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Getting Ready to Transition to Medicare? Then It’s Time to Re-Visit Your ABCs … and LMNs
Getting Ready to Transition to Medicare? Then It’s Time to Re-Visit Your ABCs … and LMNs
Transitioning from an employer-provided plan to Medicare, the federal health insurance program for those 65 and older and certain younger people with disabilities, can provide a tremendous sense of security — though it can also feel a little daunting. But demystifying this vital benefit doesn’t have to be an impossible task. In fact, it can be as easy as (re)learning your ABCs. Here’s a quick rundown on the basics of Medicare and its various parts if you’re about to become eligible.
The ABCs and Ds of Medicare
Unlike the private insurance you may be accustomed to, Medicare coverage is composed of four main parts, each labeled with a letter:
Part A (Hospital Insurance): Covers inpatient hospital care, skilled nursing facility care, hospice care and some limited home health care services. Most individuals’ premiums are covered by the Medicare taxes either they or their spouse have paid.
Part B (Medical Insurance): Covers medically necessary services, such as doctor visits, outpatient care, medical supplies and many preventive services. Part B requires a monthly premium, which is usually deducted from Social Security benefits.
Part C (Medicare Advantage): Offered by private Medicare-approved insurers, these plans combine Part A and Part B benefits and can include additional services like vision, dental and prescription drug coverage. They often have lower out-of-pocket costs but can come with network restrictions and requirements regarding your health care.
Part D (Prescription Drug Coverage): Covers prescription medications and is available as a stand-alone plan or as part of Medicare Advantage. The monthly premiums and drugs covered can vary by plan, so it's crucial to choose a plan that suits your needs.
Don’t Fall into the Gap (plus a few more letters to consider)
Just as your private insurance may have had limitations, restrictions or exclusions, it’s important to get the lay of the land regarding what is — and isn’t — covered by Medicare. Luckily, though, you have some flexibility when it comes to dealing with any coverage shortfalls. Medigap policies, also known as Medicare Supplement Insurance, are offered by private insurance companies and can help cover costs that Original Medicare does not, including copayments, coinsurance and deductibles (filling coverage “gaps”). There are 10 standardized Medigap plans available, each named with a letter (A, B, C, D, F, G, K, L, M and N) and offering different levels of coverage. Not all plans, however, are offered in every state, and they’re not compatible with Medicare Advantage. Carefully compare Medigap plans and choose the one that best aligns with your health care needs and budget.
Important Enrollment Periods
When you’re getting ready to change from private health insurance over to Medicare, there are specific periods for enrollment that you need to observe to avoid costly penalties and coverage gaps:
Initial Enrollment Period (IEP): A seven-month enrollment window begins three months before you turn 65, includes your birth month and ends three months afterward.
General Enrollment Period (GEP): If you miss your IEP, you can still sign up for Part A and/or Part B between January 1 and March 31, with coverage starting on July 1. However, you want to avoid this as you may face lifetime late-enrollment penalties.
Open Enrollment Period (OEP): Between October 15 and December 7 each year, you can make changes to your Medicare coverage, such as switching from Original Medicare to a Medicare Advantage plan.
Maximize Medicare Benefits by Choosing Wisely
Selecting the right Medicare coverage is essential to maximize benefits and minimize your out-of-pocket costs. Carefully evaluate your health care needs, budget and lifestyle as well as any program costs, covered services and restrictions when making your decision. How you handle your initial enrollment can have long-term consequences, so consider consulting a qualified Medicare consultant if you’re unsure what to do. They can help guide you through the important decisions you’ll face during the enrollment process and answer additional questions you may have as you make this important transition in your health care coverage.
Sources
https://www.medicare.gov/basics/get-started-with-medicare
https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/buying-a-medigap-policy
https://www.medicare.gov/health-drug-plans/medigap/basics
In the Long Term, Medicare Falls Short
In the Long Term, Medicare Falls Short
Americans turning 65 now have about a 70% chance of needing long-term care in the future. You might assume that Medicare will pay for all your long-term care needs, but you’d be wrong. Medicare does provide some benefits, but only under very specific conditions.
So What Does Medicare Cover?
Medicare does cover some long-term care if you meet the following criteria:
You have had a hospital admission with an inpatient stay of at least three days
You are admitted to a Medicare-certified nursing facility within 30 days of that inpatient hospital stay
You need skilled care, such as skilled nursing services, physical therapy, or other types of therapy
If you meet all their conditions, Medicare pays a portion of the costs for up to 100 days for each benefit period. After day 100, Medicare typically does not pay anything.
If your doctor prescribes it to help treat an illness or injury, Medicare can also cover physical, occupational or speech therapy as well as durable medical supplies such as walkers, wheelchairs and oxygen — typically, Medicare pays 80% with you responsible for 20%.However, a Medicare supplement plan could pay some or all of that difference.
The assistance is good for 60 days, but your doctor may reauthorize it. If you’re otherwise pretty healthy but need a home care aide to help with meals and take you for a walk, that form of support is typically not covered even though it’s the type of help that seniors commonly benefit from.
The Alternatives
Family Assistance.Many older Americans get through this period with help from friends and family. Unfortunately, this trend creates a period of “sandwich” years for middle-aged people as they juggle helping parents while raising their own children and managing a career. And sadly, some seniors have no family willing or able to help out.
Private Insurance. Others may have invested in long-term care insurance, paying premiums over a number of years in order to receive payments to help with their long-term care. However, the high price tag associated with such policies can make them cost prohibitive for many.
Medicaid. For some, their only resort is Medicaid, the medical assistance program run jointly by the federal government and the states. Rules vary by state, and some states are more generous in who they cover and how much they pay. Check your state’s Medicaid website to find out what the rules are where you live or where you’ll be when you retire.
In many cases, single applicants can have no more than $2,000 in assets to qualify for Medicaid. These typically don’t include your primary residence or one car, but they generally include bank accounts, large insurance policies and the like. There are also certain kinds of trusts that can protect assets that would otherwise disqualify you, but the rules are very specific, and it’s advisable to seek out counsel from an elder law attorney before going down that route.
Be aware that Medicaid also has what’s known as a “look back” period: Any assets you transfer to someone else within a certain number of years (depending on the state) prior to your Medicaid application will create a “penalty period,” a number of months in which you cannot receive Medicaid even if you would otherwise qualify.
The Importance of Planning Ahead
The cost of long-term care can be considerable; it can deplete your hard-earned nest egg and wipe out assets you may have hoped to give to your children. Take the time to have an in-depth discussion with your financial advisor, as early as possible, to sort out what kinds of care you may require, how much it could cost and how you could afford it. Your options will become decidedly more limited once you actually have a medical need. As Ben Franklin reminded us, an ounce of prevention is worth a pound of cure. This is the time to expend the effort to prevent an old-age calamity.
#estateplanning #estate #retirement #planning #wellcents #medicare
Source:https://longtermcare.acl.gov/medicare-medicaid-more/medicare.html
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