On November 8, 2019 the Center for Medicare & Medicaid Services (CMS) announced the 2020 Medicare premiums and deductibles.  A few highlights:

 

— The Part B (medical) premium is increasing to $144.60/mo (from $135.50/mo in 2019)

— The Part A (hospital) deductible is increasing $1,408 (from $1,364 in 2019)

— The Part B (medical) deductible is increasing to $198 (from $185 in 2019)

 

Additionally, the income ranges that determine Part B & high income Part D premiums have changed a bit.  For the first time since implementing high income Medicare premiums in 2007, the standard income range has increased. 

See all the details below:

2020 Medicare Costs

PART A (Hospital)

Inpatient Hospital Stay – You Pay…                

(benefit period ends 60 days after release from care)

— Deductible: $1,408 per benefit period

— Coinsurance (days 1-60): $0 per day of each benefit period

— Coinsurance (days 61-90): $352 per day of each benefit period

— Coinsurance (60 lifetime reserve days): $704 per day after day 90 of each benefit period

Skilled Nursing Facility Stay – You Pay…                      

(3-day inpatient hospital stay required first)    

— Coinsurance (days 1-20): $0 per day of each benefit period

— Coinsurance (days 21-100): $176 per day of each benefit period

PART B (Medical) 

Part B Deductible – You Pay… $198 per calendar year

Part B CoverageYou Pay… Generally 20%, after $198 deductible is met

 

Part B Premiums & Part D High Income Premiums (paid to Medicare)

Those enrolled in Medicare Part B will pay the premiums listed in the table below (based on income).  Higher income earners will pay a Part B IRMAA (Income Related Monthly Adjustment Amount) in addition to the $144.60 base premium. 

Those with higher income who are enrolled in Part D Prescription Drug coverage also pay a Part D IRMAA in addition to the monthly premium for a Part D prescription drug plan with an insurance carrier (see table below).

 

Reference Links

www.medicare.gov

2020 Medicare Premiums & Deductibles (+ IRMAA Amounts)

2020 Part D Prescription Drug IRMAA Amounts 

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

It’s unfortunate that we have to get into a topic like this, but we at Medicare Mindset want to help you be aware of any potential scams. Today, we’ll highlight some of the more prevalent scams associated with Medicare and Social Security. 

 

But first, a word about telemarketer calls…

 

General Marketing Phone Calls

This isn’t necessarily a scam, rather it’s a recommendation on how to address the barrage of phone calls seniors receive daily from a multitude of marketers and solicitors.  Once you are about 3-6 months away from turning 65, you will notice a significant increase in the number of phone calls you receive, as well as advertisements for insurance in your mailbox.  Many of our clients tell us they can receive up to 10-15 calls per day!

 

The entities calling are likely attempting to sell you Medicare Supplement (Medigap), Part D Prescription Drug, and Medicare Advantage plans.  Our recommendation here is to simply not take the phone calls. If you have caller ID and don’t recognize the phone number, don’t answer the call.  If it’s someone you already have a relationship with (i.e. doctor’s office), they will no doubt leave a message, and you’ll hopefully recognize who it is. 

 

Another option is to install a Robocall-blocking app on your smartphone, or add Robocall-blocking services from your phone company.  

 

Social Security Scam (Your Social Security Number)

Social Security estimates that scammers call thousands of Americans every day, attempting to obtain personal information to steal your identity.  Typically, the scammers attempt to get your Social Security number. As pointed out in the article titled Social Security Scams  from aarp.org, the scammers sometimes use “call spoofing” to make it appear as though the call is coming from the Social Security Administration.  It’s possible your caller ID will say Social Security Administration or even show Social Security’s real phone number (800-772-1213).

 

The key here is to always be suspicious of a call like this.  If the caller asks for your Social Security number, it very likely is NOT the Social Security Administration.  Typically, a real Social Security representative will use other ways to verify your identity over the phone (i.e. mother’s maiden name, spouse’s name).

 

If you ever need to call Social Security, only call their main line at 800-772-1213 or a local Social Security office.  DO NOT call a different number to reach Social Security, unless you have already been working with a particular Social Security representative and connected by phone previously.

 

Medicare Scam (Genetic Testing Scam)

This is a new scam in 2019.  Essentially, the fraudsters offer a free genetic testing screening either by phone, at health fairs, or even via door-to-door visits.  They claim to offer this genetic testing at no charge and subsequently submit it to Medicare, claiming Medicare will cover the cost.

 

It’s important to note that only a trusted doctor should order this kind of test.  Stay away from anything resembling a free genetic test.

 

BOTTOM LINE:  Until you have solid verification you are speaking with someone you know, be extra suspicious of discussions or transactions over the phone regarding Social Security or Medicare.

 

Reference Links

Social Security Scams (AARP)

Scams Come in Many Different Forms 

Fraud Alert: Genetic Testing Scam

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

We continue our “Medicare Doesn’t Cover That” series with Long-Term Care. Most long-term care services aren’t covered by Medicare, but skilled nursing care services can be.  So what’s the difference?

 

Long-Term Care

Long-term care is a variety of services provided to those with a chronic illness, injury, or naturally declining health.  Long-term care services are usually for personal care needs and normal “Activities of Daily Living” (ADLs), including eating, bathing, dressing, toileting, transferring, and continence.  This type of care is commonly considered “custodial” care, not medical care, so Medicare doesn’t cover it.

 

However, there are some situations where Medicare Part A (hospital) will cover the cost of long-term care in a Long-Term Care Hospital (LTCH).  This is typically when a Medicare beneficiary has been an inpatient in a hospital for 25 or more days and is transferred to a long-term care hospital facility that still incorporates some medical care as well.

 

Skilled Nursing Care

Skilled Nursing Facility Care (SNF) covers skilled care (think: rehabilitation) for a limited period of time, after a qualifying inpatient hospital stay (3 full days on the Original Medicare side).  If you have a Medicare Advantage plan (Part C), a qualifying inpatient hospital stay might not be required in order to get approved for the skilled nursing facility care.  

 

You can potentially receive up to 100 days of skilled nursing facility care for each benefit period. 

 

Bottom line 

Most long-term care services are not covered by Medicare. Contact us to learn more about which services Medicare might cover for you. 

 

Reference Links

www.medicare.gov

Long-Term Care

Long-Term Care Hospital Services (LTCH)

Skilled Nursing Facility Care 

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

A Health Savings Account (HSA) is a special account that can be paired with a High Deductible Health Plan (HDHP).  It enables you to contribute on a pre-tax basis to an account to help pay for future healthcare expenses (i.e. medical, prescription drug, dental, vision, etc). But how does it interact with Medicare? 

Let’s first clear up a common misconception. 

 

Most people believe that you must cease HSA contributions the moment you turn 65.  This is simply not true. You must cease HSA contributions IF you enroll in any portion of Medicare.  This means you can continue contributing to your HSA account (up to the individual or family HSA limits, based on whether you have individual or family health coverage), as long as the HSA account owner doesn’t have any portion of Medicare just yet.

Continuing to contribute to an HSA account beyond age 65 can be a great strategy for someone working beyond age 65 and staying in a group health plan. This is only a good strategy IF the group health plan has “creditable” prescription drug benefits, the Medicare-eligible employee is not receiving Social Security retirement benefits, and is in a large employer plan. That’s because in this situation, no Medicare enrollment of any kind would be required.  Reference our Misconception #2 in our Medicare Misconceptions blog post for more information on “creditable” prescription drug benefits.

When you do NOT have “creditable” prescription drug coverage through an employer, we see some Medicare-eligible folks knowingly accumulate a Part D late enrollment penalty in order to load up their HSA accounts while they can.  This really should be a short-term solution because the longer you do this, the larger the Part D late enrollment penalty will become — when you do enroll in a Part D prescription drug plan.  Typically, beneficiaries utilize this strategy when they know they will retire and/or lose group health coverage in a few years, usually 2 years or less.  Otherwise, the penalty gets larger, and the strategy might not make sense. 

 

If you contribute to an HSA during the year your Medicare starts, be careful to not over-contribute, as there can be tax consequences.  The amount you can contribute is on a prorated basis.

 

For example, if your Medicare starts June 1st, that means you weren’t on Medicare 5 months out of the year.  So you can contribute 5/12 of the HSA maximum contribution for the tax year, based on whether you have individual or family health insurance coverage.

If you over-contribute, there could be tax consequences…a 6% tax on the excess.  And those contributions will NOT be pre-tax, rather they will be considered after-tax.  Reference IRS Publication 969 for more details.

 

Contact a tax professional for confirmation of tax rules associated with excess HSA contributions, as tax law changes can occur often.

 

While on Medicare, you can use your HSA for any qualified medical expenses approved by the IRS*, including:

– Premiums paid to Medicare (i.e. Part B)

– Premiums paid to an insurance carrier for Stand-Alone Part D Prescription Drug Plans and Medicare Advantage Plans

– Medical copays, coinsurance, deductibles

– Prescription drug copays

 

Keep in mind, your HSA can’t be used for every medical expense you incur.  For example, you CAN’T use your HSA to pay your Medicare Supplement (Medigap) premiums to an insurance carrier. 

No matter if you’re currently on Medicare or are planning ahead, contact us to put your HSA to its best use. 

 

* Note: HSA account balances can be used for qualified medical expenses.  Reference IRS Publication 502 for the list of approved medical expenses.

 

Reference Links

www.medicare.gov

Medicare Misconceptions (2019)

IRS Publication 969

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is a bipartisan legislation signed into law on April 16, 2015.  It made significant changes to Medicare Supplement (Medigap) plans as of January 1st, 2020.  

Here’s a quick reminder of the standardized Medigap plans available in 2019:

But in 2020, the plan offerings will change! The MACRA legislation will impact certain beneficiaries, depending on when you’re eligible for Medicare:

Those who are Medicare eligible January 1st, 2020 and after…

Medigap Plan F, Plan C, and High Deductible Plan F are no longer available to these Medicare beneficiaries.  Instead, a new plan has been created: High Deductible Plan G. This will be added to the list of existing Medigap plans still available in 2020 (Plans A, B, D, G, K, L, M, N).

 

Those who are Medicare eligible December 1st, 2019 and before…

All existing and new Medigap plans are available to these Medicare beneficiaries, even Plan F, Plan C, and High Deductible Plan F.  And if you’re already enrolled in one of these plans, you can keep it!

If you have additional questions on how this might affect you, contact us HERE for guidance.

Reference Links

www.medicare.gov

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

Each year, the Medicare Annual Election Period (AEP) runs from October 15th through December 7th.  This is a special time frame when Medicare beneficiaries have the option to make changes to certain types of Medicare health insurance plans.  Any changes made during AEP will take effect January 1st of the upcoming year (January 1st, 2020 in this case).

 

Insurance carriers are required to provide a detailed update each year by September 30th regarding your existing Medicare Advantage Plan or Part D Prescription Drug Plan.  This notice is called the Annual Notice of Change (ANOC).  Since these Medicare insurance plans run on a calendar year basis, there are usually some sort of changes in plan benefits and features from year-to-year.  This is exactly why the Medicare AEP exists. It provides you with the “option” to change your plan, if it’s beneficial.

 

Here are some of the scenarios that can take place during AEP:

 

Take No Action

If you’re happy with your plan and wish to accept the new plan provisions for next year, no action is required.  Your plan will automatically be renewed as of January 1st.

 

Change your Part D Prescription Drug Plan

If you feel your stand-alone Part D prescription drug coverage is no longer suitable for you, a plan change may be appropriate.  Your current Part D plan might no longer cover your particular list of prescriptions as well as before (i.e. formulary changes)…OR…you may have several new prescriptions causing you to question whether you’re still in the right plan…OR…the plan premium is increasing more than you’d like.  Regardless, you can switch to another Part D drug plan during AEP — with your current insurance carrier, or another carrier. 

 

Change your Medicare Advantage Plan

If you feel your Medicare Advantage plan coverage is no longer suitable for you, a plan change may be appropriate.  Since many Medicare Advantage plans include both medical and drug coverage, you might consider a plan switch during AEP if the medical and/or drug coverage changes to your detriment.  It could be a drug formulary change, or even one or more of your medical providers are no longer in-network. Additionally, the medical benefits can be impacted each year. For example, certain medical services may have increased copayments, or the plan’s medical maximum out-of-pocket limit may increase to a level that is out of your comfort zone.  And of course, a plan premium increase can affect the affordability of the plan.

 

Switch from Original Medicare to Medicare Advantage 

When you have Original Medicare and a Medicare Supplement Insurance Plan (Medigap), you use Medicare Part A (hospital) and Part B (medical/outpatient) as your primary coverage…and then your Medigap plan as your supplemental plan for medical services.  And you usually will also have a stand-alone Part D drug plan, unless you have creditable prescription drug coverage from another source (i.e. VA benefits). What if you aren’t happy with your plan coverage, pricing, or have other issues with the plan?

You can switch entirely from Original Medicare to Medicare Advantage during AEP.  If you switch to a Medicare Advantage plan that includes Part D coverage in this scenario, you will automatically be disenrolled from your existing stand-alone Part D drug plan with a January 1st effective date.  However, you will still need to request cancellation of your existing Medigap plan as of January 1st. NOTE: You cannot switch to a Medicare Advantage plan if you have end stage kidney failure (ESRD).

 

Switch from Medicare Advantage to Original Medicare

In this reverse scenario, you would first need to see if you can be approved medically for a Medicare Supplement (Medigap) Plan.  In this situation, insurance carriers are often allowed to ask you health history questions, and could deny you from purchasing the plan.  If you get the approval for a January 1st start date, then you know you can enroll in a stand-alone Part D prescription drug plan during AEP (do so no later than December 7th).  Everything will start January 1st, and your existing Medicare Advantage plan will automatically be cancelled, due to the stand-alone Part D plan enrollment.

 

We have a complete summary of the Parts of Medicare on our website. Click here to learn more or contact us for direct support.

 

Reference Links

www.medicare.gov

Joining a Health or Drug Plan 

Annual Notice of Change (ANOC)

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

Over time, we naturally lose our ability to hear well.  But does Medicare provide any coverage for hearing exams and hearing aids?  And what about medical issues with your ears…does Medicare cover that?  

 

Both Original Medicare and Medicare Advantage plans will cover medically necessary services related to medical issues with your ears and balance.  This will run through Part B medical/outpatient benefits.  However, there is a difference between Original Medicare and Medicare Advantage plans when it comes to routine hearing and hearing aids: 

 

With Original Medicare, there is no coverage for routine hearing exams and hearing aids.  However, your Medicare Supplement (Medigap) plan may include additional benefits/discounts for these services, so be sure to confirm with your plan.

 

With a Medicare Advantage Plan, there could be coverage for routine hearing exams and hearing aids.  Some plans include a built-in routine vision exam benefit and possibly even discounted hearing aids or allowances toward purchasing hearing aids.  There’s sometimes an option to “buy-up” and get more coverage for these supplemental benefits, as well. In the past few years, we have seen more Medicare Advantage plans begin to offer the hearing aid benefits.  Each plan is unique, so be sure to confirm the details in the plan’s Summary of Benefits.

 

Please Contact Us with questions!

 

Reference Links

www.medicare.gov

Routine Hearing & Hearing Aids

Hearing & Balance Exams

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

How to Appeal Your High Income Medicare Premiums

If you’ve received a notice from Medicare that your Medicare premiums will be increased because of high income, you might be wondering, “Can I appeal to reduce the premiums?”

If you have a Life Changing Event (LCE), you might be able to! Keep reading or click here to learn more on our YouTube Channel.

When you enroll in Medicare, the premium you pay is based on your income.  Typically, Medicare looks back at your tax return from two years ago or most recent tax return to determine your monthly premiums. 

See the table below for the 2019 Medicare premiums, based on your 2017 tax return:

As the above table shows, it’s all based on how much you earned in the past. But that may not always be the case. 

Your past income can be ignored when you retire and have a reduction of income.  A reduction of income (a.k.a. Work Stoppage or Work Reduction) is one of several Life Changing Events (LCEs) you can potentially use to lower your Medicare premiums NOW.  The other LCEs you can use are Marriage, Divorce/Annulment, Death of Your Spouse, Loss of Income-Producing Property, Loss of Pension Income, and Employer Settlement Payment. [Reference Form SSA-44 (Medicare Income Related Monthly Adjustment Amount – Life Changing Event)]

Let’s say that in the last few years you were working, your income was above the first income threshold listed in the table above (which is $85,000 for an individual tax filer).  We’ll assume you’re an individual tax filer and your Modified Adjusted Gross Income (MAGI) in 2017 was $140,000. Your retirement will lead to a sharp decline in income, placing you below $85,000 from here on out.  

Based on your 2017 income, Medicare will first mark you down for a Part B premium of $352.20/mo in 2019.  That’s comprised of the $135.50/mo base Part B premium plus an Income Related Monthly Adjustment Amount (IRMAA) of $216.70/mo.  

There is also a Part D IRMAA to pay when your income is higher (reference table above).  In this example, there would be an extra $51.40/mo premium for the Part D IRMAA in the event you enroll in a Part D prescription drug plan with an insurance carrier.  Note: The Part D IRMAA is completely separate and in addition to your Part D prescription drug insurance plan.

When you receive your Initial IRMAA Determination letter in the mail about your Medicare premiums being higher than normal, this is when you can take action and file an appeal.  

This appeal can make a big difference. Let’s see what would happen in our earlier example: 

— With an initial income somewhere between $133,500-$160,000, but reducing to below $85,000 in retirement, your Medicare premium savings will be substantial: 

— Instead of $352.20/mo for Part B + $51.40/mo for Part D IRMAA, you would only have to pay $135.50/mo for Part B + $0 for the Part D IRMAA.  

— That is savings of $268.10 every month!

So how do you appeal for a lower Medicare premium?  You will use SSA Form-44 (Medicare Income Related Monthly Adjustment Amount – Life Changing Event)Complete the required information on the form and turn in to a local Social Security office.  You’ll need to provide accurate estimates of what your income will be based on the life changing event you choose, so be prepared to answer the questions on the form as accurately as possible.  

After you submit the form and any supporting documentation to Social Security (in-person or by mail), Social Security will process your appeal and update you on their decision.

 

Reference Links

www.medicare.gov

Initial IRMAA Determination Letter

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.