Medicare is on people’s minds these days, for two reasons. One, the annual open enrollment period is in full swing, and two, Part B premiums for 2012 were just announced.
Open enrollment extends through December 7
If you are over 65 you are getting a ton of stuff on Medicare supplement plans, including thick packets describing benefits and costs that will become effective January 1, and invitations to seminars by insurers hoping to lure you over. Loyalty has no place in the Medicare supplement world. Insurers are free to raise rates, reduce benefits, and even stop doing business at the end of the contract year, which extends through December 31. That’s why Medicare enrollees have to pay attention or they could find themselves without supplemental insurance or paying much higher premiums than they bargained for.
Choosing a supplemental plan, whether it’s a Medigap policy that includes a drug plan to go with the original Parts A and B, or a Medicare Advantage plan (often called Part C), that wraps everything into one HMO-type plan, is a highly individual matter. It really comes down to what your medical needs are.
Evaluating plans will be easier for you if you know your priorities: which doctors you want to see, which additional services you want included (such as vision care), and so on. Because plans and costs vary by region, you can focus on the plans available in your area.
- The deadline for choosing Medicare supplemental insurance for 2012 is December 7. If you do nothing, you will keep your same plan (if it’s still available), but rates and benefits may have changed. You need to watch your mail, read the information carefully, and act accordingly.
- Check out SHIPtalk for personal counseling. Each state provides free, local counseling to help Medicare enrollees evaluate their options.
- Refer to the Medicare Plan Finder which allows you to compare plans in your area.
Most Medicare information is clearly written and easy to understand, so you shouldn’t have any trouble making sense of the materials presented. The challenge is analyzing the myriad variables that may or not come into play depending on your own expected health care experience. Will you be hospitalized? Will you stay healthy? Will you be diagnosed with a serious condition? You need to weigh these things for yourself and decide how much coverage you want to carry and at what cost.
Medicare premiums rise less than expected
For once, Medicare premiums will actually be going down for many people. The new Part B premium in 2012 will be $99.90. This is lower than the $115.40 in effect this year. Social Security recipients who were subject to the hold-harmless provision that kept their Medicare premiums at $96.40 during the two zero-COLA years will pay $3.50 more. But people who were not subject to the hold-harmless provision—including newer Social Security recipients and high-income Medicare beneficiaries—will pay less. Monthly premiums for Medicare Advantage plans are expected to decrease by 4% while drug plan premiums remain unchanged.
Here’s what high-income clients will pay directly to Medicare. Supplemental premiums paid to private insurers are on top of this.
|
What High-Income Clients Will Pay Directly to Medicare |
|||||
|
MAGI single |
MAGI joint |
Part B |
Part B |
Part D |
Part D |
|
$85,000 or less |
$170,000 or less |
$99.90 |
$115.40 |
$0 |
$0 |
|
85,001?107,000 |
170,001?214,000 |
139.90 |
161.50 |
11.60 |
12.00 |
|
107,001?160,000 |
214,001?320,000 |
199.80 |
230.70 |
29.90 |
31.10 |
|
160,001?214,000 |
320,001?428,000 |
259.70 |
299.90 |
48.10 |
50.10 |
|
Over 214,000 |
Over 428,000 |
319.70 |
369.10 |
66.40 |
69.10 |
These income-related adjustments affect about 5% of all Medicare beneficiaries. Because they are based on modified adjusted gross income, you may be able to help clients reduce their Medicare premiums by sheltering income via annuities, municipal bonds, and tax-favored investment strategies.
It’s a Good Life!
Randall A. Luebke RMA, RFC
