Tag Archives: retirement

Medigap Insurance: Do I need a Medicare Supplement?

Medigap insurance overview:

Medigap insurance is a Medicare supplement insurance provided by a private insurance company. Medigap insurance is separate from the original Medicare insurance plan, as well as being separate from federal programs. It fills in some but not all of the holes in the basic, original Medicare plan. Typically, this Medicare supplement insurance plan pays the cost of premiums, co-payments, deductibles and any physician’s fees that exceed the amount approved and paid by Medicare. It does not cover any charges not covered by Medicare. Also, long-term care is not paid for by Medigap insurance.

Medigap insurance covers people for ongoing medical expenses. It is frequently considered to be a good idea for many people, but is not for everyone. An example may be an individual enrolled in a Medicare advantage plan or other managed-care plans, or group health plan that provides adequate coverage. In many instances, it may even be illegal for a company to sell an individual Medigap insurance coverage when they have these types of plans.

Anyone nearing the level of financial eligibility for Medicaid does not need a Medigap insurance plan. Also, as mentioned above, it is illegal for a company to sell this type of Medicare supplemental insurance plan to someone on Medicaid. However, you should be aware, that Medicaid is run by the individual states that may have their own varying coverage arrangements.

If an individual wants additional coverage, they should consider changing to a Medicare Advantage plan, which may offer some additional benefits (but may also have some limits that you may be uncomfortable with).

If you’re interested in a Medigap insurance plan, you should probably buy it within six months of enrolling in Medicare Part A. During this window of opportunity, your parent or loved one cannot be denied coverage because of existing medical problems.

After this six-month enrollment period is over, insurance companies may be allowed to increase the price of the policy, refuse coverage or even attach an array of conditions to a policy. Your senior may be protected from these increases, denials, and conditions if their current employer, group, or Medicare Advantage health coverage ends for some reason.

Your senior may also switch from one Medigap insurance policy to a different one without penalty for pre-existing illnesses or disability, as long as they have had their current policy for at least six months. The company can however delay coverage beyond what the original policy covered, for six months.

The basic Medigap insurance plan includes the following benefits. All Medigap insurance plans cover certain holes in the original Medicare insurance plan. These include:

Co-insurance for hospitalization.

After Medicare’s hospitalization coverage is used up, 365 additional days (over a lifetime).

Co-payments required by their Part B Medicare insurance (20% Medicare approved fee for doctor services and 50% for mental health services).

The first 3 pints of blood each year (at which time Medicare will then pick up the payments).

Some information from How to Care for Aging Parents by Virginia Morris

Additional information and web page by Paul Susic Ph.D. Licensed Psychologist Clinical Director- Senior Care Psychological Consulting

Medicare Supplement Insurance Plan Choices

Medicare supplement insurance plan overview:

Medicare supplement insurance plans are usually limited to 10 standard plans in most states, to make your shopping just a little easier. They usually run from plan A, which is the core plan that covers only the basic benefits and is available in all states, through plan J., which is the most comprehensive and expensive of the Medicare supplement insurance plans. By law, these insurance plans can not vary from state to state or from company to company. Also, to make it even a little easier, the language and terminology used in the policies are standardized in these Medicare supplement insurance plans.

There are always exceptions however in that not all states carry every one of the Medicare supplement insurance plans, and a few states (such as Massachusetts, Minnesota, and Wisconsin), have their own versions of these plans. Although there are many aspects of these programs that are standardized to make it easier to purchase these plans, your loved one in Minnesota may not be able to buy the same Medicare supplement insurance plan as another individual in Illinois.

Another thing to consider is that any of the standardized plans can be sold as “Medicare Select” policies which work like managed-care plans. According to these plans, individuals are required to use designated doctors, clinics and hospitals within a “network”, but usually pay less for the plan. Finally, insurers are also allowed to add benefits to a standard Medicare supplement insurance plan, making it just a little less standardized.

In spite of all these efforts at standardization, you or your loved one should read the policies carefully for any Medicare supplement insurance plan you are interested in. You should always make sure that you understand completely what is covered and what exclusions or restrictions may exist in your prospective program. Ask the company for a very simply worded summary, which companies are required to provide. You should make sure that your loved one is actually comparing apples and apples, so that they can decide with relative ease which Medicare supplement insurance plan is the best program for them. They should then shop around and find out who has the best price and best services, along with being the most stable and reliable companies providing these Medicare supplement insurance plans.

Some information from How to Care for Aging Parents by Virginia Morris

Additional information and web page by Paul Susic Ph.D. Licensed Psychologist Clinical Director- Senior Care Psychological Consulting

Medicare Advantage Plan: What is it exactly?

Medicare Advantage Plan overview:

The Medicare advantage plan is provided as an alternative to the original Medicare plan, depending upon where your loved one lives. Private insurance companies also provide coverage similar to the Medicare advantage plan. Frequently they offer broader coverage but limit which doctors, hospitals, and other health-care providers that your senior may visit for services.

If your parent or loved one decides to utilize a Medicare advantage plan, they will still be in the Medicare program, and will still get coverage included in Part A. and Part B of the original Medicare plan.

Medicare advantage plans usually fall under one of the following four categories.

Managed-care. Under managed-care plans, your senior can only go to doctors and other providers within the managed-care network. Also, in most cases referrals to specialists are made through primary care doctors. Doctors can leave the plan at any time and your senior needs to make sure that their current doctor is not thinking about leaving the plan in the future.

Some managed-care plans offer an option called “point of service” which means that your senior may go to doctors and hospitals outside of the network, but they may have to pay deductibles and coinsurance to do so.

Preferred provider organization. These organizations are similar to managed-care plans except that your senior can see specialists without referrals from primary care doctors. In some cases, your loved ones can see any doctor or other health care provider who accepts Medicare, although, they may have to pay an extra charge if the provider is not within the plans “network”.

Private fee-for-service. These plans operate much like the original Medicare plan except that are private company, rather than Medicare, determines the “approved fees”, premiums, deductibles, coinsurance, and co-payments. Your senior may go to any physician or hospital approved by Medicare who has decided to accept the plan’s fees as their payment.

Specialty plan. These plans are relatively new in that they provide normal Medicare coverage, plus they pay for any extra care that is needed because of a specific disorder or disease (such as renal disease, congestive heart failure, or diabetes).

In summary, Medicare Advantage Plans come in many forms with many being very similar to the original Medicare plan. You should continue to learn all that you can in order to make sure that your loved one gets the services that they need through either their original Medicare plan or through one of these Medicare Advantage Plans.

Some information from How to Care for Aging Parents by Virginia Morris

Additional information and web page by Paul Susic Ph.D. Licensed Psychologist Clinical Director- Senior Care Psychological Consulting

Medicare Assignment: What does it mean to me?

Medicare assignment overview:

Medicare assignment is a way to keep costs under control in the Medicare program. Medicare assignment is a way in which costs are determined in advance, with Medicare establishing a certain fee that it will pay for medical procedures and supplies before the procedures are even provided. When a physician, health care provider, or supplier of medical supplies accepts Medicare assignment, they are basically stating that they will take the assigned fee as full payment for a given service with your loved one only paying the deductible and a coinsurance (usually either 20% or 50% depending upon the service rendered) amount.

Current estimates are that more than 70% of doctors (excluding pediatricians and others who do not provide care under Medicare) are “participating physicians”, which means that they accept Medicare assignment on their patients.

If a physician does not accept assignment, they can establish the amount of their own charges and your loved one will be responsible for the difference beyond the part that Medicare would normally pay for that specific service and the actual charge. Also, your senior may have to pay the bill in full and then get a partial reimbursement from Medicare.

There are limits to how much doctors can charge for their services. In most cases, the physician cannot add more than 15% to the fees that have been approved by Medicare. For example, if the approved fee for a specific service is $100, the most a doctor can charge is $115. (Of course a doctor can charge whatever he/she wants for services that are not covered under Medicare).

If your parent or loved one is very happy with their doctor, they may be willing to pay whatever the physician chooses to charge, and they may be willing to pay the extra charge. Otherwise, your senior may find a participating physician either by calling doctor’s offices and asking if they accept Medicare assignment or by looking in the Participating Physician Directory, which can be found at www.medicare.gov , or at public libraries, Social Security offices and also at your local senior citizens center. Your senior may also call his/her Medicare carrier for a list of participating providers.

Some information from How to Care for Aging Parents by Virginia Morris

Additional information and web page by Paul Susic Ph.D Licensed Psychologist Clinical Director- Senior Care Psychological Consulting

Can You Retire Before You Die?  (Page #2)

Have we shown you enough? Well, here’s a few more facts…

“The rising stock market and escalating property values, while adding general prosperity, hide the brutal fact that for many Baby Boomers-who are now turning 50, retirement may not be a pretty picture.

Over the next 20 years, 76 million of us born between 1946 and 1964 will hit 50. For most, that means facing up to the harsh questions of how, or even if, they will be able to afford to retire.

With meaty employment pension plans gone the way of ancient history, and Social Security increasingly becoming an uncertainty, the lifestyle of retirees is no longer leisure, golfing, fishing and travel. In fact, the lifestyle for many retirees may be continued work and “cans of Spam . . . and not Caviar and Travels.”

The latest Census Statistics show that only 1 out of every 10 Americans today, is financially prepared to retire when they reach the age of 65.

What about the Current Economic Situation?

As we know, the economy is teetering on recession, companies continue to lay off in great numbers. And, you may as well kiss true job security good-bye. It doesn’t seem to exist anymore.

And although you may be one of those that make it to retirement and manage to hang on to your job, according to the Bureau of Labor Statistics, at 65 only 5% have enough money to retire on.

And since the standard route of working a traditional job has failed for 95% of all Americans. Shouldn’t you be seriously RE-evaluating the traditional career job employment scenario and if it is going to get you to and take you through retirement financially sound?

Here’s the real kicker… You and most of the people you know are going to work for at least 30 to 40 years …. at jobs you hate… with bosses you hate… with commutes you hate… with hours that you hate. What a life – failing while you are miserable most of the time. Do you want to do this for the next 40 years?
So What Can You Do About It?

Well, one pro-active move you can make is to avoid common and costly retirement planning mistakes that could seriously jeopardize your future and the lifestyle you dream of for your retirement.

Mistake Number 1: Procrastination
Mistake Number 2: Not realizing that you’ll need a specific amount of money to sustain you each month when retired.
Mistake Number 3: Relying on the belief you’ll be able to draw FULL Social Security benefits.
Mistake Number 4: The under-estimation of your medical costs if you are not in good health.
Mistake Number 5: Not setting up your long-term-care insurance early.
Mistake number 6: Making the assumption that you can retire early.
Mistake Number 7: Getting into the false hope that in retirement you will be in retirement-mode.
Mistake Number 8: Failing to seek expert financial and retirement guidance.

Start focusing on these commonly made mistakes and make sure you are not falling into the traps they can create. If you recognize some of them in your portfolio, get them fixed so you are on the right track. You don’t want any of them to affect your retirement planning and live-on income.

Start a pro-active plan NOW! If you want to be able to live financially stable now and into your “golden” retirement years, you need to make changes in the strategies you’re presently using.

One other pro-active move you can make is to join the home-business boom. It is the next big trend. CNN reports that a new home based business is started in the United States every 11 seconds.

Why? Well because a new home based business offers a low start-up investment compared to a brick and mortar, or franchise business, low monthly overhead, and you can start part-time while still employed, and create time leverage, residual income, and tax benefits for yourself. Tax expert Sanford Botkin says that a home business can result in tax savings of $3,000 to $9,000 per year.

Follow this trend, however do proceed wisely – you don’t want to get into a situation where you are wasting time or money out of your pocket.

Make sure you do your research. You are looking for an income generating system that allows you to build substantial supplemental income, PASSIVELY; where you don’t have to give up your life, or your spare time to run it successfully.

You don’t want to be adding a lot of additional work hours to your day, otherwise, you might as well start commuting to a second job site.

Start now… remember, procrastination is mistake #1… That way when you do decide to retire, unlike the income earned at a job, which stops when the work stops, the residual income from your home based business will continue to pay you long after the work is completed. Leaving you to enjoy your retirement free and to the fullest.

By: Tracey Anne 

Can you retire before you die?  (Page#1)

Most of us are familiar with these statistics…

Out of 100 people who starts working at the age of 25, by the age 65:

* 1% are wealthy
* 4% have adequate capital stowed away for retirement
* 3% are still working
* 63% are dependant on Social Security, friends, relatives or charity.
* 29% are dead.

More Statistics on “The GOLDEN Years”

Retirement by the Governments own statistics:

* The average savings of a 50 year old in the U.S. is $2500.
* 32 Million Americans are currently threatened with bankruptcy.
* More than 1,000,000 [1 Million] filed for bankruptcy in the year 2000.

More Statistics…

Out of every 100 people who reach the retirement age of 65:

* 62 retire with less than $25,000 in assets and depend on Social Security or family for their retirement.

* Another 35 retire with less than $100,000, have some form of pension in addition to Social Security and are just making it in their retirement. If either Social Security or their pension went away they would have a very difficult time surviving.

* 2 of the 3 remaining retirees have an adequate pension or retirement account. They have assets of between $100,000 and $750,000. They do appreciate having the additional money they receive from Social Security, but could survive without it.

* The last of these 100 retirees, is the only one who is financially independent. This retiree has assets approaching or exceeding $1,000,000. They do not need the income from Social Security at all.
Which group above will you be in when it is time for you to retire?
Still More Statistics…

“According to recent Governmental statistics, most people are very concerned about their financial security in retirement. Over 70% believe they won’t have enough money put away for retirement. Of those between the ages of 30 and 54, almost 80% feel this way about their future.

One of the factors is the uncertainty of Social Security. In the mid 1970’s, 2/3 of the people surveyed said they were quite confident Social Security would be there for them when they retired.

In 1980, of those surveyed, 2/3 commented that they were not confident that Social Security would be there to support them in retirement. They felt that if Social Security was still a functioning service, it probably would not be paying an adequate amount to cover a reasonable standard of living.

So if this is the case… why aren’t people socking away hoards of money so they are not part of the statistics? Well, it seems that saving for retirement is a difficult task to master for the average person.

Some have difficulty saving on a systematic basis. With others, it’s often the case of having good intentions but very poor follow-through. Still others, it’s that they make poor selections with the saving and investment vehicles they choose.”

Clearly, the working-class scenario of toiling away building someone else’s empire for forty years, trying to accumulate wealth (money) so one can retire comfortably, is NOT working. Most people would like to retire with dignity. Wouldn’t you?

Also. See Page #2

By: Tracey Anne 

Retirement Plan: Essentials you need to know.

Retirement Plan: The Basics 

You will usually be eligible for your employer’s retirement plan after you’ve worked there for at least one year and for at least 1000 hours.  Employers usually offer two basic types of retirement plans: defined contribution plans or defined benefit retirement plans. 

Retirement plans: Defined contribution and defined benefit plans: 

Defined contribution retirement plans involve annual contributions made for each employee by the employer.  The contribution can be up to 15% of the amount you (the employee) put into your plan.  The benefit you receive is the vested amount (the amount you completely own) plus the amount of investment income earned.  Examples of these types of retirement plans include 401(k)’s, 403 (b)’s, employee stock ownership plans, profit-sharing plans, and money-purchase pension plans (in which the employer must contribute a specific amount of money each year). Ultimately you receive the amount you contribute plus investment gains and losses.  The amount in your retirement plan frequently fluctuates in relation to changes in the value of your investments. 

Defined benefit retirement plans are the most traditional plans and are characterized by employer contributions which are determined by actuarial tables based on your salary as well as your years of employment. 

Some of the more typical retirement plan accounts you might have include the following: 

Simplified Employee Pension Plans (SEP): Retirement plans in which the employee sets up an Individual Retirement Plan(IRA) and employer then makes contributions (up to 15% of your pay) to it. 

401(k): The employee defers receiving part of their pay, which is then placed in an account of payment and is untaxed until sometime in the future. 
Retirement plan- ERISA and the vesting process:

Retirement plans are governed by a federal law referred to as ERISA (Employee Retirement Income Security Act). Each year you should receive a summary which shows you how your pension account is being invested as well as the return on investment. 

You must become vested in order to be qualified to receive your benefits.  Once you become vested you become the owner of the funds in the account, even if you leave the company before reaching full retirement age. Vesting is a gradual process which occurs over time. If after three years you’re 20% vested, you are then the owner of 20% of the funds in your account.  Most retirement plans require you to be in a job for five to seven years to become completely vested. If you leave that job before you are completely vested, you will then lose the unvested amount in your account.  Retirement plans may be very different.  You should always make sure that you understand the rules before you make major changes to your retirement plan or employment. 

You must start to receive benefits from your account within 60 days of turning 65 years old or, if earlier, than normal retirement age according to your retirement plan; the end of the 10th year after you began participation in the retirement plan; or, after you have left your job, whichever occurred last. 

Some information from Senior’s Rights by Brett McWhorter Sember 

Web page and additional information by Paul Susic Ph.D Licensed Psychologist – Clinical Director Senior Care Psychological Consulting.