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What you do not know about Medicare in retirement can cost you

As with any purchase, it is good to know what you are buying, before you do. Before purchasing, you should ask yourself what the product does and can do for you. Medicare is one of those things.

Did you know that an average couple could spend at least $280,000 on retirement health care. Did you also know that only approximately half of Medicare qualified beneficiaries have a financial plan in place. Many seniors find themselves unprepared for the costs of Medicare in their retirement. That is not a place you would want to be. Medicare costs can add up when you are responsible for co-insurance, premiums, deductibles and co-payments.

However, the list of out-of-pocket expenses does not end there. You will also need to shell out money for dental care, supplemental health insurance (Medigap), hearing tests, the cost of prescriptions and vision care. This sudden change in what you are responsible for if you have always had health insurance through an employer is quite drastic for many. In fact, studies have shown that over 33 percent of American adults are more concerned about paying for health care in retirement than in paying off debts or paying for lifestyle expenses. Of that number, only about half have a future financial plan in place and many do not realize all the extra expenses they are going to bear.

While there is a large number of Americans about to become Medicare beneficiaries that take the time to do some research before retirement, there are an equal number of looming newbies that are not certain where to look, what to look for, how to save, what is best for their needs, when the benefits start, when to enroll and a whole host of other critical information required to understand how Medicare (and Medigap) work. Research may help, but due to the complexity of the system, how rapidly it is changing right now and in the future, it is best to discuss your needs with a highly trained insurance agent.

What can an about-to-be Medicare beneficiary do to save for the inevitable future health care expenses? Most financial experts suggest a health saving account, available via a high deductible health plan. Why a health savings account? They are a tax-free investment accounts — all contributions are made pre-tax, and any earnings or interest accrued is tax-free. If you take money out for necessary medical expenses, then that is also tax-free.

There are always alternatives to be found to suit your budget and lifestyle. It just takes time, and patience and research in advance of your enrollment date to have it all make sense.

Medicare does not pay for all medical expenses

If you are close to your 65th birthday, then you may be wondering about Medicare and how it works. It is a good time to begin to figure out what you want and should need from your healthcare coverage. On average roughly 10,000 baby boomers turn 65 every day.

The two most important things you need to know about Medicare are: Medicare does not cover everything, so plan for extra expenses, and if you do not sign up when first eligible (and are without qualifying coverage elsewhere), you pay a life-long penalty for late enrollment.

Many people think that Medicare is free. This belief likely comes from the assumption that since they paid into Medicare while working, thanks to the employer withholding a sum of their earnings, Medicare is free. However, that is not true. Medicare has deductibles, premiums, co-pays and other assorted expenses.

The second reason, that may contribute to the belief that Medicare is free probably emerged from the trending talk about “Medicare for All.” Many assume that “Medicare for All” means that it is or will be free. That is not true. The slogan, “Medicare for All” is a call for Medicare to be open and available to all.

Currently Congress is sorting through various bills that hope to achieve a Medicare system with no co-pays, premiums or deductions. In the meantime, you need to know that the existing Medicare programs cost you money the instant you enroll. So, it is best to be prepared in advance, spend time doing cost comparisons, know what you want and need, make a list and ask questions before agreeing to buy Medicare. Moreover, remember that long-term care (if required), dental, over-the-counter medications and basic vision care are also extra expenses you need to cover as well.

If you have worked for ten years or more, you do not pay premiums for Medicare Part A, but it does have a deductible of $1,364 per benefit period and some caps on benefits. Ask your insurance agent to explain that to you in detail so you are familiar with what is and what is not covered. Part B has a standard monthly premium of $135.50 right now and comes with a $185 deductible for 2019. While Part B does not cover medications, Part D covers medications. You can also use a stand-alone plan in original Medicare or you could opt for Advantage Plan Part C to help you cover the costs of medications.

Planning for and determining you healthcare coverage in retirement is all about research. Knowledgeable and experienced insurance agents are great assets in helping seniors determine what is best for their budget and needs.

Get affordable health insurance by shopping around

When it is time to get health insurance, the first thing people think is that they cannot afford it and that they will not be able to find what they need, so why bother. Contrary to popular belief, you actually can find reasonably priced health insurance by taking the time to shop around.

We do not often buy the first car or house we see, so why would we buy the first health insurance policy we find? To that end, ask around and get at least three to five different quotes from different insurance agencies. For example, ask for a quote from an insurance company that sells all types of insurance, including health insurance and then, ask an agency that only sells health insurance. Three to five quotes offer you a wider variety of choices before making the final buying decision.

Never buy the first policy you find no matter how much of a good a deal you think you may be getting. Why? Because you will not know if it is the cheapest deal unless you compare it to other options and other policies with other agencies. If by chance the first policy does turn out to be the cheapest, then you have made a great buy.

Another way to save money on buying an insurance policy is to trim it down to what you absolutely really need. There is no sense in over-insuring. So just make certain you have enough coverage, but that you are not paying for coverage that you do not need and would never use. Along the same line of thinking, give some consideration to a high deductible plan and a health saving account combination or ask an insurance agent what would be a good health insurance combination that meets your needs but does not break your budget. There are often incentives and financial breaks to be had in a combination health insurance plan, so ask and find out what you could save.

Are you still employed and receive work-sponsored health care insurance? Even if you buy supplemental health insurance, it tends to be less expensive than going out on your own and buying a policy. A workplace sponsored health insurance plan tends to be cheaper than private insurance.

The real secret to finding reasonably priced insurance? Shop around, be diligent in asking questions, do not over insure yourself and seek ways to reduce your payments (if you get company-sponsored insurance). It may take time, but in the end, you are likely to get what you actually want and need.

Buying Health Insurance? Do Your Homework First

Everyone knows that in some form or another, they need health insurance, whether it is for an individual or a family. But the problem is, where is the best place to look for and eventually buy it?

Before actually buying insurance, it is a good idea to research the market and discover what type of plan is the most beneficial for you or your family. There are certainly a lot of choices available, but the fact is that not all insurance is created equal. Asking the neighbor what they have for health insurance may sound like a good idea, but when you check it out you find that it would not suit your needs.

Where to start? Make sure to have a list that outlines who needs insurance, what they want and require, the birth dates and social security numbers of everyone, pre-existing conditions, and whether or not they smoke. In general, smokers pay a higher rate for health insurance.

The next step would be to compare prices for policies you think may be suitable. Most insurance websites are fairly comprehensive, but realistically speaking, cannot list or outline all possible alternatives for insurance coverage.

So long as you have a general idea of what you want and need, it would likely save you time to fill out the contact form and ask an insurance agent to contact you. Use the list you made with your information on it and make sure to ask as many questions as you can. The insurance agent is going to know what you need and what would likely be a good fit for your budget and circumstances.

Be alert for any possible discounts available on different plans. Perhaps there are one or two that are close in coverage, but one is pricier than what you wish to pay. Ask about a discount. You never know until you ask. If you are intending on purchasing more than one insurance product, absolutely ask for a discount. Start with your existing insurance company first to see if they can offer you a deal and when they cannot see what else is out there.

One other tip you can use to your benefit is to look specifically for an insurance agent or agency that only sells health insurance. You are guaranteed to find something that suits your needs simply because the company does not sell a wide range of other products and can instantly ensure you get what you are looking for. Since they specialize in health insurance, they would be up-to-date with the latest new policies and be able to explain them to you in greater detail than a general all-purpose insurance agency that sells other insurance products and health insurance.

The final piece of advice to help you find insurance is to spend the time to read all the conditions and terms in the policy you are considering. You have to know what is and what is not in the policy so you do not run into a sticky situation later when you need health insurance coverage and find out that something is not covered.

Foreign Travel With Medicare May Be Problematic

Do you travel a lot? If so, make sure you check whether or not Medicare is in force when you are abroad.

Read over your insurance policy and find out what it does and does not cover. If, at any point you do not understand what the document encompasses, talk to a qualified insurance agent and have them walk you through your policy before you start to travel with Medicare.

You may not know that Medicare Advantage Plans and Original Medicare do cover urgent or emergency medical services anywhere in the United States and its territories. So if you have a Medicare Advantage Plan, you are getting urgently or emergency medical care that:

• Limits on how much the plan bills you by being out of network
• Must cover follow-up care in relation to the emergency if delaying it puts your health in danger
• Your plan cannot demand you see an in-network provider
• You can appeal if your plan denies care costs
• You do not need a referral
• That if the condition was not an emergency but looked/felt like it was, Original Medicare/ Medicare Advantage must cover care

What happens if you are denied coverage of an urgent or emergency medical assistance because you went to an out-of-network provider without an OK or a referral? Appeal the denial and get the physician to provide the appropriate documentation that the medical services rendered were urgently needed or in response to an emergency. Your State Health Insurance Assistance Program can help you in putting together an appeal.

Medicare does not cover medical costs while you are travelling outside of the United States. However, the plans must cover care in certain circumstances, including: paying for care received on a cruise ship while that vessel is in U.S. territorial waters; paying for E.R. services in Canada while traveling a direct route between Alaska and another state and the nearest treating medical facility is in Canada; and in certain limited cases, Medicare may also pay for non-emergency inpatient care in a foreign hospital.

There are a few Medigap policies that offer coverage for travelers’ abroad and they include Medigap plans C through G, M and N and offer 80 percent of the cost of emergency care.

If you do not know what your plan does and does not cover, check your policy for specific rules, and if that is not clear, contact the insurance agent and ask them to discuss the relevant sections and what they mean when you are travelling outside the United States.

Open Enrollment Period for Medicare and What to Consider

Did you know there was a special enrollment period for senior citizens from January 1 until the end of March? It is supposed to be the same for next year, so mark it on your calendars.

The most important thing to remember about this special three-month period is that it offers beneficiaries a window during which they can switch some of their Medicare arrangements. During this time, it is not a bad idea for seniors to consider their options regarding their Medicare plans. This is even more crucial if you are soon to be turning 65.

Around enrollment time, solicitations for Medicare Advantage come flying into mailboxes with light speed, each offering something special, unique. All the information is intended to inform readers that if they have a Medicare Advantage plan, they can switch to another Medicare Advantage plan or drop a plan, return to the Original Medicare and buy a Part D stand-alone drug benefit. There seems to be quite a bit of flexibility for seniors looking to make changes in their Medicare plans.

A word of caution, along with all the things that seniors can do, beware there is one thing you cannot do, and that is if you happen to have traditional Medicare partnered with a stand-alone drug plan, you cannot switch to a new drug benefit that may save you money on prescriptions. That may only be accomplished during open enrollment in the fall. So, the special enrollment period is actually a second chance for seniors to save on drug costs – one of the most sought after benefits in this age of expensive pharmaceuticals.

Remember though, if you choose to divest yourself of a Medicare Advantage policy and cut over to traditional Medicare, you might find it difficult to buy a Medigap policy to plug the holes. In fact, there are only four states that offer guaranteed issue Medigap insurance, even if beneficiaries have pre-existing conditions – Maine, New York, Massachusetts and Connecticut. This may not be possible in other locations.

The little known trick to getting good drug benefits that actually saves money is to shop ahead of needing a drug plan benefit and find out which one can save the most. If you research that information before you hit the next special enrollment period, you could end up saving upon switching plans. Research and asking a lot of questions are two of the most important things seniors need to do when it is time for special enrollment.

Medicare Policy Non-Renewal Notices Can Be Confusing and End in Cancellation

Due to the confusing nature of letters and notifications from insurers about changes to Medicare, often, Medicare Advantage beneficiaries end up not renewing their contracts. Moreover, what happens if a Medicare Advantage plan was not renewed by the insurer and the beneficiary did not understand that?

While this situation can be confusing, the beneficiary does have a special enrollment period available to make changes to their Medicare coverage. Most years, that special enrollment lasts until February 28. If the beneficiary opts to remain in the Original Medicare, they would typically enroll in a Medicare Part D drug plan and a Medigap plan. Most insurers advise Medicare beneficiaries when they discontinue coverage that the insured has a “guaranteed issue right” for Medigap plans.

The beneficiary would also be well advised to consider a Medicare Part D drug plan to handle the cost of prescription drugs. There are numerous Part D options that can be compared by using the Find Health and Drug Plan tool at www.medicare.gov. In the alternative it is always easy to call 1-800-MEDICARE to get assistance in comparing costs and coverage options.

What if the beneficiary wants to choose another Medicare Advantage plan? It is a good idea to figure out precisely how the plan is to be used before making any calls or doing research. Some Medicare Advantage plans have hearing, vision and dental services, services that a beneficiary may not need. Or they may wish to choose a plan that offers all three. Again, beneficiaries have the option of going online to see what kinds of Medicare Advantage plans are available for 2019 and use Find Health and Drug Plan tool at www.medicare.gov.

It is worth noting that Medicare Advantage plans usually have a contracted network of hospitals and physicians and also have out-of-pocket expenses that the beneficiary is responsible to pay. It is worth asking for a summary of benefits for any chosen option in order to compare various alternatives.

Medicare is changing but it is not clear yet how. That leaves beneficiaries struggling to make the best available choices open to them at the time they come up for enrolment or when they first become eligible for Medicare. The one thing to know with certainty is that whatever is purchased now is likely to be portable later and that in buying the best option(s) now is likely to mean cost savings in the long run. Always know that if you are having trouble figuring out what your best Medicare options are, you can always call a knowledgeable insurance agent who can help you make an informed choice.

If You Are New to Medicare Consider Medigap Plan G As an Option

With the current uncertainty in the health care industry and questions about what changes may come to the Medicare program, it is tough to know what Medigap plan to choose if you are new to Medicare.

While it is good to have a variety of choices when making health care decisions, it is often confusing to know which one may be the best for what you may need. Medigap consists of numerous supplemental plans for those that are eligible. Moreover, 2019 has brought changes in offerings for beneficiaries, so it is best to review what those are before making a final decision.

Medicare Part A and B provide hospital and medical insurance, but involve a lot of out-of-pocket expenses. To get a handle on the costs, you can buy a Medigap policy, also referred to as Medicare supplement insurance. These policies help cover costs that Medicare Parts A and B do not pay. For 2019 and 2020 it may be a good idea for beneficiaries to consider Plan G.

Doing research will benefit any beneficiaries considering switching or new Medicare customers who need a comprehensive Medigap pan. Choosing a Medigap plan, however, can prove to be confusing and complex. Additionally, Medigap plans change year to year, and what you once had may no longer be offered and/or you are not happy with what replaced your previous plan. When plans change, it is difficult for beneficiaries to compare and contrast them. What was once popular may not be offered or has changed in ways you are not comfortable with and want something else.

It is important to note that Medigap policies are standardized in 47 states and each has a letter to identify it. Three states, Wisconsin, Massachusetts and Minnesota, have their own standardization for Medigap policies, meaning there is no Plan F in those states.

Each plan has different benefits and cost sharing levels. For instance, Plans K and L, cover six benefits, but for five out of the six benefits, the beneficiary pays anywhere from 25 percent to 50 percent of the cost. On the other hand, Plan F covers the maximum permitted for all nine benefits and for this reason Plan F is often referred to as the “Cadillac of Medigap plans.” This means that once the premium is paid, the plan pays from day one due to first dollar coverage.

Another option to consider is Plan G that covers eight of nine benefits. The plan holder is responsible for the Part B deductible. For 2019 the Part B deductible is $185. Once the first $185 is paid, Medicare covers costs for the rest of the year. However, beginning January 1, 2020 insurance companies will no longer sell new Medicare beneficiaries a Medigap policy that covers the Part B deductible. That would be Plans F and C. However, if you have one of those plans now you can continue with it.

If you are going to be new to Medicare and Medigap by 2020, do your research early as Plan F is losing its competitive edge pricing and there are some question as to whether or not Plan F will remain viable until December 2019. Currently many plans charge more to cover Part B deductible, much more than $185. If you are in Wisconsin, Massachusetts or Minnesota there is not going to be coverage available for Part B deductible sold to beneficiaries in 2020.

It is obvious the health insurance industry is in transition and must remain responsive to government changes relating to eligibility and payment schedules. In the meantime, if you have Plan G or are about to be eligible for Medicare now, try Plan G, which will continue past 2020 if you enroll now.

More Things to Know About Your New Medicare Card

Even though your new Medicare cards have a specific new number, unique only to you, and you think no one could ever be able to use it, be wary. There is a lot of Medicare fraud in the United States.

To avoid any potential problems with your new card, only give the new Medicare Number to insurers, pharmacists, physicians and other health care providers that you know are medical personnel. People you know and trust with your card.

Forget your card at home? It happens. You, another health care provider or your doctor’s office may be able to look your new number up online.

Use your new Medicare cards right away and destroy the old one. However, if you do not have your new card yet, you may still use the old one until January 1, 2020. If you do not have your card, write, call or long into MyMedicare.gov and find out if it was sent to the right address.

New Political Landscape May Result in Medicare Negotiating Drug Prices

Given the uncertain political climate, any new proposed legislation may or may not come to pass. Just recently a bill was introduced that could let Medicare negotiate lower drug prices.

House Democratic members and one Republican indicate that if it can be passed, the bill would provide more power to the Health and Human Services (HHS) secretary to regulate Part D of Medicare. Part D covers drugs America’s seniors get. While some politicians seem to favor this kind of a move Big Pharma vigorously opposes it as do many Republicans. Right now, private insurers and pharmacy benefits managers do the drug price negotiating.

The rationale behind negotiating prescription drug prices for the over 43 million Medicare Part D beneficiaries is because it is one of the best methods to lower medication costs and open the door wider for seniors to get the medications they need at reasonable prices. The idea of letting another body negotiate drug prices is not new. There is a similar program run by the Department of Veterans’ Affairs. According to a House Committee on Oversight and Government Reform report if the government negotiated drug prices, it would potentially cut government spending by $156 billion over a ten-year period.

Another analysis of drug pricing in the U.S., compiled by Rx Savings Solutions, found that over 36 drug manufacturers raised drug prices on hundreds of medications by an average of 6.3 percent.

Trump tweeted his frustrations about drug hikes this weekend, saying that companies “were not living up to their commitments” on pricing. The comments followed an analysis by Rx Savings Solutions that found more than three dozen drugmakers raised the prices on hundreds of medicines in the U.S., for an average increase of 6.3 percent. The Pharmaceutical Research and Manufacturers of America (PhRMA), says the analysis “flawed and inaccurate.”

There are a number of other suggestions on the table on how to reduce the price of drugs, such as letting Medicare Part B negotiate prices, moving to approve a larger number of less expensive generic drugs and having drug companies post their drug prices in commercials aired on T.V.