With Plan F going away in 2020 for new Medicare participants, many people new to Medicare will be looking at Plan G and N for their medigap coverage. This supplement insurance plan offers the same benefits from one insurance company to another, but the costs can differ, so shopping any supplement plan should include meeting with a Medicare professional.   Because Original Medicare Parts A and B don’t pay for all your healthcare costs, you may want to buy a Medigap policy to supplement your coverage and help pay the uncovered expenses, including your deductibles, copayments, and co- insurance. Some plan also covers services that Medicare doesn’t, including medical care outside the United States. You can choose among a number of plans, identified by letters of the alphabet, from a range of providers. Each plan offers a slightly different combination of benefits, but all plans identified by the same letter offer identical coverage—except in Massachusetts, Minnesota, and Wisconsin. The premiums, however, vary based on the insurer, and some costs are never covered. You can find more information on the various plans in “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare,” a booklet you can download from   Read more…

Enrolling in Medicare requires a lot of decisions in a relatively short period, especially if the health insurance you’ve had from your employer ends when you retire. You’ll be glad to know that, in most cases, you can change your mind about the decisions you’ve made. You can switch between Original Medicare and a Medicare Advantage Plan, or the reverse, change your drug plan during the annual enrollment period that runs from October 15 to December 7, and change Medigap plans or providers. But rules apply, and it’s possible to get things wrong. The best source of information and help is Medicare itself. Because Original Medicare Parts A and B don’t pay for all your healthcare costs, you may want to buy a Medigap policy to supplement your coverage and help pay the uncovered expenses, including your deductibles, copayments, and co- insurance. Some plan also covers services that Medicare doesn’t, including medical care outside the United States. You can choose among a number of plans, identified by letters of the alphabet, from a range of providers. Each plan offers a slightly different combination of benefits, but all plans identified by the same letter offer identical coverage—except in Massachusetts, Minnesota, and   Read more…

Tax-deductible contributions to Health Savings Accounts can really have an impact on lowering your tax bill and it’s for a good cause, your healthcare. 2019 contribution limits for a single contributor is $3,500, for a family $6,900 and for those over age 55 an additional catch up contribution of $1,000. Health Savings Accounts allow for tax-free withdrawals at anytime for legitimate medical expenses or medical, Medicare or long-term care insurance premiums. The odds are extremely high that you will use every dollar in your HSA account during your lifetime. Everyone has medical necessities and related premiums to pay, so its economic value is considerable. And during retirement HSA distributions are not includible in the provisional income test for Social Security taxation. One-time rollovers from IRAs to HSA accounts: This provision allows for a once-in-a-lifetime distribution of amounts from an IRA (either a Traditional IRA or a Roth IRA), in a direct trustee-to- trustee transfer. Unless the only money available is in your Roth IRA, you shouldn’t use it. The best use of the exchange is with an IRA. Amounts distributed under this provision are not includible in income to the extent that they would otherwise be includible in income, and   Read more…

If you start receiving Social Security before you’re 65, you’ll get your Medicare enrollment card in the mail. And if you apply to begin Social Security benefits when you turn 65, you can apply for Medicare at the same time. But if you’re still working or want to post- pone collecting Social Security because you don’t yet qualify for your full retirement benefit, you’ve got to apply for Medicare on your own. If you apply after your initially eligible, you risk delays in coverage. More seriously, if you apply late for Part B or Part D coverage, you risk a permanent surcharge on your premium for each year that you were eligible but didn’t enroll You can apply up to three months before your 65th birthday. If you do, your coverage begins the first day of the month you turn 65. If you enroll in the month you turn 65, coverage begins on the first of the following month. If you enroll within the next three months, there is a waiting period for coverage. Medicare doesn’t cover any of your Part B bills incurred before you’re enrolled. If you enroll within the next three months, there is a waiting period   Read more…

Medicare payroll deductions are 1.45%, double that if you’re self-employed and there’s no cap on earnings, i.e. no limitation thresholds. All Americans pay the same per dollar earned into the Medicare program. Some view this as a tax, others view it as a contribution into their medical coverage when they become age 65 and throughout their retirement. But that’s where the equality or fairness ends. The U.S. tax code is a marginal-progressive tax bracket system that increases as certain income thresholds are achieved, a system has been around for over a century. But few understand that Medicare premiums are means tested. Most eligible Medicare recipients are paying the minimum of $135.50 a month, married couples double that at $271 assessed for 2019. But affluent seniors may be paying up to $460.50 a month, wealthy married couples $921.00 a month for the same benefits. And the real revelation is that the calculations for earnings go back two years! A fact that few financial advisers are aware of and not to mention the public at large. Over the last 15 years, retirement planning has embraced strategies to maximize Social Security, but little to no planning regarding Medicare. Most affluent seniors experience sticker   Read more…