What is Medicare?Category:
100’s of Supplements to Pick From
Insurance companies offer hundreds of different Medicare supplements, Medicare Advantage plans, and Medicare Part D prescription drug plans. Picking Medicare plan means choosing between Medicare supplements and a Part D prescription drug plan OR Medicare Advantage/Part C. Next picking Medicare plan means choosing the plan type. Medigap plans range from plan A through the alphabet to plan N, which doesn’t include a Part D drug plan. The drug plans can be a little simpler because you can use the Medicare tool to narrow down the selection. The Medicare calculator bases the plan selection upon the prescriptions you enter into the system. The calculator picks the Medicare Part D plan that will cost the least in total costs for you. On the other side, Medicare Advantage plans consist of a wide variety of co-pays, co-insurance, deductibles, and maximum out-of-pocket costs and amounts that may or may not include a Part D plan.
Foreign Language of Medicare
Medicare itself is like a foreign language of Part A, Part B, and Part D with rules around enrollment that includes penalties when you do not comply. The Medicare.gov website is meant to be helpful, but the shear amount of information, jargon, legalese makes it a barrier to entry rather than a door. Even the Medicare handbook is hundreds of pages. Its size makes the evaluation of information almost impossible.
The Pain of Picking Medicare Plan
As a consequence, picking a Medicare plan is a frustrating and painful process for people. That is why I take people through a 3-step process. 1.) There is a brief, foundational explanation of Medicare and how it works. 2.) Look at ALL of the plans, but in an organized and ordered fashion. The first step helps you evaluate the plans. I share the story behind each company from my fifteen years of insurance experience because each company has a history in the market. 3.) I find out about you. Everyone is unique. Some people are risk takers. Others are not. Some have health concerns that are foremost of mind. Others do not have any.
The logic of the process enables people to narrow down choices and make the best one for them. I ask questions as we go along. Test and probe. Explain aspects of the plans as we go through each. Constantly test for understanding. So the process of picking a Medicare plan becomes clearer as we move through it. I generally meet with people twice. The first time is usually months before they can do anything. There is no pressure to make a decision or ‘buy right now.’ Clients have time to think, collect more information, verify what they’ve learned, talk with confidants. The next time we get together is to review with updated information. That is the time for picking a Medicare plan. By then you are comfortable and confident with your decision because your decision is well informed. It is logical. The decision is made over time without pressure. You know what you are doing when you pick your Medicare plan.
If you would like to go through this process, there is not cost or obligation. Call 402-614-3389 to find out more.
Medicare Changes Part A Deductible
Medicare changes for 2017 came out in December. One of the changes was for Medicare Part A. Part A is the hospital side of Medicare. It does not cost anything because you paid the Medicare Part A premium during your working years. It was part of your payroll taxes. The premium is zero if you have enough quarters of work and paid in to Medicare; however, Medicare Part A has a deductible. The deductible was $1,288 for 2016. The Part A deductible for 2017 is $1,316.
Remember the Medicare Part A deductible is for each event within a 60 day period. If you revisit the hospital 61 days later OR there is a different and separate event resulting in admittance to the hospital, you pay the $1,316 again.
Increases Passed On To You
The significance of the increased Part A deductible will be an increase in the cost of your Medicare Supplement. Most Medicare supplements cover the Part A deductible as many times as it may occur in a given year. Because the insurance company will now be on for more deductible, it will have to offset that expense and risk with higher premiums. Your premium may not increase significantly, but it does cost the insurance company more. Consequently it will ultimately cost you more.
Medicare Advantage Is Different
For those on Medicare Advantage plans, you are not directly effected. Your hospital co-pays, as well as the other co-pays, are determined by your individual plan. They are already set for 2017. Any increases may result in increases in hospital co-pays down the line because, like supplements, someone needs to pay for the additional expense. The actual co-pay is determined by your Medicare Advantage plan, and they are now set for 2017. Check the changes to your Medicare Advantage plan for 2017. You received your notification of changes in October. If you cannot find it, call the customer service phone number on the back of your card. They will send you a new statement of understanding with all the 2017 co-pays, deductibles, and co-insurance.
Consult with your agent or give us a call to see how any changes to Medicare may affect your situation.
Medicare Part B
Medicare changes almost every year. Medicare changes for 2017 are significant. The Medicare Part B monthly premium is the change that hits people first. For Medicare beneficiaries who were on Medicare before 2016, the increase will be from $104.90 to $109 per month. For those who began Medicare Part B in 2016, the premium will move from $121.80 to $134. There are some minor variations on these numbers out there. Eventually Medicare will catch everyone up to the same amount. I am getting a lot of calls as clients see the higher premium. For those with annual individual incomes above $85,000 and joint incomes above $170,000, the increases are much larger.
Part B Premium Increase
The reason for the increase is the rising cost of Medicare. Fewer persons are working in relationship to the number of new beneficiaries going on Medicare. The baby boomer population turns 65 at a rate of 10,000 per day in our country. The cost of health care also consistently grows at a rate well above inflation. The CPI (Consumer Price Index) is currently about 2%. It is safe to say that Medicare Part B premiums will continue to rise in coming years.
Protection Again Medicare Changes
Medicare Part B premium is just one of the costs that are going up. Other deductibles, co-insurance, and co-pays are increasing as well. More and more of the burden of health care is being placed upon consumers, so it makes it even more critical that you select the plan that best fits your needs and budget each and every year. It may make sense to take on some deductibles, co-pays, and/or co-insurance so that the monthly premium is not so burdensome, especially if your monthly income is limited. Medical emergencies do not occur regularly, but premiums do. You must pay them every month. One of the most common calls I get is ‘how do I reduce my monthly health care expenses?’
What is Medicare? A basic question. Or rather, why should anyone care about Medicare? The reason people should care is that most bankruptcies are medical bankruptcies. In other words, if you wish to protect your retirement nest egg from bill collectors, Medicare is important to know about. There are few things that are more disturbing than a pile of medical bills sitting on the kitchen table. The golden years could be tarnished with worrying about actual or potential medical expenses. Medicare–if implemented proper–will protect you from a potential catastrophe. It is critical for people entering into retirement to understand what is Medicare.
What is Medicare?
Medicare is a Federal health insurance program for people who are 65 and older (or on Social Security disability). It began in 1965 when President Johnson signed it into law. It was designed to provide medical covered to the elderly at a reasonable price. In 1965, few people had health coverage once they stopped working. As a result, many seniors fell into poverty because of burdensome medical expenses. Medicare was a solution to a national problem.
Medicare is divided into two parts: Medicare Part A and Medicare Part B. Medicare Part A has everything to do with the hospital. It doesn’t cost anything because you paid for it during your working years. It was one of the deductions in your payroll taxes. Medicare Part A covers a 100% of the medical expenses incurred in the hospital, but there is deductible that many people are not aware of. The Medicare Part A deductible is currently $1,288. This is NOT an annual deductible. It is a deductible per benefit period, and a benefit period is 60 days. So each event has a deductible, and the time for the event is 60 days. In other words, you could have multiple events and pay multiple deductibles because the event is not limited to just a 60 day period. Each new event, even if it overlaps with another event, has its own 60 day timeline. While rare, it could happen, and probably more importantly, you could pay the Part A $1,288 deductible more than once in any given year.
Medicare Part B, however, does cost something. For most people going on Medicare and Social Security in 2016, the Medicare Part B premium is $121.80 per month. It is generally taken out of your Social Security check. Medicare Part B covers doctors’ visits and outpatient procedures, such as X-rays, blood work, emergency room visits, etc. Medicare Part B covers 80% of the cost. Your portion is 20%. The 20% coinsurance, however, is unusual. There is no cap. There is no maximum out-of-pocket. Most group plans you were ever on probably had a maximum out-of-pocket. It may have been $1,000, $2,000, even $10,000, but at some point, you stopped paying and the insurance company covered everything. Medicare Part B does not have that, so 20% of a big number will be a big number. You keep paying your 20% coinsurance as long as the bills come in.
These are the basic building blocks to what is Medicare. You must understand Medicare, Medicare Part A, and Medicare Part B to understand the rest that follows. In the next blogs and videos, we will cover how to get Medicare, how to cover the Part A deductible, and how to fill the unlimited 20% gap in Part B coverage.