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Posts from the ‘Health Care’ Category

12
Nov

Medicare Premiums and Other Costs for 2016

During the past several weeks, you may have seen media reports announcing that Medicare Part B premiums would be rising dramatically for some beneficiaries in 2016. But thanks to a provision in the Bipartisan Budget Act of 2015 signed into law on November 2, affected beneficiaries face more modest increases next year. Standard Medicare Part B premiums for the majority of beneficiaries won’t be rising at all.

What you’ll pay for Medicare Part B in 2016

The Centers for Medicare & Medicaid Services (CMS) has announced that in 2016, most individuals (about 70% of Medicare beneficiaries) will continue to pay $104.90 per month for Medicare Part B (Medical Insurance), the same standard premium they paid in 2013, 2014, and 2015. If you fall into this category, your premium won’t be rising because you won’t be receiving a Social Security cost-of-living allowance (COLA) increase in your benefit next year, as was previously announced by the Social Security Administration (SSA). Due to a provision in the Social Security Act, you are “held harmless” from Part B premium increases when no Social Security COLA is payable.

Unfortunately, this is not the case for the approximately 30% of Medicare beneficiaries who are not subject to this “hold harmless” provision. You fall into this group and will pay more for Medicare Part B next year if:

  • You enroll in Part B for the first time in 2016.
  • You don’t get Social Security benefits.
  • You have Medicare and Medicaid, and Medicaid pays your premiums.
  • Your modified adjusted gross income as reported on your federal income tax return from two years ago is above a certain amount.*

The table below shows what you’ll pay next year if you’re in this group.

Beneficiaries who file an individual income tax return with income that is: Beneficiaries who file a joint income tax return with income that is: Beneficiaries who file an income tax return as married filing separately with income that is: Monthly premium in 2015: Monthly premium in 2016:
$85,000 or less $170,000 or less $85,000 or less $104.90 $121.80
Above $85,000 up to $107,000 Above $170,000 up to $214,000 N/A $146.90 $170.50
Above $107,000 up to $160,000 Above $214,000 up to $320,000 N/A $209.80 $243.60
Above $160,000 up to $214,000 Above $320,000 up to $428,000 Above $85,000 up to $129,000 $272.70 $316.70
Above $214,000 Above $428,000 Above $129,000 $335.70 $389.80

Although substantial, Part B premiums are far less than originally projected for 2016 because of a provision in the Bipartisan Budget Act of 2015 that limited premium increases for beneficiaries who are not subject to the “hold harmless” provision.

*Beneficiaries with higher incomes have paid higher Medicare Part B premiums since 2007. To determine if you’re subject to income-related premiums, the SSA uses the most recent federal tax return provided by the IRS. Generally, the tax return you filed in 2015 (based on 2014 income) will be used to determine if you will pay an income-related premium in 2016 (your 2013 income was used for 2015 premiums). You can contact the SSA at (800) 772-1213 if you have new information to report that might change the determination and lower your premium (you lost your job and your income has gone down or you’ve filed an amended income tax return, for example).

Changes to other Medicare costs

Other Medicare Part A and Part B costs will change in 2016, including the following:

  • The annual Medicare Part B deductible for Original Medicare will be $166, up from $147 in 2015.
  • The monthly Medicare Part A (Hospital Insurance) premium for those who need to buy coverage will cost up to $411, up from $407 in 2015. However, most people don’t pay a premium for Medicare Part A.
  • The Medicare Part A deductible for inpatient hospitalization will be $1,288, up from $1,260 in 2015. Beneficiaries will pay an additional daily co-insurance amount of $322 for days 61 through 90, up from $315 in 2015, and $644 for stays beyond 90 days, up from $630 in 2015.
  • Beneficiaries in skilled nursing facilities will pay a daily co-insurance amount of $161 for days 21 through 100 in a benefit period, up from $157.50 in 2015.

For more information on costs and benefits related to Social Security and Medicare, visitSocialsecurity.gov andMedicare.gov.

To view the Medicare fact sheet announcing these and other figures, visit Medicare.gov.


The foregoing is provided for information purposes only.  It is not intended or designed to provide legal, accounting, tax, investment or other professional advice.  Such advice requires consideration of individual circumstances.  Before any action is taken based upon this information, it is essential that competent, individual, professional advice be obtained.  JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources.

22
Sep

Medicare Open Enrollment Period Begins October 15

What is the Medicare open enrollment period?
The Medicare open enrollment period is the time during which people with Medicare can make new choices and pick plans that work best for them. Each year, Medicare plans typically change what they cost and cover. In addition, your health-care needs may have changed over the past year. The open enrollment period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.

When does the open enrollment period start?
The Medicare open enrollment period begins on October 15 and runs through December 7. Any changes made during open enrollment are effective as of January 1, 2016.

During the open enrollment period, you can:

  • Join a Medicare Prescription Drug (Part D) Plan
  • Switch from one Part D plan to another Part D plan
  • Drop your Part D coverage altogether
  • Switch from Original Medicare to a Medicare Advantage Plan
  • Switch from a Medicare Advantage Plan to Original Medicare
  • Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
  • Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn’t offer prescription drug coverage
  • Switch from a Medicare Advantage Plan that doesn’t offer prescription drug coverage to a Medicare Advantage Plan that does offer prescription drug coverage

What should you do?
Now is a good time to review your current Medicare plan. As part of the evaluation, you may want to consider several factors. For instance, are you satisfied with the coverage and level of care you’re receiving with your current plan? Are your premium costs or out-of-pocket expenses too high? Has your health changed, or do you anticipate needing medical care or treatment?

Open enrollment period is the time to determine whether your current plan will cover your treatment and what your potential out-of-pocket costs may be. If your current plan doesn’t meet your health-care needs or fit within your budget, you can switch to a plan that may work better for you.

What’s new in 2016?
The initial deductible for Part D prescription drug plans increases by $40 to $360 in 2016. Also, most Part D plans have a temporary limit on what a particular plan will cover for prescription drugs. In 2016, this gap in coverage (also called the “donut hole”) begins after you and your drug plan have spent $3,310 on covered drugs. It ends after you have spent $4,850 out-of-pocket, after which catastrophic coverage begins. However, part of the Affordable Care Act  gradually closes this gap by reducing your out-of-pocket costs for prescriptions purchased in the coverage gap. In 2016, you’ll pay 40% of the cost for brand-name drugs in the coverage gap and 58% of the cost for generic drugs in the coverage gap. Each succeeding year, out-of-pocket prescription drug costs in the coverage gap continue to decrease until 2020, when you’ll pay 25% for covered brand-name and generic drugs in the gap.

 Where can you get more information?
Determining what coverage you have now and comparing it to other Medicare plans can be confusing and complicated. Pay attention to notices you receive from Medicare and from your plan, and take advantage of help available by calling 1-800-633-4273 (MEDICARE) or by visiting the Medicare website,  www.medicare.gov.

Part D late enrollment penalty
Generally, if you did not sign up for Part D coverage during your initial enrollment period, and you didn’t have other creditable drug coverage (at least comparable to Medicare’s standard prescription drug coverage) for at least 63 days in a row after your initial enrollment period, you may have to pay a late enrollment penalty. The late enrollment penalty is added to your monthly Part D premium. Your initial enrollment period is the 7-month period that starts 3 months before you turn age 65 (including the month you turn age 65) and ends 3 months after the month you turn 65.

The foregoing is provided for information purposes only.  It is not intended or designed to provide legal, accounting, tax, investment or other professional advice.  Such advice requires consideration of individual circumstances.  Before any action is taken based upon this information, it is essential that competent, individual, professional advice be obtained.  JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources.
26
Jun

Supreme Court Upholds Health Insurance Subsidies

The case of “King v. Burwell” challenged the interpretation of a portion of  the Affordable Care Act (ACA).  The ACA provided health insurance subsidies for quailed persons.  One requirement was that the insurance be purchased through state-based exchanges (marketplaces).  Only 16 states and the District of Columbia operated their own state-based exchanges.  Most consumers purchased insurance through federal exchanges through the federal government websites.  June 25, 2015 the U.S. Supreme held that insurance subsidies were available to those that qualified for subsidies purchased insurance through the federal exchange.

26
Nov

Grandfathered Plans: Can You Keep Your Current Insurance Plan?

 
Insurance cancellations and the president’s response

Over the past several months, many people have received cancellation notices from their health insurance carriers, often accompanied by the explanation that their current insurance plan doesn’t meet the minimum requirements of the Affordable Care Act (ACA) scheduled to take effect January 1, 2014. In many instances, insurers are offering to replace the cancelled insurance plan with more expensive coverage that presumably offers more benefits.

The president, in response to growing numbers of consumers whose policies have been cancelled, announced that insurers could (though they need not) elect to allow consumers to keep noncompliant policies through 2014. On November 14, 2013, in a letter to state insurance commissioners, the Centers for Medicare & Medicaid Services (CMS) outlined the conditions insurers must meet in order to continue offering noncompliant policies. The letter is available on the CMS website, www.cms.gov.


Grandfathered health insurance plans

The ACA includes provisions that allow consumers to keep their current health insurance. The ACA provides that policies in place on March 23, 2010 (the date of enactment of the ACA) that have not been materially changed, and that meet certain minimum coverage and other requirements of the ACA, may be “grandfathered” even though they do not meet all of the ACA’s requirements for health plans. But it is important to note that the ACA does not require that insurers continue to offer grandfathered plans; insurance companies can stop offering these plans at their discretion.

According to the government health-care site, www.healthcare.gov, there are two types of grandfathered plans: job-based grandfathered plans, which allow for enrollment after March 23, 2010, and individual grandfathered plans, which can’t have new enrollees after March 23, 2010 (insurers can continue to offer grandfathered plans to individuals who were enrolled on March 23, 2010).

A grandfathered plan can lose its status if it makes significant changes, such as significantly reducing benefits, decreasing the annual dollar limit of coverage, or increasing out-of-pocket spending above what it was on March 23, 2010.


So can I keep my current insurance plan?

The provisions of the ACA allowing for grandfathered plans provide the basis for the premise that consumers can keep their current health insurance if they like it. Yet, as we have seen, insurers can choose to cancel noncompliant plans even if they are grandfathered. So if you like your current insurance plan, but it doesn’t meet all of the requirements of the ACA, the bottom line is this:

  • If your plan is grandfathered, you can keep it–unless your insurer decides to cancel it, which it can do
  • If your plan isn’t grandfathered, you still may be able to keep it, at least through 2014–unless your insurer chooses to cancel it
 

The foregoing is provided for information purposes only. It is not intended or designed to provide legal, accounting, tax, investment or other professional advice. Such advice requires consideration of individual circumstances. Before any action is taken based upon this information, it is essential that competent, individual, professional advice be obtained. JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources.

 

 

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25
Jul

Does the Health-Care Reform Law Apply to You?

Beginning in 2014, the mandatory health insurance coverage provisions of the Patient Protection and Affordable Care Act (ACA) go into effect. But the law does not require everyone to have health insurance, nor are all of the coverage requirements applicable to all types of health insurance.

 Are you exempt from the health insurance mandate?

 Most U.S. citizens and legal residents are required to have health insurance beginning in January 2014 or face a penalty tax that can be as high as 1% of taxable household income exceeding the taxpayer’s federal income tax filing threshold (increasing to 2% in 2015, and 2.5% in 2016). You can avoid the penalty tax if you already have health insurance for the entire year, and the coverage is obtained from one of the following:

Medicare
Medicaid or the Children’s Health Insurance Program (CHIP)
TRICARE (for service members, their families, and retirees)
The veteran’s health program
Employer-provided health coverage
A policy you purchase on your own that’s at least at the Bronze level
A plan that is grandfathered (in existence prior to the enactment of the ACA that meets the requirements of grandfathered plans under the law)
However, certain groups are not required to be insured and thus are not subject to the penalty tax. The ACA specifically excludes people who are members of an exempt religious sect or division, members of a health-care sharing ministry, Native Americans, undocumented immigrants, incarcerated individuals, people whose income is so low that they don’t have to file federal income taxes, and people eligible for a hardship exemption (when the cost of insurance after employer contributions and federal subsidies exceeds 8% of their income).

 What types of insurance are not affected by the health-care reform law?

 The health-care reform law does not apply to automobile insurance, homeowners insurance, and umbrella liability coverage, even though they provide some health-related coverage. Also not subject to the law’s provisions are life, accident, disability, long-term care, and workers’ compensation insurance. Medigap (Medicare supplement) insurance is generally not covered by the ACA if it’s sold as a separate plan and not as part of a comprehensive health insurance policy. In addition, retiree-only plans are exempt from the ACA’s provisions. These plans are group health insurance plans with fewer than two participants who are current employees.

For more consumer information about enrolling in a health insurance plan, government subsidies, and tax credits, visit the U.S. government’s website, www.healthcare.gov.

 

 

 

 

 
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11
Mar

A financial plan is essential for you to know how to invest your money.

To over simplify, financial planning is how you manage your finances and establish a path to reaching your goals.  Investment management is one part of managing your finances.  It is the part that determines how your savings will be invested.

Financial planning starts with your goals.  The amount and timing are critical.  Prioritizing your financial goals is necessary.   You can assign a priority of 1 to 10 or categorize your goals by what is needed, what is wanted and what is wished for.  This will be essential as you monitor your progress.  Life and unanticipated events are not controllable and may require adjustments.  Adjustments may result in changes to your goals, the timing of your goals, or your spending.

A reserve fund is needed to absorb unexpected events.   Reserves should be held so that they are quickly assessable, that is, liquid.   Six months of reserve are generally recommended.   As you approach each goal, the reserve fund should be increased.  This will avoid the impact of fluctuating investment values when the funds are needed.   The amount of liquid assets should be increased as you near retirement.  This minimizes the need to sell investments when the market is depressed.  Two years of liquid funds are generally recommended for retirees.  A portion of the funds for living expenses in retirement might be held in short-term bond funds or bonds.

Investments are purchased with the amount of your savings that exceed your reserves.  The amount that is used for investments must be sufficient to reach your goals.  Education expenses and health care are two categories of expenses that have exceeded what people anticipated.  Many people underestimate the amount they will need in retirement.  Because life expectancy has increased and people have retired early, many people will not be able meet their retirement goals.

The planning process needs to consider the above events and your ability to withstand losses.

The above has touched on cash planning, investment planning, education planning, risk assessment and retirement planning.  All the planning areas need to fit together.  How you manage your investments is dependent on the other areas of your financial plan.
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