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As healthcare premiums are increasing you may have noticed rising prescription costs. In a study done by Consumer Reports in 2019, 12% of individuals said their prescriptions costs increased by more than $100 over the past year. One contributing factor is that there are no federal regulations that keep drug prices in check.
How are consumers able to offset rising prescription costs?
Ask your doctor for generic:
Most brand-name drugs have generics that can be up to 90 percent cheaper. They aren’t available for all prescription drugs, but it doesn’t hurt to ask your doctor or pharmacist.
Ask about over-the-counter options:
Some medications can be a combination of two inexpensive drugs that you can purchase without a prescription.
Use manufacturer discounts:
Many drugmakers offer some type of discount. For example, Janssen, which makes Xarelto, offers a discount that can drop the price down to $10.
These are not all the ways you can help reduce your prescription costs but are some of the most effective ways. As always if you have any questions regarding your healthcare costs please talk to one of our insurance agents.
The terms Qualifying Event, Special Enrollment Period, and Open Enrollment Period get tossed around in conversation when discussing both employer-sponsored benefits and individual health insurance plans.
The timeframes in which you can alter your benefits through a company or for your own individual policy are limited to certain times or events of the year. For employer-provided benefits, the time of year to make changes, add, or remove coverage for yourself and family members is called open enrollment and is managed by Human Resources. It’s “open” because these adjustments are made at the employee’s discretion. If you purchase your own health insurance through a private insurance company or the Health Insurance Marketplace (Obamacare), open enrollment takes place each year starting November 1st and ending December 15th. Any changes from this timeframe go into effect as of January 1st of the following year. Outside of these timeframes, your benefits are locked in until the next enrollment period. But what happens if you need to make changes at another time due to a qualifying event?
What is a Qualifying Event?
A Qualifying Event is a life circumstance that allows someone to make changes to their insurance coverage outside of open enrollment for both employers and individuals. A Qualifying Event is a reason to have a Special Enrollment Period or midyear change. The allowed timeframe for reporting these changes or updating coverage is between 30-60 days from the date of the event. If you have missed this timeframe, you may not be allowed to make changes. Some examples of qualifying events are birth, marriage, divorce, or loss of other coverage. If you have questions about your own coverage or coverage through an employer, we are here to help!
If you have any questions or would like to explore your options for health insurance, it is always a good idea to contact your insurance carrier or speak with an insurance agent. Shield Insurance Agency represents over 40 insurance companies and can provide you with a free quote and personalized advice. Contact Shield Insurance Agency at (616) 896-4600 for a free quote today or start the quoting process by visiting this LINK and an agent will be in touch soon.
There is a wealth of information in this article and too much to post, but please check it out as the Health Insurance Companies are listed A-Z and each one explains HOW they are responding to the Covid Crisis.
Insurance Companies response to Covid
The health and well-being of millions of Americans remain our highest priority. Health insurance providers are committed to helping prevent the spread of COVID-19. We are activating emergency plans to ensure that Americans have access to the prevention, testing, and treatment needed to handle the current situation.
Here are some ways health insurance providers are taking action:
Insurance and you — why open enrollment is not something to ignore. Consider your options carefully and keep your eye on the clock.
If you are one of the 183 million people who receive health insurance through your employer, you might be asking if open enrollment actually applies to you and, if so, if there’s anything you need to do. The answer to both questions is “yes.”
Each year, an open enrollment period takes place that allows employees to enroll in their employer-sponsored health insurance. It gives you the opportunity to either confirm your current health insurance coverage or to consider signing up for a new plan that better suits your needs.
When considering your options during the open enrollment, there are several factors to take into account. Here they are.
Changes to Your Health
First, take a moment to check in with your actual health. You’ll want to plan for any upcoming or ongoing medical needs. For example, if you know you’ll need surgery in the coming months, take the time to check your insurance plan’s network of doctors. This can help you avoid any surprises when it comes to what doctors and services are covered.
Your Budget
Next, take a moment to consider how your health insurance impacts your budget over the course of the year. If you had a high deductible plan with a lower premium, did that work well for you? Or, did you have an expensive medical event that caused you to dip into your savings?
If that’s the case, it’s possible a low deductible plan with a higher monthly premium would better spread out your health care costs over the course of the year.
If you have expensive prescriptions, be sure to review the prescription benefits your company offers. Your employer might work with a prescription discount company that can help reduce your out-of-pocket costs.
More Than Just Health Insurance
Your employer may also offer additional coverage during open enrollment such as life insurance, short-term disability, long-term disability, or even pet insurance. These benefits can be valuable, especially if your employer is willing to contribute to the premium.
To determine whether or not you should participate, consider your circumstances; for example, if you are pregnant and know that you will be away from the office on maternity leave next year, you may benefit greatly from a short-term disability plan. Or, if you recently adopted a puppy, this could be a great time to look into pet insurance.
Timing Matters
Your employer will set the timing for the open enrollment period, determining the start and finish dates.
Generally, employers hold open enrollment during the fall, and your benefits will kick in on January 1 of the following year.
You should expect to receive several email notices from Human Resources – make sure to pay attention so you don’t miss any important signup details.
If you don’t believe your employer has sent anything out, make sure to ask directly. It’s important to sign up for the coverage you want by the close of open enrollment, otherwise, you may have to wait until next year to do so.
If you have a qualifying life event that occurs during the course of the year, your employer will offer you another window of time where you can adjust your benefits. Qualifying events include birth, divorce, or a spouse’s job loss. If you need to change your benefits during the year, feel free to ask questions and find out if your life event qualifies you to make a change.
During open enrollment, your employer is offering you the chance to make potentially critical adjustments to your health insurance — make sure you take advantage! Consider your options carefully and keep your eye on the clock.
When Medicare Choices Get ‘Pretty Crazy,’ Many Seniors Avert Their Eyes
A new study shows that more than half of enrollees don’t review or compare their Medicare choices annually.
This is the time of year when seniors face a barrage of messages about their Medicare coverage — everything from insurance companies’ direct mail blitzes and television ads to the federal government’s emails and mailings.
All of it focuses on the fall open enrollment season, the annual opportunity to change coverage. From Oct. 15 until Dec. 7, enrollees can shop Medicare’s marketplace for the prescription drug and Advantage plans offered by commercial insurance companies. They can also switch between fee-for-service original Medicare and Advantage.
And they will have plenty of choices: Next year, the typical Medicare enrollee will be able to choose from 57 Medicare prescription or Advantage plans that include drug coverage, according to the Kaiser Family Foundation.
It hasn’t always been this way. At its creation in 1965, Medicare was envisioned as a social insurance program. All eligible workers would pay into the system during their working years via the payroll tax and pay uniform premiums when they enrolled at age 65 — and they would all receive the same coverage.
But privatization of Medicare began in the 1990s, encouraged by federal policy and legislation. The marketplace approach accelerated with the introduction of prescription drug coverage (Part D) in 2006 and the rapid growth of Advantage over the past decade.
Proponents of privatization argue that giving Medicare enrollees plenty of choices, with competition among health insurance companies, keeps consumer prices down and encourages innovation.
That notion hinges on having consumers roll up their sleeves to compare products and make changes in order to get the best prices and coverage. But a new study by the Kaiser Family Foundation finds that often doesn’t happen.
The study, based on Medicare’s own enrollee survey data, found that 57 percent didn’t review or compare their coverage options annually, including 46 percent who “never” or “rarely” revisited their plans. Strikingly, two-thirds of beneficiaries 85 or older don’t review their coverage annually, and up to 33 percent of this age group say they never do. People in poor health, or with low income or education levels, are also much less likely to shop.
“A large share of the Medicare population finds this whole task pretty unappealing, and they just don’t do it,” said Tricia Neuman, director of the Medicare policy program at the Kaiser Family Foundation and a co-author of the report. “That raises questions about how well the system is working.”
Editors’ Picks
The indifference can’t be chalked up to a shortage of information.
Each September, Medicare sends an Annual Notice of Change document (via mail or email), which lists the changes in a person’s current coverage for the year ahead, such as the premium and co-pays. Medicare also mails a thick handbook, “Medicare & You,” containing detailed information about plan options. A flurry of email alerts urging enrollees to shop their coverage using the Medicare Plan Finder website also go out each fall.
Insurance companies flood the airwaves and mailboxes with advertisements and brochures.
None of it is working very well. The Kaiser study found that 44 percent of enrollees had never visited the Medicare website, with another 18 percent reporting that they did not have access to the internet or had no one to go online for them. Only half reported that they had reviewed “Medicare & You.” Just 28 percent have ever called the Medicare help line (800-MEDICARE) for information; the rest have never called or were not even aware the line exists.
Why shopping is important
If you’re enrolled only in original Medicare with a Medigap supplemental plan, and don’t use a drug plan, there’s no need to re-evaluate your coverage, experts say. But Part D drug plans should be reviewed annually. The same applies to Advantage plans, which often wrap in prescription coverage and can make changes to their rosters of in-network health care providers.
“Plans can not only change the monthly premium but the list of covered drugs,” said Frederic Riccardi, president of the Medicare Rights Center. “And they can change the rules around your access to drugs, or impose quantity limits or require prior authorizations.”
Why we don’t do it
Complexity is a key issue. Kaiser found that 30 percent of enrollees said the Medicare program was either “somewhat difficult” or “very difficult” to understand, and those percentages were higher among younger people on Medicare who have disabilities or are in poor health.
These plans are required to meet federal requirements in terms of covered benefits, cost sharing and other features. But drug plans have tiers with varying co-payments, coinsurance, and preferred options for brand-name drugs, generics and pharmacies.
“The amount of information that consumers need to grasp is dizzying, and it turns them off from doing a search,” Mr. Riccardi said. “They feel paralyzed about making a choice, and some just don’t think there is a more affordable plan out there for them.”
But that assumption can be very wrong. In a review of the 10 most heavily enrolled Part D plans for next year, Avalere Health found several with average premiums jumping by double-digit percentages, with others holding steady or dropping a bit. Kaiser calculates that eight out of 10 enrollees in stand-alone Part D plans will pay higher premiums next year in their current plans.
Anthony Hodge, a 65-year-old Medicare Rights Center client who lives in Massapequa, N.Y., expects to save about $1,000 next year by switching Part D plans. Mr. Hodge has a kidney condition that will require a transplant, and he uses seven prescription drugs. The savings stem from differences in premiums and co-pays, including details such as pharmacies used and the “tier” on which each plan places each of his medications.
“It’s pretty crazy when you review all the different plans,” he said. “You can really get bleary-eyed.”
Supporters of the marketplace approach note that drug plan premiums have generally remained affordable since the Part D program was introduced.
“The existence of these markets, regardless of how consumers actually operate and choose, puts substantial downward pressure on the prices offered by the plans, because any marginal move away from them to a competitor has a big effect on their profitability,” said James C. Capretta, a resident fellow at the American Enterprise Institute whose research focuses on health care, entitlement programs and federal budget policy.
“Even if only 5 or 10 percent of consumers take advantage of the marketplace, it is a powerful check on plans raising costs,” he added.
The average monthly premium for Medicare stand-alone prescription drug plans was $38 this year, according to Kaiser, a slight increase from $37 in 2010. Moreover, 89 percent of Medicare Advantage plans next year will include prescription drug coverage, and 54 percent will charge no additional premium beyond the Part B (outpatient services) premium.
But focusing solely on premiums misses the bigger picture of how the Part D program affects enrollees, said Dr. Neuman of Kaiser.
“Insurers understand that consumers are more likely to compare premiums than other plan features that can impact their annual drug costs, so they have an incentive to offer low-premium products,” she said.
Insurers can extract more from enrollees through deductibles allowed under the Part D program, which the government will cap at $445 next year. Most plans (86 percent) will charge a deductible next year, and 67 percent will charge the full amount, Kaiser reported.
Is there another way?
When creation of the prescription drug benefit was being debated, progressive Medicare advocates fought to expand the existing program to include drug coverage, funded by a standard premium, similar to the structure of Part B. The standard Part B premium this year is $144.60; the only exceptions to that are high-income enrollees, who pay special income-related surcharges, and very low-income enrollees, who are eligible for special subsidies to help them meet Medicare costs.
“Given the enormous Medicare population that could be negotiated for, I think most drugs could be offered through a standard Medicare plan,” said Judith A. Stein, executive director of the Center for Medicare Advocacy.
“Instead, we have this very fragmented system that assumes very savvy, active consumers will somehow shop among dozens of plan options to see what drugs are available and at what cost with all the myriad co-pays and cost-sharing options,” she added.
Advocates like Ms. Stein also urged controlling program costs by allowing Medicare to negotiate drug prices with pharmaceutical companies — something the legislation that created Part D forbids.
A model for this approach is the Department of Veterans Affairs, which by law can buy prescription drugs at the same discounted prices available to the Medicaid program, and negotiates deeper discounts on its own.
Getting help with enrollment
If you’re uncomfortable using the internet to search for plans, or don’t have internet access, the State Health Insurance Assistance Programs network is there for you. These federally-funded counseling services provide free one-on-one assistance in every state; use this link to find yours.
OR let Shield Agency Specialist do the work for you.
The Medicare Rights Center offers a free consumer help line: (800-333-4114.)
You can browse plans on the Medicare Plan Finder, the official government website that posts stand-alone prescription drug and Medicare Advantage plan offerings. The plan finder now allows users to sort plans not only by premiums but for total costs, including premiums, deductibles, co-pays and coinsurance payments.
3 Reasons Retirees May Be Disappointed With Their Medicare Insurance Coverage
Your Medicare insurance coverage may not be as comprehensive as you think.
Medicare insurance coverage kicks in at age 65 for most Americans, and many people look forward to the day when they’ll get this government-provided insurance.
Unfortunately, some seniors may be surprised to discover Medicare isn’t necessarily all they were expecting it to be. In fact, there are three really big reasons why retirees may end up disappointed with this insurance coverage.
1. There are coverage exclusions
While Medicare covers medically necessary hospitalizations under most circumstances, as well as many types of routine outpatient care, the coverage is far from comprehensive. In fact, there are many things Medicare does not pay for including:
Eye exams and glasses
Hearing aids
Most types of dental care including dentures
Chiropractic maintenance care
Acupuncture
Routine foot care
In many cases, you’ll end up needing some or all of these services as a retiree. To make sure you can pay for them, consider getting supplemental insurance that provides for them. You could also create a dedicated savings account to pay for things that Medicare won’t.
2. With Medicare Insurance, No long-term care is paid for in most cases
As many as 70% of seniors 65 and over will need long-term care at some time during their lives. Sadly, Medicare almost never pays for this, regardless of whether it’s provided in a nursing home or provided by home healthcare aids.https://abf11d7d9c55f1f071cf7333d8de2582.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
Medicare covers skilled nursing care under limited circumstances. But most people who go to a nursing home or hire a home health aide do so because they need something called “custodial care,” or routine help with activities of daily living such as using the bathroom or bathing or eating. And Medicare doesn’t pay for custodial care at all.
To make sure you’re able to cover these services if you need them, consider buying a long-term care insurance policy. Alternatively, you could work with an attorney to engage in Medicaid planning, which allows you to protect your assets while ensuring you can qualify for Medicaid to pay for your nursing care services. You could aim to save enough to pay for long-term care out of pocket, but the cost could be more than $100,000 a year, so that’s a tall order.
3. Coinsurance costs are high
Medicare coinsurance costs are also a shock to many seniors.
See, if you have traditional Medicare, your insurance will pay for 80% of most outpatient services and you’ll be on the hook for the other 20% — with no limits on how much that amount could cost you. If you need a lot of costly medical services, which is more likely to happen as you grow older, you could end up spending thousands of dollars if you rely solely on Medicare alone.https://abf11d7d9c55f1f071cf7333d8de2582.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
To limit your costs and make them more predictable, you may want to consider buying a Medicare Advantage or Medigap plan. These can either supplement your traditional Medicare in the case of a Medigap plan or serve as an alternative to it in the case of Medicare Advantage.
Healthcare is sure to be more expensive than you think as a retiree, with the Employee Benefit Research Institute estimating out-of-pocket expenditures at around $325,000 for a senior couple turning 65 covered by Medicare. If you’re expecting this insurance to pay for everything you need and aren’t saving for your healthcare services throughout your career, you could end up very disappointed.
Healthcare Premiums Drop Slightly As 2021 Open Enrollment Period Draws Near
Even with the election and oral argument in California v. Texas looming, the 2021 open enrollment period will soon be upon us and it’s all about healthcare premiums. In all states except California (where the open enrollment period began on October 15), the 2021 open enrollment season begins on November 1, 2020, with a deadline of December 15 in the 36 states that use HealthCare.gov. States with their own marketplaces—including New Jersey and Pennsylvania, which newly opened their own marketplaces—have set their deadlines later in December 2020 or January 2021.
Ahead of open enrollment, the Centers for Medicare and Medicaid (CMS) released new data on HealthCare.gov marketplace premiums and insurer participation for 2021. CMS’s analysis includes an issue brief on premiums, landscape plan data, and a map on insurer participation. (Public use files do not appear to be posted yet but will be available here when they are.) CMS also released the scheduled maintenance windows for HealthCare.gov for the 2021 open enrollment period.
Healthcare Premiums Drop 2%
Overall, healthcare premiums are expected to drop by 2 percent for a 27-year old for a silver benchmark marketplace plan sold through HealthCare.gov. This builds on a 4 percent decline for 2020 and a 2 percent decline for 2019. The unsubsidized average benchmark plan premium for a 27-year old will be $369/month for 2021 (compared to $388/month for 2020). In four states, silver benchmark premiums will decline by double-digits: Iowa (29 percent), Maine (14 percent), New Hampshire (18 percent), and Wyoming (10 percent). Only North Dakota will see an average benchmark plan premium increase of 10 percent or more (29 percent).
Lower Healthcare Premiums Ahead
Lower premiums are expected even with the pandemic. First, Congress repealed the health insurance tax beginning with 2021, which should result in premium savings that are passed along to consumers. Second, insurers continue to owe record-high medical loss ratio rebates in the individual market. This suggests that insurers are overpricing their products and those premium reductions are warranted. Third, more states have adopted state-based reinsurance programs: currently, 14 states have received a waiver to operate a reinsurance program. Fourth, the pandemic has led to higher profits for many insurers, further incentivizing premium reductions. These factors made it unsurprising that many insurers would reduce their premiums for 2021.
Insurer participation continues to increase.
Six more insurers will offer marketplace coverage through HealthCare.gov, increasing the total number of participating insurers to 181 for 2021. (Even so, this metric continues to lag earlier years in ACA implementation, remaining well below the high of 237 participating insurers for 2016.) Of the 36 states that use HealthCare.gov, 16 states will have more insurers compared to 2020 and 27 states will have counties with more insurers relative to 2020. Only Arkansas, New Mexico, and Wyoming will have an additional insurer offer statewide coverage. Four states have counties with fewer insurers in 2021 relative to 2020 while Delaware is now the only state with just one insurer (down from two states for 2020). Only four percent of enrollees will have access to only one insurer compared to 12 percent of enrollees for 2018 and 20 percent of enrollees for 2019.
Average premium reductions and higher insurer participation are encouraging. The uninsured rate was on the rise long before the pandemic, and robust individual market coverage options will be especially important in 2021 with millions of people losing their job or health insurance. Fortunately, many low-income consumers will continue to have options in 2021. CMS estimates that 30 percent of subsidy-eligible enrollees can find a marketplace plan for $10/month or less, and 71 percent can find a plan for $75/month or less. Of those not eligible for subsidies, 27 percent can find a plan for $300/month or less.
Deductibles Continue to Rise
At the same time, deductibles continue to rise. For bronze plans, the median individual deductible increased from $6,755 for 2020 to $6,992 for 2021. For silver plans, deductibles rose from $4,630 to $4,879. And gold plan deductibles rose from $1,432 to $1,533. Consistent with prior years, nearly all enrollees will have access to a health savings account-eligible marketplace plan in 2021.
Finally, potential maintenance for HealthCare.gov has been scheduled for early morning on November 1 (to make final preparations ahead of the start of open enrollment) and each Sunday from 12 am to 12 pm ET except on November 1 and December 13. Federal officials selected the Sunday morning time period because this is when the website receives the least amount of traffic. During any website downtime, HealthCare.gov will be unavailable for consumers to select a plan and enroll in coverage. As in prior years, CMS anticipates that actual maintenance periods will be much shorter than the scheduled slots. Despite the maximum allocation of 72 hours of maintenance last year, the website was down for only 24.5 hours and HealthCare.gov was reportedly available 96.9 percent of the time.
Toys for Tots through our Marines and volunteers are determined to spread some fun and joy throughout the holiday season
Fun activities for kids “from one to 92” and beyond!
We hope that in this challenging year in which we’ve ALL had to do a lot of adapting — and so many children and families’ lives have been turned upside down — that these fun activities will bring you joy and some much-needed cheer! Please help yourself to any of these fun Christmas holiday activities. And feel free to share them freely with friends and family!
Click here to visit their page filled with Letters to Santa options, fun coloring pages, and lots of mazes and activities to keep you and the children busy!
Whether you’re reviewing your Medicare coverage during open enrollment through Dec. 7 or are signing up for the first time, there are some key considerations to factor into your decision-making, advisors say.
Although Advantage Plans often come with low or no premiums, the out-of-pocket maximums for in-network coverage can be as much as $7,550 in 2021.
So-called Medigap plans, whose monthly premiums can be pricey, provide more flexibility.
For the nation’s older residents, the stakes can’t be higher when it comes to choosing health-care coverage.
That’s partly because under Medicare — you’re eligible at age 65 — changing plans can be challenging in some circumstances and costly if you get your choices wrong. So whether you’re giving your coverage an annual checkup during open enrollment (Oct. 15 through Dec. 7) or signing up for the first time, financial advisors say there are some key considerations to factor into your decision-making.
“I encourage people to get the best plan they can because you don’t know what will happen with your health,” said certified financial planner Carolyn McClanahan, a physician and founder of Life Planning Partners in Jacksonville, Florida.
“The most important thing when it comes to health-care costs is to be adequately insured,” McClanahan said.
Roughly 62.8 million individuals are enrolled in Medicare, the majority of whom are age 65 or older (the remainder are younger with disabilities or individuals with end-stage renal disease).
About a third choose to get their benefits delivered through Advantage Plans, which are offered by private insurers and typically include Part D prescription drug coverage. The remainder sticks with original Medicare: Part A (hospital coverage) and Part B (outpatient care). Those beneficiaries often pair that with a stand-alone Part D plan and a Medicare supplemental plan (aka Medigap), both of which also are offered by private insurance companies.
The most important thing when it comes to healthcare costs is to be adequately insured. Dr. Carolyn McClanahan
The current open enrollment period is for making changes related to those stand-alone drug plans and Advantage Plans: You can switch, drop or add them.
This window is different from your initial sign-up for Medicare when you get a seven-month period that starts three months before the month in which you turn 65 and ends three months after it. During that time, unless you meet an exception — i.e., you have acceptable coverage elsewhere — you generally must sign up for Parts A and B.
When deciding on your coverage, it’s important to consider all associated costs. In addition to things like premiums, copays or coinsurance through Medicare, be sure to consider aspects of your care that may not be covered. For example, dental, vision, and hearing generally are not covered under original Medicare, which also comes with no out-of-pocket maximums.
Additionally, higher-income beneficiaries pay extra each month for their Part B and Part D premiums through so-called income-related monthly adjustment amounts or IRMAAs. Your tax return from two years before the coverage year is generally relied on to determine whether you’re subject to the extra charges. However, if your financial situation has changed, you can appeal the decision. The charts further below show the 2020 amounts to give you a sense of how the IRMAAs are applied (income thresholds and monthly charges for 2021 have not been released yet).
Here are some tips from financial advisors when it comes to determining which type of coverage is most suitable for you.
Advantage Plan considerations
Enrollment in Advantage Plans has more than doubled over the last decade, to 24.1 million beneficiaries in 2020 from 11.1 million in 2010, according to the Kaiser Family Foundation.
These plans often come with low or no monthly premiums (although you usually still pay your Part B premium). As mentioned, they also typically include prescription drug coverage, as well as extras such as dental or vision.
However, “just know that it might look good on the surface at first, but it can be very limiting,” McClanahan said.
For example, you may have to see a doctor or other provider in the plan’s network. This means if you have a health crisis, you might be unable to see the specialist you want. And while Advantage Plans also come with out-of-pocket maximums, they can be as high as $7,550 (in 2021) for in-network coverage before the plan pays 100% of covered services.
Nevertheless, one of these plans may be suitable, depending on how much you use the health-care system. Keep in mind that generally speaking, the lower the premium, the more you’ll pay in copays or other cost-sharing.
If you’re already enrolled in an Advantage Plan, you can switch to another during this open enrollment if you find one that’s more suitable. If you take no action, your current coverage will continue next year.
“Just make sure your prescriptions and doctors are still being covered under your current plan,” said CFP Joe Boden, senior wealth advisor, and partnerat EP Wealth Advisors in Seattle.
If you want to drop your Advantage Plan during this enrollment period and are planning to pair original Medicare with a Part D plan and Medigap, be aware that getting the latter may involve medical underwriting. And if you have underlying health issues, you may be charged more or denied coverage altogether (more on that below).
Also, if you discover after open enrollment ends that you aren’t happy with the Advantage Plan you chose, you can switch to another, or drop it and return to original Medicare, during a separate window that runs from Jan. 1 to March 31.
Medigap considerations
So-called Medigap policies either fully or partially cover some cost-sharing aspects of Parts A and B, including copays and coinsurance and, perhaps, deductibles.
Each is simply assigned a letter: A, B, C, D, F, G, K, L, M and N. Some states also offer high-deductible versions of Plan F and G. While they are standardized from state to state, coverage between each plan varies. And the premiums can vary widely among locations and insurers.
For instance, the difference among the highest- and lowest-cost Plan G policies in various markets can be stark, according to the American Association for Medicare Supplement Insurance. In one Dallas ZIP code, the lowest cost is $99 per month for a 65-year-old female and the highest was $381 monthly for that same consumer. So yearly, that would be $1,188 vs. $4,572.
Nevertheless, many Medicare beneficiaries like the lower out-of-pocket predictability that can come with a Medigap plan. For example, if you get Plan D, you know that all of your Part B copays (usually 20% of covered services) would be picked up by Medigap. The same goes for the Part A deductible charged per benefit period (in 2020, that amount is $1,408).
Sticking with original Medicare also comes with flexibility in choosing where to get care. For example, if you’re vacationing far from your home state, most providers accept original Medicare. Some Medigap plans will even partially cover care if you’re traveling overseas.
“If you want to make sure you’re covered no matter where you are, a Medigap plan may be more advantageous than an Advantage Plan,” Boden said. Joe Boden SENIOR WEALTH ADVISOR AND PARTNER AT EP WEALTH ADVISORS
It’s important to know that if you don’t get a Medigap plan during your six-month “guaranteed issue” period — which starts when you sign up for Part B — it could be hard to get one down the road.
After that window, unless you live in a state with different rules, you would have to undergo medical underwriting, which could result in a higher premium or being denied coverage altogether if you have underlying health issues.
One exception: If you try out an Advantage Plan for the first time and decide within the first 12 months that it’s not for you, you generally would get a special enrollment period to purchase a Medigap policy without any underwriting.
Additionally, be sure that if you definitely want Medigap, pick the one that would be suitable long term, McClanahan said.
“Once you pick a Medigap plan, it can be really difficult to change because there might be underwriting,” she said.
Prescription drug Medicare coverage
If you’re first signing up for Medicare and wonder why you’d need prescription drug coverage when you are healthy and take no medications, be aware that you may face a life-lasting late-enrollment penalty if you change your mind down the road. And, you could find yourself shelling out full price for medicines if you have a health event and no coverage.
“People hate paying for Part D if they don’t have health issues, but the problem is that you don’t know when something could happen,” McClanahan said.
If you already have a stand-alone Part D prescription drug plan alongside original Medicare (and, perhaps, a Medigap policy), you can change it during this open enrollment if you find one that better suits you. If you take no action, you generally will remain with the same plan — which could have changed its formulary and how it covers (or doesn’t cover) certain medicines.
Be sure that any medications you take are on your plan’s formulary and that you’re at peace with any additional requirements for the plan, such as step therapy (trying a lower-cost drug before a more expensive one). Also, know your deductible. While not all Part D plans have one, it could be up to $435 (for 2020).
The bottom line is that regardless of the Medicare coverage you choose, it’s important to consider the “what ifs” in addition to the cost.
“Insurance is always one of those things where you might be glad you paid an extra amount upfront,” Boden said. “Sometimes it’s about peace of mind, even if you’re paying a little more each month.”
Contact Shield Agency owner, Andy Simmons, to answer your questions on Medicare.
The pandemic has made everyone acutely aware of the need for healthcare Insurance coverage. Small businesses struggling to survive are challenged to find ways to offer health coverage as a fringe benefit to employees. Premium costs are high.
Nonetheless, there are several ways in which small employers can help employees get coverage for the upcoming year.
5 Things to Know About Healthcare Insurance Coverage in 2021
Don’t wait until the last minute to explore your options. Here are 5 things to keep in mind.
1. Coverage Requirements for ALEs
If you have at least 50 full-time and full-time equivalent employees, you are an Applicable Large Employer (ALE) subject to the employer mandate under the Affordable Care Act. This means you must offer minimum essential health coverage that’s affordable to your full-time employees or pay a penalty. What’s affordable Healthcare Insurance? The IRS has released this information for 2021. The cost to employees can’t be more than 9.83% of household income in 2021.
2. HSAs
Health savings accounts (HSAs) allow individuals to cover their out-of-pocket costs. But to make contributions—whether by employers or employees—to such accounts, individuals must be covered by a high-deductible health plan (HDHP). For 2021, this means insurance with a minimum deductible of $1,400 for self-only coverage or $2,800 for family coverage and a cap on out-of-pocket expenses (deductibles, co-payments, and other amounts other than premiums) not exceeding $7,000 for self-only coverage or $14,000 for family coverage.
If you have group insurance that is an HDHP, then you can decide whether to contribute to employees’ HSAs. If not, then employees can choose to make deductible contributions to their accounts for 2021. More information about HSAs is in IRS Publication 969.
3. HRA Options
Health reimbursement arrangements (HRAs) facilitate tax-free reimbursements to employees. While the business can deduct these reimbursements, they aren’t subject to employment taxes. For 2021, consider these HRA options:
Qualified small employer health reimbursement arrangements (QSEHRAs). These plans reimburse employees for premiums on their individually-obtained coverage up to a set dollar limit ($5,250 for self-only coverage or $10,600 for family coverage in 2020).
Individual coverage health reimbursement arrangements (ICHRAs). These plans also reimburse employees for their premiums on individually-obtained health coverage. The law doesn’t cap the reimbursement; it’s up to the employer to fix this amount (on a nondiscriminatory basis).
Excepted benefit health reimbursement arrangements (EBHRAs). These plans help pay for certain benefits, such as dental or vision care, not otherwise covered by a general insurance policy. Reimbursement is capped up to a set dollar amount. The cap for 2021 has not yet been announced (it was $1,800 for 2020).
If you don’t provide a Healthcare Insurance plan or do have a plan (including an HRA) but you don’t pay all of the cost, you can enable employees to pay all or the balance of premiums on a pre-tax basis. The plan must offer employees a choice between cash or reimbursement for health insurance coverage. If they choose the coverage, the amount of what they’d pay for premiums that are withheld from their paycheck is not treated as taxable compensation to them. There are no employment taxes on this benefit. If, however, they choose the cash option, it’s taxable compensation.
5. Notice Requirements
Employers offering a Healthcare Insurance plan are required to give notice to employees about their participation and what’s involved. Depending on the plan, notice may include providing a summary plan document.
Generally, notice is required to be given 90 days before the start of the plan year. So, if the plan year starts on January 1, 2021, notice must be given by October 3, 2020.
Conclusion
Start shopping now for Healthcare Insurance. Contact the Shield Agency expert Carlos Garcia or another tax advisor to find ways to make this benefit available to employees without busting your budget. And be sure that whichever option you use that you do so in compliance with the law.
