AEP, ObamaCare & Medicare Supplements

One of the most common questions we're being asked lately is, “Will my Medicare Supplement change this year?”  Generally people have one of two reasons for asking this question.  There are those concerned about the Annual Enrollment Period (AEP) affects them, and there are those concerned about the Affordable Care Act (ObamaCare) affects them.  The answer to the question, regardless of your concern, is “No.”

The Annual Enrollment Period is an enrollment period that applies to Prescription Drug Plans (PDPs) and Medicare Advantage Plans (MAs), but it does not pertain to Medicare Supplements whatsoever.  Both Prescription Drug Plans and Medicare Advantage Plans are set up on one-year contracts with the government to offer Medicare services.  Thus, during the Annual Enrollment Period, these plans announce their changes for the upcoming year and give you a chance to change your plan if you like.  However, a Medicare Supplement does not hold an annual contract with the government, and thus it does not have to renew anything at the end of the year.  Your coverage simply continues on without requiring you to take any action.  This is one of the reasons a Medicare Supplement remains one of the most stable, dependable, and comprehensive coverages available.

ObamaCare, similarly, does not affect your Medicare Supplement either.  In fact, ObamaCare really doesn’t even effect Medicare that much.  There were a few changes that went into effect back in 2010, but there is nothing new that will roll out in 2014.  The ObamaCare deadlines you keep hearing about are only applicable to individuals who do not receive Medicare benefits.

So there you have it.  If you have a Medicare Supplement, sit back, relax, and enjoy your holidays! 

* If, on the other hand, you have a Medicare Advantage Plan and/or a Prescription Drug Plan and you are dissatisfied with the changes your plan is making next year, please give us a call or drop us an email and we’ll help you sort through your options.  We have access to nearly every Medicare and prescription plan available in Idaho and we’d love to help take the complexity out of your search.

Annual Enrollment Period (AEP)

Salvador Dali is credited with once saying, “What is important is to spread confusion, not eliminate it.”  If you’ve been on Medicare for more than 10 minutes, you probably think that the Centers for Medicare/Medicaid Services (CMS) came up with this line.  And it’s easy to see why.  The bureaucracy and complexity of Medicare can be overwhelming.  And certain times of the year seem to highlight this feature – like the Annual Enrollment Period (AEP).

The AEP is a timeframe each fall in which you can make changes to your Medicare coverage.  We have found that there is a lot of confusion around what you can and cannot do during this period.  Hopefully the information below will help clear some things up.

What the AEP is:

• AEP begins on October 15th and ends on December 7th.
• During AEP you may enroll into or disenroll from a Prescription Drug Plan.
• During AEP you may enroll into or disenroll from a Medicare Advantage Plan.
• If you already have a Prescription Drug Plan or Medicare Advantage Plan, you may change your plan during AEP if you wish.
• Any changes you make during the AEP will be effective January 1st of the upcoming year.

What the AEP is NOT:

• AEP does not affect a Medicare Supplement (Plan F, G, etc).  If you have a Medicare Supplement, you can change your coverage anytime during the year, and you are not required to do anything during the AEP.
• AEP does not require you to make any changes to your coverage.  If you are happy with your plan, it will continue into the next year with no action required on your part.
• AEP is not the end of the world.  :-)  

Although the AEP may seem very confusing and daunting, we assure you that we can help guide you through it all.  If you have questions about your coverage or your options during this AEP, please feel free to call or email us anytime.

ANOC

ANOC  (ә / näk)
   noun

1. An acronym that stands for:  Annual Notice Of Change. 
2. The document that is sent out each year by Prescription Drug and Medicare Advantage Plans that updates members as to changes in their coverage.
3. A very important document that should be reviewed carefully.

Well, it’s getting to be that time of year again.  Although it seems like it was just summer yesterday, we are already less than two weeks from October.  Of course you know that we are getting close to fall because you’ve started getting more and more email.  The Medicare Annual Enrollment Period is just around the corner, which means open season for Medicare marketers.  This means that you may find your paper recycle bin bulging at the seams as you try to keep ahead of all the solicitations and various junk mail.  There is however, one very important piece of mail for which you will want to be on the lookout.  That’s right, it’s your Annual Notice Of Change (ANOC).

If you have a Prescription Drug Plan or are enrolled in a Medicare Advantage Plan, you will get one of these every fall.  If you do not have a Prescription Drug Plan and you are not enrolled in a Medicare Advantage Plan, well then my friend, you can stop reading right here and take the rest of the day off!  But for those of you who do, keep reading. 

This document is very important because it will detail the changes in your plan for the upcoming year.  This will help you make the decision about whether or not you will keep your current plan, or shop for another.  The document itself is generally divided into two sections.  The first section is a brief summary of the highlights of the plan changes, and the second is a more detailed account of the previous year’s benefits next to the upcoming year’s benefits.  Typically this is done in a two column chart that makes comparison very easy.  As you look through these changes, we would recommend asking the following questions as a guide for keying in on some of the major, and sometimes harder to see, issues.

For Prescription Drug Plans ask:

    Did the monthly premium change?
    Did the drug copayments change?
    Are there any significant changes to the list of participating pharmacies?
    Are there any changes to the list of covered drugs that effect you (such as a change in drug tier)? 
    Are there any additional restrictions on the drugs that you're taking (such as step therapy, or quantity restrictions)?

For Medicare Advantage plans, ask the following questions in addition to those above:

    Did the annual out of pocket maximum change?
    Are there changes to the doctor, hospital, or nursing facility copays?
    Are there any changes to the out-of-network copays?
    Are there any changes to the extra benefits?

Note that sometimes the answers to the questions about prescription drug coverage may be found in the drug formulary that came with the ANOC and not in the ANOC itself.

Final Expense Planning

Benjamin Franklin is credited with the now common saying that the only two certain things in life are death and taxes.  As much as we don’t like to think about death, it is certain.  The question is, how are you going to be prepared?  How you answer this question has a significant impact on your family.  During a time of grieving and major life change, the last thing you want your spouse or family to be worrying about is how to cover your final expenses.  A final expense life insurance policy is the best solution to this situation. 

A final expense life insurance policy is distinguished from many other types of insurance by two characteristics.  First, they are generally written for a smaller death benefit – usually $3,000 to $30,000.  Second, they generally have very simplified underwriting.  This means no physical exams and, in most cases, no requirements for medical records.  Here are a few other noteworthy facts regarding final expense policies that make them a great fit for managing your final expenses:

• Benefits are paid directly to a beneficiary of your choice.
• Benefits are generally paid within a few days of notification of death.
• Benefits are tax free.
• Benefits are restriction-free; they can be used for any purpose.
• Application for a Final Expense coverage is quick and does not require a medical exam.
• Your premium is guaranteed never to increase and your policy value is guaranteed to never decrease.
• Your policy also accrues cash value.
• It is impossible to save faster than a life insurance policy. 

Call or email us today for a quote to see how little it will cost to provide for your family in their greatest time of need.

ObamaCare: Non-Medicare

Two months ago we posted an article detailing how ObamaCare will affect Medicare recipients.  That article can be found by clicking here.  In this article we are going to take just a minute to look at how the law affects non-Medicare folks.  Since this group of people are the target of the bill, the effects are numerous.  Therefore, we are going to briefly summarize the high points, and spend a minute talking about what your options are.

Right off the bat this legislation makes a distinction between people covered under group coverage and those not.  If you are covered under group coverage, and your employer is choosing to continue coverage under ObamaCare, then you really don’t have anything to worry about.  You can keep your group coverage and life goes right along.

Of the group of people who do not have employer coverage, the law divides the population between people with individual insurance and those with no insurance.  If you have existing individual insurance, there is a small chance (~10%) that your plan may meet grandfathering criteria in which case nothing would change for you either.*  However, for most people who are currently purchasing insurance, your plan will be discontinued on January 1st, 2014.  Now before your heart jumps a few beats, let us be clear that just because your plan is being discontinued on January 1st, 2014 , does not mean that you lose your coverage on that date.  Your coverage will remain inforce until your annual policy anniversary date (the date your policy renews each year).  At that point it will terminate and you will lose your coverage.  Thus, you can either choose to keep your current plan until your renewal date and look at options then, or you can take advantage of the Open Enrollment Period (Oct 1, 2013 – Mar 31, 2014) to change your coverage before your renewal date.

Now we come to the uninsured.  The bottom line is that everyone, with a few exceptions, will be required to purchase health insurance.  And so here come all the questions.  How much is the coverage?  What if I can’t afford it?  What happens if I don’t purchase insurance?  etc.  It is at this point that this article can become a novel if we’re not careful.  For the sake of brevity, therefore, let us just say the following.  If you can’t afford to purchase insurance, the government will help you pay your premium.  If you don’t purchase insurance, you will pay an extra tax.

So whether you have insurance, or whether you don’t, what are your options?  If you’re currently insured by a grandfathered plan, you can stay put and be fine.  If you’re currently insured by a non-grandfathered plan, you can move to another plan during Open Enrollment, move to another plan at your policy renewal date, or drop your coverage on your annual renewal date and pay the annual tax.  If you’re currently uninsured you can do nothing and pay the annual tax (provided you are not one of the few exceptions), or purchase insurance coverage.

Before concluding, there is probably one major question still remaining, “What about these health insurance exchanges I keep hearing about?”  The exchanges are a vehicle by which to purchase insurance.  You do not have to use the exchange, but it is an option.

We know that while this has answered some of your questions, it has no doubt given birth to many more.  That is fine; that’s why we are here.   For answers to your specific questions about the annual tax, government subsidies, the exchange, and coverage options, please call or email us anytime.  If you’re currently on Medicare, simply smile, close your web browser and thank God that you don’t have to worry about any of this!  :)

* Note: since insurance rates are largely based on the number of people in a particular insurance pool, small pools often become very expensive.  Old plans (such as grandfathered plans) often become very expensive because there is no incoming new business to help grow the pool.  Additionally, people often leave old plans in favor of new ones.  These factors can cause the size of the pool of old plan to shrink, thus increasing cost.  Therefore, even on a grandfathered plan, you may find you can obtain more affordable coverage elsewhere.

Short Term Care?

We’ve all heard of Long Term Care, but what is Short Term Care?  Care in a nursing facility is getting more and more common.  Approximately 40% of people who reach age 65 will spend some time in a nursing care facility^[1].  When many people think of receiving care in nursing facilities they generally imagine very long term stays that end in death.  To pay for this type of care requires a Long Term Care Insurance policy.  These policies can be expensive, and many people cannot afford this type of coverage.  Consequently, many people imagine that help for nursing care is not an option and they walk through life without any protection for an event that occurs tos one in two people on Medicare.  

However, the idea that all nursing care stays last years and years is a myth.  In reality, only 10% of all nursing home stays last longer than five years^[1].  The majority (68%) are less than three months^[2], and the average stay in a nursing care facility is just over one year^[3].  However, just because we are dealing with shorter stays does not mean that they are easy to pay for.  The cost of an average nursing stay in Idaho is around $6,000 per month or $72,000 per year^[4].  Medicare may pay some of these charges (up to 100 days), but recent trends are leading to a reduction in the number of stays that Medicare is authorizing.  From 2009 to 2011 there was a 60% increase in the number of Medicare cases that were denied nursing care^[5]. 

This is where Short Term Care Insurance comes into play.  Short Term Care Insurance covers much like a Long Term Care Insurance policy, except that it typically only provides coverage up to one year.  Consequently, it is generally easier, compared to Long Term Care Insurance, to qualify for coverage.  Additionally, Short Term Care Insurance pays claims quickly and directly to you rather than to the facility, giving you more control over the funds.  And because the term of coverage is shorter than Long Term Care Insurance, it is much more affordable.  A 65 year-old Idaho resident can purchase a policy that provides $40,000 worth of coverage for $40 per month.

Short Term Care Insurance is affordable, easy to obtain, and fills a very necessary void in your health coverage.  Call or email us today for a quote or more information. 

[1]  America’s Health Insurance Plans. Guide to Long Term Care Insurance. Washington, D.C.: 2004. PDF file.
[2]  AARP Public Policy Institute. Fact Sheet: Nursing Homes. 2007. PDF file.
[3]  Bankers Fidelity. Short Term Care: An Affordable Approach to Covering the High Cost of Nursing Home Care.  2011. PDF file.
[4]  Genworth. Genworth 2013 Cost of Care Survey – 10th edition.  2013. PDF file.
[5]  Iverson, Ron. “Ron Iverson's Short Term Care Insurance Newsletter for May 21, 2013.” Message to the author. 21 May 2013. E-mail.

ObamaCare: Medicare

One question that we’ve been getting asked a lot lately is, “How is ObamaCare going to affect me?”  Well, there are many ways in which Obama will affect you (e.g. national economy, taxes, etc), but we know that you are referring to your health insurance coverage.  The answer to that question depends largely on how you obtain your health insurance; whether through Medicare, a private individual policy, or through group coverage.  We will deal with the last two situations in another article, but here we want to answer the question as it pertains to people on Medicare.

The short answer is, ObamaCare’s full implementation in 2014 will not affect you at all.  Here’s the longer answer.

When the Patient Protection and Affordable Care Act, known as the Affordable Care Act or ObamaCare, was passed in 2010, there were three major items that affected Medicare.  First, there was a provision to reduce the donut hole coverage gap on Prescription Drug Plans.  Second, there was an increase in the number of preventative services that Medicare offers.  Third, there was a reduction in payments to Medicare Advantage Plans. 

• Donut Hole.  Prescription Drug Plans provide coverage to help pay the costs of prescription drugs.  Under the old plan design, these plans assisted with prescription costs until your annual medication expenses reached a certain level ($2,830 in 2010).  At that point, you would begin to pay 100% of the cost of your medications.  The Affordable Care Act implemented a gradual phase-out of the donut hole that will be complete by 2020.  For a chart detailing this phase-out, click here.
• Preventative Services.  Medicare has always offered preventative services.  Under the Affordable Care Act, these services were expanded to include new services, as well as providing many of these services at no cost.  For a full list of the preventative services that Medicare now offers, click here.
• Medicare Advantage Plans.  The easiest way to describe a Medicare Advantage Plan is to think of it as a farming out of the administration of health benefits by Medicare to a third-party-administrator.  Private insurance companies are paid a fee by Medicare for each member they enroll to provide their health benefits.  Under the Affordable Care Act, these fees were reduced.  The effect of this has been increased premiums and reduced benefits to members of Medicare Advantage Plans.  Additionally, some plans were unable to adjust to the reduced fee schedule and canceled their contracts with Medicare thus terminating their members health benefits.

As you can see, these changes to Medicare are not insignificant.  However, they have all been in effect since 2010.  In the Medicare world, we’ve been living under the effects of ObamaCare since 2010.  Therefore if you are a Medicare recipient, there will  be no noticeable change in January 2014.  If you have further questions about this, please feel free to call or email us anytime.

Turning 65?

It’s pretty common knowledge that when you turn 65 you become eligible for Medicare.  However, it’s not always easy to figure out how you get everything in order to begin receiving benefits.  So let’s take a quick look at what that process entails.

1. Eligibility.  One of the first things you need to know is when you are eligible for Medicare.  Assuming that you are going on to Medicare due to age and not disability, your Medicare benefits will begin on the first day of your birth month.  Therefore, if you were born on June 18th, your Medicare will begin June 1st.  If you were born on the first of the month, however, your benefits will begin on the first of the preceding month.  For example, if you were born on June 1st, your Medicare benefits will begin on May 1st.
2. Part A/B?.  Medicare has two parts (Part A and Part B), and you must sign up for both if you want to receive full Medicare benefits.  In certain cases, such as coverage by an employer, you may wish to delay your Part B benefits.  If you are considering delaying your Part B coverage, be sure to obtain counsel from your employer or from an insurance professional.  If you delay your Part B benefits by mistake, it can be a very challenging error to correct; and in some cases it can mean that you will be without Part B for one year. 
   • Note:  Part A has been paid-up by your Medicare taxes over your working lifetime.  Part B, however, charges a monthly premium.  If you are, or will be, drawing Social Security retirement when your Part B benefit begins, your Part B monthly premium will be automatically withheld from your check.  If you are not drawing Social Security when you begin Part B, Social Security will bill you quarterly for this premium.  For a chart detailing the Part B premium, click here.
3. Apply.  Once you know your entitlement date and whether or not you want Part A only or both Part A and Part B, it is time to apply for benefits.  This is done through Social Security in any of three ways.
   • Online.  This can be pretty easy if you are tech-savvy.  The website is:  https://secure.ssa.gov/iCLM/rib 
   • By Phone.  You can also call and complete the process over the phone by calling:  800-772-1213, or for TTY users:  800-325-0778. 
   • In Person.  This can be the easiest way if you live near a local office.  For a list of offices click here:  https://secure.ssa.gov/ICON/main.jsp 
4. Confirmation.  After completing your application, you will receive a confirmation letter from Social Security.  Hang on to this letter as it may save your bacon should something go wrong. 
5. ID Card.  When everything has processed, you will receive your Medicare ID card in the mail.

The above, of course, is the norm.  But we all know that sometimes we find ourselves outside the norm.  If you have a unique set of circumstances and would like some advice, please feel free to call or email us anytime at 800-817-9223 or info@tweedyinsurancegroup.com.  

Scam Alert

Every so often we get emails regarding the latest Medicare-related scam circulating our the Idaho, Oregon, Washington, Utah, and Montana region.  The most recent one involves diabetic supplies.  In short, Medicare beneficiaries are getting calls from a diabetic supplier who is informing them that as of July 1, 2013, many suppliers of diabetic supplies are going out of business.  This company, however, is not going out of business and will gladly offer to be your new supplier.  Although this scam pales in comparison to many of the other ones we see, it did prompt us to write this article.  While tips to avoid every insurance scam ever imagined would fill volumes of books, we’ve boiled it down to five general rules that will get you past most any scam.

1. Make sure you know who your coverage is through.  We recommend writing the names of your insurance companies down on a piece of paper and sticking them on your refrigerator or somewhere you see often.  If you have a Medicare Supplement (e.g. Bankers Fidelity, Mutual of Omaha, or Continental Life), your Prescription Drug Plan is mostly likely with another carrier (e.g. Humana, First Health Part D, AARP United Healthcare).  If you have a Medicare Advantage Plan (e.g. True Blue, Pacific Source, Regence MedAdvantage) your health and your prescription coverage will likely be combined into one policy.
2. Don’t respond to anything.  If you receive anything (letter, post card, flyer, etc.) that looks like it’s from Medicare or your insurance company, DO NOT respond using the information provided.  Instead, call Medicare directly (800-633-4227) or your insurance carrier, depending on who the scammer is trying to impersonate. 
3. Don’t give out personal information.  If you get a phone call from Medicare or your insurance carrier, and they begin asking you personal information, hang up.  If you’re afraid that it may have been a legitimate call, simply place a call to Medicare or your carrier telling them that you received a call from them and wanted to see if there is anything they need.  Most carriers will NEVER ask for personal information over the phone.
4. Look for promises and pressure.  One common tactic of scammers is, ironically, to appeal to our fear of getting ripped off.  If there is some deal with loads of promises that sounds too good to be true, it probably is.  While there have been several changes to Medicare in the last few years, there is nothing new that is going to take away all your problems.  Also, be wary of anything or anyone that is trying to get you to act RIGHT NOW!  Any deal that is going to expire soon (like before they get off the phone) is not legitimate.
5. Use us.  If you ever get a call or receive something in the mail that sounds or looks fishy, don’t ever hesitate to drop us a call (800-817-9223) or email.  Often in just a few minutes, we can help you discern whether you’re in a situation that actually requires something from you, or whether you’re holding a 8½ x 11 inch waste of time.

The above relates specifically to insurance; below are some helpful links to avoid other types of scams. 

Idaho Attorney General

FBI Fraud Schemes

What about hearing aids?

Every so often we get questions about hearing aids.  Does Medicare cover them?  If not, will my insurance cover them?  If not, can I buy stand-alone hearing insurance?  And not surprising either, since hearing aid costs can range up to $10,000 for a set.  So what’s the scoop?

First, Medicare does not cover hearing aids.  Medicare will cover hearing and balance tests when ordered to treat you for a medical condition, but not to determine a need for hearing aids.  Since Medicare Supplements are bound by law to only fill in the gaps within Medicare (and not provide extra coverage), they are unable to pay for hearing aids.  Some people choose to receive their Medicare benefits via a Medicare Advantage Plan rather than through Original Medicare hoping to receive extra benefits.  However, most Medicare Advantage Plans in Idaho do not include hearing benefits either, and those that do typically only cover one hearing exam per year, and offer no coverage for hearing aids. 

However, all hope is not lost!  There is the option to purchase a stand-alone hearing insurance coverage.  While these policies aren’t just falling off trees, we do have one option in Idaho.  It is a combination Dental-Hearing-Vision policy and offers up to $2,000 per year in benefits.  The best part about this coverage is that it allows you to see any dentists, optometrist, or audiologist you wish, unlike many plans that restrict you to a network of providers.  This can prove to be a huge advantage in that it allows you to shop all kinds of retailers, including large discount chains like Costco where prices can be half of those found at hearing aid specialty stores.  If you would like more information about this coverage, please call or email us anytime at:  800-817-9223 or info@tweedyinsurancegroup.com.