest way to go. And one area that you can likely save money is shopping for all broker prices in your market. This means that rather than just go with the big name, well-known insurance carriers (like United Healthcare or Cigna), ask about getting quotes from all carriers in your market area. Some lesser-known companies that offer good deals with the exact same policy coverage.
Recently high-deductible health plans have become trendy because they offer low premiums. What many people do not realize is that Medigap has a high-deductible health plan option — high Deductible Plan F. In this plan Medicare pays its share and you pay yours until you reach the plan deductible ($2,200 in 2017). Once you reach the deductible, the plan kicks in and pays 100 percent of your share for the remainder of the year. Premiums for this particular plan are exceedingly low, saving you hundreds of dollars a year.
Posted on Friday, September 8th, 2017. Filed under
Medicare.
New beneficiaries of Medicare often ask: Which type of coverage is best, Medigap or Medicare Advantage? Because each individual’s situation is different, it is important to note that what might be perfect for one person would not work for another. While Medicare Advantage plans, also called Part C Medicare, usually have lower premiums, Medigap plans are easier to comprehend.
In 2016 a report released by the Kaiser Family Foundation indicated that roughly 31 percent of Medicare beneficiaries decided to choose Medicare Advantage. Medicare Advantage plans have either an HMO or PPO network through which members access their healthcare. This allows Medicare Advantage to offer low premiums with some plans having $0 premiums. In choosing Medicare Advantage, members have access to a built-in Part D benefits.
Medicare Advantage plans may also include other attractive benefits, such as routine eye and dental care. But be aware that there are back-end costs in the Medicare Advantage plans. The costs may be minute if you are healthy but could escalate later if you require more care. Therefore, it is a good idea to take the time to find out what to expect out of your chosen Medicare Advantage plan.
The two important areas to examine closely in your Medicare Advantage plan are deductibles and copays. In order to find out more about deductibles for the plans that interest you, first check the Summary of Benefits to see what you are responsible for right up front. Medicare Advantage plans cover the same Part A and B services offered by Medicare, so a careful comparison is to your advantage.
Furthermore, Medicare Advantage members pay copays for medical care. Copays are very common for ER visits, lab work, ambulance trips, x-rays and other services. For example under one plan a beneficiary with a $15 copay at their primary care doctor’s office will pay a $45 copay to see a specialist. The copay amounts vary by plan, thus it is a good idea to research the plan you are choosing before signing up. To help you determine what may be best for you financially, try to calculate what you may spend in an average month on health care. Doing your research before you need to make choices should provide you with the best outcome.
Posted on Friday, September 1st, 2017. Filed under
Medicare.
This year will see one of the largest Social Security cost-of-living adjustment since 2012. However, Medicare premiums are said to increase as well.
Even though the Social Security COLA is not announced until October, inflation trends are pointing to an increase of roughly two percent. Previously, there was zero COLA in 2016 and only a 0.3 percent in 2017.
The cost-of-living adjustments are determined automatically through a formula tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). From 2013 through to 2015 annual COLA increases have averaged about 1.3 percent. Low COLAs are relatively rare, but 2018 will be an unusual year for retirees.
The last couple of years saw non-protected Medicare beneficiaries paying most of the cost of rising Part B premiums. In 2017 they are paying $134/monthly versus protected beneficiaries who are paying roughly $109/month.
For a retiree receiving the average Social Security benefit of $1,360 per month, a two percent increase would translate into $1387.20 per month. However, Medicare Part B premiums are taken off Social Security. Next year, the impact of Part B premium cost will vary based on the “hold harmless” Social Security provision.
The “hold harmless” law states that the Part B increases must not exceed the amount of the COLA — ensuring that net Social Security benefits do not decrease. This provision applies to roughly 70 percent of those enrolled in Medicare in both programs. The “hold harmless” provision does not include those who delayed filing for Social Security benefits, and possibly some state and federal government retirees. Well-to-do seniors are not protected under the “hold harmless” law.
When the 2018 COLA kicks in it will help spread Part B costs across the total Medicare program, in effect leveling the playing field where non-protected enrollees get lower premiums and protected enrollees will pay more.
Across the board it appears the COLA formula, even with the assistance of the “hold harmless” law, is not able to keep American seniors stable with ever increasing inflation. Rising health care costs threaten to dramatically eat into net Social Security benefits over time. Many seniors may find themselves working longer to delay the number of years of Medicare payments to be made.
Posted on Thursday, August 31st, 2017. Filed under
Medicare.
Medicare does not offer coverage for younger spouses or dependent children when the other spouse qualifies for Medicare. No one may receive Medicare benefits prior to the age of 65, unless eligible at a younger age due to a disability. What can be done to cover the younger spouse?
There are some options that may be considered for the younger spouse who is not ready to retire. Those options include planning on working past the retirement age of 65, if that is at all possible, which would permit the younger spouse to continue to be covered under an employer health insurance plan until they are eligible for Medicare.
Failing that option as a possibility, there may be employer options open, such as the employer providing retiree health benefits. This is something that would need to be checked with the benefits administrator along with asking whether or not your spouse may continue under their plan as well. In addition, if your spouse is employed, they may switch to their employer’s provided health care plan.
Individual health insurance through the Health Insurance Marketplace, or Obamacare, may be worth considering as well, especially since the proposed health care plan by the current White House administration did not pass, keeping the health care plan in place. Thus, insurance pricing is currently very competitive. The policies offer comprehensive health coverage, insurers cannot deny coverage or charge extra for pre-existing conditions.
An option to consider is COBRA. If you work for a firm that has 20 or more workers, once you make the change to Medicare, your younger spouse could stay with the company insurance for 18 to 36 months. While this is an expensive option, it may work for you depending on your circumstances. If the company has fewer than 20 workers, continued coverage may be available provided your particular state has what is referred to as “mini-COBRA.”
If your income is below the 400 percent poverty level ($64,080 for couples, $27,520 for individuals) then you may be able to receive a tax credit to reduce the amount you will have to pay for a health insurance policy.
For information on insurance plans in your state visit https://www.healthcare.gov/ or call the toll-free helpline at 800-318-2596.
Some Medicare beneficiaries, those that are fairly new to the program, are not aware that if they do not agree with a payment decision or coverage decision made by a Medicare health plan or by Medicare, that they might file an appeal.
There are five levels involved in the appeals process and a beneficiary can proceed up a level if the appeal is denied at a lower level. In order to prepare for an appeal, make sure to gather any and all information from your physician or healthcare practitioner.
If you need a quick decision because your health is in jeopardy, you may request a quicker decision. If your doctor or your Medicare plan agrees, a decision must be delivered within 72 hours.
Always be aware of what Medicare covers and does not cover and what options are available to you if you disagree with decisions made that may affect your health.
Many Medicare beneficiaries do not realize that once they sign up for Medicare they are eligible to get a number of free preventive services. Additionally, for new beneficiaries, Medicare Part B offers a “Welcome to Medicare” preventive visit during the first 12 months of enrollment. During this visit, your doctor will review your medical history and provide you with information regarding any services you may need. Beneficiaries who have had Medicare Part B coverage for over 12 months qualify for an annual wellness visit to update or get a personal health care plan from your doctor.
Medicare also provides its beneficiaries with other free preventive services. Some of these services are listed below:
A cardio-vascular screening every five years
Annual mammograms
Annual flu shots
Annual screenings for prostate cancer
Annual screenings for cervical cancer
Annual screenings for colorectal cancer
When you sign up for Medicare, take the time to find out what it offers. Preventive services are important for all beneficiaries to take advantage of as theses benefits lead healthier lives. Always read your health care insurance policies and if you have questions, speak to a health care insurance expert agent.
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.
