Are You A Higher Income Earner? Take Note

Often times I work with clients that want to leave their current Employer Group coverage, in order to save money and roll over to Medicare plus a supplement.  While many times this can be a savings to the individual, be aware that the Medicare premium you might be thinking of might not be the rate your friend has.  Most people are eligible for premium free Medicare Part A, but Medicare Part B does have a monthly premium.  (The state does have programs to help pay for the cost of Medicare Part B, for lower income earners).  If you are still working, you may fall under the requirement to pay an additional surcharge on top of your Medicare Part B monthly premium.  For more information regarding these income levels, you can download a free copy of the 2017 Higher Income Earners booklet at www.ssa.gov or you can click here to get a copy.  https://www.ssa.gov/pubs/EN-05-10536.pdf .

If the Social Security Administration determines that your annual household income exceeds the standard amount, you will pay an additional surcharge for Medicare Part B and Medicare Part D.  The standard Medicare Part B premium as of 2017 is $134.00 and the average Medicare Prescription Drug Plan is running around $35.63.  The surcharges shown on the income grid in the above referenced booklet will be added to these standard rates if you activate your Medicare.    However, many individuals are still paying high premiums for medical insurance even under Employer Group Coverage and its well worth it to take the time to calculate your total costs to stay on your group plan or to move over to Medicare.  If you need help with the process, we can help, call us at 1-888-268-1912 and we can walk you through it.

ObamaCare and Medicare Advantage Plans – What is the impact?

Many clients continue to ask me questions about how Obama Care is going to impact their Medicare.  All kinds of rumors are flying around and the lack of understanding can create quite an anxiety among some.  I have had people ask me, ‘Is it true that Medicare goes away in 2014?’ or the opposite ‘With Obama Care, I can return to a Medicare Supplement with no underwriting, correct? The answers are simply, NO and NO.

One of the biggest challenges I find in all this confusion is the separation of marketing and advertising from carriers that offer both products and the consumer who accidentally combines them together.  For example, some clients might here that Anthem’s rights are going through the roof so they call me thinking this applies to their Medicare Supplement and they want out.  Its very important to really understand what is being said on the radio, tv or media and make sure you obtain all the facts before you make a change.

First, Obama Care’s impact on Medicare plans is they will require participating carriers to increase quality of care for members.  This is a plus!  Through various programs, initiatives and ratings systems, you will see different carriers trying to improve their star ratings and those that don’t will be financially impacted.  Agents are required to discuss star ratings with their clients, but some do not realize this is a result of healthcare reform.

Second, there will be some payment reductions to carriers based on all different types of criteria.  However, many of these plans are in this for the long haul or are already non-for-profit.  So these changes will help separate the men from the boys, so to speak, and may result in the ‘fly by night’ healthplans closing up shop and their membership moving to the top carriers that have been in business long enough to adapt to these changes.

Third, the underwriting associated with Medicare Supplements is not affected by the Healthcare reform for individuals on non-medicare plans.  Since California already has provisions for when you can enroll, regardless of your medical condition, plus other special election periods, those are not changing at this time.  So if you are eligible for Medicare and are not sure?  I always recommend you try the Medicare Supplement first.  This way you are utilizing your guaranteed enrollment period and you can always switch over to a Medicare Advantage Plan if you need to reduce costs.

Finally, keep in contact with your insurance agent so they can provide you with updates as they receive them.  Carriers are in constant contact with their agents including resources to help them with membership retention.   So keep your agent close during this challenging time.  Dont have anyone to call your own?  We can help.  Contact us at 888-268-1912 and let us know your questions or sign up for this blog to stay informed.

Medicare Part B Premiums – Don’t Forget to do the Math

For many people, becoming eligible for Medicare provides a unique opportunity to finally save money on the expensive premiums one might be paying under their employer group plan.  If you are approaching the age of Medicare eligibility, reviewing the cost of Medicare Supplements or Medicare Advantage Plans available can be quite exciting.  A word of caution, however, make sure you check your Medicare Part B premium rates.

Many people talk about Medicare among their friends and hear that the premium is a little over $100.00 per month for Part B.  This is often the case, unless your income exceeds the thresholds for the base premium per the Social Security Administration.  If your modified adjusted gross income (MAGI) from the tax return filed two years previous exceeds $85,000 for an individual or $170,000 for married couples (see the brochure available from the social security administration Medicare Premiums: Rules for Higher Income Beneficiaries) you may be subject to an additional surcharge for both Medicare Part B and Medicare Part D.  If your income has gone done since the previous two years, the Social Security Administration will make adjustments to your information provided the change is verifiable.  In addition, they will revisit your premium surcharges on an annual basis and adjust them down if your income begins to decline, or adjust them up if they increase.

So do the math before you come of your employer group plan if you currently earn a lucrative income.  It may be more cost effective for you to wait until you retire.  Remember, if you are currently employed and covered under a creditable employer group plan, you can delay your enrollment with no penalties.

FIVE WAYS THE PRESIDENT’S BUDGET WOULD CHANGE MEDICARE

– “Provided by Kaiser Health News.”

By Mary Agnes Carey

KHN Staff Writer

APR 15, 2013

 

President Barack Obama’s fiscal 2014 budget includes a variety of what he says are “manageable” changes for Medicare’s 54 million beneficiaries as well as for the hospitals, nursing homes and other health care providers that serve them.

That assessment has drawn concern from some patient and provider groups that, although recognizing the need to address the nation’s rising health care costs, say seniors shouldn’t bear the brunt of efforts to reduce entitlement spending.

(Photo by T.J. Kirkpatrick/Getty Images)

“Instead of making harmful cuts to Medicare or shifting additional costs onto beneficiaries, we need to look for savings throughout the health care system, including Medicare,” said AARP Executive Vice President Nancy A. LeaMond.

Obama’s budget proposal, which would reduce the growth in Medicare spending by $371 billion over the next decade, asks wealthier beneficiaries to pay more for coverage and future retirees to pay higher copays for outpatient services such as doctor’s visits and home health care. But the gap in Medicare’s prescription drug coverage where beneficiaries cover all the costs — known as the “doughnut hole” – would close by 2015, five years faster than current law mandates.

The president’s plan would eliminate the two percent payment cut Medicare providers began to feel earlier this month as part of the automatic across-the-board cuts known as “sequestration.” But hospitals and other providers would see their reimbursements reduced. Drug makers would be required to pay higher rebates for drugs dispensed to Medicare’s poorest beneficiaries.

Obama’s budget plan is far from the last word. House Republicans have approved their own fiscal 2014 blueprint, as have Senate Democrats. And many of Obama’s Medicare proposals have been included in prior budget proposals that were not approved by Congress.

While  Obama offered no surprises, “it’s nonetheless significant that the president is once again recommitting himself to more than $4 trillion in deficit reduction built upon $400 billion in health program savings,” said Eric Zimmerman, a partner at the Washington office of McDermott Will & Emery where his clients include hospitals, medical device makers and pharmaceutical companies.

What follows is a closer look at key provisions in Obama’s fiscal 2014 budget that would impact Medicare beneficiaries and providers.

Higher Cost Sharing for New Medicare Beneficiaries: In 2017, 2019 and 2021, new Medicare beneficiaries would have to pay an additional $25 for their Part B deductible, for a three-year total of $75 to be added on to the cost of the Part B premium, which in 2013 is $147.

The administration says the change would “strengthen program financing and encourage beneficiaries to seek high-value health care services.” Seniors advocates say it’s an additional cost to people already struggling on fixed incomes. In 2012, nearly half of Medicare beneficiaries had annual incomes of below $22,500.

Also starting in 2017, Obama’s plan would require new Medicare beneficiaries to pay $100 for five or more home health care visits that are not preceded by a stay in the hospital or another medical facility, such as a nursing home or a rehabilitation hospital. Home health care is one of the few areas in Medicare that does not have cost sharing, and its rapid growth in recent years has led panels like the Medicare Payment Advisory Commission (MedPAC) to recommend beneficiary cost sharing.

Beginning in 2017, new beneficiaries who purchase supplemental insurance, known as Medigap, with particularly low cost-sharing requirements — such as “first-dollar” coverage — will face a surcharge equivalent to approximately 15 percent of the average Medigap premium. The thought is that more generous Medigap plans encourage overuse of services, but seniors rely on these generous plans to shield them from unanticipated costs.

Joe Baker, president of the Medicare Rights Center, said that Medicare proposals that “increase deductibles and co-pays, and tax Medigap plans that ensure financial security, must be rejected.”

Wealthier Beneficiaries Pay More: Current law already requires individual beneficiaries whose incomes are $85,000 and above ($170,000 and above for couples) to pay a larger share of Medicare Part B (outpatient services like doctor visits and laboratory services) and Part D (prescription drugs) premisums. While most beneficiaries pay 25 percent of their Part B premiums, higher-income beneficiaries pay between 35 to 80 percent, depending on their income.

Obama’s plan would increase the lowest income-related premium to 40 percent and cap it at 90 percent.  His plan would also maintain the current income thresholds until a quarter of Part B and Part D beneficiaries are paying the higher income-related premiums.

In a 2012 analysis, the Kaiser Family Foundation found that if the proposal to have a quarter of all beneficiaries pay the higher premiums were implemented last year, beneficiaries with incomes at or above $47,000 for individuals and $94,000 for couples would be paying higher income-related Medicare premiums. (KHN in an editorially independent program of the Foundation.)

The Obama administration says the proposal would help improve Medicare’s financial stability by reducing how much the government spends on Medicare for beneficiaries who can afford to pay more. But the Center for Medicare Advocacy fears asking higher income people to pay a greater share of premiums “might lead to more people choosing not to participate in Medicare. Fewer participants in [Medicare] B and D would result in increased costs for the remaining participants.”

Doughnut Hole Closing Faster, Higher Drug Rebates for Low-Income Beneficiaries: Obama’s budget plan would close by 2015 —  instead of 2020 as mandated by the health law —  the “doughnut hole,” that gap in Medicare prescription drug coverage where seniors pay the full cost of prescriptions until they hit a catastrophic cap. This acceleration would be financed by increasing the current 50 percent discount that the drug makers give to beneficiaries in the “doughnut hole” to 75 percent starting in 2015. Beneficiaries would be responsible for the remaining 25 percent of drug costs. Drug makers oppose raising the discount amount.

The president’s proposal also alters drug costs for the nine million low-income Medicare beneficiaries who qualify for both Medicare and Medicaid. These people, known as “dual eligibles,” used to get their drug coverage from Medicaid, the shared federal-state health insurance program for the poor and disabled. And drug makers returned back to Medicaid in the form of rebates part of the cost of drugs for those beneficiaries, just they do now for current Medicaid beneficiaries.

As part of the creation of the Medicare Part D prescription drug program, the drug coverage for “duals” shifted to Medicare. But the rebates that Medicare Part D plans negotiate are not as generous as those that drug makers previously paid to Medicaid, the administration says. Part D plans also pay higher prices for drugs than Medicaid does. The administration’s proposal would require drug makers to pay the difference between rebate levels they now provide to Part D plans and the Medicaid rebate levels.

In a statement the Pharmaceutical Research and Manufacturers of America, said the rebate proposal would increase  beneficiary premiums and copays.

Provider Cuts: Hospitals are none too happy about Obama’s plans to cut their Medicare payments for bad debt and graduate medical education over the next decade. Medicare now pays hospitals 65 percent of debts resulting from beneficiaries’ non-payment of deductibles and co-insurance after providers have made reasonable efforts to collect the money. Starting in 2014, the president’s plan would decrease that amount to 25 percent over three years, which the administration says would be closer to private payers that typically pay nothing on bad debt. The reductions would be in addition to those hospitals and other providers face as part of the 2010 health law.

Beginning in 2014, the Obama plan also would cut by 10 percent “add-on” payments to teaching hospitals for graduate medical education. In its budget document, the Department of Health and Human Services cites a MedPAC finding that these additional payments “significantly exceed the actual added patient care costs these hospitals incur.”

Hospital groups, however, maintain that the cuts to bad debt reimbursement and medical education payments would weaken hospitals’ ability to provide care and to train physicians, nurses and other health professionals.

Concerning payments to physicians, Obama’s budget assumes that Congress will once again pass a “doc fix” to avert a scheduled 25 percent payment cut in 2014. Administration officials say they want to work with Congress to find a long-range solution to avert the annual crisis over Medicare physician payments.

What Obama Left Out: The president did not propose an increase in the Medicare eligibility age from 65 to 67, a savings mechanism favored by the GOP but assailed by some key Democrats.

Nor did Obama propose combining the premiums beneficiaries pay for hospital care (Part A) and outpatient services (Part B). Taking that step, which has the support ofRepublican leaders like House Majority Leader Eric Cantor, R-Va., would reduce Medicare expenditures and lower beneficiaries’ costs for hospital care. But seniors who mostly use Part B and don’t go to the hospital often would pay more.

Some analysts wonder if these and other Medicare overhaul ideas could resurface as part of a larger discussion that includes overhauling the tax code and entitlements.  “This is the first time in this presidency that I have seen a chance at a bipartisan budget agreement, so I am cautiously optimistic about that,” House Budget Committee Chairman Paul Ryan, R-Wis., told National Public Radio.

House Ways and Means Committee Chairman Dave Camp, R-Mich., has said his panel will hold a series of hearings to evaluate ideas including those advanced by Obama and by his fiscal overhaul commission. “Given the bipartisan support for various reforms to these programs, there is no reason we cannot roll up our sleeves and get this done,” Camp said in a statement.

But the GOP and Obama have widely different views. House Republicans’ fiscal 2014 budget plan, for instance, would eventually turn Medicare into a “premium support” plan that would give beneficiaries a set amount for their coverage, which Democrats oppose. Meanwhile, Obama has said he’ll agree to entitlement changes only if Republicans agreed to higher revenues, which they steadfastly oppose.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Delayed Medicare Enrollment Can Sting

Dont Get Stung With Penalties - medicareoptionsonline.com
Dont Get Stung With Penalties – medicareoptionsonline.com

So you qualified retro-actively for Disability and viola you got Medicare.  However, since you had coverage under your spouse’s health insurance you decided to suspend your Medicare Part B coverage.  BE CAREFUL.  If for some reason your spouse retires, or loses the coverage through his employer and goes onto COBRA, the waiving of the penalty for not being enrolled in Medicare does not apply.  One of my clients recently discovered this only 3 days after the open enrollment from January 1st through March 31st had ended.  Worse yet, she had been on Cobra for nearly 18 months paying high premiums for coverage that she could have ended and gone back onto her Medicare.  So be careful, if you call Social Security and ask them to STOP your Medicare Part B,  they are going to assume you know what you are doing.  Ignorance is not bliss nor is it an excuse, you will be charged a penalty if you are not covered under an employer group plan through yourself or your spouse and that coverage is being provided during employment.  COBRA does not qualify as a waiver of the penalty because the primary covered individual is no longer working.

So ask questions if you are not sure about your Medicare options, rights, and penalties.  There are many resources available online at Medicare.gov and through broker agencies like ours at www.medicareoptionsonline.com.  Avoid the 10% penalty and make sure that you elect your Medicare Part B when you are required to do so.  For more information you can download a free copy of ‘Medicare & You’ for further information.

What do the letters at the end of the Medicare Number Represent?

Many individuals inquire from time to time what the letters shown at the end of their Medicare ID/Claim Number represent.  Here is a summary of the letters and their designation (this many not be a complete list, but the most common):

*A = retired worker

 

B = wife of retired worker

B1 = husband of retired worker

B6 = divorced wife

B9 = divorced second wife

C = child of retired or deceased worker; numbers after

C denote order of children claiming benefit

D = widow

D1 = widower

D6 = surviving divorced wife

E = mother of a child of a deceased worker

E1 = divorced mother of a child of a deceased worker

F1 = aged dependent father

F2 = aged dependent mother

*HA = disabled worker

HB = wife of disabled worker

HC = child of disabled worker

*J1 = special “over 72” benefit, has A and B

K1 = wife of “over 72” benefit, has A and B

*M = has Part B Medicare only, no SSA benefit

*T = has A and B Medicare, no SSA benefit

W = disabled widow

WA = railroad retirement

*denotes the recipient’s own social security number.

If you are looking for answers to questions such as these, or information regarding Medicare Benefit Plans in your area call us at 1-888-268-1912 and we are happy to provide you with immediate assistance.

Can I Enroll In Medicare if I’m over 65 and still working?

Yes.  I get asked this question all the time from individuals who are still working and do not want to start their Social Security benefits just yet.  If you are covered under your employers insurance policy and have determined that it is more cost effective to enroll into Medicare, then you will need to obtain a creditable coverage letter for your late Medicare Part B and Medicare Part D enrollment.  This letter which must be provided by your employer, tells Medicare that you were covered by Group health insurance during the time that you were originally eligible for Medicare.  As long as the insurance was creditable, you will not receive any late enrollment penalties.  Since you do not want to start your Social Security yet, Medicare can bill you for the cost of your Part B coverage rather than deducting it from your Social Security.  You do not have to start your Social Security in order to start your Medicare benefits.  They are two separate benefits.

Please note it is important to review your Group Health Insurance benefits before disenrolling and switching to Medicare.  Some Group Health benefits offer additional services not covered by Medicare so its important to review your evidence of coverage and make sure the change is right for you.  Many individuals have saved a considerable amount of money switching to a Medicare Plan and feel that the savings far outweigh any change in benefits. 

Top 5 Things to Think About When Choosing a Medicare Plan

Are you ready for your Annual Enrollment Period on November 15th?  By now, you probably have over 2 feet of advertising piled up on your dining table offering a myriad of different healthcare choices that are ‘Just Right For You’.  The truth is there are several very good options available to Medicare beneficiaries.  However, the process of trying to determine which one is right for you can be confusing.  The best way to make sure that you are getting everything you need, is to write down the Top 5 things that are important to you, such as: 

1. Do you have a specific doctor or doctors that you currently see or wish to see? 

2. Do you have a specific hospital that you prefer to use in case of an emergency? 

3. Do you have a specific amount of money that you have budgeted to spend, and;

4. Do you have a list of medications that you currently take and will continue taking? 

5. Do you have any special needs such as transportation or low income?

Now that you have focused your needs down to the Top 5, where do you go from there?  You have several options there as well and most importantly, don’t be afraid to ask for help.  Once beneficial and time saving options is to use an independent insurance agent that is contracted with several different healthplans.    This will save you time because they can gather your Top 5 concerns in combination with your zip code and provide you with various options.  Otherwise, you may find yourself wandering from healthplan website to healthplan website trying to determine which of the plans meet your needs and also carriers the richest benefits.  When you use an independent insurance agent, YOU become the client instead of the healthplan.  If an agent only works for one plan, than he/she can only provide information on the benefits of their employer.  Not the case with an indepedent agent, he/she can provide you with a variety of options for you to choose from and eliminate the hassle of working with multiple agents.  The best part of all – there is no cost to the consumer when using an agent, since they receive their compensation directly from the healthplan that you choose. 

So why make this 45-day Annual Enrollment Period stressful?  Sit Back, Relax, and let the agent do the work.  Ask good questions, share with them your concerns and when presented with choices, make sure you fully understand what they are sharing with you, and if you like what you see, enroll!  Chances are, you’ll make a new connection that can assist you years to come.  Most agents want to maintain the relationship year-after-year, which allows you to call them should any Medicare question arise.  For more information on where you can get free quotes for both Medicare Supplement Plans, Medicare Advantage Plans, and Prescription Drug Plans for California go to www.medicareoptionsonline.com.  Now get back to doing something more enjoyable than working about Medicare!