Ron Bliss guest col: Decisions ahead for those turning 65, going on Medicare
November 9, 2015
If you are turning 65, it is decision time.
Medicare kicks in at age 65 for qualified Americans and those who choose to go on it will have three different choices.
1. You can go on Original Medicare without a supplement.
2. You can opt for a Medicare Advantage plan (Part C), which is an alternative to Original Medicare.
3. Or you can go on Original Medicare with a supplement.
So which is best? With Original Medicare, you have 80 percent coverage, if you have Parts A and B, but you will still be responsible for up to 20 percent of other charges – in addition to the Part A deductible, which is $1260 in 2015, and the Part B deductible, which is $147 for 2015.
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The Part A deductible, which is due after you spend just one day in the hospital, is a lot to pay. Yearly premiums for some Medicare supplements cost less than you would pay for one day in the hospital.
Medicare Advantage plans have been forced to cut back to make up for a reduction of $5.5 Billion in the budget deal for 2014. That reduction came from the amount of money given by the government to help pay for beneficiaries. As a result, premiums have been going up and benefits down. One area plan requires beneficiaries to do a co-pay of $400 a day for the first five days in the hospital or $2,000. Another requires $365 a day for the first four days.
Most also have increased out-of-pocket limits to $3,000 or more.
Some include drug plans with the medical coverage and the premiums tend to be lower than Medicare supplements, but the plan tends to only work for those who stay healthy.
If you can afford it, the best bet is to stay on Original Medicare and purchase a Medicare Supplement – some of which cost less than premiums for Medicare Advantage plans and have little or no cost out of pocket, after the premium.
Be aware that Part D drug plans are separate and add to the cost, but overall the cost is lower – if you have medical issues.
It is your call.
No matter which way you choose, you will need to pay a Medicare Part B premium, which varies according to your income.
Under the new budget deal agreed to last week, those already on Medicare and having the premium deducted from their Social Security checks, will continue to pay $104.90 per month if their income is $85,000 or less for an individual or $170,000 or less for a couple. That includes about 70 percent of those already on Medicare.
However, those new to Medicare in 2016 and those who are not having their premium drawn out of their Social Security checks will be paying 17 percent more.
For those in the lower-income category, that will be nearly $123 per month for an individual and $246 per month for a couple.
Those making $85,000 or more individually or $170,000 or more as a couple, are facing even higher costs for the Part B which covers 80 percent of doctors, nurses and services cost. Part A covers hospitalization and related charges.
Those who will have to pay the 17 percent increase include:
• Individuals who enroll in Part B for the first time in 2016.
• Enrollees who do not receive a Social Security benefit.
• Beneficiaries who are directly billed for their Part B.
• Current enrollees who pay an income-related higher premium.
• And dual Medicare-Medicaid beneficiaries, whose full premiums are paid by state Medicaid programs.
One blogger says there is a way to beat the increase.
"Enroll earlier if you're already 65 and otherwise eligible," says Michael Kitces, publisher of The Kitces Report and author of the Nerd's Eye View blog. "If you're not eligible now, I'm afraid you're stuck."
You can apply for your Part B three months before your birth month.
Here is the breakdown on the Part B premium for those who will experience the increase:
$85,000 or less — $122.73
$85,000-170,000 — $171.87
$170,001-214,000 — $245.47
$214,001-$428,000 — $319.06
Above $428,001 — $392.77
If you need guidance on which way to go, call us at Affordable Healthcare Pros and we will advise you – according to your situation. We can do a Medicare supplement and we can also arrange for you to go onto a Medicare Advantage plan.
Call our office in Carson City at 775-883-3414 or call me personally at 775-224-7169 or 775-450-6769.
Ron Bliss is a former long-time sports writer who has been doing health insurance since 2009. He is certified on both Covered California and the Nevada Health Link and can sell products on and off both exchanges. Affordable Healthcare Pros also offers a variety of dental plans to include dental-vision-hearing plans in both states, as well as a wide variety of Medicare supplements and other health supplemental products to include critical illness, short-term care, disability, plans to cover in-home or nursing home costs, accidents and hospital indemnity policies.