An Opportunity You Don’t Want to Pass Up
October 31, 2011
This is a special time of year. No, I’m not talking about Halloween or the traditional holiday season from Thanksgiving through New Year’s. It is Medicare’s open enrollment period, a once a year special event.
Medicare is one of the many government programs that can be maddeningly confusing. There are so many different options to choose from. There is Part A which is mandatory but then Parts B, C and D are not. There is a smorgasbord of plans to select from. But, what if you opt for a plan and later change your mind?
Well, that’s where the seven week period of open enrollment comes in. The government allows current Medicare enrollees to get into and out of any plan one time a year. This year it’s between October 15 and December 7. (There are other times of the year that allow some changes but they are much more limited.)
So, for example, you can switch from traditional Medicare to Medicare Advantage (Medicare’s HMO) or from Advantage back to traditional. You can switch between Medicare Advantage plans. You can also add drug plans (Part D), change drug plans or drop one entirely.
Of course, having the ability to do this doesn’t mean it’s easy to make the right choice. There are so many plans to pick from. Specialty plans are available, for example, which are designed to work well for people who are receiving Medicare and Medicaid or Medicare and certain VA benefits.
The bad part about having so much variety is that making the right decision is that much harder. Like anything else, however, getting the right guidance from a qualified and knowledgeable specialist can make all the difference. It is just impossible to make such an important decision without getting the answers to all your questions first. Those Medicare insurance specialist are out there. You just have to seek them out, but don’t delay, because if you miss the window you’ll likely have to wait an entire year. For more information contact us at info@hauptmanlaw.com.
65 and Still Working – Should I Enroll in Medicare? (Part 2)
December 20, 2010
What do you think about when you turn 65 in this country? For most people, Social Security and Medicare will quickly come to mind. Last week were talking about the basics of Medicare. This week we’ll pick up where we left off with Medicare Part B.
Part B covers doctors’ bills. It is possible to sign up for Part A but not Part B. Part B carries a separate premium (unlike Part A which has none) that, when you collect Social Security, is deducted from your Social Security payment. The premium ranges from $96.40 to $110.50 for most people. Because it is optional, some may decide to delay signing up for it if they have other insurance, through their employer or former employer, for example. If you wait, however, you could be hit with higher premiums, 10% more for each year you could have signed up and didn’t. And that lasts for the rest of your life.
But, the rules on when you need to sign up are confusing. Most should enroll at age 65 or when they retire, whichever is later – maybe. If you still have health insurance through your employer or your spouse’s employer you might be able to delay signing up, as long as there are at least 20 employees in your company. Otherwise, you should enroll. There are also special rules for federal government workers and other groups.
Medicare Part D is the prescription drug coverage introduced a few years ago. Part D rules differ from Parts A and B. Enroll too late and there is also a premium penalty, 1% for each month you wait. If you have “creditable” drug coverage from your employer’s plan, then the penalty may not be imposed. Your employer must tell you each year whether its’ plan is better than Medicare’s.
Medigap insurance covers what Medicare doesn’t. So, for example, it may cover some of your Medicare co-pays. These plans are regulated by the government, meaning there are a few basic plans that will cover certain standard things, the more comprehensive the plan the higher the premium. Switching in and out of these plans can be tricky. If you want to change plans without going through a medical screening process there are separate rules that apply.
Another option that Medicare offers is called Medicare Advantage. Most Advantage plans are HMO managed care plans. If you are enrolled in one of these plans you don’t get Parts A and B and you don’t need a Medigap policy. The premium will generally be lower but the negatives to these plans are similar to other HMOs in that your options for treatment may be more limited.
Turning 65 is a milestone. Making a decision on Medicare enrollment will have long term ramifications so do your research and choose wisely.
I’m 65 and Still Working – Should I Enroll in Medicare? (Part 1)
December 13, 2010
Much has been written about the oldest baby boomers starting to turn 65 next month and what it might mean for the future of long term care in this country. But, from a practical standpoint there are decisions that each new senior must make that so many are unaware of. Take Medicare for example. More Americans than ever are working beyond what once was the “automatic” retirement age of 65. How does that impact Medicare eligibility?
Most people know that Medicare is the government health insurance program for seniors and the disabled that is now 45 years old. For many years, turning 65 in this country has meant collecting Social Security and enrolling in Medicare. Except that for new seniors now, Social Security won’t start till they turn 66 years old. Many may then assume that age 66 applies to Medicare – it doesn’t – or they may simply choose to wait to enroll in Medicare, which could be a big mistake. That’s because you could limit your options in the future and it could cost you more money in premiums for the rest of your life.
Even if you are working and have health insurance benefits through your employer when you turn 65 you should sign up for Medicare Part A, which covers hospitalization expenses. The initial enrollment period is 6 months, beginning 3 months before and continuing through 3 months after your birthday. However, when during that 6 month period you sign up also matters. If you sign up before the month of your birthday then your coverage starts on the first day of the month of your birthday. Sign up during your birthday month and coverage begins the month after. Sign up later than that and your beginning date will be even longer, possibly 3 or 4 months later.
What about Medicare Part B? When should you sign up for that? We’ll discuss it next week along with Medigap policies Medicare managed care.
Obamacare – What Seniors Need to Know (Part 2)
October 18, 2010
So, last week we were discussing the highlights of President Obama’s health care plan that most affect seniors. The closing of the infamous prescription drug donut hole is one. But there are others.
Beginning in 2011 Medicare Advantage plans will have to reduce members’ out of pocket expenses for some more costly services and for members who use the most health care. The Advantage plans must continue to provide the same benefits available under Medicare Parts A and B. Currently Advantage plans are paid 14% more than it would cost to cover the same person in traditional Medicare. Over the next several years the new law will reduce that number to 1%. Plans that receive a high government rating will receive bonus payments, so seniors considering an Advantage plan should look for a plan in existence at least 5 years and one that carries a high government rating.
The Community Living Assistance Services and Supports Act (CLASS) establishes a national long term care insurance program. The program is intended to help pay for some future long term care services and support. (See my blog posts of April 12, 2010 and April 19, 2010 for further discussion.)
The new law also provides better information and accountability for nursing home care. It promotes home and community based services by providing financial incentives to the states to offer greater assistance for those who choose to remain at home rather than residing in a nursing facility. This signifies a recognition by the government that more people want to remain at home (where it is less expensive to administer care). It will be interesting to see if this becomes a trend as 77 million baby boomers start to turn 65 next year.
The new law does include provisions requiring those with higher incomes to pay for Medicare. Beginning next year, some will see higher premiums for Part D benefits. Additionally, the Medicare tax rate for households with high income will increase and the Medicare tax will be applied to unearned income (investment income, royalties, rent etc.)
The Affordable Care Act is very complicated and this review covers only a few key elements of import to seniors. It is clear, however, that while President Obama and Congress have attempted to address some long term care concerns, the need for planning is as urgent as ever. The government will not come to the rescue. It is up to each one of us to protect ourselves and a carefully constructed long term care plan will go a long way to providing that security.
Obamacare – What Seniors Need to Know
October 11, 2010
Recent studies have shown that most Americans, while fearful of President Obama’s new health insurance plan, (something which many opposed to the plan have been quick to capitalize on) don’t really know what’s in it. This is partly due to the President’s failure to educate the general public about it. The complexity and broad scope of the law no doubt have something to do with it as well. There are, however, some important features of interest to seniors and their loved ones.
The Affordable Care Act, which Congress passed and the President signed into law in March, 2010 will expand health care coverage for all Americans. No guaranteed benefits under Medicare Part A or Part B are being cut. Some provisions of the new law will take effect immediately. Others will be phased in over the next several years.
Seniors will receive a big benefit immediately with assistance with the infamous Medicare Part D donut hole. The donut hole is the Part D coverage gap. When a Medicare beneficiary surpasses the prescription drug coverage limit, he/she is then responsible for all prescription drug costs until expenses reach the catastrophic limit. Each year everyone starts at zero again so many seniors incur this cost year after year.
A $250 rebate will be paid to Medicare beneficiaries who reach the donut hole in 2010 (even by $1). Seniors will receive these checks automatically. They do not need to fill out any special forms. Be careful, however, as there are scams in which it is claimed that you can pay a fee to get your check faster. Not true. Beginning in 2011, upon reaching the donut hole, seniors will received a 50% discount on brand-name prescription drugs and a 7% discount on generic prescription drugs. By 2020 the donut hole will be gone and Medicare beneficiaries will instead pay 25% of the cost until they reach catastrophic coverage levels.
Another change beginning in 2011 will be coverage for preventative care. Medicare will cover one annual wellness exam for each beneficiary. There will be no cost sharing for these services.
Stay tuned next week for some more features of the new health care plan that will affect seniors.
The Difference Between Medicare and Medicaid
March 1, 2010
In speaking with people about Medicaid, they will often refer to it as Medicare. Perhaps it’s just a slip of the tongue since the two words sound so similar. But, I think, there is very often a fundamental misunderstanding about the two programs. Medicare is the federally funded and state administered health insurance program primarily designed for those individuals over age 65, disabled or blind. But, here is where the common mistake lies. Medicare does not cover long term care.
Not that this is different from any employer sponsored health insurance program. It isn’t. What most don’t realize until they need long term care is that health insurance policies, Medicare included, do not cover custodial nursing home care. Medicare does cover skilled nursing care but only if you’ve got an illness or injury from which you can recover. The common illnesses which cause long term care stays, such as Alzheimers and Parkinsons, have no known cures. Medicare won’t help you. Which surprises many who are confusing skilled nursing care and custodial care.
In general, if you are enrolled in traditional Medicare, and you’ve had a hospital stay of at least 3 days, and then are admitted to a skilled nursing facility, Medicare may pay for a while. If you qualify, Medicare may pay the full cost of the nursing home stay for the first 20 days and can continue to pay for the next 80 days, but with a deductible of about $130 per day. Some Medicare supplement insurance policies will even pay the cost of that deductible so that in the best-case scenario, Medicare may pay up to 100 days for each “spell of illness.”
In order to qualify for this 100 days of coverage, however, the nursing home resident must be receiving daily “skilled care” and generally must continue to “improve.” (Note: Once the Medicare beneficiary has not received a Medicare covered level of care for 60 consecutive days, the beneficiary may again be eligible for the 100 days of skilled nursing coverage for the next spell of illness).
While it’s never possible to predict at the outset how long Medicare will cover the rehabilitation, from our experience, it usually falls far short of the 100 day maximum. It makes sense, since the recuperative abilities of an 80 year old are certainly not what they are for a 40 year old. But, even if Medicare does cover the 100 day period, what then? What happens after the 100 days of coverage have been used?
At that point, in either case, you’re left with paying the bills with your own assets or long term care insurance, or qualifying for Medicaid which does cover long term care but is a needs based program. That means you’ve got to meet certain income and asset limits, but if you were thinking Medicare was going to cover you, then you’ll be completely unprepared when it comes to long term care. And if you’ve been a frequent reader of this blog you know what happens when you’re totally unprepared for the prospect of long term care.
Medicare Part B Premiums for 2008
January 29, 2008
I was speaking with someone the other day who told me her Social Security monthly check declined from 2007 to 2008 and asked if that was possible or a mistake. While the government does on occasion make mistakes (hard to believe), an increase in the Medicare Part B premium may have resulted in the decrease. Part B generally covers outpatient services, such as doctors visits and home health services. Medicare recipients pay a portion of the premium for this benefit, which increases every year. (In 2008 the premium is $96.40.) The monthly Social Security benefit also increases, resulting in a net increase in the monthly check from year to year.
This year, however, for the first time, higher income beneficiaries will pay a higher premium for Part B. Individuals with income between $82,000 and $102,000 per year will pay a monthly premium of $122.20. Married couples with income between $164,000 and $204,000 will pay the same premium amount. There are 3 other income levels which result in higher premiums, the top level being $205,000 per year of income for individuals and $410,000 for married couples. The premium in that case is $238.40 per month.
