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  • Archive for the ‘Healthier and Wiser’ Category

    Five Things You Better Know about Medicare

    Thursday, May 28th, 2015

    managing money in retirementMedicare is celebrating its 50th anniversary this year as the nation’s federal health insurance program, playing a vital role in the lives of most people age 65 and over.  In fact, Medicare currently covers 49 million Americans. Many people, however, do not know the very basic but important facts about the program. Here are five things you need to know about Medicare (and a few that will save you from the glitches that can cost expensive lifetime penalties!):

    1.     Medicare is not a “one size fits all” program.  

    While collectively referred to as Medicare, the program is actually made up of different parts: Part A covers inpatient hospital care, skilled nursing facilities and some home health care. Part B covers doctor visits (but not all routine exams), medically necessary supplies and equipment, physical and occupational therapy, outpatient mental health services and other outpatient hospital services. Part D is an optional program, but you need to enroll in Part D if you want to receive coverage for prescription drugs.

    Important decisions are involved as you enroll in each of these Parts, including whether or not you need or want supplemental insurance. Many people will buy supplemental insurance to cover health expenses not covered by Medicare Part A and B. Medigap Supplemental Insurance and Medicare Advantage Plans (sometimes referred to as Part C) are two options, but you need to do your homework and learn how these plans differ as lower out-of-pocket costs may also place more restrictions on physician and hospital choice.

    2.     Medicare is not free!

    Medicare is not a fully subsidized program; much like with private insurance, you have to pay premiums, deductibles and co-pays. The amounts can vary depending on income.

         •     Part A does not have a premium, but it does have an annual deductible and co-payments. The deductible in 2015 is $1,260.

         •     Part B has a premium and the amount you pay is based on income. In 2015, the monthly premium for Part B for those whose income is $85,000 or less is $104.90. Higher income seniors pay a higher premium. There is also an annual deductible, which in 2015 is $147.00. Co-payments apply to most Part B services.

         •     Part D also has a monthly charge that varies depending on which plan you choose. The average Part D premium is $31 a month, and you usually also have to pay out-of-pocket for a percentage of your prescription drug costs.

    It is also important to know that your Part B premium is automatically deducted from your Social Security benefit! Many people do not realize this and are surprised when their monthly Social Security benefit payment is less than they expected.

    3.     Medicare does not cover all of your possible health care needs.

    The recent healthcare reform increased the number of free preventive services available to Medicare beneficiaries such as the annual free “wellness” visit to develop or update a personalized prevention plan. Beneficiaries also get a free cardiovascular screening every five years, annual mammograms, annual flu shots, and screenings for cervical, prostate and colorectal cancers.

    But Medicare does not cover routine dental care, eye care, or hearing aids, and perhaps most importantly: Medicare does not cover most long-term care, and covers only limited home health care and nursing home costs (usually following a hospital stay). So even if you are eligible for Medicare, you need to also be thinking about and planning for your possible long-term care needs.

    4.     You risk a possible penalty if you do not sign up for Medicare once you are eligible.

    You are eligible for Medicare when you turn 65.

         •     If you are already receiving Social Security benefits, you will be automatically enrolled in Parts A and B (and you can choose to turn down Part B if you’d like).

         •     If you have not started taking Social Security, you will have to sign up for Parts A and B (or Medicare Advantage) during your initial enrollment period. The initial enrollment period to apply for Medicare is 3 months prior to your 65th birthday, the month of your 65th birthday, and 3 months after your 65th birthday (for a total enrollment period of 7 months). To ensure coverage starts by the time you turn 65, sign up in the first three months you are eligible.

    If you miss signing up during that initial enrollment period, you can sign up during the general enrollment period (that runs from January 1 to March 31, and coverage will begin on July 1), but you will have to pay a 10% penalty for life for each 12-month period you delay in signing up for Part B! The penalty does not apply if you delayed enrollment because you were actively employed and covered in a workplace plan or covered by an employed spouse’s workplace plan (but read this next point carefully!)

    5.     There are special rules you need to know if you have health insurance through your employer at the time you are eligible for Medicare.

    If you are still working and have insurance through your employer when you become eligible for Medicare, you may want to delay signing up for Medicare. If this is the case, you also have an 8-month Special Enrollment Period to sign up for Part A and Part B that starts the month after the employment ends or the group health plan insurance based on current employment ends, whichever happens first. Usually, you don’t pay a late enrollment penalty if you sign up during a Special Enrollment Period.

    This is another important item to note: COBRA and retiree health plans are NOT considered coverage based on current employment. That means you are not eligible for a Special Enrollment Period when that coverage ends. So it is important to also understand how COBRA and Medicare work together:

    •     If you have Medicare first and then become eligible for COBRA upon leaving your employer plan, you can have both. But remember that Medicare pays first and COBRA pays second, so you do not want to drop Medicare to take COBRA—without it you have no primary insurance, which is like having no insurance at all.

    •     If you have COBRA first and then become eligible for Medicare, your COBRA coverage may end. Since you will not be fully covered with COBRA, you should enroll in Medicare Part A and Part B when you are first eligible to avoid a late enrollment penalty.

    To learn more about Medicare and other resources available, check out WISER’s Medicare Basics fact sheet, and visit www.medicare.gov and www.medicarerights.org. The website, www.mymedicarematters.org also provides an easy online guide for exploring coverage options, costs, and the enrollment process.

     

    This blog is part of an ongoing series for the “Campaign for a Secure Retirement:  Helping Millions of Americans Plan and Save for Retirement;” the Campaign is a joint educational retirement campaign to encourage retirement planning and saving and to promote the online Social Security Statement, available through my Social Security, as an important retirement planning tool. 

    A New Year to Invest in Your Financial Future

    Wednesday, January 19th, 2011

    The New Year presents us all with an opportunity to reevaluate our priorities and make some new year’s resolutions. Sometimes we have a habit of creating really extravagant goals for ourselves each year, hoping that this year will be the year to change it all. But by the time the New Year ball drops again, we often feel disappointed that we didn’t accomplish all we had in mind. This year, let’s resolve to make some financial resolutions that will stick!

    WISER’s mission is to help you create achievable savings and investing practices that can be maintained for a lifetime. To help you create your own unique, financially savvy path towards retirement, we have put together resolutions—one for each month—that are realistic and attainable. Take this opportunity to start fresh in 2011 with new goals for your financial future. Then when the ball drops on this year, you will be on your way to a more secure retirement. From all of us at WISER we wish you a happy financial new year in 2011!

    12 Helpful Tips for Each Month of 2011: Click here to print out your own copy for the fridge or your desk to remind you year round!

    1. January – Resolve your budget.
    Even if you feel like you are swimming in debt or living paycheck to paycheck, the first step to taking control is knowing how much money is coming in and where it is going. Our budget worksheets can help track where your money is going and help you establish some firm financial goals. Simply taking the time to calculate the numbers and having them right in front of you can be empowering and help motivate you to get (and stay!) on track.

    2. February – Invest in your financial relationships.

    This month, take time to sit down with your partner, spouse, significant other, (or even just yourself) and review all of your finances – look at what you spend each month, make sure you are both aware of each other’s employee-sponsored or other retirement plans and assets, review your insurance needs, and create an organized file with your important documents. Try not to let it become an overwhelming conversation, but make it your goal as a Valentine’s day gift to yourself and your loved ones to have a financial discussion about the future.

    3. March – Prepare for Tax Season.

    A quick way to immediately start saving before your tax refund burns a hole in your pocket is to have your tax refund automatically put into a savings bond. Visit the IRS website for great information that can help you fill out your tax forms so that you can instantly start saving with government bonds.

    4. April – Start a “Rainy-day” fund.

    April showers bring May flowers, and this month is a great opportunity to start a “rainy-day” fund. Many experts recommend having about six months’ worth of expenses in a savings account to cover sudden unemployment or other emergencies. Of course it will take some time to build up to this amount, but resolve this April to start stashing away some money each month, even if it’s just a small amount, for that rainy day.

    5. May – Show Mom you really care.

    May is a time to celebrate our mothers and all the other women in our lives who have done so much for us over the years. A great way we can show our mothers and other older relatives our appreciation is to make sure they will have the financial assistance they need in retirement. Take time this month to have a conversation with your parents or others who may depend on you down the road about their caregiving needs and retirement plans. Helping them now will also help you in the long run. Visit the National Alliance for Caregiving for great resources on this topic.

    6. June – Take a vacation from your finances by paying yourself automatically.
    Put yourself at the top of your “payee” list. Regular automatic deductions from your paycheck or bank account into a savings, investing or retirement account will keep you on track toward your short and long-term financial goals. Commit to save as much as you can each month, but if you don’t feel like you have a lot to save, start small. Find a way to save even just $25 a month towards your retirement goals.

    7. July – Kick the summer doldrums by taking a long-term view.
    Summer months give us the opportunity to slow things down and appreciate the long days of summer. This is good time to think long-term about your retirement needs.  Take some time this month to play around with a retirement calculator and start to get a sense of what you will realistically need. Don’t let this task overwhelm you, but instead try plugging in different scenarios and allow yourself to plan for the future. A good calculator we recommend can be found at www.360FinancialLiteracy.org, specifically the Retirement Planner Calculator.

    8. August – Feeling the heat of debt?

    Let’s admit it; most of us have some pesky debt that is hanging over our heads. Take this month to face the heat and organize your debt. Resolve to stop adding to your debt and start making some headway on paying it off. Check out WISER’s Debt Warning Signs Fact Sheet to see where you fall when it comes to financial debt, and what you can do to start getting out of it.

    9. September – It’s back to school time, so educate yourself.
    If you are not already investing your money and feel overwhelmed by the thought of things like stocks, bonds, and mutual funds, then commit this month to educating yourself on these topics.  Read at least one book or informational booklet that covers the basics of investing.  You do not need to be an expert in finances to successfully plan and save for retirement; a little knowledge of the basics can go a long way. WISER’s booklet, “What Everyone Needs to Know About Money and Retirement” is a great place to start.

    10. October – Trick or Treat? Understand Financial Scams.

    Sometimes it’s hard to tell whether or not something is a great financial opportunity or just too good to be true. Use October as the time to educate yourself about financial scams and abuse that unfortunately happen more often then we’d like to think. WISER’s Too Good to Be True Checklist can help you spot a financial scam, and our Elder Financial Abuse Brief can also help you look out for those you love. Then share this information with a friend or family member to help protect them too!

    11. November – If you have benefits at work, give thanks! And learn how to maximize your options.

    For many companies and organizations, November is benefits enrollment season where you can sign up or make adjustments to your benefits. Take this month to learn more about your individual benefits and how you can make the most of them.  To help you think about this, check out WISER’s brochure “20 Ways to Take Advantage of Your Company Benefits Plan”.  If your company does not offer a benefits plan, take this time to research what you can do on your own, like opening an IRA (Individual Retirement Account).

    12. December – Celebrate your financial success.

    As the year comes to an end, celebrate all that you have accomplished this past year. Look back on all of the financial strides you have made and commit yourself to keeping up those goals and improving upon your success next year. If for some reason you were unable to meet your financial goals, then take this month to recommit to your financial future and to making each month count in 2012. One month at a time can make all the difference when it comes to saving for retirement.

    State Healthcare Coverage May Aid in Creating a National Plan

    Friday, January 30th, 2009

    A feeling of excitement was felt on Capitol Hill in one of the first hearings, conducted after the inauguration of President Barack Obama. On Thursday January 22, 2009, the Senate’s Health, Education, Labor, and Pensions committee held a hearing to examine measures states are enacting to keep their citizens healthy.

    According to Senator Edward M. Kennedy of Massachusetts, the chairman of the committee, 38% of deaths related to chronic illness among Americans arise from alcohol use, smoking, physical inactivity and poor diet. In addition, 75% of health care costs associated with chronic disease are preventable. State Senator of Iowa, Jack Hatch, stressed the importance of preventative healthcare measures. He mentioned that Iowa should lead prevention and wellness initiatives by enabling doctors to use efficient practices and administer proper protocols necessary to treat chronic illnesses. Health care costs are continuing to rise making it necessary for people to receive proper health education, so they can make better lifestyle choices to improve health and contain costs. The state of Iowa has enacted preventative healthcare measures as a means of reform. Some include: 1. By 2011, the state is expected to provide healthcare coverage for all eligible children 2. Iowa has strengthened its public health and prevention programs by launching the healthy communities initiative, enabling small businesses to receive a qualified wellness tax credit.

    Mr. Emmet spoke about our country’s failure to treat mental illness. He revealed mental illness is a major cause of disability, yet many insurance services do not provide coverage for mental health visits.

    Dr. Dobson stressed the need for community healthcare services. He revealed quality of healthcare can be enhanced and the cost of healthcare can be reduced by providing people with primary care, creating local networks to gather resources and providing state funding for healthcare related programs. State healthcare systems need to be sustained in order to enable one to have access to care and be treated efficiently.

    Dr. Bigby spoke about the importance of prevention. She mentioned the 2006 Massachusetts health care reform bill designed to provide the citizens of the commonwealth with universal coverage. 97.4% of Massachusetts residents contain healthcare coverage, 99% of kids contain coverage and 90% of residents have regular healthcare providers and thus receive preventative care. In addition, Dr. Bigby spoke about “Mass in Motion,” a program designed to promote healthy eating and exercise through grants to cities and towns in hopes of making wellness a priority. She also addressed the need to remedy the racial and ethic disparity prevalent in who receives healthcare coverage.

    The experts at this hearing were in agreement that access to and quality of healthcare needs to be augmented. In order for people to live healthier lives, they say diet and exercise programs, as well as preventative and routine healthcare services need to be provided to the people of our nation.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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