Your Medicare decisions can only be made after you understand what’s right for you concerning coverage and care. First you will need to understand just what Medicare covers.
There are three types of Medicare plans:
- Part A, which covers any care received in a hospital or skilled nursing facility. No Fees
- Part B covers all doctor visits and outpatient care. Monthly Fees
- Part A & B combined or Part C
If you decide to enroll in both A & B, you can either go with Original Medicare or chose the Medicare Advantage Plan, which is actually Part C. Original Medicare is through the government and it pays the same for every single person. The Medicare Advantage Plan is devised through insurance companies that have been approved by Medicare. This will give you different choices on coverage and costs. If you go to Medicare.gov there will be plans for the region you live in to chose from to help you with your Medicare decisions.
Original Medicare does not include prescriptions so you may have to add Plan D at a cost to help cover medications. There is also a twenty percent cost for doctor visits that the plan doesn’t cover. Adding a Medicare supplement insurance may be a decision you will want to make if you chose to use the Original Medicare. Medicare supplement rates are going to vary based on your age, health, and where you live. It is easy to get a free quote online to get an idea of what your costs might be.
Medicare Advantage has to give the same kind of coverage and the nice thing is that many of them offer prescription and extra benefits like vision, dental and even hearing exams. The monthly premium varies but you will never pay more out of pocket then Medicare allows.
It’s important to take a look at everything Medicare has to offer so that your Medicare decisions will enable you to have a long and stress free life.
Traditional, or original, Medicare is a government health insurance program that is available to all citizens 65 years of age and older along with some individuals who are disabled. Medicare provides benefits at a set rate but does not pay all expenses. Individuals with Medicare coverage are left with annual deductibles and copays. In some situations Medicare will only pay 80 percent of medical costs. The individual is left to pay the remaining costs out of pocket. How will those costs be paid? An individual can be self-insured or those costs can be covered by purchasing a Medicare supplemental insurance policy.
Private insurance companies offer those supplemental insurance policies to cover the gaps in Medicare coverage. These policies are sometimes known as Medigap policies. Anyone who is covered by Medicare is eligible to purchase a supplemental policy. Costs will vary by the age of the policyholder and extent of coverage. Most Medicare recipients will need the insurance if they want to avoid potentially large medical bills. Examples of individuals who do not need a Medigap policy would be anyone who is gainfully employed and covered by an employer’s group policy or a military retiree who has Tricare. In both situations, the other health coverage acts as a Medicare supplemental insurance policy.
Medicare supplemental insurance has an open enrollment period of six months from age 65 or the time an individual signs up for Medicare Part B, the part of Medicare that covers outpatient treatment and office visits to a physician. No one has to sign up for Medicare Part B at age 65. Someone who is still employed and covered by an employer health plan may delay signing up. In any event, the six month enrollment period starts with coverage under Part B. During the open enrollment period an insurance company cannot deny coverage. Anyone who does not want to have a gap in coverage should start shopping for the policy prior to becoming eligible for Medicare. The policy can be purchased with the coverage date being the same day that Medicare Part B commences. Once the open enrollment period expires, then the supplemental policy can only be purchased after meeting underwriting conditions which can be difficult for a person 65 and older. Any type of medical problem can be the basis for an insurance company to refuse to issue a policy. Once a policy is in place, it is very important to not let the policy lapse. If that happens, it may not be possible to get another policy due to existing medical issues. The policy needs to be renewed so there is never a gap in coverage.
Like any other type of insurance, Medicare supplemental insurance comes with differing types of coverage. There are 10 standardized plans used in 47 of the 50 states in the country (Wisconsin, Minnesota, and Massachusetts being the exceptions). What means is if someone is looking at Medicare supplement plans in Texas and someone else is reviewing Medicare supplement plans in Florida, they are both looking at the same coverage options. The prices carriers offer in different markets will vary, but the coverage options are identical.
In general, the more you pay the more coverage you receive. A potential policyholder has to balance the cost of the premium against the ability to pay any medical bills not covered by Medicare and the supplemental policy. A good supplemental policy will basically cover almost all of the gaps and the policyholder will have they peace of mind knowing medical bills will be paid in full. If the policyholder can make the premium payments and still have money for retirement that is the way to go. Each individual has to make an informed decision about the type of supplemental policy to purchase.
For most people, some type of Medicare supplemental insurance is a good idea if an individual has the resources to afford the policy.
One of the most commonly used financial tools for the protection of assets is life insurance. Although many people have a vague notion that life insurance somehow protects them and is good to have, most people are not fully aware of the many advantages that life insurance creates.
Life insurance should be a substantial part of every person’s financial plan. Here are just a few reasons why.
1.) Life insurance protects assets when they are passed to beneficiaries.
One of the most important aspects of life insurance is its ability to protect your assets after you pass away. The taxman is ruthless when it comes to passing real property and resources to beneficiaries. An airtight life insurance plan can serve as a tax haven that keeps Uncle Sam away from your real assets.
2.) Insurance plans can build cash value and increase your creditworthiness.
Many insurance plans build cash value that can be borrowed against in a pinch. Although you likely do not want to borrow directly from your life insurance plan unless you have a specific business plan or an unavoidable emergency, it is always good to have that option.
Even if you do not borrow directly from your life insurance, you increase your ability to borrow in general by holding a good plan. Having a good plan increases your net worth, making you less of a risk to financial institutions. You also gain the option of trading in the cash value of your plan for a lump sum or using it as collateral for some other purpose. Little did you know that your life insurance plan can actually help you when you are alive!
3.) A good insurance plan protects your loved ones.
This goes without saying, but if you are the breadwinner in your family, then people depend on you being alive and providing. A life insurance plan helps to create peace of mind for those you love if the unthinkable should happen to you. Considering the options available for low cost term life insurance, it only makes sense to ensure that your loved ones will be cared for. For most people, there is nothing better than knowing that your loved ones will be taken care of no matter what.
It is never too early to start planning for retirement by establishing savings and investment accounts. Preparation should also include debt reduction to minimize out of pocket expenses during retirement years. Planning also should include saving for additional insurance plans to cover life-changing events. It is important to start saving money for retirement as soon as possible. Simple techniques can be used early on in your working career to establish a habit of savings. This can include contribution to a simple savings account each pay period. You should participate in any retirement savings program offered by your employer including 401k. Many companies offer contribution match programs to encourage participation. Independent investment also will enhance the employer-based programs. You can seek advice from a financial planner to establish a diversified approach to investing. Portfolio diversification helps to counter any possible market volatility and ideally will reduce loss.
Debt reduction is a major component to retiring comfortably. The easiest method is by reducing and eliminating credit card debt. This can be done gradually if you have accumulated a significant amount of debt. Consolidation of debt can be done by continuing to find low interest cards and paying off those with the highest interest rates first. Mortgage planning is also an important factor to retirement planning. You should not purchase above your financial means and be able to put enough of a down payment on the purchase to avoid additional mortgage insurance expenses. Your ability to pay off the mortgage will be partially based on a purchasing a home that you are able to comfortably make the monthly mortgage payments. Retirement planning should involve a plan to pay off the mortgage as soon as possible so that you can use the additional money saved for the retirement account.
You should finally consider the anticipated costs for retirement. These include health care needs. There are many insurance programs to consider but you will have to evaluate them to determine the best investments for your individual needs. Some insurance plans offers assisted living benefits that will reduce the financial burden for your next of kin. You can also purchase plans to avoid financial impacts of catastrophic health events.