Medicare Part D Supplemental Prescription Drug Changes in 2017

We know the last thing anyone wants to hear is that they are going to be paying more for their current healthcare coverage, but it is important that recipients stay informed and up to date on their Part D Plan benefit changes.

2017 changes to Medicare Part D include increases in our healthcare costs. What does that mean? Premiums, deductibles and co-payments will increase while fewer and fewer choices are available for Medicare Part D recipients.

2017 Medicare Part D Plans Available

It’s anticipated that only 750 plans will be made available to Medicare recipients within the United States during this year’s open enrollment period. Each year the amount of available Prescription Drug Plans diminishes this year it will put us at more than a 15% decrease from the previous year.

2017 Deductible, Initial Coverage Limit & Out of Pocket Threshold for Medicare Part D

Deductible: $400, a 10% increase from 2016

Initial Cover Limit: $3,700, a 10.54% increase from 2016

Out-of-Pocket Threshold: $8,071, a 2% increase from 2016 (Please note that this number varies depending on the use of brand name and generic drugs)

2017 Coverage Gap (Donut Hole)

The percentage Medicare Part D recipients are required to pay for a brand name drug has decreased. Once the recipient has reach the Initial Coverage Limit, they will only be required to pay 40% of the plans cost for brand name drugs and 51% of the plans cost for generic drugs.

2017 Catastrophic Coverage

Catastrophic Coverage begins once the recipient has reached the out of pocket threshold. This means that Medicare will then pay 80% of any remaining drug costs until the end of the year, while their prescription drug plan will cover 15%. Leaving the recipient responsible for the remaining 5% of cost.

Standard Benefit Design Parameters

Below you will find a table generated from Segal Consulting (https://www.segalco.com/media/2521/me-5-4-2016.pdf) that compares the standard benefit design parameters for the Medicare Part D Changes from 2017 and 2016.

Standard Benefit Design Parameters 2016 2017
Deductible $360.00 $400.00
Initial Coverage Limit for Drug Expenses Paid by the Individual and the Part D Plan $3,310.00 $3,700.00
Out-of-Pocket Threshold Paid by Individual $4,850.00 $4,950.00
Total Covered Part D Drug Spending before
Catastrophic Coverage*
$7,062.50 $7,425.00
Minimum Copayment in Catastrophic Coverage Portion of Benefit for Generic/Preferred Multi-Source Drugs $2.95 $3.30
Copayment in Catastrophic Coverage Portion of Benefit for Other Drugs $7.40 $8.25

* Cost sharing for the catastrophic portion of the benefit is set at the greater of 5 percent coinsurance or fixed copayments set by CMS, which are shown in the last two rows of this table.

Affordable Care Act Prescription Costs in the Coverage Gap

The Affordable Care Act implemented substantial changes to the Medicare program, and the Medicare beneficiaries enrolled in a Medicare Part D Plans (PDP).  One of the more significant changes made is to the prescription drug costs in the coverage gap or donut hole. Medicare Part D recipients will be paying less out of pocket for their prescriptions each year until 2020. At which time the coverage gap will be eliminated.

Individual’s Responsibility for Prescription Drug Costs in the Coverage Gap
Year Brand-Name Drugs Generic Drugs
2016 45% 58%
2017 40% 51%
2018 35% 44%
2019 30% 37%
2020 25% 25%

*The 25 percent of drug costs that seniors will pay for both brand and generic drugs starting in 2020 is the same percentage of costs that seniors pay now during the initial coverage period.

Other Information

Other important information to note in the 2017 Medicare Part D Supplemental Prescription Drug Changes is that the CMS will begin monitoring the inappropriate use of medications, such as antipsychotics on patients suffering with dementia. Nursing homes and other community settings will be used to collect such information. Also, medications currently considered high risk that is unable to be monitored will no longer be included on the list of high risk medications.

medicare 4 everyone low dose ct lung cancer

Medicare Approves Coverage for Lung Cancer Screening with Low Dose Computed Tomography (LDCT)

It is an exciting time in Medicare’s history… Medicare Approves Coverage! The Centers for Medicare & Medicaid Services (CMS) has completed their investigation and have approved an immediate national coverage for Medicare patients. This type of coverage provides Screening for Lung Cancer with Low Dose Computed Tomography (LDCT). “This is the first time that Medicare has covered lung cancer screening. This is an important new Medicare preventive benefit since lung cancer is the third most common cancer and the leading cause of cancer deaths in the United States,” said Dr. Patrick Conway, chief medical officer and deputy administrator for innovation and quality for CMS.

The approved coverage will provide coverage for annual lung cancer screening with LDCT for all Medicare beneficiaries who meet all of the below criteria:

  • Ages 55-77
  • Have no signs or symptoms of lung cancer
  • Have a history of smoking for at least 30 pack-years (one pack of 20 cigarettes per day for 30+ years)
  • Be a current smoker or have quit smoking within the last 15 years
  • A written order from a physician or qualified non-physician meeting the above criteria

Amazing Update: Medicare Approves Coverage for Lung Cancer Screening!

This type of coverage also includes a visit to receive counseling and education about the risks and benefits of lung cancer screenings. The National Coverage Determinations (NCD) also provides specific coverage eligibility standards and important data collection for radiology imaging centers as well as radiologists which is consistent with the U.S. Preventive Services Task Force recommendation, National Lung Screening Trial protocol, and the multi-society multi-disciplinary stakeholder evidence-based guidelines.

LDCT Decision Memo Postedhttps://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=274

Our mission at Health Exchange Agency (HEA) is to be your one stop learning resource center! If you wish to obtain more information on Medicare and Medicare Supplement Insurance, please call the number provided above to speak to a licensed agent in your state and we would be happy to assist for the best medicare advantage plans!

 

Senior Playgrounds Offer Fitness and Community
January 5, 2017 Comments are off admin

Learn more about Senior Playgrounds in the United States

Senior Playgrounds in the United States

Over 75 Million (in 2015) Baby Boomers, are starting to enter their senior years while redefining our current outlook on “aging”. We all know that proper eating habits and regular exercise is the key to staying independent, yet studies have found that not enough seniors are exercising on a regular basis. One of the ideas that have recently taken hold in the United States are “Senior Playgrounds”, this idea could change the stigma for baby boomers.

What Are Senior Playgrounds Like?

Currently, Adult Outdoor Fitness Areas, which originated in China around 1995 and quickly spread throughout parts of Europe and Japan. Senior Playgrounds can vary in layout and equipment, but at their core each of these fitness areas house outdoor activity and exercise areas developed specifically for the needs of senior adults (Baby Boomers). Traditional exercise equipment may include weight machines, stationary bikes, rope bridges, and balance beams. Many will include walking areas and covered paths.

From SeniorPlanet.org

“For people who spend time caring for grandchildren, multi generation playgrounds make sense – and that’s the model that the nonprofit KaBOOM!, working with the Humana Foundation, is pushing in the United States. Since 2011, KaBOOM! Has built 53 multigenerational playgrounds across the country, according to spokesperson Sarah Pinsky. Many of KaBOOM’s playgrounds are in low-income communities.  “One specific benefit of a multigenerational space is you get children and seniors interacting in ways they might not otherwise,” Pinsky told us. “Plus, it’s a great opportunity for children to see role models of active seniors.” Here’s a 2012 news report of the first multigenerational playground in NYC…”

From MentalFloss.com

“KaBOOM! has constructed 53 multigenerational playgrounds in cities across America, but we still have plenty of catching up to do with the rest of the world. In just the greater Barcelona area alone, there are close to 300 parks for senior citizens (see the video below). Don’t let anyone tell you that playtime is just for kids.”

What is this KaBOOM about?

“The state of play” aka KaBOOM is the national non-profit dedicated to ensuring that all kids get a childhood filled with the balance and active play needed to thrive. How is KaBOOM involved though with seniors?

As published by the Huffington Post, “The United States’ approach to playgrounds for the elderly is slightly different. U.S. playgrounds are being built for multiple generations, not just for seniors. KaBOOM!, a nonprofit organization, is working in partnership with the Humana Foundation to build multigenerational playgrounds throughout the country. KaBOOM! has built 53 multigenerational playgrounds across America that have served 135,471 kids and 61,500 seniors, according to Sarah Pinsky, Director of Client Services at KaBOOM!.”

KaBOOM is turning it’s focus to include the ever growing need for Senior Playgrounds! In Tampa, prior to the playground project with Humana and KaBOOM!, Ragan Park had outdated playground equipment for children and just a walking path for adults in the community. Neither were utilized by the community. Now usage of the outdoor space has dramatically increased, even beyond the new playground, with heavy attendance by neighborhood children, seniors and adults. It is truly amazing to see the amount of Barcelona elderly parks reach over 300 alone, which correlates to one for every town in the district.

Looking for more information about Medicare Plans for your relatives or family members, click here to contact us today!

Medicare Advantage Disenrollment Period (MADP)

Between January 1st and February 14th of each year the annual Medicare Advantage Disenrollment Period takes place. During this is the 45-day period recipients are able to make certain changes to their current coverage. Any changes that the recipient makes will go into effect the first day of the following month. For example, if a receipt makes a change to their policy on January 20th, their coverage with that new change will begin February 1st.

Here are some of the MADP FAQs:

Question: What Changes Can I Make to My Coverage During MADP?

Answer: If you are currently enrolled in a MA Plan with or without Prescription Drug Coverage, you are able to switch to an Original Medicare plan with or without a prescription drug plan.

If you are currently enrolled in a Medicare Private Fee-For-Service (PFFS) plan that does not have prescription drug coverage and a stand-alone prescription drug plan (MA and PDP) you can switch to an Original Medicare but you cannot cancel your current PDP.

If you are currently enrolled in a MA Plan and have a separate stand-alone drug plan (PDP), then you can switch to Original Medicare but cannot make changes to any stand-alone drug plans.

If you are currently enrolled in an Original Medicare or Original Medicare and a prescription drug plan you cannot make any changes or switch your plan during this period.

  • Please note that any recipients who lose or have lost their prescription drug coverage should enroll into a PDP as soon as they are able too. Otherwise that recipient may be charged with an late enrollment penalty and have higher out of pocket medication costs.

Question: Can I Switch to Another Medicare Advantage Plan During MADP?

Answer:You cannot switch to another Medicare Advantage Plan during MAPD. However, you can switch during the Annual Enrollment Period (AEP), which is open annually between October 15th and December 7th.

  • Please note that you may be subject to medical underwriting that could have an affect on your plan costs and coverage when deciding to make changes to your MA Plan during this period.

Question: Can I Enroll in a Part D Prescription Drug Plan During MAPD

Answer:Yes you can enroll into a Part D Prescription Drug Plan During MAPD if you disenroll from a MA Plan with or without prescription drug coverage. This enters you into the Special Enrollment Period (SEP) and makes you eligible to join a Part D Prescription Drug Plan as along as it is within the MAPD 45-day period.

Medicare Advantage Disenrollment Period

Medicare Advantage Disenrollment Period

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The ABCs of Selecting a Medicare Supplement Plan

Selecting a Medicare supplement plan can seem daunting initially. Just like practically every other health insurance plan known to man, Medicare comes with deductibles and co-pays. And, while original Medicare generally offers good coverage, it also comes with some holes.

For instance, I wouldn’t rely on it if you’re planning to go abroad — at risk of Montezuma’s revenge. Basic Medicare won’t cover care received during foreign travel. It also won’t pay for the first three pints of blood should you need a transfusion. And it may let you be billed for “excess charges” should your provider bill for more than what Medicare divines to be appropriate.

You can fill these holes by purchasing a Medicare supplement plan, also known as a Medigap plan. Here are the ABCs (and D) of finding the right plan.

A: Analyze your options

One of the best things about Medicare supplement plans is that they are all standard, and they can all be used anywhere a provider accepts Medicare payments.

Currently, there are 10 plans on the market, and they are labeled with letters from A-N. Because the plans are standardized, Plan A from Company X is exactly the same as Plan A from Company Y. It makes it easy to shop. You simply need to compare prices and look for a company you trust. No need to pull out a spreadsheet and compare deductibles, networks and co-pays.

Your biggest decision will be to pick the right plan. Medicare has this handy chart on its website that may help you out. In addition, here are a few points worth noting:

  • Plan A is the most basic plan and will pay for most of your coinsurance and copayments, minus any related to skilled nursing facility care.
  • Plan F is considered the most comprehensive and will pay for all co-pays, deductibles, coinsurance, foreign travel and any excess charges that original Medicare will not cover.
  • Plans K and L are the only plans with an out-of-pocket limit, which functions much like a deductible. All the other plans will begin paying benefits immediately.

If you live in Massachusetts, Minnesota or Wisconsin, your options will be different because we apparently wouldn’t want to make this too easy, would we? Click on the Medicare link above and scroll to the bottom of the chart to find links to your states’ plans.

B: Buy a community-rated plan

Once you know which plan you’d like, you can begin shopping around. Again, because the plans are standardized, price will likely be your main consideration.

However, don’t automatically jump on the plan with the lowest price. It could be the one that will see rates rise most rapidly as the years pass. You see, Medicare supplement plans have premiums that are calculated in one of three ways.

  • Community-rated
  • Issue-age rated
  • Attained-age rated

If you can, you want to buy a policy that is community-rated. These plans may cost a little more initially, but future premium increases should be modest, maybe 4-5 percent each year. That’s because community-rated plans don’t base premiums on your age and instead charge the same amount to everyone enrolled in the plan.

Unfortunately, community-rated plans simply aren’t available in some areas. In that case, an issue-age plan is your next best bet. These plans have premiums based on your age when you initially purchase the policy.

Attained-age policies should be your last choice. They adjust premiums every year to reflect your age. As a result, your premiums may start out low in your 60s and then skyrocket in the years to follow.

C: Call a broker

Still feeling a bit confused?

Then don’t be afraid to pick up the phone and call an insurance broker for help. By law, brokers can’t tack on a commission to the price of a policy, which means you’ll pay the same premium regardless of whether you buy through an agent or direct from a company.

A good agent can help you walk through the various plans and pinpoint which one best suits your lifestyle. However, look for an independent broker who works with a variety of companies rather than someone associated with a specific insurer. Known as “captive agents,” individuals working for one company can certainly be helpful and objective, but you’ll have more choices going through someone independent.

D: Don’t delay

OK, this is the ABCs of Medicare supplement plans, but we’ll throw in a bonus “D” here as well. And that would be “D” for don’t delay in signing up.

When you turn 65, you have an initial enrollment period of seven months that includes three months before your birthday, your birthday month and the three months that follow. If you’re enrolling in original Medicare (versus Medicare Advantage), this is when you want to get your Medicare supplement policy.

During the initial enrollment period, you’re guaranteed coverage without any underwriting. In other words, the insurance company can’t look at whether you have any pre-existing conditions and then decide to deny you a plan or jack up your premiums. Once that initial period ends, you can still buy a Medicare supplement, but the door opens for insurers to start asking all sorts of questions about your health status. Then you could end up paying significantly more for your coverage, or you may be barred from buying certain plans.

This last point is why it’s so important to select the right plan upfront. You should be thinking about your Medicare supplement as a long-term investment and look for a plan that will serve you well today as well as 15-20 years from now. While you may have the option of canceling or switching plans down the road, it could be a costly decision.

July 9, 2016 Comments are off admin

How to choose the best Medigap plan

Wondering how to choose the best Medigap plan? Medigap health plans are basically bookkeeping operations. Unlike Medicare Advantage plans, Medigap plans don’t make any decisions about what to cover. They don’t have networks of doctors or hospitals. All they do is pick up a specified share of your medical bills that Medicare doesn’t pay, such as Part A or Part B deductibles or co-pays. If Medicare paid for it and you still owe a part of the bill, Medigap will pay it, no questions asked.

Medigap plans come in standardized varieties

In all but three states (Massachusetts, Minnesota, and Wisconsin), Medigap plans are available in 10 standardized benefits packages, which vary according to how much of your expenses they will pick up. The more expenses the plan will pick up, the higher its premium will be.

The most popular plan is F, which pays for pretty much everything Medicare doesn’t, including the 15 percent excess charge that you can be billed by doctors who don’t accept Medicare as payment in full. Here’s a chart of the various kinds of Medigap plans.

You can find a complete list of Medigap carriers in your area on Medicare.gov.

When you put your ZIP code into the search box, you will see a list of which plans are available in your area and which companies sell them. You will see a range of prices for each type of plan, and the names, websites, and other contact information for companies that sell them. But it’s up to you to contact the carriers directly to get their specific pricing information.

There are no ratings for Medigap plans

Consumers are often surprised to find this out because there is plenty of rating information available forMedicare Advantage plans. Basically, there is very little to base Medigap plan ratings on. The benefits of Plan F are the same no matter which company you buy it from.

In almost every case, the companies get information on your Medicare bills straight from Medicare and pay their share automatically. They don’t have networks of doctors or hospitals.

And the rules for Medigap are not the same everywhere, the way they are for Medicare Advantage. The federal government sets some minimum rules to protect consumers but many states have decided to add additional consumer protections on top of those.

The type of premium pricing method you choose will affect your future costs

A policy that looks inexpensive when you first buy it at age 65 could end up being the most expensive when you hit 80.

Insurance companies use three different ways of setting premium prices. In some states you may have a choice of only one or two.

Community-rated (also called no-age rated). The same premium is charged to everyone, regardless of age. Medigap experts say these plans are the least expensive over time, though not necessarily when you first purchase them.

Issue-age-rated. The premium is based on your age when you buy the policy. It won’t go up as you age, but will increase due to cost inflation.

Attained-age rated. The premium starts low but goes up as you get older. Over time, this type of policy is the most expensive.

Learn more about policy pricing.

Medigap plans can turn you down or charge you more for pre-existing conditions at certain times

In every state, you have a guaranteed right to buy a Medigap policy for six months starting the first day of the month you are at least 65 and enrolled in Part B. During this grace period, the insurance company is not allowed to turn you down or charge you more because you have a pre-existing condition. This is called “guaranteed issue.”

After that, you’re only entitled to guaranteed issue Medigap in specific situations, such as these.

  • Your Medicare Advantage plan shuts down or you move out of its service area.
  • Your retiree plan shuts down.
  • You joined Medicare Advantage at 65 but decide to switch back to original Medicare within a year.
  • Your Medigap plan shuts down.

The minimum rules for when Medigap must sell you a plan are explained in this publication from Medicare. But some states have chosen to go beyond these minimums, for example, by requiring insurers to sell Medigap plans to applicants at any time. Your State Health Insurance Assistance program or state insurance department can give you information on your state’s rules.

The rules are different if you are under 65

If you are under 65 but have Medicare because of a disability or other qualifying condition, you do not have the same blanket right to buy a Medigap plan guaranteed issue. Some states have gone above and beyond the minimum rules about this and do require at least some Medigap plans to be made available. You can learn more from Medicare’s free publication on choosing a Medigap policy.

If you are in this category and cannot buy a Medigap plan, you have the option of getting a Medicare Advantage plan instead. These must be sold to anyone on Medicare, regardless of age. Then when you turn 65 you can switch to a Medigap plan if you want.

How to buy a Medigap plan

You can’t buy a Medigap plan directly through Healthcare.gov the way you can a Medicare Advantage plan. You can buy the plan directly from an insurance company. Or you can work with a reputable local insurance broker to close the deal.

May 4, 2016 Comments are off admin

Starting Medicare After 65: What You Need to Know

Starting Medicare after 65? We’re here to help you learn all you need to know!

Understanding Medicare’s different parts

Medicare comes in four parts, each of which covers particular services or types of insurance. Virtually everybody who gets Medicare eventually enrolls in the first two parts, which have been around since the program started in 1966.

  • Part A covers hospital inpatient care, some types of home health care, hospice care, and care in skilled nursing facilities. There is no premium for Part A if you or your spouse has earned at least 40 Social Security work credits. (Here are your options if you don’t have those credits.)
  • Part B covers doctor services, outpatient hospital care, preventive care, and some types of home health care. You have to pay a monthly premium for Part B. In 2015, as in 2014, it’s $104.90 for individuals with an income of less than $85,000 a year and couples with an income of less than $170,000. Higher-income beneficiaries pay more.

The second two parts were added later.

  • Part C, also known as Medicare Advantage, is an alternate way of getting your Part A and Part B benefits. Instead of the government paying your provider directly, Part C plans are run by Medicare-approved private insurance companies. If you elect to get your benefits through Part C, you must also be enrolled in Part A and Part B.
  • Part D covers prescription drugs. This is an optional benefit that is only available through private insurance companies. Most Medicare Advantage plans include Part D.

For more details on exactly what each part of Medicare covers, see Medicare’s website.

No matter how you choose to receive your Medicare benefits, you will receive certain preventive services for free, such as immunizations and screening tests for breast and colon cancer.

Must have: ‘Medicare & You’

Before you do a single other thing, download a copy of “Medicare & You,” the consumer handbook that Medicare puts out every year. It includes detailed and crystal-clear instructions for starting Medicare—but, inexplicably, Medicare won’t mail a copy to you until you are already enrolled. Here’s where to find it.

When you can enroll

The “initial enrollment period” for Medicare consists of the three months before, the month of, and the three months after your 65th birthday. If you want your coverage to start the month you turn 65, sign up during that first three-month period.

If you are already receiving Social Security, Medicare will automatically enroll you. If not, you must enroll on your own either online through Medicare.gov or at a Social Security office.

When to enroll in Part A

Nearly everyone who becomes eligible for Medicare should enroll in Part A immediately, because it has no premium. This is true even if you are still working and have health insurance through your job. It will get you into the system and you’ll start receiving “Medicare & You.”

When to enroll in Part B

This is trickier. If you get it wrong, it can cost you money.

If you are already retired or will retire right at 65, the answer is simple: sign up for Part B the same time you enroll in Part A.  If you are still working, you’re going to have to figure out the right time to enroll on your own.

It’s really important not to mess this up. If you don’t sign up for Part B when you should, you will be hit with a harsh late enrollment penalty. The penalty is a permanent increase in your Part B premium of 10 percent for every year that you should have been enrolled but weren’t.

So for instance, if you sign up for Part B two years after you should have, your premium will be 20 percent higher.

Tricky Part B situations

Look down this list to see if any of these situations apply to you. It will tell you what you should do about signing up for Part B.
You receive financial help to buy an individual health plan through your state’s Health Insurance Marketplace. Once you become eligible for Medicare, you can no longer get a subsidy. If you keep the plan anyway you will get that late Part B enrollment penalty. Enroll in all parts of Medicare and cancel your Marketplace plan.
You have an individual health plan but don’t receive a subsidy to help pay for it. If you keep this plan instead of enrolling in Medicare when you turn 65, you’ll be hit with the late enrollment penalty. It doesn’t matter where you got it or how long you’ve had it. Cancel it and enroll in Medicare.
You are still working at an employer with 20 or more employees. You can delay Part B enrollment without a penalty if you have health insurance through your own or a spouse’s current job. Once the last working spouse leaves his or her job, even if they’re getting COBRA or retiree insurance, it’s time for both of you to sign up for Part B. You have eight months, starting the month after the job ends, to get this done without penalty.
You are still working at an employer with fewer than 20 employees. Sign up for Part B at 65. Your employee health plan then becomes a “secondary” plan that pays for things only after Medicare has paid its share of the bills. Smaller workplaces like these are allowed to drop you from their employee plan after you reach 65. (That’s against the law for for larger employers.) If you ignore this rule, and your group health plan finds out you’re over 65, it may refuse to pay claims that Medicare would have paid.
You or your spouse is on COBRA. Once you turn 65 you must switch to Medicare or face the late enrollment penalty. But COBRA can still function as the main insurance for the younger spouse, and you can keep parts of your COBRA plan that Medicare doesn’t cover, such as your dental benefit. Learn more about Medicare and COBRA.
You have a retiree plan. If you have a retiree plan from your old job, you must sign up for Part B when you turn 65. After you go on Medicare, the retiree plan becomes a secondary plan. But if your spouse isn’t old enough for Medicare yet, he or she can still get the retiree plan if your former employer allows that.
You receive veteran’s benefits. The Department of Veterans Affairs and Medicare operate independently of each other for the most part. Medicare won’t pay for care you get at a VA facility. The VA won’t pay for the share of your medical bills that Medicare doesn’t pay. The VA encourages veterans to sign up for Medicare A and B to have the flexibility to seek care at non-VA facilities if need be. Moreover, if you are not in one of the VA’s higher priority groups, you could lose your coverage suddenly if Congress decided to cut back the VA’s budget. At that point, you would have to pay a penalty for late enrollment in Medicare Part B.Learn more about VA and Medicare.
You have TRICARE for Life. If your military service entitles you to TRICARE for Life, you must sign up for Part B when you turn 65. This is required regardless of whether you are working or have other sources of coverage. If you don’t, you lose your eligibility for this valuable benefit. Learn more about how TRICARE works with Medicare.
You are on the Federal Employees Health Benefits Plan (FEHB). FEHB will continue to cover you after retirement, even if you don’t take Medicare at all. But if you delay enrollment in Part B after retiring, and then change your mind later, you’ll be hit with the Part B late-enrollment penalty. Because FEHB premiums can be substantial, you need to consider your options carefully. Learn more about how FEHB works with Medicare.

When to enroll in Part D, your drug plan

You should sign up for Medicare Part D at the same time that you enroll in Part B. It’s important to be prompt. There is a permanent premium penalty for enrolling late.

There’s one situation that will exempt you from this late enrollment penalty. That is if you have other drug coverage, such as an employer or retiree plan, that is as good as Part D coverage. (Your plan administrator can tell you whether your plan’s drug coverage meets this qualification.)

medicare part b premiums increase
March 22, 2016 Comments are off admin

Surprise Medicare Part B premiums increase by 50 percent in 2016

Medicare rules and private insurance plans can affect people differently depending on where they live. To make sure the answers here are as accurate as possible, Phil is working with the State Health Insurance Assistance Program (SHIP) and the Medicare Rights Center (MRC).


Edward: I read about there being a big increase projected in Medicare Part B premiums next year. However, I understand that if people began this year to have their Part B premiums withheld from their Social Security payments, they would not pay higher Part B premiums in 2016 due to Social Security’s “hold harmless” rule. If this is the case for 2016, I wondered if there also is no Social Security COLA [cost of living adjustment] for 2017, would this also be the case that year? And would any savings continue, in theory, for the rest of a person’s life?

Phil Moeller: Edward’s question and many others on this topic have risen to the top of the Maven’s inbox of late. He is referring to a very complicated but also potentially very big hike in Part B premiums that might be levied on some Medicare beneficiaries in 2016.

As you read on, keep in mind that these projected increases have not been formally adopted. Further, there is not a lot that affected people can do to avoid them. However, by the time 2017 premiums are set this October, it will be too late for even the limited responses I’ve laid out below.

People who have claimed Social Security benefits and are on Medicare must, by law, have their Part B premiums withheld from their Social Security payments.

Most Part B premiums are paid out of people’s monthly payments from Social Security, and it has what’s called a “hold harmless” provision. According to this rule, Social Security benefits can’t decline from one year to the next. Normally, this is not a problem for Medicare. Each October, Social Security announces a cost of living adjustment (COLA) for the following year. Medicare can then boost Part B premiums and these higher payments will be taken out of people’s COLA-adjusted Social Security benefits.

But what happens when the COLA is zero, as it’s forecast to be next year? Medicare beneficiaries who pay the lowest Part B premium directly to Social Security — about 70 percent of all beneficiaries — can’t be required to pay any premium increases at all next year.

Unfortunately, Medicare is not able to just absorb all those projected increases in 2016 Part B expenses. By law, it must collect about 25 percent of Part B expenses from beneficiaries. Because it can’t collect any more dollars from the 70 percent of beneficiaries who are held harmless, it must seek to achieve this 25-percent ratio by collecting a lot more from people who aren’t held harmless.

The trustees thus projected these folks would pay 52 percent more in Part B premiums next year.

This group includes new enrollees to Medicare in 2016, people with modified adjusted gross incomes (MAGI) above $85,000 ($170,000 on joint tax returns) and those who pay their Medicare premiums directly to Social Security, because they haven’t yet begun receiving Social Security benefits. People with low-incomes who have their premiums paid by their state are also not held harmless, so state budgets also would take a hit next year.

New enrollees and Medicare beneficiaries who aren’t on Social Security — and who do not have high incomes — would thus pay not $104.90 a month in 2016 but $159.30. People in the higher-income premium groups would have similar percentage hikes, from a range of $146.90 to $335.70 a month in 2015 to a range of $223 to $509.80 in 2016.

Medicare officials say they will do what they can to reduce these increases while still honoring their funding obligations to support Part B expenses. Congress also could provide stopgap funding, although it’s hard to see them doing so.

In the meantime, the only strategy to avoid these increases is for people paying their premiums directly to Social Security to sign up for Social Security before the end of the year and begin having their Part B premiums automatically deducted from their Social Security payments. If they do so in the next couple of months, they should be held harmless in 2016. This can be a complicated decision to unwind, so it’s important that you consider all the reasons to take or not take Social Security at this time.

In answer to Edward’s question, if there was no COLA in 2017 too, then people held harmless next year also would be held harmless in 2017. But he is not correct that any savings would continue for life.

Once COLAs resume — and they surely will — Part B premiums will “normalize” over time. People held harmless next year would pay more. And people not held harmless in 2016 would see their premiums decrease. After at most a few years, everyone without an income-based premium surcharge once again would pay the same Part B premium.

Lastly, there could also be some more financial heartburn from the Part B situation for other Medicare beneficiaries. The trustees’ report projected that the annual deductible for Part B Medicare expenses would also increase by 52 percent in 2016, from $147 to $223.

People on Original Medicare would be hit by this, except for those with plan C and F Medigap policies, which pay that deductible.

Most people with Medicare Advantage plans also would likely see little or no direct impact from a boost in the Part B deductible. Medicare Advantage health plans are free to set their own deductibles, and many do not charge one at all.


Jennie – S.C.: I am 69 years old. I am losing my health coverage due to divorce. I use little prescription medicine, have been diagnosed with osteoporosis, use physical therapy for back and arms and need mental and dental health care. I have serious issues because of failed oral surgery. What Medicare plan should I get and what supplemental coverage do I need?

Phil Moeller: Jennie, I literally feel your pain. I have had recurring dental issues and often feel I’ve helped send generations of dentists’ kids to college! I assume money is an issue for you, so this answer assumes you are watching your dollars closely, if not your pennies. Medicare covers almost no dental work — only surgeries in limited situations — and does not cover ongoing dental care, which you clearly need. Medicare supplement plans, or Medigap, don’t cover dental either. Some Medicare Advantage plans do provide some dental coverage. This is where I’d start.

Medicare Advantage (MA) must cover at least everything covered by Original Medicare (Part A for hospital and Part B for doctors, outpatient services and medical equipment). Most Medicare Advantage plans offer more coverage, including dental, vision and built-in Part D drug plans (a Part D plan is a separate policy for people on Original Medicare). The reasons Medicare Advantage plans can offer more coverage is complicated, but one major reason is that most Medicare Advantage plans save money by requiring you to use doctors, hospitals and other providers who are in their local network. Original Medicare, which often is also called fee-for-service Medicare, lets you use participating doctors and other health care providers anywhere in the country.

I suggest you visit Medicare’s Plan Finder website. Enter your ZIP code and do some careful comparison shopping to see if there is an Medicare Advantage plan that includes the dental coverage you need. If not, you will have to seek a separate dental insurer, and the premiums for a 69-year-old person with a history of dental issues will hardly be cheap. Medicare plans, by contrast, cannot refuse to cover you because of prior conditions. Call the South Carolina SHIP office at 1-800-868-9095 and ask a counselor there to help walk you through your options. There is a lot to consider, and it really helps to speak with someone who has helped others navigate the process.

Last, but not least, don’t wait too long to do this. First, you do not want a break in coverage that leaves you exposed. Also, when your current health coverage ends, you should have an eight-month special enrollment period during which you can sign up for Medicare coverage. It’s important to get Medicare during this period so that you don’t get hit with late enrollment premiums surcharges.

Good luck!


Jim – Texas: My wife and I are both 66 with current Part A, B, D and Medigap G plans. We will be living and I will be working outside the U.S. in 2016 — at least 330 of 365 days — although my wife may be in the U.S. more days than I will. My insurance agent tells me if I cancel our Part G coverage while I am gone, I would be subject to underwriting if and when I return and reapply. Is it best to just bite the bullet and keep all the coverages in place while we are traveling and try to schedule doctor visits and medications when we are back between assignments?

Phil Moeller: Your agent is right about possibly paying a lot more for your Medigap plan if you drop it. These plans provide what’s called guaranteed issue when you are first eligible for them. This means they must cover you for pre-existing conditions and can’t “uprate” you for age or other factors. That’s not the case if you drop coverage and later seek to reinstate it. I know money is always a factor, but I’d recommend you keep all your Medicare coverages when you’re outside the U.S., especially if you’re only going to be gone for a year. Also, Medigap G plans do provide some coverage outside the states. Ask your agent about this, and decide if you need any additional foreign insurance.


DeeDee – Fla.: Is it true that there will be no new enrollments accepted into Medicare Supplement Plans C and F beginning in January 2020?

Phil Moeller: No. What is true is that under terms of a new law (the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA), beginning in 2020, these two types of Medigap plans will no longer be able to cover the annual deductibles for Part B of Medicare, which is $147 this year. However, you can still buy C and F plans in 2020. From now to then, you can continue to get C and F plans that cover the Part B deductible. And, if you have a C or F plan by the time 2020 rolls around, it will continue to cover the deductible in later years, even though newly sold plans will not.


Mark – Calif.: I have been on SSDI (Social Security Disability Insurance), Medicare and Medicaid for 20 years. I have just turned 65. My share of Medicaid costs me $700 a month, and as SSDI is my only income, I can barely pay my Medicare Parts B and D payments, so supplemental insurance is out of the question for now. Was something supposed to change when I turned 65? Is there a better way to do this all?

Phil Moeller: Nothing changes when you’re on SSDI and turn 65. Next year, when you turn 66 and reach what’s called your full retirement age, your SSDI payment automatically converts into a normal Social Security retirement payment. However, you will not get any more money beyond cost of living increases (and they’re supposed to be zero next year). There are numerous low-income supports for Medicare beneficiaries. Perhaps you have checked all of them out. If not, call a California SHIP counselor at 1-800-434-0222 and ask about Medicare Savings Programs and the Extra Help program for assistance paying Plan D expenses.

January 4, 2016 Comments are off admin

How to Pick a Medigap Policy

More than 10,000 people enroll in Medicare each day, according to the National Council on Aging. If you are getting ready to join these ranks, you may find yourself in the market for a plan to pay costs not covered by original Medicare.

Here are five steps to help you find the right plan for your needs.

Step 1: Decide if you want Medigap or Medicare Advantage.

First, know that Medicare alone will not cover all your health care costs.

“Original Medicare pays about 80 percent,” says Jane Kassel, owner of insurance brokerage firm Kassel Benefits in Phoenix.

The remaining 20 percent includes Medicare Part A and Part B deductibles and coinsurance, such as copays for office visits. In some cases, Medicare beneficiaries may have to pay excess charges when a health care provider charges more than the amount approved by Medicare. Original Medicare also does not pay for certain services such as prescription drugs, dental and health care costs incurred abroad. While beneficiaries could pay these costs out-of-pocket, consumers can cover some expenses through the purchase of a Medigap or Medicare Advantage plan.
Medicare Advantage, also known as Part C, allows Medicare beneficiaries to purchase bundled coverage from a private health insurance company. These plans include all the coverage provided by original Medicare plus additional benefits such as prescription drug and dental coverage. Kassel says the biggest downside to Medicare Advantage plans is that they may have a limited network of providers and typically do not provide out-of-state coverage. They may also come with their own deductibles and coinsurance requirements.

Those who want to avoid provider restrictions may want to consider a Medigap policy, also known as a Medicare supplement. These policies cover expenses anywhere Medicare is accepted and may provide what Ross Blair, vice president of eHealthMedicare.com, calls “bumper to bumper coverage” that results in little to no money spent out-of-pocket for health care costs.

“The trade-off is higher premiums,” Blair says. “In some states, you could pay up to $300 to $350 per month.” In addition, Medigap policyholders need to purchase a separate Part D plan for prescription drug coverage, which is included in most Medicare Advantage plans. Medigap plans also do not include dental coverage.
Step 2: Know your Medigap plan choices.

For those who decide they want a Medigap plan, the next step is to become familiar with the options.

“The great thing about Medigap plans is that they are standard benefit design,” says Kris Schneider, vice president of insurance product and carrier management at Aon Hewitt.

Standard benefit design means Medigap policies offer a uniform set of benefits. The policies are lettered from A to N, with each letter representing a different set of benefits. Since Medigap plans are regulated at the state level, not every plan is available in all states. In addition, Massachusetts, Minnesota and Wisconsin have nonstandardized plans.

Of the standardized plans, Plan A offers the most basic coverage, paying Medicare Part A and Part B coinsurance costs as well as up to 3 pints of transfused blood. Plan F is considered the most comprehensive, covering coinsurance, blood, deductibles, skilled nursing in facility care, foreign travel and Part B excess charges. “Plan F is the only plan that covers everything,” Kassel says.

Other plans offer various combinations of the benefits covered by Plan F. Furthermore, all plans except Plan K and Plan L have no out-of-pocket limit. (The limit for Plan K is $4,940, and the limit for Plan L is $2,470.)
Step 3: Narrow your options.

“Medicare consumers have to be very thoughtful about their medical costs,” Schneider says. “[They need to consider] what are their costs now and what they will be in the future.”

Schneider suggests Medicare-eligible individuals consider all the following when weighing their options.

  • Personal preference
  • Risk tolerance
  • Ability to pay
  • Lifestyle and travel

“It is also important to ask about rate stability,” Schneider says. Looking at historical rate changes is one way to gauge stability. Blair suggests consumers also find out which of the following rating mechanisms are used for the policy they are considering.

  • Community rated: Plans that are community rated do not use age as a factor when calculating premiums. Everyone enrolled in the plan, regardless of age, pays the same amount.
  • Issue-age rated: The premiums for these plans are based upon an individual’s age at the time he or she purchases the policy.
  • Attained-age rated: These policies have premiums that will adjust every year based on an individual’s age.

According to Blair, community-rated plans may cost more upfront, but then rates tend to remain stable. Attained-age plans, which Blair likens to variable-rate mortgages, start out inexpensive, but rates increase rapidly as you age.

Successful Retirees Financial Secrets

If you’re looking for retirees who are happy with the financial situation, you’ll want to review TIAA’s “2016 Voices of Experience” survey. It found an overwhelming percentage of retirees (86 percent) are “very satisfied” or “somewhat satisfied” with their financial health. With satisfactions levels that high, it pays to learn about the steps they took to get there. Read on to find more retirees financial secrets.

TIAA surveyed more than 1,500 retirees — most of whom worked in higher education (55 percent), public education (10 percent) or health care (9 percent) — about the steps they took to prepare for retirement.

The first key step they took was to start saving early, consistently and enough. Three-quarters (75 percent) of the retirees who started planning for retirement before age 30 reported being very satisfied with their retirement. According to Cathy McCabe, senior managing director at TIAA, the average contribution to retirement accounts for its clients is 14 percent of pay, considering both employer and employee contributions.

More than half of the survey respondents (55 percent) said they expected their savings would need to last 20 years or more in retirement. This may be one reason that 70 percent of them have an annuity to provide a steady source of retirement income, and 92 percent say they’re satisfied with their decision to buy an annuity.

A majority (54 percent) said they didn’t need to make any financial adjustments to their lifestyle after retirement, while another 20 percent said they made only minor changes. Those who made financial adjustments bought fewer clothes and accessories (59 percent), are traveling less (52 percent) and are dining out less frequently (43 percent). About one-fifth (21 percent) moved to a smaller house.

As these retirees age, they’re less likely to stay in the homes they lived in when they retired. Of retirees age 66 to 69, 68 percent are still in their home, but that percentage drops to 40 percent of those age 80 or older. Those who moved had a variety of reasons, including finding a home with a more suitable size or layout (17 percent), to be closer to family (16 percent) and to reduce maintenance costs (11 percent).

The top two financial priorities for these retirees were planning for the certainty of having enough income to cover essential living expenses (reported by 91 percent) and having enough to pay for health care (87 percent).

These items remain important for retirees as they age, but other issues become important as well. Older retirees focus more on issues that benefit others, such as charitable giving and leaving a legacy. As they settle financially into retirement, they become more comfortable thinking about what they can do for others.

The vast majority of retirees (90 percent) have medical insurance to supplement Medicare. This breaks down as follows:

  • 52 percent have coverage under a group plan from a former employer or other organization
  • 33 percent have purchased individual insurance
  • 4 percent have both a group policy and individual coverage

Twenty-one percent have purchased a long-term care insurance policy.

What advice do these retirees have to share? Here’s a sample:

  • “Do not wait until you have enough retirement money to live in luxury. Retirement itself is a luxury.”
  • “Know your precise monthly income. Be realistic about the lifestyle that income can support, and begin to ease into it 18 months before retirement.”
  • “Try to ease into retirement. I consulted half-time for one year and quarter-time for another year.”

As a result of the smart planning described above, fewer than one-quarter of these retirees are now concerned about running out of money. Here’s one more quote from a retiree that shows it’s well worth your time and effort to plan for a successful retirement: