Let’s Clear Up Your Health Insurance Confusion | Understand And Save Money

Updated: April 12, 2024 at 9:40 am

I suspect that health insurance confusion is worse than filling out taxes. That’s what I feel when I speak to people about health insurance.

People become even more confused when it’s time for the health insurance open enrollment period.  This period runs from November 1st to December 15th every year.

We at My Family Life Insurance call it the “health insurance open confusion period”. Why?

Many individuals and families are simply and incredibly confused about their health insurance. For example, most people don’t know the difference between a copay and coinsurance. Not knowing these basics can have a negative impact…on your checking account!

Continue reading Let’s Clear Up Your Health Insurance Confusion | Understand And Save Money

5 Ways To Save Money On Medicare [Simple Solutions]

Updated: April 12, 2024 at 9:40 am

Medicare and Medication MoneyAre you looking to save money on Medicare? You are not alone.

According to a new report by CNBC, a healthy couple aged 65 could expect to pay over $385,000 in today’s dollars in Medicare with copays, coinsurance, and deductibles as well as dental premiums, vision costs and more!

If you are currently on Medicare, or will be turning 65 soon, you may have wondered how to save money on Medicare. Like anything else, figuring out ways to save takes some effort on your part. There’s many simple solutions, though. It can seem impossible. It is not.

In many cases, the process of saving money on Medicare is similar to that of saving money on other things. If you are a person who just can’t save money in general, then saving money on Medicare and other healthcare expenses will be hard.

In this article, we discuss the following. Feel free to click and jump around.

Let’s talk about a Medicare assessment next.

Take An Assessment to Save Money on Medicare

In order to truly save money on Medicare, you first need to perform a financial self-assessment on your health. Does this mean you have to be a doctor? No, all you need to do is look in the mirror of your current health. Answer these questions:

  • What were your health expenses during the last couple of years, including premiums?
  • How much did you spend on prescription drugs?

(Note these two are easily found on your health insurance carrier’s website whether it is Medicare or not.)

  • Do you have a family history of any conditions or diseases?
  • Are you comfortable with out-of-pocket exposure or do you want a plan which will cover nearly everything?

The answers to these questions will help determine the best Medicare plan for your situation. For example, if you had a lot of out-of-pocket costs, or have a long-term, costly chronic condition, a Medicare Supplement plan might be beneficial for you rather than a Medicare Advantage plan.

It is also important to make a list of the providers you see and gather a list of your prescription drugs. You will want the right part D prescription drug plan and assistance through the “donut hole” if you are exposed.  More on that in a minute.

What you are trying to do: you are aiming for the “Goldilocks” plan. It is the one that you don’t pay too much or not enough. In other words, one that is “just right” in terms of cost, coverage, and your specific financial and health situation. Some people will spend too much on Medicare insurance plan premiums or too little which cost them higher out-of-pocket costs.

Knowing Your Income Will Save Money On Medicare

A majority of us paid into Medicare during our working years. This allowed us to pay for Part A (hospital care). Therefore, nearly all of us do not have to pay for Part A upon enrollment.

However, Part B is a different story. We do have to pay for Part B (doctor services), and how much we pay is directly based on our modified gross adjusted income from two years prior. For instance, your 2020 Medicare Part B premiums are based on your 2018 MAGI. In 2020, for single income individuals with less than $87,000 MAGI and joint filer with $174,000 MAGI, your monthly Part B premium is $144.60. A MAGI above these levels results in a higher Part B premium.

If you are in a higher bracket and earn a higher income, you may ask how you can mitigate this? Have a tax, cash flow, and spending plan. Although we are not tax advisers, we are CFPs and financial planners. You will want to understand the different tax income options. You will also want to keep an adequate cash on hand and try not to tap into retirement savings. At the end of the day, you will want to work with a qualified advisor who has experience with creating a retirement income plan.

To Save Money On Medicare, You Need To Know Your Enrollment Periods

Do you know your enrollment periods? This is one of the keys to save money on Medicare. Many don’t, and this is a major mistake I see many Medicare beneficiaries make.

Three months before you turn 65, a 7 month window starts for your Original Medicare (A&B), Medicare Advantage (C), and Prescription Drugs (Part D). Moreover, if you have done your homework and wished to purchase a Medicare Supplement plan instead, that window begins the month you turn 65 and goes an additional 6 months.

Why are these initial enrollments important? If you don’t sign up when first eligible for Medicare, you will pay a penalty.

The Part B penalty is 10% of the premium for every 12 months you should have been enrolled. It is a lifetime penalty, so getting it right the first time is important. Likewise, you will pay a penalty if you don’t sign up for Part D prescription drugs when first eligible. That penalty is different than the Part B penalty. So, it is important that you know these enrollment periods in order to save money on Medicare.

 What happens if you continue to work beyond age 65 or on an employer-retiree health care plan? This is an allowed exception, and you can delay your enrollment period once you are off your employer plan. You will have a special election period. As long as you make your choices within the special election timeframe, you won’t pay a penalty.

Moreover, you can make changes to your plan, without penalty, during Medicare’s annual election period. This period runs between October 15 and December 7th. During this time, you can disenroll in your current plan and enroll in something else. Plan changes during this time will be effective January 1 of the ensuing year.

Knowing Your Plan Options Can Help Save Money On Medicare

You really have three common plan options when it comes to Medicare insurance plans (there are other plan options for specific needs individuals such as Medicaid beneficiaries. These plans are outside the scope of this article). Which one you choose depends on your self-health assessment. That is why the self-assessment is important because it will save you money.

Note that some plans pay more benefits and others pay less. The premiums range: a lower monthly premium usually means greater out-of-pocket exposure and vice versa. Between the Part B premium, Part D premium, and the Medicare Advantage/Medicare Supplement plan selected, you could pay $200 to $500 per month or more. Here are the plans.

Medicare Plan Options

(1) Stick with Original Medicare (Parts A&B) and a Part D Prescription Drug Plan. You can simply enroll in Original Medicare A & B, and enroll in Part D. You will have to pay the Part B premium and a Part D premium.

Here’s an example. Your Part B and Part D premiums cost you $200 per month in total. Did you know if you stayed with original Medicare, you would be subject to not only cost sharing but also unlimited out-of-pocket costs? Let’s say you got in a car accident which cost Medicare $50,000. There would be deductibles to pay along with the standard 20% coinsurance. Let’s say you had to pay $12,000 out-of-pocket.

Can you pay this?

(2) Enroll in a Part C Medicare Advantage Plan.  A Medicare Advantage plan is offered by private insurers. It combines parts A & B. You typically have to pay a monthly premium in addition to part B. Nearly all Medicare Advantage plans integrate with Part D, in which there is no separate premium. So, that is a good thing! These plans may also offer other benefits such as preventative dental coverage, vision, and hearing among some fitness discounts.

The downside: you still have out-of-pocket exposure, up to $6,700 in 2020. You still have to pay plan deductibles, co-pays, and coinsurance. Is that worth the out-of-pocket exposure?

(3) Enroll in a Medicare Supplement Plan. Medicare supplement plans work in tandem with Parts A, B, and D, which means you would have to purchase a separate Part D plan if you choose a Medicare Supplement Plan. A Medicare Supplement Plan generally pays for your out-of-pocket costs. Most Medicare beneficiaries have access to 10 different Medicare Supplement plans. Other residents have alternative Medicare Supplement plans, but they work the same way.

Understanding Carrier Discounts And Assistance Can Help You Save Money On Medicare

It pays to look beyond the insurance coverage as well. Most carriers offer additional value-added services such as fitness discounts or 100% paid, home/errand assistance, etc. CVS Pharmacy offers a 20% discount on their generic over-the-counter products for anyone who purchases a Part D plan through their network. These benefits are different among carriers, so it pays to do some homework here, too.

Additionally, you may qualify for Part D “extra help,” manufacturer discounts, or Medicaid. It pays to look into these programs as well. If your doctor prescribes a high-cost drug, approved by your Part D carrier, chances are the manufacturer could offer a discount beyond what is offered through the donut hole, which your cost exposure will be greatest.

Finally, if you have money in an HSA, you can use that money to pay for coinsurance, deductibles, and copays. Although it is not allowed to pay for Medicare Supplement premiums, HSA money can pay for Medicare Advantage and Part D premiums as well as any cost sharing and deductibles.

Using A Qualified Agent To Help Save Money On Medicare

Ok, a shameless plug, but it is worth mentioning. You can go on any website and select a Medicare plan. How do you know if it is right for you? Do you have the time to go through every plan available in your area and select the right one? The longer you wait, you might miss important enrollment deadlines (see above).

And, sure, you can visit a SHINE/SHIP counselor in your area. It is a free service, and he or she can present the plans to you. However, counselors can not advise you on what the right plan is for your specific situation. Having a qualified agent like My Family Life Insurance work on your behalf, and with many carriers, can save money on your Medicare costs.

You can be certain a qualified agent will direct you to the right plan for your situation, discussing the advantages, disadvantages, and expectations. Sure, we get paid a commission. The commission is paid for our efforts and to provide future service for your Medicare needs. You have someone in your corner. Does that make you feel comfortable?

Now You Know How To Save Money On Medicare

As you can see, selecting the right Medicare plan is more than simply picking the cheapest, least expensive option. It is really dependent upon you and your health care needs. Need help in determining that? We at My Family Life Insurance have helped many Medicare beneficiaries select the right plan for their own, unique situation. Contact us today to help you.

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AHCA Summary: What You Need To Know Now

Updated: April 12, 2024 at 9:40 am

You know the saying. You must be living under a rock if you haven’t heard about the proposed American Health Care Act (AHCA, also known as “TrumpCare”). Maybe you have heard from one of your friends that he or she will no longer be able to obtain affordable health insurance due to a pre-existing condition. Or, that premiums will rise significantly. Or, that penalties will increase. The proposed bill has certainly garnered much attention, some truthful and some not. In this article, we will give an AHCA summary and discuss the truths and myths of the Act. We hope that after reading this article, you feel empowered and informed. Continue reading AHCA Summary: What You Need To Know Now