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Don’t “Set It and Forget It” This Annual Enrollment Season!

Does anyone remember Ron Popeil?  If you don’t, allow me to rephrase the question.  Does anyone remember the “set it and forget it” infomercial king?

 

I bet it’s ringing a bell now.

 

I, for one, can still see him in his green apron, armed with nothing but some well-seasoned meats and a fancy rotisserie cooker, taking the cheesy and overly scripted infomercial world by storm: “All you have to do is…”  The unrealistically enthused audience chants, “SET IT AND FORGET IT!”

 

He was like the Billy Mays of the 70s, but with food instead of cleaning products.

 

But I digress…back to the topic at hand.  The reason I retrieved this slogan from memory lane is to make a point: Many people have the “set it and forget it” mindset with their Medicare Health Insurance Plans.  They think that once they undergo the process of enrolling in Medicare, enrolling in supplemental coverage or an Advantage plan, and signing up for a drug plan that they never have to change anything again.  Happily ever after.

 

But this just isn’t true.  Yes, most of the work is done.  And you’ve definitely done the minimum to get by.  But there’s a good chance your situation will change over time.  And, even if your situation doesn’t change, there is a very good chance your health care plans will, oftentimes drastically.  This leaves you in an ill-fitting plan that doesn’t meet your needs or your budget.  You may need to switch!

 

When it comes to Medicare Annual Enrollment, there is a reason for the season.  From October 15—December 7, you have the opportunity to make strategic changes to your health care plans.

 

Here are 3 reasons you might need to make changes this year!

 

The Medicare Supplement Creep

Medicare Supplements are typically consistent from year to year.  The benefits are guaranteed to stay the same, and the premiums rarely increase drastically.  But the premium cost almost always creeps up, dollar by dollar, slowly but surely.

 

If you stay on that ride for too long, you could end up paying $100+ more a month than you should.  In fact, if you have been in the same Medicare Supplement Plan for 4-5 years, there’s a good chance you’re paying too much for it.  Shopping around for a better deal this year could save you hundreds…and all without reducing your coverage.

 

REMINDER:  You can change your Medicare Supplement any time of year (click here for related info), not just annual enrollment.

 

The Advantage Plan Leap

There are so many aspects of an Advantage Plan that can frog around over time.  The deductible may go up.  The premium may go down.  You might have higher copays.  Your coinsurance might drop.  And beyond benefits and price, doctors and hospitals may go in and out of your plan’s network.  A doctor available to you this year, may not be available the next.

 

This is why it is important to review your plan.  Is your family doctor still within the plan’s network?  Is it still the best value for you?  If you simply set it, forget it and let it skate by another year, you’ll never know.

 

The Drug Plan Drop

A drug plan may vary in cost from year to year, but what you really need to check is the list of medications the policy covers, also known as the formulary.

 

Over the years, a drug plan may discontinue or reduce coverage on certain medications.  Imagine if the drug it discontinued was your most expensive one, and you didn’t realize it.  Yeah…it could be a financial disaster.

 

Review Your Plan This Year!

So make sure to take control of your health insurance options.  Review your plans, and take careful note of all the changes.  The “set it and forget it” philosophy might work well for cooking chickens, but it doesn’t work for this.

 

For your health insurance, I offer another slogan:  If you set it and forget it, you might regret it.

 

Maybe that will catch on…

 

Yeah…probably not.

 

Looking to review your plans with a Certified Senior Advisor? Call Seniormark at 937-492-8800 for a free consultation.

Think Poor Health Will Stop You From Getting Medicare Supplement Insurance? Think Again.

Insurance companies can’t refuse you coverage for having cancer or being on an expensive chemo-treatment. They can’t deny you a policy for having diabetes or (Burger King-induced) sky-scraping cholesterol or any other pre-existing condition for that matter. These companies are federally mandated to grant you coverage as long as you enroll within the Medicare Supplement Open Enrollment Period. This is good news for you!

 

The Open Enrollment Period

The Medicare Supplement Open Enrollment Period is a 6-month window beginning the day you both turn 65 and are enrolled in Part B of Medicare. During this time frame, you have all the privileges of someone who doesn’t have poor health, including:

  • Access to all 11 Supplement plans (A, B, C, D, F, HDF, G, K, L, M, and N)
  • No premium hikes due to health conditions
  • No medical underwriting

 

You’ve Got Another Shot.

And then there’s guaranteed issue. Although this is based on very specific circumstances (such as coming off of employer insurance or your current plan discontinuing service), it still offers many people with pre-existing conditions another shot at getting on a plan. It is important to note, though, that some plans may not be available under guaranteed issue. It isn’t an all-access pass like the Open Enrollment Period, but it does give you the assurance to know you will not be denied.

 

 

It’s Not the End of the World!

But don’t sweat if you are no longer within the Open Enrollment Period. This definitely does not mean you won’t be able to get Medicare Supplement Insurance. It just means you will have to answer questions about your health, where they might look at your whopper addiction with a more critical eye.  You may have to pay more, but (depending on your specific conditions) they won’t automatically deny you coverage.

 

Of course, this doesn’t mean that there aren’t still circumstances where you will be unable to receive coverage. But—because of open enrollment and guaranteed issue—this doesn’t happen nearly as much. The government is making strides to ensure that health coverage is available to those who need it most: those who are unhealthy.

 

Need help picking out one of the 11 Medicare Supplement Plans? Want somewhere to start? Call Seniormark at 937-492-8800 or click here to set up a free consultation.

Sample Medicare Card

Is Signing Up For Medicare Automatic?

It might be. A lot of things are nowadays. You can now set up your bank account to automatically pay for your bills. And do you remember the last time you turned on your computer, and it took 20 min doing automatic updates?

 

But Medicare enrollment? Most of the time—no. You usually have to call or go online or visit your local security office to enroll…unless…

 

Did you sign up for social security prior to age 65?

If you did, signing up for Medicare is, in fact, automatic. You will receive your Medicare card in the mail 3 months before you turn 65. As pictured above, it will have the dates your Medicare Part A and B will go into effect and your Medicare number (which you should protect very carefully). As long as you can’t think of a reason why you should delay Part B of Medicare, you are finished with this phase of the Medicare planning process.

 

But before you exit this window, I do have some bad news: you’re not done yet. You still have some major decisions to make. Do you want a Medicare Advantage Plan? Or a Medicare Supplement? What about Drug plans?

 

And—quite unfortunately—these decisions are not automatic.  But, the good news is that we can help you make those decisions.  Just call our office at 937-492-8800 to set up your free, no obligation consultation and we will put your mind at ease.

 

Turning 65 soon and not sure what to do? Click here to sign up for our free Medicare workshop. No high-pressure sales pitches here, just in-depth discussion about the ins and outs of Medicare!

Don’t “Set It and Forget It” This Annual Enrollment Season!

 

Does anyone remember Ron Popeil? If you don’t, allow me to rephrase the question. Does anyone remember the “set it and forget it” infomercial king?

 

I bet it’s ringing a bell now.

 

I, for one, can still see him in his green apron, armed with nothing but some well-seasoned meats and a fancy rotisserie cooker, taking the cheesy and overly scripted infomercial world by storm: “All you have to do is…” The unrealistically enthused audience chants, “SET IT AND FORGET IT!”

 

He was like the Billy Mays of the 70s, but with food instead of cleaning products.

 

But I digress…back to the topic at hand. The reason I retrieved this slogan from memory lane is to make a point: Many people have the “set it and forget it” mindset with their Medicare Health Insurance Plans. They think that once they undergo the process of enrolling in Medicare, enrolling in supplemental coverage or an Advantage plan, and signing up for a drug plan that they never have to change anything again. Happily ever after.

 

But this just isn’t true. Yes, most of the work is done. And you’ve definitely done the minimum to get by. But there’s a good chance your situation will change over time. And, even if your situation doesn’t change, there is a very good chance your health care plans will, oftentimes drastically. This leaves you in an ill-fitting plan that doesn’t meet your needs or your budget. You may need to switch!

 

When it comes to Medicare Annual Enrollment, there is a reason for the season. From October 15—December 7, you have the opportunity to make strategic changes to your health care plans.

 

Here are 3 reasons you might need to make changes this year!

 

1.  The Medicare Supplement Creep

Medicare Supplements are typically consistent from year to year. The benefits are guaranteed to stay the same, and the premiums rarely increase drastically. But the premium cost almost always creeps up, dollar by dollar, slowly but surely.

 

If you stay on that ride for too long, you could end up paying $100+ more a month than you should. In fact, if you have been in the same Medicare Supplement Plan for 4-5 years, there’s a good chance you’re paying too much for it. Shopping around for a better deal this year could save you hundreds…and all without reducing your coverage.

 

REMINDER: You can change your Medicare Supplement any time of year, not just annual enrollment.

 

2.  The Advantage Plan Leap

There are so many aspects of an Advantage Plan that can frog around over time. The deductible may go up. The premium may go down. You might have higher copays. Your coinsurance might drop. And beyond benefits and price, doctors and hospitals may go in and out of your plan’s network. A doctor available to you this year, may not be available the next.

 

This is why it is important to review your plan. Is your family doctor still within the plan’s network? Is it still the best value for you? If you simply set it, forget it and let it skate by another year, you’ll never know.

 

3.  The Drug Plan Drop

A drug plan may vary in cost from year to year, but what you really need to check is the list of medications the policy covers, also known as the formulary.

 

Over the years, a drug plan may discontinue or reduce coverage on certain medications. Imagine if the drug it discontinued was your most expensive one, and you didn’t realize it. Yeah…it could be a financial disaster.

 

Review Your Plan This Year!

So make sure to take control of your health insurance options. Review your plans, and take careful note of all the changes. The “set it and forget it” philosophy might work well for cooking chickens, but it doesn’t work for this.

 

For your health insurance, I offer another slogan: If you set it and forget it, you might regret it.

 

Maybe that will catch on…

 

Yeah…probably not.

 

If you haven’t already downloaded our Annual Enrollment Checklist, there is no time like the present!  Make sure you have completed it — and then you can forget it — until next year this time!  Download it here:  https://seniormark.com/annual-enrollment-period-checklist/.

 

Looking to review your plans with a Certified Senior Advisor? Call Seniormark at 937-492-8800 for a free consultation.

 

Hate Your Medicare Insurance Plan? Here’s a Quick and Easy Guide to Switching!

You thought the Medicare mess was all tidied up when you first enrolled and purchased proper Medicare insurance (whether it be Medicare Advantage or Medigap), but then you discover a sad fact of life: Costs change. Benefits change. Your needs change. Or, perhaps you’ve quickly come to realize that a plan you thought was all sunshine, rainbows, and good value is a terrible fit for you. Regardless of the reason, it’s time to switch to an option that is more suited to you needs.

 

That is why I want to offer you a simple guide, answering some questions you may have about switching. Is it possible for you to switch? If so, when? And how should you go about it? I will also cover some of my best tips all of us at Seniormark have learned after helping thousands of retirees through this process—tips to save you time and needless hassle.

 

This post is organized into section based on the type of switch you are planning to make:

  1. From a Medicare Supplement to another Medicare Supplement
  2. From a Medicare Supplement to a Medicare Advantage Plan
  3. From a Medicare Advantage Plan to a Medicare Supplement
  4. From a Medicare Advantage Plan to another Medicare Advantage Plan
  5. From a Part D Drug Plan to another Part D Drug Plan

 

Feel free to skip to the section that is most pertinent to you, and don’t forget to call us at 937-492-8800 if you have any additional questions!

From Medicare Supplement to another Medicare Supplement

Can I Switch?

Most people can, except people with very serious, chronic health conditions. You will have to undergo medical questioning and get approved, but don’t lose hope too fast: in many cases, even those with poor health can find a company who will accept them (click here for an blog to answer some questions about this)!

 

When Can I Switch?

Anytime of year. However, I recommend avoiding switching during the Annual Enrollment Period (October 15- December 7). That is a really busy time of year for insurance agencies, so the process might not be as smooth.

 

How Do I Switch?

 (1) Find the best plan for you by doing private research or shopping with an independent insurance agency like Seniormark. (2) Call the company and follow their application process. (3) If you are approved, cancel your previous supplement.

 

Best Tip

This type of switch is not just for those who hate their plans, but is also for those who like to save money (which I assume includes most of us). If you have been in the same Medicare Supplement for 3-5 years, you could save hundreds a year or more by switching without changing your benefits (click here for some help on shopping around).

 

From a Medicare Supplement to a Medicare Advantage Plan

Can I Switch?

Yes, in the vast majority of cases. As long as you don’t have End Stage Renal Disease (kidney failure), you can switch!

 

When Can I Switch?

You can switch during the Annual Enrollment Period (October 15- December 7).

 

How Can I Switch?

(1) Find the best plan for you by doing private research or by shopping with an independent agency like Seniormark. (2) Call the company and follow their application process. (3) Cancel your previous coverage effective January 1st and wait for your new coverage to go into effect for the New Year.

 

Best Tip

Before switching to an Advantage Plan, realize that you are giving up benefits for the lower premium. Advantage Plans are more cost effective when it comes to premium, but even the ones that cost $0 aren’t really free (click here for our blog on “free” Advantage plans), so make sure you understand what you are getting into.

 

And as you are shopping plans, remember to consider more than just the premium. For instance, are your doctors in the plan’s network? If your plan has a built-in drug plan, does it cover your medications? We’ve had unfortunate retirees call in for help after they found out they couldn’t see their own doctor without losing all coverage. And the worst part? They were locked into their plan for the whole year! Advantage Plans can be an excellent fit, but only if you find the right one for you.

 

From a Medicare Advantage Plan to a Medicare Supplement

Can I Switch?

Most people can, except people with very serious, chronic health conditions. Anytime you switch to a Medicare Supplement, this will be the case: You will have to undergo medical questioning and get approved. But don’t lose hope too fast: in many cases, even those with poor health can find a company who will accept them (see link above)!

 

When Can I Switch?

You can only switch during the Annual Enrollment Period (October 15-December 7).

 

How Can I Switch?

(1) Find a plan that’s right for you by doing private research or by shopping it with an independent, local insurance agency like Seniormark. (2) Call the company and follow their application process. (3) If approved, ensure that your policy gets cancelled effective January 1st and then simply wait for your coverage to go into effect in the New Year.

 

Best Tip

Don’t wait until the last minute to switch. Since Annual Enrollment is such a busy time of year for Insurance companies, it may take 3-4 weeks for your application to get processed. So, put your application in early (in October or early November); you don’t want to be stuck in an Advantage Plan you hate for another whole year!

 

From a Medicare Advantage Plan to Another Medicare Advantage Plan

Can I Switch?

Yes, in the vast majority of cases. As long as you don’t have End Stage Renal Disease (kidney failure), you can switch!

When Can I Switch?

You can only switch during the Annual Enrollment Period (October 15-December 7).

 

How Can I Switch?

(1) Find a plan that’s right for you by doing private research or by shopping it with an independent, local insurance agency like Seniormark. (2) Call the company and follow their application process. (3) Wait for your previous plan to cancel by itself and wait for your new coverage to go into effect on January 1st.

 

Best Tip

As I’ve previously noted, make sure your new Advantage Plan has your doctor in its network, and—if your new plan has a built-in drug plan—that your medications are covered. It’s a real pain to kick off New Year off with an ill-fitting insurance plan!

 

From a Part D Drug Plan to Another Part D Drug Plan

Can I Switch?

Yes, there are no restrictions to changing coverage!

 

When Can I Switch?

You can only switch during the Annual Enrollment Period (October 15-December 7).

 

How Can I Switch?

(1) Find a plan that’s right for you by shopping it yourself on Medicare Plan Finder or call OSHIIP (Ohio Senior Health Insurance Information Program) at 1-800-686-1578 and they can help you re-shop your plan. (2) Enroll online at www.medicare.gov for a new plan. (3) Your new coverage will go into effect on January 1st and your old coverage will automatically end when you sign up for a new part D plan.

 

Best Tip

Do not make drug plan decisions with a tunnel vision focus on premiums. Make sure you find a plan that covers all of your medications and, if possible, has your desired pharmacy as one of its preferred pharmacies.

 

The Ultimate Best Tip: Get Expert Guidance When Making Your Switch This Annual Enrollment Season!

Annual Enrollment is the only time of year you can switch your Medicare Advantage and Prescription Drug plan.  Looking to review your plans with a Certified Senior Advisor this Annual enrollment season? Call Seniormark at 937-492-8800 or click here to set up a free consultation.

One Priceless Secret to Help You Find a Trustworthy Retirement Advisor

You can’t choose retirement help based on an agent’s smile or friendliness or wrinkleless pants. And contrary to popular belief, the handshake shouldn’t make or break your decision either. The truth is, even if he or she is a nice guy or gal, that doesn’t make the person any more trustworthy.

 

Not that those things don’t matter at all. I hope the person you work with during this crucial transition isn’t a jerk. All I am asking is for you to consider this as well: Is he a captive or an independent agent? Because knowing the difference…well…it can make a world of difference.

 

Tied Hands

A captive agent works for one company. Their job is to sell that one company’s products. They can’t lead you to the best-valued plan for your unique needs because they are limited to the insurance plans that their company offers.

 

Here’s something you’ll never hear a car salesman say: “Yeah, you know what you need, sir? You need to go visit the dealer down the street. He’s got exactly what you are looking for…and at half the price! Here, let me get the directions for you.”

 

It’s the same thing with captive agents. Even if there’s a better deal with another company, they’re not going to tell you that! Just like a car salesman, they have to sell what’s on the lot if they want to make a commission. In other words, their hands are tied. And when their hands are tied behind their back, it’s a bit more tempting for them to cross their fingers.

 

Hands Free Help

On the other hand (I promise I didn’t try that), independent agents are on their own. Since they don’t work for any one specific company, they can instead work for you, shopping plans from all the companies they represent. By analyzing your situation, they can find the one health care plan that is best suited to you. Or—if there are several—they can talk to you honestly about the advantages and disadvantages of your different options. It’s that simple!

 

And that’s why the captive vs. independent agent dichotomy is so vital when you are deciding who to work with. Because—when compared side by side—the independent advisor is the obvious choice…

 

Hands down. (I’m deeply sorry…I had to.)

 

Are you interested in working with an independent advisor with a passion for helping retirees? Then call Seniormark at 937-492-8800 to set up a free consultation.

 

 

Photo:  https://www.mogicons.com/en/stickers/emoticons/secret-emoticon-265/

 

Q&A: What You Need to Know about the New Medicare Cards and Numbers

I’m sure you’ve heard about it on the news or from a friend. If you haven’t, I would like to inform you now: As a part of the Social Security Number Removal Initiative, the Centers for Medicare and Medicaid Services (CMS) will be issuing new Medicare cards with a new number gracing the front. Unlike the old HICN number that is on all the old cards, this new number is not based on your Social Security number. Rather, it is a randomly generated 11-character identifier.

 

I anticipated a little bit of  “buzz” surrounding this topic, so I thought I would provide quick, simple answers to some of the questions you might be asking out of curiosity or general concern. Let’s get started.

 

How Much Will It Cost?

It won’t cost you anything. However, the government has set aside $320 million over five years to fund the initiative. It’s amazing how something as simple as changing numbers and letters on a card can end up costing so much!

 

Why Are They Doing It?

Think $320 million is a lot of money? How about $60 billion? As it turns out, that is one estimate of the amount of money Medicare loses every year due to fraud, according to AARP. The government hopes taking everyone’s Social Security numbers off the cards will help prevent identity theft and put a dent in that multi-billion dollar problem.

 

How Is My Medicare Beneficiary Identifier (MBI) Generated?

Unlike the old Health Insurance Claim Number (the number on your current card), which is based on your Social Security Number, your new Medicare number (the MBI) is a completely randomly generated 11-character identifier. It does not have any special meaning whatsoever.

 

For more information on the MBI, how it will look on the card, and each of the characters, see this helpful explanation.

 

When Will I Receive Mine?

They began the transition in April of 2018. Their goal is to have a new Medicare card in the hands of every active Medicare beneficiary by April of 2019.  You can also sign up at medicare.gov to receive an email when your state mails their new cards.

 

What Does This Mean for My Healthcare Provider?

Your doctors and care facilities will likely need to update their software and information systems to recognize the new number. Issues and challenges may arise as the transition takes place, but all the kinks should be worked out before you get your new card in the mail.

 

Do I Need to Do Anything?

Be sure to destroy your old card (it has your social security number on it), start using your new card as soon as you get it, keep the new number safe, and also check out our blog post about potential scams that may arise throughout this transition.

 

Do You Have Other Medicare Questions?

At Seniormark, we’re always here to help. If you have any questions about when and how to sign up for supplements, Medicare Advantage or drug plans, give us a call at 937-492-8800 or click here to sign up for a free consultation!

The Diversification Misconception: Why All Your Eggs May Still Be in One Basket

The adage is almost older than investing itself: Don’t put all your eggs in one basket. In other words, diversify your portfolio so that—if a particular investment tanks—you haven’t lost all your money.

 

So you set off to work, scattering your wealth in various locations over time. $10,000 in a Vangard mutual fund, $25,000 in U.S. Bank, 15,000 in randomly selected stocks. Here a little; there a little.

 

Sounds simple, right? The only problem is that this isn’t diversification. Sure, it is better than betting your entire life savings on a Kraft Mac and Cheese stock.  And it may protect you against any one company going under. But—in almost every other respect—this investment strategy doesn’t leave you any better off than a one-basketeer. Why?

 

Because asset classes are the ticket!

Diversification is not about the variety of companies, but rather the variety of asset classes you invest in. Maybe you’ve heard some of them thrown around at dinner parties as wealthy investors brag about their business ventures: fixed income, large cap growth, international, global, etc.

 

But what is an asset class? In short, it is just a categorization of investments, but this definition doesn’t tell the whole story. An asset class, rather, is a category of investments with comparable characteristics that tend to behave similarly in the marketplace. If one goes up in value, it is likely that the others have gone up as well (at least to some degree). And when one plummets, check the others; they probably aren’t doing so hot either.

 

This means that if you have all of your money invested in one asset class, your portfolio is not diversified. If that one asset class does poorly (since all investments within the category behave similarly), your entire portfolio will suffer.

 

But you can’t stop there!

Haphazardly choosing various asset classes will put you far above those who are randomly selecting investments, but you must go further to truly diversify your portfolio.

 

It’s not just about a variety of asset classes; it is about the right variety of asset classes. Some asset classes behave very similarly to other asset classes. These pairs are considered positively correlated. The general rule is this: you don’t want pairs of investments that are positively correlated. In fact, negatively correlated asset classes are the best. Following this rule puts you in a strong position as an investor. Your investments won’t all go up and down at the same time.

 

 

Allow me to give you an example to illustrate this concept.

Imagine a friend of yours just caught a big break at work. His salary just doubled. Since he doesn’t know what to do with this expendable income, he decides to invest. The first thing he purchases is 100 shares of umbrella stock (the umbrella industry is rockin’). Then—to diversify his portfolio—he also buys 75 shares of stock in a poncho company. He’s in the clear, he thinks, but just to be sure, he goes online and buys 90 shares of stock in a company that sells rain boots.

 

How do you think he’s doing?

Yeah. It’s a disaster. In fact, his miniature portfolio is so imbalanced and hopelessly one-basket-ed that you internally cringe by his second purchase. You don’t need to know much about investing to know that his stocks are positively correlated. They will behave the same way! When it’s dry weather, they will all crash and burn. When it’s wet, they will likely do well.

 

What your friend should have done is invest in a sunscreen company to offset his investments in the umbrella company. In a basic sense, this is diversification.

 

Now, this is definitely an oversimplified example. Anyone can see it from a mile away. But people are doing this in the real world, with real money. Not because they are dumb, but because—in reality—correlations aren’t nearly as obvious.

 

In my practice, I’ve seen it all too many times. People come in for a financial consultation, thinking they have a diversified portfolio, and I find that 70% of their investments are in a single asset class. And this isn’t even taking into account the correlations!

 

Needless to say, it’s a scary situation. No one knows how well a particular investment is going to do from year to year. And no one knows how a particular asset class will do either. The only thing we can do is develop a well-balanced, well-rounded, well-diversified portfolio to smooth out the ups and downs, and then watch the money grow over time. It’s the time-tested, statistically- verified choice.

 

But as long as investors believe the misconceptions, thinking that their portfolio is diversified, they will never change the reality that their eggs are still—in fact—all in one basket.

 

Concerned that your portfolio isn’t diversified? Call Seniormark at 937-492-8800 for a free consultation with a Certified Financial Planner!

 

How Much Does Medicare Cost in 2017?

The cost of health care is a big question mark for soon-to-be retirees. Perhaps you’ve been on a trusty employer plan for the last few decades or have come to know and love a private insurance plan that fits your needs and budget.

But now you’ve got to switch to Medicare. And although you’ve always been able to pay your premiums, the cost of Medicare is an unknown number among a sea of unknowns associated with health care in retirement (or retirement in general, for that matter).

Although I can’t grant you any magical, one-size-fits-all answer, I can give you some solid estimations based on my experience working as a local Medicare expert to help you compare what Medicare costs with your current plan.

I always like to start with some good news…

 

  • Medicare Part A (Inpatient Care) Is Free

Have you paid into Social Security for at least 10 years (40 quarters)? Then your premiums for Part A are paid for!

Unfortunately, though, it can’t all be free…

 

The Associated Part B (Outpatient Care) Monthly Premium Is $134.00

This figure is adjusted for high income, but that is not a concern for most people. $134.00 will be your monthly premium unless your income exceeds $85,000 per year or more as an individual or $170,000 filing jointly with your spouse.

This is where there is a fork in the road. From this point, the cost of Medicare is heavily affected by which path you take. You can boil down all the madness into two basic choices (“Swamped with mail? Here’s what it all means”): Medicare Advantage or Original (traditional) Medicare.

 

The Traditional Medicare Route

If you take this path, I always suggest picking up a Medicare Supplement Plan. It might seem unnecessary (“Do I Really Need a Medicare Supplement?”) to some, but without the extra coverage, there is no limit to your out-of-pocket spending.

A Supplement’s price range is anywhere from $50-150, but a standard, middle of the road Plan G usually costs about $110 per month. This is the typical plan I recommend to my clients.

Then, since a Supplement does not cover those sky-high prescription drug costs, the vast majority of retirees purchase a Part D Drug Plan. Although the prices span anywhere from $14.60 to $157.40 per month, the average cost for a drug plan is $35.63 as of 2017. The out-of-pocket costs associated with Part D vary greatly depending on your medications. Just keep in mind that there will likely be copays and coinsurance regardless of which plan you choose.

 

The Medicare Advantage Route

The other choice is the less beaten path. From my experience, most people feel very cozy in the stability of a Medicare Supplement. However, an Advantage Plan often appeals to the more cost-conscious, risk-taking retirees. Offered as an alternative to Traditional Medicare, Advantage plans range from $0-179 per month with most settling in around $70. To make them even more attractive, a Drug Plan is almost always included as a part of the package.

Caution: Check For Possible Out-of-pocket Costs
At first glance, it looks like choosing a Medicare Advantage is a no-brainer, but there is a reason it appeals to risk-takers. With a Medicare Supplement (only available with Original Medicare), the maximum out-of-pocket is only $183 annually for Plan G (not including prescription drug costs). However, in an Advantage Plan, the coverage is a bit spottier. You pay less in monthly premiums, but copays, coinsurance, and deductibles are much higher. The potential out-of-pocket for an advantage plan can be as a high as $3500-6000 per year or more! Some years you will save money because of the cheaper premium, but one year of bad health can turn that around really quickly.

The Costs At a Glance For a 65-Year-Old

Original Medicare
Free Part A
+
$134 per month Part B
+
$110 per month for Medicare Supplement Insurance
+
$35.63 for Part D Drug Plan
= $279.63 monthly
(with LOW out-of-pocket spending limit)

Medicare Advantage
Free Part A
+
$134 per month Part B
+
$70 per month for an Advantage Plan (Part D included)
= $204 monthly
(with HIGH out-of-pocket spending limit)

 

Interested In A More Personalized Analysis?

So there you have it! This should give you a good idea of what Medicare costs for the average 65-year old. But—as I said before—the cost of Medicare is different for every person. If you are interested in more personalized figures, call us at 937-492-8800 for a free consultation. We will assess your financial and health situation to find an overall plan that meets your needs, concerns, and pocketbook. Ensuring you a successful and secure transition into retirement is our number one priority.

There will always be some unknowns when it comes to health care costs in retirement, but sitting down with a professional in order to assess your situation can diminish even the biggest question marks and settle your deepest concerns.

Disclaimer: Numbers are based on Sidney, Ohio.

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