What are Home Caregiving Options for Parents?

January 14, 2022

At least 2.4 million U.S. workers provide in-home personal and health care for older adults and people with disabilities. That number has more than doubled since 2010, according to PHI, a New York–based nonprofit advocacy group that works to improve the quality of direct-care services and jobs. What are the best home caregiving options for your parents?

AARP’s recent article entitled “How to Hire a Caregiver” says that a shift in long-term care from institutional settings like nursing facilities to those aging in place in their own homes and communities has fueled the growth. This is also likely to continue as the population ages. The U.S. Census Bureau projects that the 65-and-older population, which was just over 54 million in 2019, will grow to 94.7 million by 2060.

There are several types of paid in-home caregivers that provide a range of services.

Personal Care Aides. PCAs aren’t licensed and have varying levels of experience and training. They serve as helpers and companions. They can provide assistance with bathing, dressing and do some housekeeping, as well as transportation to shopping and appointments. Training requirements for caregivers vary by state, and some states have no formal standards. This will be an out-of-pocket expense because Medicare or private health insurance typically doesn’t cover them.
Home Health Aides. HHAs monitor the patient’s condition, check vitals and assist with activities of daily living, such as bathing, dressing and using the bathroom. HHAs also provide companionship, do light housekeeping and prepare meals. This group must meet a federal standard of 75 hours of training. Their training and certification varies by state.
Licensed Nursing Assistants (LNAs) and Certified Nursing Assistants (CNAs). LNAs and CNAs observe and report changes in the patient, take vital signs, set up medical equipment, change dressings, clean catheters, monitor infections, conduct range-of-motion exercises, offer walking assistance and administer some treatments. Any medical-related tasks are performed as directed by a registered nurse (RN) or nurse practitioner (NP). CNAs also provide help with personal care, such as bathing, bathroom assistance, dental tasks and feeding, as well as changing bed linens and serving meals. As with home health caregivers, federal law requires nursing assistants to get at least 75 hours of training, but some states have other requirements.
Licensed Practical Nurses (LPNs). These skilled nursing providers have to meet federal standards for health and safety and are licensed by states. They evaluate, manage and observe a senior’s care and provide direct care that nonmedical and home health aides can’t. Their tasks could include administering IV drugs, tube feedings, and inoculations; changing wound dressings; and educating caregivers and patients. Some LPNs are trained in occupational therapy, physical therapy and speech therapy. Medicare covers home health skilled nursing care that is part-time or intermittent, doctor-prescribed and arranged by a Medicare-certified home health agency.
Registered Nurses (RNs). This group has a nursing diploma or an associate degree in nursing. They’ve passed the National Council Licensure Examination and have satisfied the other licensing requirements mandated by their state’s nursing board. RNs provide direct care, administer medications, advise family members, operate medical monitoring equipment and assist doctors in medical procedures.

These are some of the best home caregiving options for your parents. Work closely with an elder law attorney to ensure you have all of the options available to you and your family. If you would like to learn more about home care, and other long term care issues, please visit our previous posts.

Reference: AARP (Sep. 27, 2021) “How to Hire a Caregiver”

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Restructure Assets to Qualify for Medicaid

December 29, 2021

Some people believe that Medicaid is only for poor and low-income seniors. However, with proper and thoughtful estate planning and the help of an attorney who specializes in Medicaid planning, all but the very wealthiest people can often qualify for program benefits. There are ways to restructure assets to qualify for Medicaid.

Kiplinger’s recent article entitled “How to Qualify for Medicaid” says that unlike Medicare, Medicaid isn’t a federally run program. Operating within broad federal guidelines, each state determines its own Medicaid eligibility criteria, eligible coverage groups, services covered, administrative and operating procedures and payment levels.

The Medicaid program covers long-term nursing home care costs and many home health care costs, which are not covered by Medicare. If your income exceeds your state’s Medicaid eligibility threshold, there are two commonly used trusts that can be used to divert excess income to maintain your program eligibility.

Qualified Income Trusts (QITs): Also known as a “Miller trust,” this is an irrevocable trust into which your income is placed and then controlled by a trustee. The restrictions are tight on what the income placed in the trust can be used for (e.g., both a personal and if applicable a spousal “needs allowance,” as well as any medical care costs, including the cost of private health insurance premiums). However, due to the fact that the funds are legally owned by the trust (not you individually), they no longer count against your Medicaid income eligibility.

Pooled Income Trusts: Like a QIT, these are irrevocable trusts into which your “surplus income” can be placed to maintain Medicaid eligibility. To take advantage of this type of trust, you must qualify as disabled. Your income is pooled together with the income of others and managed by a non-profit charitable organization that acts as trustee and makes monthly disbursements to pay expenses on behalf of the individuals for whom the trust was made. Any funds remaining in the trust at your death are used to help other disabled individuals in the trust.

These income trusts are designed to create a legal pathway to Medicaid eligibility for those with too much income to qualify for assistance, but not enough wealth to pay for the rising cost of much-needed care. Like income limitations, the Medicaid “asset test” is complicated and varies from state to state. Generally, your home’s value (up to a maximum amount) is exempt, provided you still live there or intend to return. Otherwise, most states require you to spend down other assets to around $2,000/person ($4,000/married couple) to qualify.

Sit down with an experienced elder law attorney and your estate planning attorney. Together they can help restructure your assets to qualify for Medicaid. If you would like to learn more about Medicaid, please visit our previous posts.

Reference: Kiplinger (Nov. 7, 2021) “How to Qualify for Medicaid”

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Common Errors with Medicare Enrollment

November 30, 2021

Money Talks News recent article entitled “5 Things Most Seniors Get Wrong About Medicare” reports that recently, the insurance website MedicareAdvantage.com surveyed more than 1,000 Medicare beneficiaries and found that they share common errors with Medicare enrollment. The researchers said that this ignorance can mean seniors wasting money and forfeiting benefits. Here are the errors most seniors make with Medicare enrollment, and how such things really work.

Premiums, deductibles, and coinsurance. Many survey respondents were unable to correctly define these terms:

Deductible: 59.7%
Coinsurance: 55.5%
Premium: 56.1%

A deductible is the amount you pay out-of-pocket for care before your insurance kicks in. Coinsurance is what you often pay for services after you’ve met the deductible — for example, a common coinsurance requirement is 20% of service costs. Your premium is the amount you pay each month for coverage.

Out-of-pocket spending limits. One thing about most health insurance plans is that they restrict the amount you’re expected to pay out of pocket. However, when talking about original Medicare, nearly three-quarters (73.7%) of survey respondents don’t realize they could be hit with an unlimited amount of coinsurance bills for Part A and Part B coverage. It’s a big reason why Medicare supplement plans are so important, if you’re choosing original Medicare. Many Medicare Advantage plans — also known as Medicare Part C — come with out-of-pocket limits. After you reach this limit, you pay nothing for the Part A and Part B care that is included in your plan.
Part D’s late enrollment penalty. Only a fifth (20%) of Medicare beneficiaries knew that there’s a penalty if you sign up late for Part D prescription coverage. After your initial Medicare enrollment period ends, you may owe a penalty if there’s a period of 63 or more consecutive days when you don’t have Medicare drug coverage or other equivalent prescription drug coverage. If you have a penalty, you’ll have to pay it for as long as you have Medicare drug coverage.
The fall open enrollment period. Every year, the federal government schedules an open enrollment period when you can make changes to your existing coverage. This period always starts on October 15 and goes until December 7. However, 59.7% of Medicare beneficiaries didn’t know the start date, and half of that percentage falsely thought open enrollment starts after October 15.
Virtual services covered because of the pandemic. Since the COVID-19 pandemic, virtual health care has become more widely available. As a result, the federal government now permits Medicare to cover some of these services. However, a large percentage of beneficiaries are unaware of that fact. Here are the percentages of survey respondents who didn’t know that the following services now are covered:

Virtual e-visits with a physical therapist: 81.9%
Virtual telehealth visits for preventative health screenings: 56.6%
Virtual telehealth visits for mental health counseling: 54.1%

Working with an experienced Elder Law attorney who can help you avoid these common errors with Medicare enrollment, and allow you the full benefits you have earned and deserve. If you would like to read more about Medicare benefits and how to enroll, please visit our previous posts.

Reference: Money Talks News (Nov. 3, 2021) “5 Things Most Seniors Get Wrong About Medicare”

What Should Women Know about Long-Term Care?

September 23, 2021

A longer retirement increases the odds of needing long-term care. An AARP study found more than 70% of nursing home residents were women, says Kiplinger’s recent article entitled “A Woman’s Guide to Long-Term Care.” What should women know about long-term care?

Living longer also increases the chances of living it alone because living longer may mean outliving a spouse. According to the Joint Center for Housing Studies of Harvard University, “In 2018, women comprised 74% of solo households age 80 and over.”

The first step is to review your retirement projections. It’s wise to look at “what-if” scenarios: What-if the husband passes early? How does that impact their retirement? What if a female client lives to 100? Will she have enough to live on? What if a single woman needs long-term care for dementia? Alzheimer’s and dementia can last for years, eating up a retiree’s nest egg.

Medicare and Medicaid. Government programs, such as Medicare and Medicaid, are complicated. For instance, Medicare may cover some long-term care expenses, but only for the first 100 days. Medicare doesn’t pay for custodial care (at home long-term care). Medicaid pays for long-term care. However, you must qualify financially.

Planning for long-term care. If a woman has a high retirement success rate, she may want to self-insure her future long-term care expenses. This can mean setting up a designated long-term care investment account solely to be used for future long-term care expenses. If a woman has a modest degree of retirement success, she may want to lower her current expenses to save more for the future. She may also want to look at long-term care insurance.

Social Security. Women can also think about waiting to claim Social Security until age 70. If women live longer, the extra benefits accrued by waiting can help with long-term care. Women with a higher-earning husband may want to ask the higher-earning spouse to delay until age 70, if possible. When the higher-earning spouse dies, the widow can step into the higher benefit. The average break-even age is generally around 77-83 for Social Security. If an individual can live longer than 83, the more dollars and sense it makes to delay collecting until age 70.

Estate Planning. Having a comprehensive estate plan is a must. Women (and men) should have a power of attorney (POA). A POA gives a trusted agent the ability to write checks and send money to pay for long-term care.

When it comes to long-term care, women should know their own health and the potential drain on the retirement savings. Work with a financial advisor and estate planning attorney to make sure your later years are secure.

If you would like to learn more about long-term care, please visit our previous posts.

Reference: Kiplinger (July 11, 2021) “A Woman’s Guide to Long-Term Care”

Beneficiary Controlled Trust can protect your legacy

Taking Medicare or Employer’s Health Plan

September 9, 2021

As we get older, a common dilemma approaches: Do I consider taking Medicare or keep my employer’s health plan? Let’s say that you work full time and have a very good medical insurance plan, but it’s costly, especially if you also have been covering the rest of your family. Say that the spouse is 60 and permanently disabled and has been told he’s eligible for Medicare. A common question is whether the working spouse should remove the disabled spouse from the employer’s coverage and go with Medicare. What’s the best option?

NJ Money Help’s recent article entitled “Should we take Medicare or keep an employer health plan?” explains that there are different components of Medicare to cover specific services: Medicare Part A, Part B, and Part D.

Medicare Part A helps pay for hospital and facility costs. Medicare Part B helps pay for medical costs, like doctors and medical supplies. Medicare Part D is for prescription drug coverage. Most people don’t pay a monthly premium for Part A, but there are premiums associated with Part B and Part D coverage.

If an individual is 65 and has received disability benefits from Social Security for 24 months or has received certain disability benefits from the Railroad Retirement Board for 24 months, he or she will automatically get Medicare Part A and Part B.

You should also know that you can decide to delay Medicare Part B by contacting Social Security after you become eligible, and you receive the card. Discuss this option with your employer’s health care benefit department to understand how Medicare may or may not work with your current coverage. This is because there are some plans and health benefit plans (especially those with fewer than 20 employees) that become secondary to Medicare, when an enrollee becomes eligible for Medicare.

If you decide to participate in Medicare Part B, understand that there’s a cost. The premium is based on your income, and the standard Part B premium in 2021 is $148.50 per month, if your income was $176,000 or less in 2019 for a married filing joint return. The Medicare Part B premium increases as your income increases.

Medicare Part B pays for many of your medical bills. However, not all the costs for covered health care services and supplies are included. As a result, many seniors buy a supplemental insurance plan, called Medigap. This plan will pay for some of the remaining health care costs, like co-payments, coinsurance and deductibles that are not covered by Medicare.

Remember that it’s important to enroll in Medigap coverage within six months following Medicare Part B enrollment. Medigap is an additional cost along with your Medicare Part B premium and is sold through a private insurance company. To determine what will be more cost effective, you’ll need to compare the Medicare costs with your employer plan. There are many things to consider when taking Medicare or your employer’s health plan. Consulting with an experienced Elder Law attorney who has worked with Medicare coverage and knows the ins and outs.

If you would like to learn more about Medicare coverage, please visit our previous posts.

Reference: NJ Money Help (Aug. 13, 2021) “Should we take Medicare or keep an employer health plan?”

The most common Medicare Mistake

August 18, 2021

Although not everyone is required to enroll in Medicare at the age of eligibility, many people must do so or risk lifelong late-enrollment penalties. CNBC’s article entitled “If you’re still working when you turn 65, be sure to avoid costly mistakes with Medicare” says the most common Medicare mistake is to believe that you don’t need Medicare and to miss enrolling in it when the time comes.

Approximately 10 million workers are in the 65-and-older group, or 17.9% of that age group, according to the Bureau of Labor Statistics. The general rule for Medicare enrollment is that unless you satisfy an exception, you are allowed a seven-month enrollment window that begins three months prior to your 65th birthday month and ends three months after it.

One exception? If you have qualifying insurance with your employer.

Original, or basic, Medicare includes Part A (hospital coverage) and Part B (outpatient care coverage). Part A doesn’t have a premium, provided you have at least a 10-year work history of contributing to the program through payroll (or self-employment) taxes. Part B has a standard monthly premium of $148.50 for 2021, although higher-income beneficiaries pay more through monthly adjustments. About half (43%) of individuals opt to get their Parts A and B benefits delivered through an Advantage Plan (Part C), which typically includes prescription drugs (Part D). It may have a premium.

The rest go with basic Medicare and may pair it with a Medigap policy and a stand-alone Part D plan. Note that higher-income beneficiaries also pay more for drug coverage.

It’s crucial to understand that this common Medicare mistake creates late-enrollment penalties that can last a lifetime. For Part B, the surcharge is 10% for each 12-month period you could’ve had it but didn’t sign up. For Part D, the penalty is 1% of the base premium ($33.06 in 2021) multiplied by the number of full, uncovered months you didn’t have Part D or creditable coverage.

The general rule for workers at companies with at least 20 employees is that you can delay your enrollment in Medicare, until you lose your group insurance (when you retire). Many people with large group health insurance wait with Part B but sign up for Part A because it’s free. It also doesn’t hurt you to have it. However, if you have a health savings account and a high-deductible health plan through your employer, you can’t make contributions after you enroll in Medicare, even if only in Part A.

If you remain with your current coverage and delay all or parts of Medicare, make certain that the plan is considered qualifying coverage for both Parts B and D. If you’re unclear if you need to enroll, ask your human resources department or your insurance carrier to confirm.

However, some 65-year-olds with younger spouses also might want to keep their group plan. Unlike your company’s option, spouses are required to qualify on their own for Medicare, regardless of your own eligibility.

If you have health insurance through a company with fewer than 20 employees, you should sign up for Medicare at 65, whether or not you stay on the employer plan. If you do choose to remain on it, Medicare is your primary insurance. However, it may be more cost-effective in that scenario to quit your employer coverage and purchase a Medigap and a Part D plan (or alternatively, an Advantage Plan,) rather than keeping the work plan as secondary insurance.

Workers at small companies frequently pay more in premiums than employees at larger firms. The average premium for single coverage through employer-sponsored health insurance is $7,470, research shows. However, employees contribute an average of $1,243 — or about 17% — with their company covering the remainder. At small firms, the employee’s share might also be far higher. The bottom line is this: Don’t forget to enroll when it is your time. This most common Medicare mistake could lead to a financial disaster.

If you would like to learn more about Medicare policies and how to manage your coverage, please visit our previous posts.

Reference: CNBC (July 22, 2021) “If you’re still working when you turn 65, be sure to avoid costly mistakes with Medicare”

Women should plan for Long-Term Care

August 13, 2021

Women face some unique challenges as they get older. The Population Reference Bureau, a Washington based think tank, says women live about seven years longer than men. This living longer means planning for a longer retirement. While that may sound nice, a longer retirement increases the chances of needing long-term care. Thus, women should consider how to plan for long-term care.

Kiplinger’s recent article entitled “A Woman’s Guide to Long-Term Care” explains that living longer also increases the chances of going it alone and outliving your spouse. According to the Joint Center for Housing Studies of Harvard University, in 2018 women made up nearly three-quarters (74%) of solo households age 80 and over.

Ability to pay. Long-term care is costly. For example, the average private room at a long-term care facility is more than $13,000/month in Connecticut and about $11,000/month in Naples, Florida. There are some ways to keep the cost down, such as paying for care at home. Home health care is about $5,000/month in Naples, Florida. Multiply these numbers by 1.44 years, which is the average duration of care for women. These numbers can get big fast.

Medicare and Medicaid. Medicare may cover some long-term care expenses, but only for the first 100 days. Medicare does not pay for custodial care (at home long-term care). Medicaid pays for long-term care, but you have to qualify financially. Spending down an estate to qualify for Medicaid is one way to pay for long-term care but ask an experienced Medicaid Attorney about how to do this.

Make Some Retirement Projections. First, consider an ideal scenario where perhaps both spouses live long happy lives, and no long-term care is needed. Then, ask yourself “what-if” questions, such as What if my husband passes early and how does that affect retirement? What if a single woman needs long-term care for dementia?

Planning for Long-Term Care. If a female client has a modest degree of retirement success, she may want to decrease current expenses to save more for the future. Moreover, she may want to look into long-term care insurance.

Waiting to Take Social Security. Women can also consider waiting to claim Social Security until age 70. If women live longer, the extra benefits accrued by waiting can help with long-term care. Women with a higher-earning husband may want to encourage the higher-earning spouse to delay until age 70, if that makes sense. When the higher-earning spouse dies, the surviving spouse can step into the higher benefit. The average break-even age is generally around age 77-83 for Social Security. If an individual can live longer than 83, the more dollars and sense it makes to delay claiming benefits until age 70.

Estate Planning. Having the right estate documents is a must. Both women and men should have a power of attorney (POA). This legal document gives a trusted person the authority to write checks and send money to pay for long-term care.

Living longer means women should plan for long-term care. Work with your estate planning attorney and financial advisor to craft a plan that ensures you are well cared for should long-term care be needed.

If you would like to learn more about long-term care, and other related issues, please visit our previous posts.

Reference: Kiplinger (July 11, 2021) “A Woman’s Guide to Long-Term Care”

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Increase in Benefits for Vets Next Year

July 29, 2021

A new plan, to be voted on by a House Appropriations subcommittee, asks for $113.1 billion in discretionary spending for VA programs in fiscal 2022. The plan should see an increase in benefits for vets next year.

That’s an increase of about 8% from current levels and about $176 million more than what President Biden asked for in his budget proposal released last month.

Military Times’ recent article entitled “House lawmakers back big budget boost for Veterans Affairs programs” says that if it were approved, the proposal would result in total department spending of more than $270 billion in 2022.

“This bill demonstrates a strong commitment to our servicemembers, their families and our veterans,” said Rep. Debbie Wasserman Schultz, D-Fla., in a statement accompanying the budget proposal release.

“It’s a blueprint to make our VA and military stronger and more responsive to all those who proudly protect America, now and in the past,” the Democratic Congresswoman said.

Total department spending is expected to be more than $250 billion in fiscal 2022.

This draft budget also includes $10.9 billion for military construction projects next fiscal year—roughly $3 billion above current year levels and $1 billion more than the president’s request.

House appropriators are expected to vote to pass the plan to the full chamber soon. A possible vote on the package is expected in late July.

However, it will likely still be months before a final budget agreement is reached on VA and military construction spending with the U.S. Senate.

The latest plan calls for $97.6 billion for veteran medical care spending, of which $778.5 million would go towards gender-specific care for women veterans ($73 million more than what the White House requested), $902 million for medical and prosthetic research ($20 million more), and $84 million for “whole health” initiatives ($10 million more). In total, it looks like a significant increase in benefits for vets next year.

If you would like to learn more about veterans health care and other related issues, please visit our previous posts.

Reference: Military Times (June 24, 2021) “House lawmakers back big budget boost for Veterans Affairs programs”

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Aspects of Medicare that may Surprise You

July 13, 2021

If you are over 65, then you are aware of how complicated Medicare can be. There are aspects of Medicare that may surprise you. CNBC’s recent article entitled “Here are 3 Medicare surprises that can cost you thousands every year” reports that about 62.6 million people—most of whom are age 65+— are enrolled in Medicare. Most pay no premium for Part A (hospital coverage) because they have at least a 10-year work history of paying into the system via payroll taxes.

As far as Part B (outpatient care) and Part D (prescription drug coverage), a senior may see some surprise premium costs, no matter if you stay with original Medicare (Parts A and B) or choose to get your benefits through an Advantage Plan (Part C).

Higher premiums for higher income. About 7% (4.3 million) of Medicare enrollees pay more than the standard premiums for Parts B and D for income-related monthly adjustment amounts, or IRMAAs, according to the Centers for Medicare and Medicaid Services. This starts at modified adjusted gross income of more than $88,000. It goes up at higher income thresholds. For example, a single taxpayer with income between $88,000 and $111,000 would pay an extra $59.40 per month for Part B on top of the standard premium of $148.50, or $207.90 total. Note that these IRMAAs don’t gently phase in within each income bracket. If you earn a dollar above the income thresholds, the surcharge applies in full force. Generally, these extra charges are calculated by your tax return from two years earlier. You can also request that the Social Security Administration reconsider the surcharges, if your income has dropped since that you filed that tax return.
Your spouse’s income counts against you. The IRMAAs aren’t based on your own income. For example, if you have retired but your spouse is still working, and your joint tax return is a modified adjusted gross income of $176,000 or higher, you would be subject to IRMAAs.
If you sign up late, you’ll pay a penalty. Sign up for Medicare during a seven-month window that starts three months before your 65th birthday month and ends three months after it. However, if you meet an exception — i.e., you or your spouse have qualifying group insurance at a company with 20 or more employees — you can put off enrolling. Workers at big employers often sign up for Part A and wait on Part B until they lose their other coverage. When this happens, they generally get eight months to enroll. Note that the rules are different for companies with fewer than 20 employees, whose workers must sign up when first eligible. For each full year that you should have been enrolled in Part B but were not, you could face paying 10% of the monthly Part B standard premium ($148.50 for 2021). The amount is added to your monthly premium for as long as you are enrolled in Medicare.

For Part D prescription drug coverage, the late-enrollment penalty is 1% of the monthly national base premium ($33.06 in 2021) for each full month that you should have had coverage but didn’t. This Part B penalty also lasts as long as you have drug coverage. Don’t let these parts of Medicare surprise you.

If you would like to learn more about Medicare, please visit our previous posts.

Reference: CNBC (June 21, 2021) “Here are 3 Medicare surprises that can cost you thousands every year”

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Avoid these classic Medicare Mistakes

June 30, 2021

Retirement is supposed to be a time to enjoy the fruits from decades of labor, but managing your health care can feel like a whole new job, says Money Talk News’ recent article entitled “5 Medicare Errors to Avoid for a Healthy Retirement.” This is no easy task because the official guide to Medicare, the federal health insurance program primarily reserved for people age 65 and older, is roughly 120 pages. This means it is easy to make Medicare mistakes. You may pay extra, or a blunder could leave you with a gap in coverage. If you haven’t enrolled in Medicare but are almost 65, avoid these classic Medicare mistakes that seniors who are already enrolled in Medicare can’t afford to make with their coverage:

Not taking advantage of the “freebies.” Some medical services and products come at no charge for Medicare recipients—or recipients don’t have to pay anything extra, like a co-pay or meeting a deductible to take advantage of these freebies.
Missing your annual chance to switch plans. Your Medicare plan’s coverage, costs and benefits can change every year. You have a chance during open enrollment to examine your options, make sure you’re still getting the best value and, if you want, switch your plan. During the open enrollment, it’s wise to consider the Medicare plans that are available and see what the cost will be in the coming year. You should also confirm that your favorite pharmacies, hospitals and medical providers still will accept your plan in the new year.

Before you do this open enrollment homework, however, it helps to review these resources:

gov and its Medicare Plan Finder
The latest annual “Medicare & You” handbook
Evidence of Coverage document; and
Plan Annual Notice of Change document.

Losing in-network access. Remember that not all health care providers accept all Medicare coverage. As a result, if you go to a doctor who’s not in your plan network, you could see higher co-payments, or your insurer might refuse to pay any of the bill.
Losing Medigap coverage. People with Original Medicare have the option to buy a supplemental policy from a private insurer, known as a Medigap policy, to cover some of the costs that Original Medicare doesn’t fully cover. If you have a Medicare Advantage plan, you can’t buy a Medigap policy. Therefore, if you decide to switch to a Medicare Advantage plan from Original Medicare with a Medigap plan, you’ll drop the Medigap plan. That can be risky. Only during your initial Medigap enrollment period (which is when you first became eligible to sign up for Medicare) are you guaranteed coverage by a Medigap plan. That is the only time when are insurance companies cannot deny you coverage or charge you extra due to pre-existing conditions. After that, insurers typically ask about your health status. Thus, based on your health and where you live, if you lose your initial Medigap coverage because you switched to Medicare Advantage, you could wind up paying a lot more for a Medigap policy, if you later decide to switch back to Original Medicare. You might even be prohibited from certain plans.
A tax penalty for HSA contributions. If you contribute to your health savings account (HSA) while on Medicare, you may be penalized. You should stop making HSA contributions the month before your Medicare Part A coverage (which primarily covers inpatient hospital-related costs) begins, which can be as early as six months before you apply for Medicare or Social Security.

Medicare is complicated. Avoid these classic Medicare mistakes by working closely with your financial advisor and estate planning attorney. They will help craft a plan that works for your retirement.

If you would like to learn more about Medicare planning, please visit our previous posts.

Reference: Money Talk News (June 7, 2021) “5 Medicare Errors to Avoid for a Healthy Retirement”

Category: Medicare

What are Home Caregiving Options for Parents?

Restructure Assets to Qualify for Medicaid

Common Errors with Medicare Enrollment

Taking Medicare or Employer’s Health Plan

The most common Medicare Mistake

Increase in Benefits for Vets Next Year

Aspects of Medicare that may Surprise You

Avoid these classic Medicare Mistakes

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