Upcoming Changes to the Notorious Medicare “Donut Hole”
Medicare is the primary government-funded health insurance plan that covers the impoverished and senior citizens in America. It is an institution that covers 48 million citizens and costs roughly $600 billion dollars per year. It accounted for roughly 6% of the United States’ GDP in 2012.
The notorious “donut hole” in the Medicare plan is a gap in the payment and coverage of prescription drugs during Part D of a citizen’s Medicare plan. The user during this time is responsible for paying 100% of the costs of drugs until you pay enough to be under the Catastrophic Coverage Plan of Medicare. This “donut hole” gap in coverage results in about a $4,000 gap in coverage where people have to pay for drugs out-of-pocket until they reach the next level of coverage in Medicare. Even with the best Medicare supplement, people still face out-of-pocket drug costs.
In 2008, when Barack Obama was elected president of the US, he brought forward the Affordable Healthcare Act, which was passed by Congress and was put in place in the government. The HHS mandate will work alongside Medicare to provide patients with a way out of the “donut hole” by shrinking it until it will completely disappear in a decade. A typical beneficiary under a Medicare plan will pay roughly $700 to get out of the donut hole in 2010; this is a savings of $3,000 compared to the donut hole in Medicare before the HHS mandate was created. Eventually, by 2020, beneficiaries will go immediately from Plan D to the Catastrophic Coverage Plan with no donut hole in-between the two plans. The only consequence of this removal of the Medicare donut hole will be the increase in monthly premiums for Medicare beneficiaries and a national increase in the overall cost of Medicare – roughly $1.2 trillion dollars over the course of the next 20 years.
Do I Need Final Expense Insurance
An unfortunate truth in our world is that all of our lives must come to an end. Tragically, we cannot know when this end will be, but this simply requires us to prepare for this end, whenever that may come. One excellent way that some folks have chosen to prepare for their death is to purchase final expense insurance. Final expense insurance is not the solution for every person. In fact, for some people this option may not be the best decision, but for most folks this is a very beneficial service.Final expense insurance covers the cost of our final expenses. This could include costs for such things as the mortuary fees, casket fees, funeral service fees, even flower arrangements and graveside marker fees. The average total of all of these fees for a basic funeral could costs upwards of $8,000. This is an extraordinary burden to leave with your loved ones when you are no longer around to cover these costs. Also, even if you do have the funds to cover these costs in your estate, this would be a significant portion of the inheritance and legacy you are leaving behind for your beneficiaries. Having an insurance policy to cover all of these expenses will ensure that you leave your loved ones with as much of you as possible.
Most of us have insurance policies to cover unplanned or large expenses. We have insurance policies for our vehicles, for our possessions, for our home, and even for our lives. None of these insurance policies however, including life insurance, can be used to help cover the final expenses of burial, and a funeral. Final expense insurance is one of the only insurance policies available that is designed especially to cover these last expenses we have after departing this life.
You may want to consider this insurance if you do not already have funds set aside to cover this expense. If you have any sort of medical condition that would cause you to be more likely in the next decade to need this type of insurance, then it is time to seriously consider a policy of this nature. Also, even if you do think that you would ever need this policy anytime soon, it is a great way to protect your loved ones after you are gone. You can rest easy knowing that your loved ones are taken care of.
Life Insurance Is Easy
Life insurance is pretty easy to understand once you get past all the insurance agent jargon and start breaking down how life insurance works. To make it as simple as possible there are two types of life insurance; life insurance that has an investment and regular term life insurance.
Life Insurance With an Investment
Life insurance policies that have an investment attached to them are what causes all of the confusion when people are deciding what life insurance to get. Life insurance that has an investment attached to it comes under a ton of different names. The two most common are whole life insurance and universal life insurance. No matter what the name what you need to know is that these policies have a monthly premium and a piece of that premium goes into an investment account. This account grows via interest and from the continued premiums that you pay. It grows over time and whether you die or not you own this account. The money in the account is called a cash value. The downside to this type of life insurance is that it is expensive. Not only are you paying for insurance, you are also putting money into an investment account and you are paying fees to have the insurance company manage the account for you.
Term Life Insurance
Term life insurance rates are much lower than the Life Insurance that has an investment account. This is because it is plain and simple insurance. You pick an amount that you want to be covered for and the number of years that you want the premiums to stay the same (usually twenty to thirty years), you pay that monthly premium and get your coverage. The plans are so simple and so easy to administer that the insurance companies can offer them for very low prices. This means that the term life insurance rates can be as much as ten times less expensive than the rates for whole or universal life insurance.
Of course with either type of life insurance you will get the best rates from the best life insurance companies by being in good health. So before you apply for either of these make sure that you are at your best physical shape before they poke and prod you to determine what rate class you qualify for.
Several Ways You Can Save On Your Life Insurance Policy
Purchasing life insurance is a smart thing to do. Getting the right life insurance coverage for you will take some research, though. However, you may need some help figuring out how to get started. Check out goldsmithinsurance.com as one of our preferred insurance brokers.
Pick a company that’s not only large, but also reputable when you investigate underwriting companies when it comes to your policy for life insurance. An inexpensive policy is worthless if the company cannot provide payment when necessary.
When you’re choosing a policy, you need to make sure to calculate the coverage for both ongoing and fixed expenses. Keep in mind that life insurance funds can be used for pricey one-time expenses as well, like estate taxes or funeral costs which can add up.
In most cases, you should find other solutions to financial problems, rather than cashing out your insurance policy. There are many people today who are opting to terminate their insurance policies for cash. This creates a ‘vacuum’, sucking down all of the valuable money and more valuable time that you’ve pushed into creating this policy. If you run into financial difficulties, there are alternatives to cashing out the policy.
Name brands are not always the best option. While insurance companies may have great marketing gimmicks, you need to ask just how much these gimmicks cost, and wonder if these companies offer higher prices in order to pay for this type of marketing. Seek out a dependable company instead of the one most publicized.
If you are dubbed a high risk by insurance companies, shop around for rates. Do not let yourself be deterred by one life insurance company telling you a high price. Companies tend to negotiate differently based on many conditions. While one company may consider you high risk, another may give you a better rate.
Many life insurance policies can be used to finance a retirement. If this idea appeals to you, then read up on policies that offer a return on premiums. If you are living when your policy is expired, you will get all of your money back. Now you can take that well deserved retirement trip!
When purchasing life insurance, it’s better if you grab a policy while you’re still young. With increased age, health issues are likely to increase as well. That fact is likely to result in higher insurance costs if and when you try to purchase coverage than you might have paid when you were younger.
So, as you have seen, it is true that buying life insurance requires research, and asking lots of questions. This is also a process that requires some perseverance. By using these tips, you can find the perfect policy for you.
When Should I Buy A Medicare Supplement Insurance Policy?
The best time to purchase a Medicare supplement insurance policy is during your open enrollment period. Your open enrollment period lasts for six months. It begins the first day of the month in which you are the age of 65 and enrolled in Medicare Part B. Some states offer additional open enrollment periods under state law. You will want to examine the laws that pertain to your state for any exceptions. The advantage of purchasing a Medicare supplement insurance policy during the open enrollment period is that insurance companies are not allowed to use medical underwriting for your application.
This means that an insurance company cannot refuse to sell you any Medicare supplement policy that it sells. They cannot make you wait for your coverage to start. They also cannot increase their premiums for your policy because of any past or present health conditions. A diabetic smoker is going to pay the same premium as a non-diabetic, non-smoker will. There will be no pre-existing condition waiting period for your coverage.
If you miss your open enrollment period, you may find yourself paying much higher premiums when you do purchase a supplemental insurance policy. Even worse, you might find yourself outright rejected by insurance carriers and unable to purchase the Medicare supplement that you want.
Life Insurance for those with Crohn’s Disease
Finding life insurance for high risks comes down to finding an expert with your specific risk. Life insurance with Crohn’s Disease is one of those areas where you need an expert in order to secure the lowest life insurance rates available.
Using the wrong life insurance company can result in a decline and unfortunately many people with Crohn’s have used the wrong life insurance company and are either paying too much or were declined.
Crohn’s Disease refers to inflammation of any part of the gastrointestinal tract, from mouth to anus; untreated Chrohn’s Disease attacks increase in frequency with time. Therefore if you have established control of your Crohn’s Disease over time, you’ll receive better life insurance rates.
The mortality risk for Crohn’s Disease is different from that observed for CUC. In Crohn’s Disease, there is an accumulation of inflammatory products in the wall of the intestine, rather than on the internal surface. This accumulation can lead to complete blockage of the intestine which may require emergency surgery. Those who have had surgery for their Crohn’s are still candidates for life insurance, but you have to use the right life insurance company. There are only a few companies who we’ve seen take moderate-severe Crohn’s Disease applicants and offer them coverage.
Underwriters are looking for the amount of time that has elapsed since the first diagnosis, your age, location, frequency, severity and duration of each episode. Also looked at is your control of Crohn’s and your responsiveness to treatment.
It’s important you find a life insurance expert experienced in underwriting Crohn’s . Underwriting any form of intestinal disorder can be positively affected by good nutritional habits, use of supplemental vitamins, exercise and weight control – something not asked on life insurance applications but an experienced agent will know to detail in a cover letter to an underwriter.
So don’t get discouraged if you’ve been declined life insurance for your Crohn’s Disease. Do an internet search for an expert and give them a call to see what they can do for you.
Tips For Avoiding Medicare Insurance Related Fraud
Unfortunately, the Medicare Open Enrollment Period brings out many of the more dishonest salespeople in the insurance industry. They will often try to get seniors to purchase an insurance policy without really understanding what it is they are buying.
The best way for one to avoid being taken advantage of is to always err on the side of caution and to equip yourself with as much information as possible. If something does not feel or seem right, you are better off walking away from the deal before agreeing to anything and seeking a consult with a second insurance professional to get their take on the situation.
You should never feel pressured to make a purchase of anything right there on the spot. If the agent is trying to rush you or push really hard for you to sign the policy, you should be suspicious. Inform the agent that you require more time and refuse to make an immediate purchase.
Never sign anything without understanding what it is you are signing. This one sees like it should go without saying, but it happens all the time. Read over what you are signing. Ask questions about anything you are unsure about. And never, ever sign a blank application.
Understand what exactly you are buying. A Medicare Advantage Plan is different than a Medigap policy. Purchasing a Medicare Advantage Plan changes the way you receive your healthcare coverage. You may find it difficult to impossible to reverse your choice later.
Request a summary of benefits. Before purchasing an insurance policy, this document should be made available to you for review. It is also known as Evidence of Coverage. It will summarize who is covered, what is covered, your premiums, any co-pays, and which prescription drugs are covered by the policy.
Checkup on who you are dealing with. Ensure the agent you are working with is licensed by verifying them with your state’s department of insurance. Some scrupulous agents will identify themselves as an official Medicare agent. This is illegal. There is no such thing. Medicare does not have sales agents. Insurance agents may not represent themselves as representatives of Medicare or declare that they are endorsed by Medicare.
Consult your physician. Before making any changes to your current health insurance coverage, it is a good idea to talk to your doctor and make sure that they do accept the plan you are mulling over. If your doctor is not “in-network” for a Medicare Advantage Plan, you will find yourself having to change to a new physician.
Maintain records. Never pay for an insurance policy by cash, especially by handing case directly to your agent. Always make your payments by check or money order so that you maintain a clear record of your payments. Your payments should never be made payable to anyone other than the insurance company or insurance agency. Request a receipt for your payment if it is being handed to an agent.
If you do not want to receive sales calls, do not give permission for them. Insurance agents are not allowed to cold call prospects without their permission. If you have not requested a phone call in the past, refuse to discuss your health coverage with anyone who calls. If you attend an insurance related event and meet an agent, do not sign a “request to contact form” unless you do in fact wish for someone to call you.
How Much Will Health Insurance Cost Me In Retirement?
There is no nice way to answer this for you, so let me just say that you should expect to spend a lot. The amount is going to vary for each retiree based on their health at and into retirement and whether or not they receive any retiree benefits from their employer.
One recent survey of retirees found that on average those who were receiving at least some health insurance coverage from a past employer were still paying monthly premiums of $552 if they were under the age of 65. That comes to over $6,000 a year. Over the age of 65 they were paying $227 a month. At age 65, retirees were enrolling into Medicare which accounted for the drop in premiums. Employers are going to make sure you enroll in Medicare at that time and reduce the coverage provided by the company plan.
With no help from your former employer, you can expect to pay much, much more. Medicare does provide coverage at 65, but there are costs associated with that coverage as well. Many retirees make the decision to purchase a Medicare supplemental insurance policy to provide even more coverage.
The short end of the story is you need to start saving as soon as possible for future health costs in retirement. Those costs are not going to go down any time between now and then. Even with Medicare and any other private insurance you may maintain, you still will be looking at premiums, deductibles that need to be met, co-pays, and many times prescription drug costs. Add it all up and you may find that health care costs are your biggest expense in retirement.
