We probably talk to more people this time of year than any other. Part of that is because of the Annual Enrollment Period October 15 through December 7. A lot of what we do is just answer questions. Most of the time we can give an answer right over the phone, but sometimes we have to do a little research to find the answer to an individual’s specific question. I know Kate was on the phone the other day for over two hours with an insurance company, making sure the information her client needed was current.
One of the results I’m seeking with this column is providing information that will make it easier for my readers to make educated decisions regarding their health care. Too many of the calls we receive are people looking to undo decisions that they had previously made. Often it’s too late, due to health issues. The die has been cast and there are no “do overs”. I consider the purchase of supplemental coverage to Medicare one of the most important decisions that we will make in our lifetime. It is critical that we make the right decision for our personal insurance needs, yet we don’t have a crystal ball. We may not have a clue regarding our future health.
I suppose the only constant about Medicare is change. Just about the time we think we have a handle on it, it changes again. We’re expecting increases in the deductibles and copayments for 2017. I’ve heard that there will be an increase in the Medicare Part B premium. So far, everyone is tight lipped. I believe that we’ll know more soon after the election. Until I can share the changes with certainty, I’d like to share some of the most asked questions we receive and some of our answers. Often the response to many of the answers we provide is: “I didn’t know that!”
1. When should I apply for Medicare? This is one of the most asked questions we receive. If you are retired and will not be covered by any other insurance upon reaching age 65, you have the three months prior to your birthday month, your birthday month, and three months following your birthday month to enroll with no late fees or penalties. Don’t wait. Your coverage will begin the 1st day of your birthday month. Any insurance that you have prior to the 1st day of your birthday month will be discontinued, so there will be no double coverage and no time period without coverage.
2. When do I apply for supplemental coverage to Medicare? Apply as soon as you receive your red, white, and blue Medicare ID card.
3. Is my supplemental coverage to Medicare guaranteed to be issued, regardless of my health? Yes, and your rates will be the same as someone who has no health issues.
4. Will my rates increase? If history is an indicator, rates are sure to be adjusted (usually up).
5. Is my supplemental insurance guaranteed to be renewed every year? Only if you purchase a Medicare Supplement policy and pay the premium on time. Medicare Advantage plans are reviewed annually and may add, reduce, or eliminate benefits. Some Advantage plans may be pulled from the market, causing the insured to seek another available company and/or plan usually during the Annual Enrollment Period.
6. Can I be penalized if I do not enroll with Medicare within the prescribed time allotment? Although most of us pay no premium for Medicare Part A (hospital benefits), we could be penalized if we don’t enroll at the proper time. Medicare Part B (benefits outside the hospital) carries a 10% per year penalty if you enroll late. When you enroll late, you must wait until the following July for benefits to take effect. Medicare Part D (prescription drug benefits) carries a 1% per month penalty for late enrollment and limits the enrollment period to the Annual Enrollment Period of October 15 through December 7 each year, with benefits beginning January 1st the following year. Note: If we were allowed to enroll and disenroll at our own discretion, the tendency would be to carry the benefits only as we needed them, causing the system to collapse very quickly.
7. How much is it going to cost? Theoretically, the cost should be different for each of us. All of us have such different needs and abilities to pay. We attempt to personalize and customize plans for each individual. With so many companies offering such a diverse array of benefit packages and prices, this is no easy task. Combine these variables with individual health issues and realistically assuming that both Medicare and supplemental plan prices will increase due to claims and cost of living, it’s difficult at best.
8. What do we know for sure? We know that most of us are not paying any premium for Medicare Part A. We know that most of us are paying $104.90 per month for our Medicare Part B premium except for those who are enrolling in 2016. That cost is $121.80 monthly. Higher premiums for Medicare Part B are being charged, based on Modified Adjusted Gross Income exceeding $85,001 for singles and $170,001 for married couples. Medicare Part D, Medicare Advantage plans (some with Part D included), and Medicare Supplements (Medigap plans) can begin at less than $50.00 per month and exceed $300.00 monthly. Out-of-pocket cost of claims are significantly less with the higher priced plans.
If you’ve followed me this far, you can get a feeling as to just how important it is to sit down with a professional and invest some time and long range thinking into such an important decision. It needs to be right for you! Call us anytime at 623-846-6891.
Orion Steen is a licensed agent and specializes in Medicare supplemental plans. He has been advising his clients on life and health insurance matters in Arizona for over 45 years. He can be reached for related questions by E-mail at firstname.lastname@example.org, call toll-free 888-846-6891 or cell 623-846-6891.