Tag: Medicare supplement

The Two Faces of Your Financial Planner

I recently read an excellent article in AARP Magazine about the inherent conflict of interest that many so called “financial planners” have and what they do to hide it from you.  It’s the same thing I have been teaching people about for over 15 years and why I am a “fee only” Certified Financial Planner™.

Definitely worth the time…what you don’t know can hurt you!

Announcing our summer gas card giveaway!

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SUMMER GAS CARD GIVEAWAY!

Celebrate summer with our gas giveaway!!!  We will be giving away a $200 gas card to a random person the week of August 1, 2012. 

It’s easy to enter!  Just tell people about us!!  You will receive one entry for every person that calls and tells us that you sent them.  So, the more you spread the word, the more chances you’ll have in the drawing!

They do not need to purchase anything for you to be eligible.  However, they do need to mention your name during their first phone call to our office or their first workshop they attend, so make sure you remind them!

As always, our current clients will still receive a $20 gift card to Bob Evans for every referral.  But during the Summer Giveaway your fun is doubled because your name will also be thrown in the hat for our free gas card.

Good luck to everyone!

Announcing……our next Medicare Workshop!

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Are you turning 65 and wondering what the next step is?

We will be holding our next Medicare Solving The Medicare Puzzle Workshop:

Tuesday, May 15 @ 5:30 pm – Location: Sidney office — 1602 Wapakoneta Avenue.

This is an introductory session explaining the 4 parts of Medicare and what an individual’s options are when they turn 65 or retire and go on Medicare.  We have had an excellent response to these workshops, so if you know of someone who could benefit, please let them know.

Seating is limited, so please RSVP:  Toll Free – 877-492-8803, or comment on this post!

State Teachers Retirement…To Save or Not To Save

I am often asked about the health insurance coverage offered by the State Teachers Retirement System (STRS) of Ohio and whether a retired teacher should stay on the STRS coverage once they turn 65 and go on Medicare.  I will be assuming here that the retiree had 30+ years of service with STRS.

As with all situations there is never a hard fast rule for everyone, but in most cases for the employee it is what I call a “no brainer.”  The current premium in Ohio for the employee is $81/month.  The plan offered by STRS is the Aetna Medicare Plan (PPO) which is a group Medicare Advantage Plan.  The plan has a $500 deductible and a $1500 annual out of pocket maximum (which includes the deductible).  More importantly, the prescription drug plan does not have the infamous donut hole like Medicare Part D has.  So if you are a retired teacher, be very wary of “advisors” recommending you leave STRS to go on a Medicare Advantage plan on your own.  If you have already made this mistake, don’t worry because you may be able to get back on your STRS plan.  Just give them a call to find out what to do.  You may have to wait until the Annual Enrollment Period (AEP) before you can get out of your current plan.

For the spouse of a retired teacher the story is much different.  The current premium for the spouse is $290/month for the same Aetna Medicare Plan (PPO).  On the surface it may seem like the answer is cut and dry, but not so quick.  There is no doubt that you can get much better medical coverage for a much lower premium.  But like I tell all of my clients, premium doesn’t tell the whole story.  We can’t forget about the prescription drug coverage.  Like I said above, you have to deal with the donut hole when you leave STRS and go with the Medicare Drug Plan.  So whether it makes sense to leave STRS and go out on your own will depend on your medications.  This is where you would be wise to contact a professional who can analyze the costs for you.  Here are two clients I have worked with in the past, with two very different outcomes:

 

Client 1:

This gentleman was in good health and only on three generic medications.  We were able to put him on a Medicare Supplement Plan G for $106/month and a Part D prescription drug plan for $25/month for a total of $131/month.  He wasn’t even close to having to worry about his donut hole.  With Plan G his annual out of pocket maximum on medical expenses is $140.  So for this gentleman he saved $159/month and now has much better medical coverage.

Client 2:

This lady was in fair health but had a very long list of medications including several brand name meds.  We could have put her on the same Plan G for $106/month and given her better medical coverage, but the real story was her medications.  With her meds she was going to go WAY into her donut hole.  This seriously raised her cost.  The premium for her drug plan was only $25/month, but because of the donut hole her total cost was going to average $333/month.  This combined with his $106 for Plan G made it a total monthly cost of $439/month, which would be $149/month more than she was currently paying.  We obviously told her to stay on STRS.

As you can see, you can’t just look at premiums when you are making a decision on the best plan for you.  Looking at the two examples above, the premium was the same for both clients, $131/month.  But the expenses were VERY different.  So before you make a decision you may regret contact a professional (not a salesperson) who can help.

 If you know a retired teacher, please pass this article along (just click the SHARE button below).  I’m sure they would appreciate it!

An Extra Alphabet Soup Seminar

Are you turning 65 and wondering what the next step is? 

Due to an overwhelming response to tonight’s Alphabet Soup Seminar, we have added another one next week.  We still have a few open spots.

Thursday, March 22 @ 5:30 pm – Location: Troy office — 1385 Stonycreek Road.

This is an introductory session explaining the 4 parts of Medicare and what an individual’s options are when they turn 65 or retire and go on Medicare.  We have had an excellent response to these meetings, so if you know of someone who could benefit, please let them know.

Seating is limited, so please RSVP:  Toll Free – 877-492-8803, or comment on this post!

Next Alphabet Soup Seminar

Are you turning 65 and wondering what the next step is? 

We will be holding our next Medicare Alphabet Soup Seminar:

Thursday, March 15 @ 5:30 pm – Location: Troy office — 1385 Stonycreek Road.

This is an introductory session explaining the 4 parts of Medicare and what an individual’s options are when they turn 65 or retire and go on Medicare.  We have had an excellent response to these meetings, so if you know of someone who could benefit, please let them know.

Seating is limited, so please RSVP:  Toll Free – 877-492-8803, or comment on this post!

Donut Holes Aren’t Always Tasty!

If your brain works like mine, it thinks about food a lot more than it should.  And it’s always food that’s not good for me, like donut holes.  Nothing beats a donut hole.  It’s like eating a whole donut in one bite…AWESOME!

But when it comes to the Medicare Prescription Drug Plan, donut holes lose their luster.  Don’t ask me why Medicare decided to give it the name donut hole, maybe it was to take the edge off its bite (no pun intended, unless you think it’s funny).  The Donut Hole, otherwise known as the coverage gap, is exactly what it sounds like.  It is a hole in your coverage.  Here’s how it works according to the Medicare guidelines:

Stage 1: The plans start off with a “Deductible Period.”  This is the amount you must pay for out of your pocket before the plan will pay anything.  Not all plans have a deductible.  The plans cannot have a deductible higher than $320.

Stage 2: After you have met your deductible (if you have one) you go into what is called the “Initial Coverage Level.”  During this stage you will pay approximately 25% of the cost of the medication.  Most drug plans set up copays during this stage based on the medication which they assign to a Tier.  For instance, you might pay a copay of $5 for generics (Tier 1), $25 for formulary brand names (Tier 2) and $45 for nonformulary brand names (Tier 3).

Stage 3:  Once you have had $2930 in total drug costs, you will go into the “Donut Hole.”  Notice I said “total drug costs.”  This means what you paid for the medications plus what the plan paid.  For example, if the total cost of a medication is $100 and you only had to pay a copay of $25, it’s the entire $100 that goes toward the donut hole number.  Once in the donut hole you will pay 50% of the full cost of any brand name medications and 86% of the full cost of any generics.  Due to the new healthcare reform, these percentages will continue to decrease each year until they reach 25% in the year 2020.

Stage 4:  Once you have paid a total of $4700 in out-of-pocket costs (not including the premium for the plan), you enter the “Catastrophic Coverage Level.”  Notice that this amount is out-of-pocket meaning that you would have to pay a total of $4700 before you entered this next level.  Once you hit this level you would only pay approximately 5% of the cost of the medication for the rest of the calendar year.

Once you reach the end of the calendar year, all plans start back at Stage 1 on January 1st.

According to a report from the Kaiser Family Foundation, approximately 19% of Medicare beneficiaries reach the donut hole at some point during the year.  So not everyone has to worry about hitting the donut hole, but if you do your expenses can add up in a hurry.  For those of you who are in this situation, maybe you can ease the pain with a box of donut holes (the good kind from the local bakery).

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Next Medicare Alphabet Soup Seminar

We will be holding our next Medicare Alphabet Soup Seminar:

Thursday, February 16 @ 5:30 pm – Location: Sidney Office – 1602 Wapkoneta Ave.

This is an introductory session explaining the 4 parts of Medicare and what an individual’s options are when they turn 65 or retire and go on Medicare.  We have had an excellent response to these meetings, so if you know of someone who could benefit, please let them know.

RSVP:  Toll Free – 877-492-8803

Don’t Retire Naked!

Every day, thousands of people are making the decision to retire.  You probably even know of someone personally.  A good number of those who are making that decision are doing it prior to turning age 65.  And it never fails that some of them will do it NAKED!  No, I don’t mean without clothes…at least I hope not.  What I mean is they are doing it without insurance coverage.

You may say, “Who would ever take that chance!”  Well, most of them didn’t do it on purpose.  They did it accidentally through a lack of planning.  It usually starts with them making the assumption that they will automatically qualify for coverage because they have always had insurance coverage.  That is not the case.  When you are age 65, you can go on Medicare and get a medicare supplement regardless of your health.  The same cannot be said if you retire prior to Medicare age.  If you retire at age 62 for instance, a health insurance company can refuse to insure you based on your current health.  Some health conditions that may cause you to be declined include heart conditions, insulin dependent diabetes, Alzheimer’s disease, etc.

Another common mistake I see is when an individual retires early and goes on COBRA coverage.  COBRA coverage is temporary!  It normally lasts only 18 months (36 months in some circumstances).  I recently spoke with an individual whose COBRA coverage ran out 6 months prior to him turning age 65, and he had an uninsurable heart condition.  So what are his choices?

He has only 3 options…

Option 1:  Because he has exhausted his COBRA insurance, he qualifies as a HIPPA eligible individual.  This means he can get health insurance regardless of any preexisting health conditions.  GREAT!  Problem solved.  The only problem is he will have to pay $1,2oo a month for a plan with limited coverage.  “But what about the Obama healthcare reform, didn’t it take care of people being left without insurance?”  Not really, which brings us to…

Option 2:  The new healthcare reform set up high risk pools in each state to help the uninsured get health insurance.  There’s one big problem, you have to be without insurance for 6 months before you qualify.  So this solves nothing for the gentleman I was talking to because by the time he would qualify for the high risk pool, he could go on Medicare.  Even if he wasn’t Medicare age yet, who wants to be NAKED for 6 months.  So what’s his last option…

Option 3:  Go without insurance coverage until he turns 65 and goes on Medicare.  Definitely not a good option, but for many this is what they are left with.  And with an open heart surgery costing well over $200,000 this could be devastating.

Retiring naked is not only cold, but could be detrimental to everything you worked your whole life for.  So, before you decide to retire, do a little planning and PUT SOME CLOTHES ON!