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Medicare

Medicare Refresh

By | Medical Advocacy, Medicare, SH&J Blog | No Comments

During working years, most individuals have little choice in their health insurance coverage. Employees and their family members typically enroll in the health insurance plan offered by their employer and don’t ‘shop’ for a personal policy unless self-employed. However, once you turn 65 and are no longer working, typically you have choices to make about Medicare!

Initial Enrollment Period

Each individual has their own initial enrollment period, which begins 3 months prior to your 65th birthday and ends 3 months following your 65th birthday. If you want your coverage to start the first day of your birth month, you will want to enroll within the 3 months leading up to your birthday. If you are 65, still working, and enrolled in a group policy that covers 20 or more employees, you are eligible for an extended special enrollment period where you can enroll in Medicare after your 65th birthday. To avoid late enrollment penalties, you will need to enroll within 7 months of your group coverage ending. If you miss both of these enrollment periods you are eligible to enroll in Medicare during the general enrollment period January 1 – March 31, annually. However, late enrollment penalties may apply for each year you delay signing up.

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | Medicare Refresh
Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | Medicare Refresh

Before You Enroll

Before enrolling, you may ask yourself, what does Medicare cover and what are my options? Original Medicare includes Part A and Part B. Part A covers hospitalization expenses and Part B covers doctor visits. If you or your spouse has paid into Medicare for over ten years, you will not owe a premium for Part A but will still be responsible for an annual deductible. With Part B, individuals are responsible for a monthly premium based on household income as well as an annual deductible and coinsurance. Because there are various out of pocket expenses associated with Part A and Part B, individuals have the option to obtain a standardized supplemental Medigap insurance policy to cover expenses original Medicare may not cover. If you enroll in a Medigap policy during your initial enrollment period, you will not be subject to medical underwriting and cannot be denied. Lastly, there is an option to enroll in a Part D drug plan through private insurers. Depending on your current prescriptions, you’ll want to shop around as plans vary in monthly premium amount, deductible, and coinsurance. If you have creditable retiree coverage through your employer, this may replace the need for a Part D and/or supplemental policy.

Medicare Options

As an alternative to original Medicare, individuals have the option of enrolling in a Medicare Advantage (Part C) plan through a private insurer more like an HMO or PPO. Medicare Advantage Plans cover all care that Part A and B cover and sometimes include drug coverage. If you join a Medicare Advantage plan, you do not need a supplemental policy but are still required to enroll in Part A and Part B, as well as pay Part B premiums along with any premiums due for your Medicare Advantage plan. If you enroll in a Medicare Advantage plan and later decide to switch over to original Medicare, you may do so, but you will be required to pass health underwriting.

There are many factors to consider before enrolling in Medicare. Are you healthy or do you require a high level of healthcare? What prescription drugs are you currently taking? Do you travel a lot or live in multiple places throughout the year? Be sure to talk with your Financial Advisor and/or Medicare Specialist prior to enrolling to discuss which options may best fit your current health care needs.

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | Medicare Refresh

Watch those Medicare Part B & Part D (Prescription Drug Coverage) Premiums: You May be Paying Higher Premiums than you Should!

By | Medicare, SH&J Blog, Tips | No Comments

For our seniors 65+ and those caring for seniors…

Did you know that if your income has dropped significantly you may be eligible for a reduction of your Medicare Part B & and Part D (Prescription Drug Coverage) premiums?

If you’ve ever received a letter from Social Security telling you that your income level causes you to pay extra premiums on your Medicare Part B and Part D, then you should be aware of these rules.

The Social Security Administration receives data that is two-years old, specifically your Modified Adjusted Gross Income (MAGI), each year from the Internal Revenue Service (IRS) and uses this information to determine the amount of your monthly premiums. If your income has dropped below specific thresholds, your premiums will decrease and vice versa. See the chart below for a breakdown of income levels and premiums required in 2016.

(source)

The important thing to note is that you don’t have to wait for two years for Social Security to get updated information from the IRS. Instead, if you know your MAGI has dropped below the income threshold on which your current premiums are based, then you can file an appeal along with some required documentation of your current MAGI and request a review.

Required documentation is:

  • A copy of your filed tax return and an IRS transcript;
  • A letter or statement from the IRS stating they have corrected your tax information and explaining the correction;
  • Your amended tax return, along with a letter from the IRS accepting your amended return or an IRS transcript; Your copy of your tax return that shows an obvious IRS transcription error in tax-exempt interest income; or
  • Your declaration under penalty of perjury that you lived apart from your spouse for the entire year when you filed your income tax return as “married Filing separately”. (source)

If the Social Security Administration finds that you’ve been paying a higher premium than you should have been, then they will refund the excess within 30 days of notifying you of their findings. So don’t wait, keep an eye on your income level and if you’re due a reduced premium, get filing!

For additional information read publications, Medicare Premiums: rules for Higher-Income Beneficiaries (SSA Publication No. 05-10536) and Medicare Premiums: What You Can Do If you Think Your Income-Related Premium Is Incorrect (SSA Publication No. 05-10125).