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Why Do Some People Pay More for Medicare than Others?

2/4/2021

Medicare Part B is medical insurance that helps pay for your doctors’ visits and outpatient care. The government pays a substantial portion - 80 percent - while you pay the remaining 20 percent. This comes out to $148.50 a month. However, some people pay more for Medicare health insurance than the standard. If you’re in this group, you’re probably wondering why this is the case.

What Does the Average American Pay for Medicare Part B?

If your yearly income in 2019 was $88,000 or less (for individuals) or $176,000 or less (for couples), you will pay the standard premium of $148.50. However, if you make more than this, you’ll kick in more every month for your insurance. Depending on your income, you may pay 35, 50, 65, 80 or 85 percent of the total cost of the premium. Here is what you can expect to pay each month if you fall outside the standard premium:

Why Do I Have to Pay More for Medicare?

Since 2007, higher-income beneficiaries must pay more for Medicare Part B medical insurance. This is referred to as the Income-related Monthly Adjustment Amount or IRMAA. If you receive a letter from Social Security saying that you met IRMAA, you’ll have to pay more for Part B.
Additionally, you may also have to pay more for Part D or prescription drug coverage. The 2021 amounts range from $12.30 to $77.10. Keep in mind that Social Security looks at the tax return from two years prior.

What if I’m Paying More Needlessly?

While no one enjoys paying more for Medicare, the flip side is that you’re generating more income than the average American. However, there are some cases where you might be paying more than you need to. For example, a life-changing event can significantly decrease your income and affect the premium you have to pay for medical insurance.

Examples of life-changing events are:

Marriage
Divorce
Death of spouse
Work reduction
Work stoppage
Loss of income-producing property
Loss or reduction of pension income

If any of these events occur and reduces your income, file a notice with the Social Security Administration to seek a reduction in Part B insurance. If you have additional questions regarding Medicare and Part B premiums, contact Leonard Financial Solutions today.

What is Covered and Not Covered by Medicare?

12/29/2020

Has the time come for you to apply for Medicare in New Jersey? You’ll be happy to know that Medicare is good insurance and the majority of people are happy with it. But, during a time with so much change, Medicare is just another thing to adjust to. And this can make it scary, especially when you’re not sure what healthcare services are covered and not covered.

To help you understand your coverage options, you’ll need to know the different parts of Medicare:

Part A provides basic hospitalization coverage.

Part B covers outpatient care like doctors’ visits and diagnostic testing.

Part C (Medicare Advantage) is a private option that combines Part A and B and offers additional benefits.

Part D is prescription drug coverage.

Medicare supplement plans (Medigap) is private insurance that helps cover out-of-pocket costs like copays, coinsurance and deductibles.

Medicare Part A

Medicare Part A covers hospital costs when you are formally admitted with a doctor’s order. The insurance will pay for wheelchairs and walkers, hospice care, some home healthcare services, blood transfusions and limited coverage for skilled nursing.

Medicare Part B

Medicare Part B covers doctor visits and preventive healthcare like yearly screenings and exams. Some of the tests and services covered are:

Cancer and mental health screenings
Ambulance and emergency department services
Vaccinations for flu and hepatitis
Medical equipment and diabetes supplies

Medicare Part C

Also called Medicare Advantage, this private option provides the benefits of Part A and Part B, as well as extra benefits like dental, hearing, vision and prescription drug coverage. You’ll pay a premium for this plan and only be allowed to see the doctors in your network.

Medicare Part D

Medicare Part D covers prescription drugs. This plan is optional, but we highly recommend it because you could face late enrollment penalties later on.

What Doesn’t Medicare Cover?

Medicare does cover a wide range of services, but there are some things it does not provide coverage for such as:

Hearing aids
Most dental care, including dentures
Routine vision and foot care
Long-term or custodial care
Acupuncture
Cosmetic surgeries
Medical care overseas

To ensure you have the coverage you need to be safe and healthy, it’s important to go over all of your options with a financial planner in NJ. Schedule a consultation with Leonard Financial Solutions to learn more about your coverage options and how to lower out-of-pocket expenses with a supplement plan.

What Questions Should I Ask When Signing Up for Medicare?

12/28/2020

If you’re new to Medicare, you probably have a lot of questions about what coverage is right for you. You’ve likely seen commercials on TV or have talked to other people your age, so you might have a basic understanding of the coverage available.

However, it’s also easy to be misinformed if you’re not getting the right information. For example, Medicare Advantage plans are often portrayed positively in advertisements, and while there isn’t necessarily anything ‘wrong’ with these plans, they also limit the doctors you can see.

To help you make an informed decision, here are the questions we recommend asking when going for Medicare help in New Jersey.

What are the Basics?

Medicare is a complex federal healthcare program that can be confusing at times. Educate yourself on the basics of this coverage, including who is eligible, the different parts available, the times to enroll and potential penalties that can result from putting off enrollment.

What Coverage Options are Available?

Everyone has different healthcare needs, so what’s right for your friends may not be right for you. Some people choose Original Medicare while others opt for the more budget-friendly Medicare Advantage. And if you currently have employer insurance, you may decide to wait to enroll in Medicare until you’re retired.

What Type of Medicare Do I Automatically Get?

Many people don’t even have to enroll in Medicare to receive it. If you’re getting Social Security benefits, you’ll automatically be enrolled in Part A and Part B. But because this enrollment can happen automatically, you’ll want to be aware of your options so that you get the healthcare coverage you need.

Should I Enroll in Part D?

Part D of Medicare is prescription drug coverage, and there are many options to explore. Original Medicare may not cover your prescriptions - it only covers medications in limited situations. And, if you choose to sign up for Part D later on, you could face a late enrollment penalty.

Do I Need Supplemental Insurance?

When initially enrolling in Medicare, the government allows six months to purchase a supplement plan. These plans can help you reduce your out-of-pocket costs by paying for copays, coinsurance and deductibles. It’s definitely worth exploring Medigap plans with your financial advisor in NJ.

Will I Have to Change Doctors?

As long as your doctors accept Medicare, then you don’t need to change them. Many primary care doctors accept Medicare so you shouldn’t have to worry. This is also a key reason why we recommend Original Medicare over Medicare Advantage as your doctors are far less limited.

For personalized Medicare help in New Jersey, contact Leonard Financial Solutions today. We can go over your circumstances and the type of coverage that is right for your health and budget.

New Medicare Part B and Part D Prices for 2021

12/9/2020

Older Americans are often surprised to learn that Medicare, the federal insurance available to Americans when they turn 65, is not free. Most people pay for Part B and supplemental coverage, so it’s important to anticipate these costs. Plus, Medicare premiums typically increase from year to year.

As we enter 2021, it’s helpful to seek Medicare help in New Jersey so that you know what your Medicare premiums will look like. This is the time in your life when you need your insurance to be both comprehensive and affordable.

Part A Premium in 2021

Part A is free for most people. If you’ve worked 10+ years in the U.S., you’ve already paid for Part A via your payroll taxes. If you have to buy Part A, you’ll pay around $471 a month. People with less than 10+ years of working experience may be eligible for prorated premiums.

As far as the deductible and insurance, you pay $1,484 deductible for each benefit period. This is $76 more than it was in 2020. So, if you need to stay in the hospital, your Part A deductible will be $1,484. However, if you have a Medigap plan, it will likely cover these costs for you.

Part B Premium in 2021

Medicare Part B premiums are based on your modified adjusted gross income. The Social Security office will use your IRS tax return from two years prior. Off this information, they’ll determine how much you will pay for Part B. Part D premiums are also based on income.

The items that contribute to your modified adjusted gross income are money earned from wages, interest, dividends from investments and capital gains. If you file jointly with your spouse, your premiums are based on your married income. However, you will each pay your own Part B premium.

Part B premiums will increase for 2021. Here is what they will look like (based on 2019 income). We also added Part D premiums for your reference.

How Much Will I Pay for Medicare?

Most people new to Medicare will pay nothing for Part A and $148.50 for Part B in 2021. This is the standard amount that people pay based on their income. But if you are a high earner, you will pay more for your premiums. Because this can be confusing, it’s helpful to speak with a financial planner in New Jersey.

At Leonard Financial Solutions, we’ll figure out exactly what your Medicare costs will be. Many people find that Medicare and supplemental costs are a bit less than the private insurance they had. And most people are satisfied with their coverage. Schedule a consultation with us today and we’ll be happy to assist you in finding the best coverage for your needs and budget!

Are Medicare Supplement Plans Really Worth It?

12/4/2020

If you have Medicare or are about to get Medicare, you’ve probably been told that you need some type of additional coverage. But is this coverage really necessary? This is an important question to ask, as you may have learned by now that Medicare is not free. By the time you pay your Part B and Part D premiums, is a supplement plan really worth it?

While there is no single solution for everyone, Medicare supplement plans are almost always worth it. Going with just Original Medicare (Part A and Part B) is not wise. Let’s cover the reasons why a Medicare supplement plan is in your best interests.

Fill in the gaps in Original Medicare.

The main purpose of supplemental insurance is to fill in the gaps in Original Medicare - hence why it’s called Medigap. Medicare is good insurance, but you’re still responsible for out-of-pocket costs like coinsurance, copayments and deductibles.

Not only can these costs add up, but also there’s no out-of-pocket maximum. All it takes is one long stay in the hospital and you could be out tens of thousands of dollars. Even smaller ongoing medical needs can add up. With Medigap, you’ll get help paying for these expenses.

Protect your financial assets.

Insurance, in all its forms, protects people from significant loss. By paying for a Medigap plan, you can protect your financial assets.

Normal-length hospital stays, regular office visits and a standard imaging procedure might not break the bank, but some medical conditions will. Medicare does provide a solid insurance base, but what it doesn’t cover can be substantial. Having supplemental insurance ensures these added expenses will be covered on your behalf.

Give yourself better care.

When you know that you have good health insurance, you’re more likely to go to the doctor and get regular screenings. Sadly, 1 in 4 Americans skip medical care because of the costs. As difficult as it is when people are young and just starting out, it’s equally challenging when people are older and living off a fixed income.

By having the proper insurance coverage, you can give yourself the best care possible. Between Medicare and supplemental coverage, most of your healthcare costs will be covered. This way, you can seek out the care you need when you need it.

Learn More About Medigap Plans Today

In a nutshell, Medicare supplemental plans are worth it. Even though you’ll be paying another premium, this will help you cover out-of-pocket costs like deductibles, copays and coinsurance. You can manage your finances this way and know that high quality medical care is within reach. With so many Medigap plans to choose from, contact Leonard Financial Solutions to discuss your options.

Medigap vs Medicare Advantage: What are the Key Differences?

12/1/2020

Many people look forward to getting Medicare when they turn 65, but they often don’t realize how many options there are! Original Medicare has two parts: Part A is hospital insurance and Part B is medical insurance. After you pay your deductible, Medicare pays its share and you pay yours.

But there’s more to Medicare than this. Medicare Advantage, also called Plan C, is an alternative to the original Medicare plans. It bundles Part A and Part B, offering more complete coverage. A second option is supplemental insurance (Medigap) which helps cover coinsurance, copays and deductibles to lower your out-of-pocket costs.

As you consider your options for coverage, here are the key differences between Medigap and Medicare Advantage plans. You can’t have both, so you must choose wisely.

What is Medicare Advantage?

Medicare Advantage plans are typically funded by private insurance companies approved by Medicare. These plans offer Part A and Part B coverage, along with dental, vision, hearing and wellness programs. Most Medicare Advantage plans also cover Part D, which is prescription insurance.

What is Supplemental Insurance (Medigap)?

Medigap plans fill in the gaps of Original Medicare. This additional health insurance can be purchased from private insurance companies and is available through 10 different plans. Premiums vary depending on the plan you choose, but the benefits stay the same regardless of the insurer.

While these plans are more expensive, they significantly extend hospital, skilled nursing and travel coverage. They also pay for some or all of deductibles, copayments and coinsurance. However, Medigap plans do not include prescription drug coverage.

Which is Better: Medicare Medigap or Medicare Advantage?

If you’re not comfortable paying the premiums for Medigap plans, Medicare Advantage may be a suitable option for you. With these plans, you can get more coverage, including vision and dental. Medigap rarely covers extra services, so you’ll need to purchase different coverage or pay out of pocket for these services.

On the other hand, if you are comfortable paying a Medigap premium, we generally recommend these over Medicare Advantage. Here’s why. You have complete freedom to see the doctors of your choice (Advantage works more like an HMO), you don’t need authorizations or referrals for medical services and you’ll have little to no out-of-pocket costs.

Contact Us Today to Learn More About Medigap Plans

Leonard Financial Solutions will help you make an informed choice when it comes to Medicare. Contact us today and we can go over your options. With us, you’ll find the best policy to suit your needs, budget and lifestyle. Isn’t this what you deserve after all your working years? We sure think so!

Original Medicare vs Medicare Advantage: What's the Best Option?

10/19/2020

When you enroll in Medicare for the first time, you can choose how you get your coverage. The two main ways are through Original Medicare or Medicare Advantage. The plan you choose will affect how much coverage you get, the doctors you can see and the quality of care you receive. This is why it’s such an important decision!

The good news is that you can make changes to your plan during fall open enrollment if you’re unhappy with your coverage. To help you navigate through Medicare quotes in NJ, let’s break down the two different coverage options and what to expect from each one.

Original Medicare vs Medicare Advantage: What’s the Best Option?

Original Medicare:

- Original Medicare includes Medicare Part A (hospital insurance) and Part B (medical insurance). If you want prescription drug coverage, you can add a Part D plan.

- You can choose any doctor or hospital that accepts Medicare.

- To help with your out-of-pocket costs, you can purchase Medigap supplement insurance.

Medicare Advantage:

- Medicare Advantage (also known as Part C) is an all-in-one alternative to Original Medicare, combining Part A, Part B and Part D.

- Advantage plans typically have lower out-of-pocket costs.

- You can only use doctor’s who are in your plan’s network.

- Most plans offer extra benefits that are not included with Original Medicare like vision, hearing and dental.

Is One Better than the Other?

There is no one-size-fits-all solution when it comes to Medicare. The best approach is to meet with a financial advisor in New Jersey who is knowledgeable in Medicare and Medigap plans. They can go over your options and help you determine the best fit for your needs, health status and budget. That said, here are some key points to consider.

- Doctor and hospital choice. Original Medicare allows you to go to any hospital or doctor that accepts Medicare. Medicare Advantage requires you to use doctors in your plan’s network and may ask for referrals to see a specialist.

- Cost. Out-of-pocket costs are usually lower with Medicare Advantage but you have a yearly limit on what you pay. You also can’t buy or use separate supplemental coverage. Original Medicare usually requires you to pay 20% after you meet your deductible. There’s no yearly limit and supplemental plans are allowed.

-Coverage. Original Medicare covers most medical necessities and supplies. You can also join Part D for prescription medications. Medicare Advantage includes prescription drug coverage, as well as extra benefits like vision, hearing and dental.

- Travel. If you travel outside the U.S., Original Medicare probably won’t cover your care. However, Medigap plans may. Medicare Advantage plans also won’t cover international healthcare expenses.

Looking to apply for Medicare in New Jersey? Contact Leonard Financial Solutions for a detailed look at your individual healthcare needs. Many clients find that they can get the best and most comprehensive healthcare coverage by combining Original Medicare with a supplemental plan. Let’s chat and find the best options for you!

What's New for Medicare in 2020

10/2/2020

The Centers of Medicare and Medicaid (CMS) are responsible for managing the 75 million people who receive this healthcare coverage. In order to ensure there is enough money, changes are made to the plans every so often. And - you guessed it - premiums often rise as a result.

Whether you’re a long-standing Medicare member, new to Medicare or approaching age 65, here’s what’s new for this healthcare coverage in 2020.

Higher Part A Premiums and Deductibles

Medicare Part A is the part of Medicare that pays for nursing home care, hospitalizations and healthcare services. Most people do not pay a deductible for Part A because they prepaid for it during their working years. But for those who do pay, premiums have gone up. Here’s what you need to know.

- People who worked for 30-39 quarters in their lifetime will pay $252/month, up $12/month since 2019.
- People who worked less than 30 quarters in their lifetime will pay $458/month, up $21/month since 2019.
- Deductibles for each benefit period are $1,408, up $44 from 2019.
- Part A charges participants a coinsurance of $352 per day (from days 61-90), up from $341 in 2019. After 90 days, you pay $704 per day, up from $682 in 2019.
- Daily coinsurance for skilled nursing facilities (for days 21-100) are $176 a day, up from $170.50 in 2019.

Higher Part B Premiums and Deductibles

Medicare Part B covers outpatient services, physician fees, home health care services, medical equipment and some medications. Most people pay a premium for this plan based on their income.

For individuals who make less than $87,000 per year and couples who make less than $174,000 per year, their monthly premium is $144.60, up $9.10 from last year. Deductibles also increased under Part B, going from $185 to $198.

Removal of “Donut Hole” in Medicare Part D

Part D is the prescription drug plan for Medicare. Your premium costs are adjusted based on your income. One big change in Part D is the closing of the “donut hole.” The donut hole is a gap in coverage that happens once the plan has paid out a certain amount of prescriptions for the year.

Once this limit is reached, you pay 25% of the cost of your medications until you reach your out-of-pocket max. Before the donut hole closure, you had to pay 40% of your drug costs before you could reach your out-of-pocket maximum, leaving a donut hole.

Change in Income Brackets

The income brackets for Medicare are also getting an update. Income brackets were introduced in 2007 and influence what you pay for Medicare, among other things. The bottom bracket is set at $85,000 for individuals and $170,000 for couples. However, this has been increased to $87,000 and $174,000, respectively, due to inflation.
Even though prices are increasing for Medicare, there are still ways to save money. Contact Leonard Financial Solutions in New Jersey to learn more about Medicare and the money it can save on essential healthcare services.

Your Top Questions About Medicare Answered

9/9/2020

Medicare can be confusing! The good news is that most people report being satisfied with their health care coverage. But like other types of health insurance, Medicare is complicated and features a wide range of plans, coverage choices, premium levels and enrollment rules. If you are interested in applying for Medicare, your best bet is to contact a financial advisor in NJ who can walk you through your options.

In the meantime, here are the top six questions we hear from clients, along with our responses. For additional questions or concerns, feel free to contact Leonard Financial Solutions!

1. When can I get Medicare benefits?

Unless you are disabled, Medicare kicks in at 65 years old. A common misconception is that Americans can get Medicare once they apply for Social Security, which can be as early as 62. But this isn’t true. Even if you retire early, you’ll still have to wait until you are 65 to be eligible for Medicare.

2. How do I apply for Medicare?

If you are already receiving Social Security benefits, you don’t have to apply for Medicare. At age 65, you’ll be enrolled automatically in Parts A and B. However, if you’re not receiving Social Security, you’ll have to apply for Medicare. Your initial enrollment period starts three months before your 65th birthday and extends for three months after.

3. Can you explain what the different “parts” of Medicare are?

There are four parts of Medicare. It’s important to understand each part so that you can be properly covered.

- Part A is your hospital insurance that covers hospital stays and some stays in skilled nursing centers.
- Part B is your medical insurance that covers doctors’ visits, lab tests, outpatient procedures and more.
- Part C is Medicare Advantage - plans offered by private companies to provide Medicare benefits. You’ll still be enrolled in Medicare, but you’ll have extra coverage like vision, hearing and dental.
- Part D is your prescription drug coverage. These plans cover both name-brand and generic prescriptions.

4. How much does Medicare cost?

Medicare A is free for most Americans, though there is a deductible to account for as well as coinsurance for some hospital stays. Medicare B has a monthly premium that varies based on your income as well as a deductible. Part D also has a monthly premium of around $35. You can find updated costs for 2020 here.

5. Are there things Medicare doesn’t cover?

Yes, there are healthcare services that Medicare won’t cover. While this is not a complete list, here are some of the things excluded from Medicare:

- Long-term care
- Dental care
- Eye exams
- Glasses
- Dentures
- Acupuncture
- Hearing aids
- Foot care

6. What is Medigap insurance? Do I need it?

Since Medicare has many copays and deductibles, private insurers sell Medigap or Medicare Supplemental Insurance Plans. Whether you should get a Medigap plan depends on how much risk you’re willing to take on.

Medicare Parts A and B cover a lot but certainly not everything. A serious illness could cost you a significant amount of money if you only have Medicare. With Medigap insurance, you can set a limit on your medical costs and plan for your health care expenses more accurately.

If you have additional questions or concerns about Medicare and Medigap insurance, contact Leonard Financial Solutions today!

Do I Automatically Get Medicare When I Turn 65?

7/31/2020

Remember when it was exciting to turn 16? 21? Well now it’s exciting to turn 65. This is the magic year when Medicare starts. As you know, Medicare is federal health insurance for people 65 and older, as well as some younger people with disabilities. Even though most Americans receive Medicare when they’re 65, there’s still a lot of questions about this coverage.

Let’s answer the question of, “Do I automatically get Medicare when I turn 65?” and why you should also consider Medicare supplement insurance at this time.

When Does Medicare Kick In?

If you are collecting Social Security benefits, you should be signed up automatically to receive Medicare at age 65. If you are not collecting Social Security, you’ll have to apply for Medicare in New Jersey either online or through Social Security. You can enroll yourself in Medicare Parts A, B and D (prescription coverage) as early as three months before the month you turn 65 or three months after the month you turn 65.

We always recommend that our clients stay on top of deadlines, as you could get hit with permanent surcharges if you miss them. But there’s more than just enrolling in Medicare that matters. It’s also important to know what is covered and if you need supplemental insurance.

What is Medicare Supplement Insurance?

Medicare does not cover everything. So what happens if this federal insurance can’t meet your needs in full?
Medicare supplement insurance, or Medigap insurance, helps pay some of the health care costs that Original Medicare doesn’t cover. This allows you to reduce unexpected health care costs and preserve your savings. It also gives you the options you need to take care of your mental and physical health.

Some of the things Medicare supplement insurance can help with are:

Deductibles
Copayments
Coinsurance
Excess charges
Medical care when traveling abroad (only some policies)

How Can I Get Medigap Insurance?

All Medicare supplement insurance is sold through private insurance companies. Most of the insurance companies will expect you to have Medicare Part A and Part B, and you will be required to pay the Part B premium and the Medigap premium. As long as you keep your premiums current, your supplement insurance will automatically renew.

Rather than having to work with private insurance companies on your own, it’s helpful to speak with a financial advisor in NJ. This individual will sit down and look at your overall financial picture and if Medicare supplement insurance is right for you. If it is, you can get quotes from multiple carriers and compare which ones are the best. Costs do vary, but most policies offer the same benefits.

To learn more about Medigap insurance for you or your spouse, contact Leonard Financial Solutions today. We’ll be happy to provide you with free Medicare quotes.