If you’re considering taking out an insurance policy, it’s important to understand the components that go into it. And review the options that you have, starting with one of the most crucial concepts – the annuity. Are fixed annuities a good investment for you to make? Consider how they work to make an educated decision.
An annuity is how an insurance company collects funds, accrues value by investing them, then grants payouts when it becomes necessary. In the insurance business, a company that sells you a policy will set it up so that you pay into the annuity on either a fixed or a variable basis. And the money you put in accrues until eventually, it is paid back after a period of time has elapsed.
The point of an annuity is generally to benefit people who think they may outlive their assets and not be able to support themselves once they reach a certain age. Annuities provide a steady flow of cash after a person retires. Or they can be used to turn a lump-sum payment into a regular distribution of funds. For example, if you win the lottery, you can put your money in an annuity, so it pays it out to you over time.
Two examples of annuities from the government perspective are benefit pensions and Social Security. They continue to support annuitants (the beneficiaries of an annuity) until the time of their death. However, annuity payouts can also be structured so that they only continue for a fixed period. It could be 20 years and then stop – even if the annuitant continues to live. If you put in an annuity as a lump sum, you can also choose whether you want to receive payouts immediately. Or you can defer the benefits to a later date.
Annuities have two phases: the accumulation phase, where money is being deposited, and the annuitization phase when you start receiving payouts. During the annuitization phase, there are two possibilities for how you will receive payouts. They are fixed or variable; you decide the type when you first sign the annuity contract. The first of these, the fixed annuity, allows you to accumulate capital while your funds are invested. This is the result of a guaranteed fixed rate of interest. An insurance company also guarantees your principal investment. And that ensures you won’t lose funds. Eventually, you’ll get a guaranteed income payout. You can structure it to be paid out for life or for a certain period.
Fixed annuities are the oldest type of annuity contracts. Traditionally, they have offered by governments to the public anywhere from Caesar’s Rome to 17th- and 18th-century Europe. These annuities can take anywhere from one to 10 years to mature. And they will typically renew their interest rates automatically unless you decide to take the money out or move it somewhere else.
Though the interest you accrue depends on current interest rates, some companies will offer a “teaser rate” that’s higher than normal but only good for one year. Other types of fixed annuities might start you off at a lower rate. But they increase it over time so that you can gain more returns the longer you keep the annuity. Annuities also decrease their “surrender charges.” These are penalties exacted on funds that you take out, over time until there is no penalty for withdrawing funds.
You can purchase an annuity with payments that are made to the contract. And they will be subtracted from the return on investment.
Whether or not you want to get a fixed annuity depends on how confident you feel about your investments. A fixed annuity involves a stable interest rate. Therefore, you get a guaranteed income. A variable annuity, by contrast, structures your payouts depending on whether your investments do well or poorly. That means you could gain a lot with a fixed annuity if the alternative is a low-interest rate and therefore smaller payouts. But you could also lose if a variable annuity would give you a higher interest rate.
The main benefit of a fixed annuity is a sense of safety and security. Going into the process, you want to be sure that upon your retirement, you’ll receive enough to guarantee a comfortable income. The best way to do that is with an annuity that doesn’t hold any surprises. Instead, it makes the money that you expect. It also helps as a steady stream of income that can complement your other retirement income. And you don’t have to worry about how you’re going to pay for the cost of living later in life.
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Category: Annuities
For many younger people, the thought of buying life insurance is probably about as far from your mind as it can be. You’re young, and life insurance is something only old people have to think about, right? Unfortunately, nothing could be further from the truth. While you seem to have a long, happy life ahead of you, the fact is that accidents and other problems can arise. You might be asking what should I buy life insurance now? Discover the advantages of being young when you decide to invest in a life insurance policy.
Life insurance premiums are calculated based on several factors, but one of the main pieces of the puzzle is the applicant’s age. Since the whole point of life insurance is that it gets paid out when the insured individual passes away, the younger you are, the less chance that’s going to happen. Being young means greater savings for you in the form of lower premiums. In the eyes of the insurance company, you’re a much less risky gamble, so they do not need to charge more to offset their potential losses.
When you’re in your 20’s, life insurance is quite affordable. When you get older, though, you’ll start to see those premiums increase. By starting now and locking in a cheaper rate, you’ll save a lot of money in the long run.
Another piece of the insurance factor puzzle is your level of health. It’s probably safe to assume that you’re as healthy now as you ever will be. And you’re certainly healthier now overall than you will be in 20 or 26 years. Just as stated above, the longer you wait, the more you will see those premiums creep up.
If we were to look at the typical 20-something, most likely we’ would find a whole group of other people who rely on this person. And in the future, this group may continue to depend on the person. Consider a young family, just starting out, as well as older parents. Aging parents will need additional help and care as time progresses.
As a 20-something, people depend on you or may rely on you very soon. What would happen to them if you were not around? Like we mentioned before, even the most careful of us can still have accidents or become ill. By investing in an insurance policy now, you are taking a huge step in guaranteeing their financial stability even after you’re gone.
Unfortunately, another typical 20-something characteristic these days is debt. In fact, right now the average student debt amount of a new graduate is over $37,000. And do you know what happens if you pass away? In some situations, your debt might transfer to your spouse or someone else. Taking out a life insurance policy helps make sure they do not have to face off with this debt for years to come.
Students loans aren’t the only kind of debt that could come back to haunt someone else. Credit cards, car payments, mortgages — in the event of untimely death, the creditors aren’t likely to just write off the amount owed and move on to the next person.
For some of you, there’s a good chance that you think that this list doesn’t apply to you because your work supplies you with coverage. While this is a good step, most likely the amount of insurance from your job just isn’t enough. Most work-related plans only offer an amount equal to two or three times your annual salary. The amount might be sufficient to pay off immediate expenses and set up a small safety net. But unless you’re living by yourself with no dependents, then that money will run out sooner than you think.
In contrast to this, most insurance experts estimate that you should take out an insurance plan that’s worth eight to ten times your annual salary. This level of coverage gives your family and others enough money to pay off your debts, handle the bills, and still have enough left over to help them while they struggle – first by coping with loss, and second by learning to survive.
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Category: Life Insurance
When you’re shopping around for an insurance policy, one thing is probably on your mind: price. Most people are looking for the cheapest option possible. But choosing an insurance agent is more than just a cost-conscious decision. This choice can impact your life for years to come. Make it wisely, by reviewing all possible options. Ideally, customers want to get the best coverage at the lowest price. The goal is to get the most comprehensive coverage to suit your needs at a competitive rate. The best insurance agents will have a few qualities in common. Here are a few considerations to keep in mind when searching for Ohio insurance agents.
There are two types of insurance agents: direct writers and independent agents. Direct writers, who are hired directly by an insurance company to write policies just for them, will work just for that one company. Independent agents, meanwhile, work for the client. They are hired by insurance companies on a contractual basis and can often provide you with numerous options that a direct writer may not have the leeway as an employee.
When meeting a potential insurance agent, ask questions about their experience in various areas, and find out what their areas of expertise are. Look for technical credentials that are marked by letters after the insurance agent’s name — CIC, CPCU, ARM, and CRM. Ask about their education and the number of years they have worked in this particular field of insurance.
Depending on what kind of insurance policy you are looking for, you may want to find an insurance agent that specializes in a particular type of coverage. For example, if you are a business owner, it makes sense to find an agent that has worked with commercial insurance. Some insurance agents will offer many different types of insurance, while others will be more specialized, so make sure that you find someone who has what you want.
Though this is a professional relationship, his or her character still matters. Verify the insurance agent you work with is someone who communicates well and understands your needs. Look for traits such as honesty, trustworthiness, passion, and enthusiasm. Such qualities will help you feel confident that your agent is there to help you. Plus, customers want to know an agent is readily able to answer questions and make changes as needed.
While location should not be a key factor, it sometimes plays a role in a customers decision-making process. Many people look for insurance agents who understand the needs of the people who live and work in their neighborhood. In certain instances, this means finding an agent who services a designated region. And some customers prefer to work with agents in-person while others like to deal with insurance issues online. Consider your preferences and choose an insurance agent who can provide the highest level of convenience. Communicating with your insurance agent should be simple and accessible.
Before you commit, make sure to do your homework. Check out the agent as well as the agency itself. Start by researching the agency online to see what kinds of reviews other people have left and what kind of press the agency receives. Is it a respected and philanthropic business, or is it embroiled in the middle of a lawsuit? Select an agency that appears trustworthy. Then, search the agent. If you find any social media profiles, you can learn a little more about their online personality and see if it matches up with their professional one. Gather information and find out as much as possible before you commit to working with an insurance agent.
A smart way to test a potential agent is to ask for a quote right away. See how long it takes to get a response and what the quote includes. Is the agent passionate about signing you on or just going through the motions? Talk it through and ask about anything in the quote that makes you feel unsure. The agent should give you clear answers and help you understand the terms of the potential policy. Then, ask for a detailed, written quote that can delineate the carriers and coverages to their full extent. A dedicated agent should help you understand the coverage being offered, including what might not be covered by the policy.
Choosing the right agent requires research, but it is worth the effort. An insurance agent does the shopping around to help you save time and money in the future. Over the years, an insurance agency can provide essential protection that fits your budget and needs.
Thank you for reading our blog! How can we help you? Contact us today.
Category: Health Insurance
If you’re nearing age 65 (or retiring and losing group insurance) you may need help with Medicare planning. It’s always best to get started early so that you fully understand all of your options. Choices you make now will affect your options in the future.
We help our clients through this progression. There is a natural order to Medicare enrollment and in this article, we will walk you through it step by step. We’ll help eliminate the confusion so you’re Medicare ready day one.
The first step in Medicare planning is enrolling in Medicare Parts A & B. Most people are entitled to Part A automatically when turning age 65 because of work credits. Nothing usually needs to be done here. Medicare will mail out your red, white and blue card showing your Part A effective date as the first of the month when you turn age 65.
Medicare Part B is the gatekeeper, however. This is the one that requires your careful attention. Not everyone is automatically enrolled (or entitled to Part B) at age 65. In fact, some people defer Part B enrollment until they retire some months or years after turning 65. But it’s the part of the puzzle that allows you to move to the next step, so you’ll want to make sure you’re on top of it.
Failing to enroll in Medicare Part B when you are required can lead to enrollment delays and/or late enrollment penalties. These penalties can increase your Part B premiums (what you pay to the government) for your lifetime. It’s very important to get this enrollment timed correctly.
You’ll only want to defer Part B enrollment if you have creditable coverage elsewhere; maybe through your employer. If this is not the case and you’re turning 65, you need to start the enrollment process. There are several ways to enroll in Medicare Part B:
There are thousands of people turning 65 every day. The representatives at Medicare are usually pretty good at telling you how & when to enroll. Whether you defer Social Security beyond age 65 will also determine your path forward. If you are electing SS payments, then you may want to make an appointment at your local SSA office. Your Part B premiums will be deducted from your SS check when you begin payments.
If you are deferring Social Security beyond age 65, then you can try options 1 or 2 as they are more convenient. In this case, Medicare will bill you quarterly for your Part B amounts. Make sure you keep track of and pay those bills. We’ve seen cases where some people missed their Part B payments and that led to a coverage gap and a lifetime penalty.
Okay, so your Medicare Parts A and B are in the works – or finalized. What now? The next step in Medicare planning is deciding how best to supplement your coverage. You are now in your Open Enrollment window. This period of time lasts approximately 7 months. It includes the 3 months prior to your Part B effective date, the month of, and the three months following. The world is your oyster.
During your specific, one-time Open Enrollment window, you can purchase any Medicare Supplement, Part D or Advantage plan you want. It’s wise to explore all of your options. What you choose now can limit your choices down the road. Again, you usually only get one shot at this – and if your window expires and you’ve done nothing – you can face medical underwriting, insurance declines, late enrollment penalties and coverage delays.
There are several gaps in Medicare and to go it alone with only A & B will expose you to significant out of pocket costs. So you’re next decision is deciding whether you are a Medicare supplement or Medicare Advantage person. You cannot have both. Each has their own pros and cons. We compare Supplements to Advantage plans here if you would like some background.
This is a good time to speak with an independent agent, your friends & family, and also gather information online. There is not necessarily a right or wrong way to fill the gaps in your Medicare coverage. Once you’ve done your research and talked with those who understand both Supplements and Advantage plans well, your decision won’t be too difficult. Just remember, you cannot have both. It’s one or the other. And make sure to ask you agent about how your choice now will affect your options later.
If you’ve chosen a Medicare supplement plan over an Advantage plan, it’s wise to purchase a stand-alone Part D drug plan as well. (Most, but not all, Medicare Advantage plans include Part D drug coverage – so you don’t need to buy one separately. Advantage plans that do not include Part D coverage usually won’t allow you to buy a stand-alone drug plan without cancelling-out your Advantage coverage. Advantage plans without a Part D element are usually appropriate for veterans and those who have creditable drug coverage elsewhere. This is another good time to talk with your agent so that you don’t accidentally cancel any coverage you want.)
Failing to purchase a Part D drug plan during your Open Enrollment window will likely lead to delays and penalties when you do want to enroll. Medicare assesses a 1% penalty for each month that you were required to own a drug plan and did not. This Late Enrollment Penalty (LEP) accumulates over time and results in increased premiums for life. Even if you don’t have need for a Part D rx plan, it can be wise to buy the cheapest placeholder available simply yo avoid the penalty.
In a nutshell: If you choose a Medicare supplement, you may also want to purchase a stand-alone Part D drug plan as the two (by rule) are sold separately. If you purchase a Medicare Advantage plan, then chances are it already includes a drug plan and nothing more needs to be done. Any knowledgeable agent can walk you through this process quickly and easily so that you are compliant.
We get these questions a lot. The answer is government run Medicare does not cover much in the way of dental, vision or long term care. If you want this insurance, then you will need to pay separately in most cases. Medicare only goes so far.
It’s important to note that some Medicare Advantage plans include basic dental, vision and hearing. Others offer more robust coverage at an additional cost. Conversely, Medicare supplement plans do not offer any ancillary coverage – basic or otherwise. It will need to be purchased separately if you choose a Medigap plan like F, G, or N.
And no combination of Medicare, Supplement and/or Advantage plan covers much in the way of long term care. The most you can hope for is 100 days of skilled care coverage. If you need the more common types of care (custodial and intermediate) then you won’t even be afforded 100 days.
Our clients who are concerned about estate protection will usually turn to a long term care insurance policy. Fortunately, there are several options to address these costs. There are traditional LTCi policies, hybrid LTC annuities and life insurance, short term care plans, hospital indemnity insurance as well as cancer, stroke and heart attack policies. One size does not fit all in such a broad category – so we help our clients find the options that suit them best.
When you are Medicare planning and enrolling, you’re just marching down the cafeteria line. You get your meat and potatoes (Medicare A & B) from the government and then your vegetables and dessert (supplemental & Part D insurance) from a broker. We’re happy to guide you through all phases so you find the insurance plans that best meet your needs and budget.
Ready to get started? Contact us today!
Category: Medicare Supplements, Retirement Planning
If you own a Health Savings Account and you’re approaching Medicare eligibility, you likely want to know what you can and can’t do with your unused funds.
The good news is you can keep your HSA once on Medicare. This is helpful for those who have accumulated significant assets in their accounts. Furthermore, there are several Medicare specific expenses you for pay for tax-free using your HSA balance.
Not everyone begins Medicare at age 65. If you have qualified group health insurance (over 20 members), you can defer Medicare enrollment. In this case, you can keep your HSA qualified health plan and contribute up to the allowable maximums each year.
But once you elect Medicare Part B and leave your group health plan, you can no longer contribute to your HSA. Those are the rules. You must have a HSA qualified, high deductible health insurance plan in order to make contributions each year. And if you leave your qualified group plan in the middle of the year? You will need to have already contributed the allowable amount before making Medicare your primary insurance.
Your HSA funds always belong to you – not the insurance company. You can move your account to any custodian that accepts HSA’s. Most owners use a savings account, but some with larger balances invest in mutual funds or other market sensitive instruments. It’s up to you where you’d like to keep your deposits once on Medicare.
HSA funds can only be put toward qualified medical expenses in order to be withdrawn income tax-free. As was before, you can continue to use your HSA to pay for expenses like dental work, eye exams, chiropractic and acupuncture visits, but Medicare eligibility opens up a few more doors.
The I.R.S. allows you to use your Health Savings Account to pay for:
If your income is above certain thresholds, you will be charged more for your Medicare Part B and Part D premiums. You can use your HSA balance to pay these increased premiums as well. This can help to alleviate some of this financial burden until your income potentially decrease in retirement.
You can also pay for Medicare related deductibles, copays and coinsurance with your HSA. Even with a comprehensive Medicare Supplement plan, you may still have out of pocket costs. HSA plans can cover those – like your Part B deductible for insurance. You can also cover the cost sharing expenses associated with Medicare Advantage plans like deductibles and copays.
If you wish, you can use your Health Savings Account to pay for the care of a family member. The I.R.S allows for tax-free distributions from HSAs to cover health expenses for a spouse or a dependent. This is true even if you’re on Medicare and they are not.
You cannot, however, pay for a Medicare supplement (Medigap) policy using your HSA funds. That is one rule we’d like to see changed. Most Medicare supplement insurance plans are usually over a $100 a month. Allowing consumers to cover those regular expenses with an HSA would be helpful. Maybe we should petition Congress for this change…
However, if your supplement has deductibles, coinsurance or copays, then you can cover those amounts income tax-free with your HSA dollars. Some of our clients choose Medigap plans with larger out-of-pocket costs so as to maximize their HSA spending. This can be even more beneficial as some of the lower tier plans offer great value. There are some very compelling arguments to purchase Plans G or N (over C or F) regardless of your HSA status.
It’s important to understand that if you withdraw HSA funds for anything other than a qualified medical expense, a taxable event will likely be created. And if you’re under age 65, the government can levy a 20% penalty on top of any income taxes you may owe.
Yes, assuming you are purchasing a tax-qualified long term care insurance plan. (The government deems which types of LTC plans are tax qualified and which are not.) The good news is almost all LTC plans sold today are tax-qualified. Plans that don’t meet this standard are easily identified. They usually involve increased income (from an annuity) or an accelerated death benefit (from life insurance). Ask your agent or the underwriting insurance company when in doubt.
Your age will determine how much you can withdraw from your HSA to pay from long term care insurance tax-free. Those age 65 and above can spend approximately $4,000 each year while those above age 70 are allowed to spend closer to $5,000. Using HSA dollars is a great way to fund some or all of a long term care insurance policy costs.
Hyers and Associates is an independent agency. We specialize in Ohio Medicare supplement plans as well as Advantage, Part D, life and long term care. We work in several states across the country and can help you learn more about your best insurance options and strategies. Contact us today!
Category: Medicare Supplements, Retirement Planning
We see quite a few mistakes people make with their Medicare insurance plans. Many of these are avoidable by knowing the most important rules, regulations and timelines while having a good team around you.
If you’re researching your options as you near Medicare eligibility, you know there is a lot of information to sort through. We’ll discuss the most common issues we see and how to avoid them.
Medicare is a maze, but it’s not always easy to backtrack if you reach a dead-end. A wrong turn can result in enrollment delays and lifetime penalties. The most common mistake we see is people missing their personal enrollment deadlines. Everyone’s Medicare enrollment timeline is a little different and it does not always correlate with turning age 65.
Some people defer Medicare Part B because they have group health insurance available through a large employer (more than 20 employees). Others think they can defer Medicare and take COBRA instead. The first option is usually okay, the second is not. This is just one example of a so-called Medicare trap that awaits those who are eligible. In other cases, we see people enroll in and pay for Medicare Part B when they may not need to.
Part B is the gatekeeper and there is almost always a right and a wrong time to enroll. And if you do nothing, the government can automatically enroll you at age 65 if you’re already taking Social Security payments. That might be a mistake if you have creditable large group health insurance available that you plan on keeping. It’s important to know when to start your Part B with the government.
Assuming you have navigated the above satisfactorily, then it’s time to think about your supplemental insurance. Once Part B starts, then you have a six month window to buy any Medicare supplement without medical underwriting and a three month window to buy a Part D drug plan. We see a lot of mistakes here.
Many people let these windows pass thinking they can buy a supplement any time they want – or later during the yearly Open Enrollment. That’s not the case. The so-called Open Enrollment in the fall each year does not apply to Medicare supplements. Enrolling late in a Part D plan incurs lifetime penalties.
Missing your window to purchase a Medicare supplement, Advantage or Part D drug plan can cause future ineligibility (due to medical underwriting) and late enrollment penalties from the government. Everyone’s timeline will be a little different, but in almost all cases, once Medicare Part B begins the clock is ticking to purchase supplemental insurance. There are usually no free passes once your personal enrollment window has expired.
Once you’ve enrolled in Medicare and any other supplemental/replacement type plans of your choosing, your coverage cannot be cancelled… unless you don’t pay your premiums. It might seem silly to even bring this up, but it’s one of the most common issues we see. People miss their premium payments – and if the policy lapses, it can be difficult to reinstate.
Most Medicare beneficiaries have their Part B premiums taken directly from their Social Security checks. That’s easy enough. But if you’ve delayed SS, then your premiums will be billed to you quarterly. You must keep track of your Medicare premiums and pay them on time. One of our clients did not. She had to then wait for the Medicare General Enrollment Period (January 1 – March 31), reinstate her Part B for a July 1 effective date, and pay a 10% lifetime penalty on top of her normal premiums. It was not a good situation for her and there was nothing we could do to help.
Another gaffe we see all too often is the failure to pay Medicare supplement and Part D premiums on time. Most of our clients set up their policies on bank draft and have no problems. Others wish to be billed and it’s not uncommon for a payment to be missed when someone is traveling, sick or otherwise preoccupied.
The issue is once a Medicare supplement, Part D or Advantage plan lapses due to non-payment, the insured is at the discretion of the insurance company for reinstatement. If denied, then medical underwriting may be required. If the insured is unwell, then it can be very difficult to find a new policy. On top of that, late enrollment penalties can be assessed on your Part D drug insurance coverage.
No matter how you choose to pay your bills, you must keep your payments up to date. Setting things up on a bank draft is more foolproof in our opinion. Just remember to take inventory and contact the insurance company(s) if you change banks.
When you’re aging into Medicare, retiring or losing creditable group coverage, it’s time to build a team. You’ll want to consult with your human resources manager, check with state and local resources, lean on friends and family, and most importantly contact a knowledgeable insurance agent.
We see too many people try to be their own insurance agents. Most of the time, they have bad information or an incomplete picture of Medicare. Don’t try to be your own insurance agent! Just trust us on this one. It saves you no money whatsoever and will likely lead to heartburn down the road. As agents, we are not allowed to charge you any more or less than the going rate for any plans you are considering. And we know a lot more than what you might find out by reading a few articles like this one.
Those of use that have been doing this a while are extremely knowledgeable; we’re as close to experts as you’ll find. Think of us as field-guides who can show you what to do and when to do it while explaining the repercussions of a particular decision. Medicare is full of “if this, then that’s” and we can tell you how one decision will affect another.
We live in a “do it yourself” world, but there are some things that are best left to the experts. It can be difficult to learn all there is to know about Medicare on your own. Build a good team around you, find an independent agent you trust and put them in your bullpen. You can rely on their knowledge now and in the future. It doesn’t cost you a thing and you’ll be much less likely to run into problems going forward.
Medicare only goes so far. We get a lot of questions from our clients about foreign travel and long term care. We’ll discuss both, but of the two, long term care is more important. It poses the single biggest risk to any portfolio, family, estate, inheritance and so forth. In a few words, Medicare does not cover much in the way of long term care expenses.
Medicare, when coupled with most Medicare supplements, covers only the first 100 days of skilled care in a hospital, rehab or nursing home. That’s it. Medicaid only picks up the tab once you’ve depleted your assets. It’s unwise to count on either of these two programs to pay for routine long term care expenses. Skilled care is administered by a doctor, but most people need custodial care which is help with the activities of daily living. Medicare does not cover custodial care at all – or skilled care for more than 100 days. If you want this type of coverage, you’ll need to purchase a long term care insurance policy.
When it comes to foreign travel emergency Medicare, if combined with supplemental plans C, D, F, G, M or N, only pays a maximum of $50,000 lifetime after a $250 deductible has been met. This should be okay for most short trips abroad, but if you’re someone who travels abroad for long periods of time, you may want a health policy tailored to your trip. We help our clients with those as well.
Once you’ve decided whether a Medicare supplement or Medicare Advantage plan is most suitable (you can’t have both), you’ll want to explore all of your options. Too many times I see consumers gravitate toward the insurance company they had before becoming Medicare eligible. This can be a mistake.
There are several options in the Medicare markets and many policies are identical. In almost all cases, Medicare supplements offer the same coverage with the exact same access to doctors and hospitals. In other words, a Plan G is a Plan G. It doesn’t matter whether you buy from one of the big guys or a lesser known name. Many of the smaller supplement providers offer lower rates and smaller increases, however. Don’t rule out the smaller carriers just because they are new to you. You might be spending more than you need to and you can be missing out on extras like Silver Sneakers.
You should also ask your independent agent about any Medicare supplement discounts available. Let us know if you have a spouse who will soon be eligible for Medicare or if you share a household with someone. In some states this will qualify you for a 5%-12% discount even if the other person does not apply.
And you need to review your insurance on a regular basis. It may be okay to stick with your Medicare supplement for a few years, but Medicare Advantage and Part D plans usually change their coverage yearly. What works well now may not be your best option next year. If you don’t shop, then you can be in for a rude awakening when filling prescriptions or visiting doctors.
This is another good reason to have a relationship with an agent. We’ll have your information on file and also be aware of the ever-changing Medicare landscape. We can quickly see if any changes are needed or if there are policies that will save you significant dollars. We have saved some of our clients well over $100 a month without decreasing their benefits simply by replacing their older, more expensive plans. Shop once in a while, it can do your pocketbook a world of good.
Hyers and Associates is an independent Medicare supplement insurance agency. We specialize in Medigap, Advantage and Part D plans. We’ll make sure you understand all of your options while also helping you to avoid the many Medicare mistakes laying in wait. Contact us today to discuss your options, compare plans and enroll direct in the insurance that best fits your needs and budget.
Category: Medicare Supplements
If you are shopping for (or own) a fixed index annuity, you likely have your eyes on a few different indices. Fortunately, 2016 was a good year for most markets and many annuity accounts showed positive returns. Posted below, we have summed up the returns of the major indexes (like the Dow, S&P 500, NASDAQ, etc.) as well as some of the more popular indexing options available.
It’s important to note that the numbers below may not reflect your overall returns. Caps, spreads, participation rates, bonuses and other metrics could increase or decrease your overall performance. And it’s unlikely that your annuity anniversary date is January 1 or each year. Many annuities start at different times throughout the year depending on when they were funded.
| Fixed Index Annuity Indices | December Return | Total 2016 Return |
|---|---|---|
| S&P 500 Index | +1.82% | +9.54% |
| NASDAQ Index | +1.12% | +7.50% |
| Dow Jones Index | +3.34% | +13.40% |
| Russell 2000 Index | +2.63% | +19.48% |
| Barclays ARMOUR II Gross USD 7% ER | +0.29% | +11.25 |
| Barclays U.S. Dynamic Balance I | +1.10% | +4.83% |
| BlackRock Diversa Volatility Control | +1.01% | +3.14% |
| BNP Paribas Multi Asset Diversified 5 | +1.80% | +5.94% |
| Goldman Sachs Dynamo Strategy | +1.05% | +0.82% |
| J.P. Morgan MOZAIC | +0.57% | +10.07% |
| Merrill Lynch Strategic Balanced | +0.47% | +2.73% |
| Pimco Tactical Balanced | +0.67% | +5.27% |
| S&P 500 Daily Risk Control II 8% | +1.56% | +7.62% |
| S&P 500 Dividend Aristocrats Daily Risk Control 5% | +0.56% | +3.44% |
| Shiller Barclays CAPE US Risk Controlled 10% USD Total Return | +1.52% | +9.62% |
When reviewing the numbers above, most people might gravitate toward the indexes that performed the best in 2016 – like the Russell 2000 and S&P 500. Those figures only tell half of the story, however. What’s most important is how your annuity actually tracks the chosen index.
For instance, a monthly sum and point to point crediting method will show different returns when applied to the same index over the same period of time. Furthermore, caps, spreads, participation rates and multipliers will also affect your overall returns.
For example, if your index annuity only offered a 4% cap on a one year S&P point to point with annual reset, then that’s the maximum return you would receive. Whereas a similar annuity with a 7% cap would have gained 3% more interest. Using a $100,000 investment, that difference in cap would equate to $3,000! It’s very important to shop for the best caps when researching index annuities.
At our annuity brokerage, we receive several inquiries about bonus annuities. They’re very popular and for good reason. It’s nice when you deposit $100K in an account and receive a 10% upfront premium bonus increasing your principal by $10,000 at onset.
Nothing in life is free, however. Whenever you see an annuity account with a large upfront bonus, know that the growth metrics (caps, spreads, etc.) will usually be greatly reduced. This simply means you will have less potential for interest gains going forward. That’s the trade-off; it’s pay me now or pay me later.
If you want a large bonus, be prepared for smaller interest gains when the market goes up when compared to a similar annuity with no bonus. That’s not to say the bonus account will necessarily be worth less over time, it really depends on the economic cycle you’re in, but it will affect your returns going forward.
When shopping for the best fixed index annuity, it’s important to consider all of your options. The chart above just lists a few of the prominent indices available. There are many, many others to choose from, including: inversion strategies, gold & precious metals, European indexes, emerging markets as well as several proprietary options.
One size does not fit all. You’ll want to consider the term of the account, crediting strategies, bonus availability and all other metrics like caps, spreads participation rates, etc. It’s also important to see that double digit growth is possible with these policies in good market years.
We work with our clients to find the indexed annuities that best fit their needs, goals and timeline. Contact us today to learn more about our offerings.
Category: Annuities
We get the question from our clients all the time, “Do Medicare supplement insurance plans have networks?” A rare few do, but most don’t. If you are asking this question, then it’s important to better understand how these insurance policies work.
In this post we will discuss in detail what you can expect from your Medicare supplemental insurance plan. This will make it easier for you compare and buy a plan so you don’t encounter any unexpected bills or network restrictions in the future.
The first and most important thing to know is that Medicare is usually your primary insurance once you enroll in Parts A & B. This means that your Medicare supplement insurance is secondary. You are simply pairing a supplement to your government-run Medicare insurance. Put another way, almost all supplements just piggy-back off of the network of doctors and hospitals that accept Medicare A & B. Most everyone accepts Medicare, so they will also except the supplement you choose.
These Medigap policies (like Plan G, F and N) have no networks at all. Supplements start paying once Medicare stops – no matter the insurance company, Medicare is your network and almost all supplements just compliment Original Medicare. They do not create a secondary network of providers for you to worry about. In other words, your supplement does not determine who you can see – Medicare does. You get to see the same doctors and use the same hospitals with Humana, Aetna, United Healthcare or any of the smaller insurance companies you may not have heard of yet.
(The above assumes you don’t also have group employer coverage and you’re not enrolling in a Medicare Advantage plan. In the case of group coverage and Medicare Advantage plans, you can still have network restrictions. It depends on which insurance is primary, but there are not these same concerns with a supplement.)
The short answer is, YES! Because Medicare is primary and your supplement is secondary, networks will not differ in any way between insurance companies. You have the same access to providers with almost all plans.
When you got to see your doctor, you just present your Medicare and supplemental ID cards and they take care of the rest. In fact, most Medicare supplements coordinate through Medicare which means you don’t have to worry about the billing process whatsoever.
It does not matter which Medicare supplement insurance company you choose. It can be a very large well-known company like United Healthcare – or it can be any number of smaller insurance companies you may not be familiar with. The networks are the same. If they accept Medicare, then they’ll accept your supplement. The billing will be the same and hassle-free.
Our advice: Don’t narrow your Medicare supplement insurance options to only a few large companies. There are several smaller companies with very good reputations and below average rate increases. The smaller players are very much worth a look in our opinion!
Many of the larger companies have thousands of policyholders. This usually results in several claims. Higher claims means larger premium increases. Smaller companies that are a little further from the main stream don’t usually have these same issues can can usually hold rates lower for a longer period of time.
Yes, there is one type of Medicare supplement that has network restrictions. These are called “Select Plans” and they are not very common. Select Plans are usually offered from larger providers like Anthem, United Healthcare and Mutual of Omaha to name a few. (These same larger carriers offer traditional plans with no networks too, of course.)
Select Plans will require you to stay in-network for routine care usually administered by your primary care physician. Emergencies will always be covered, however, and are not subject to any network restrictions. The advantage of Select Plans are the lower premiums they offer.
If you find a traditional plan with no network restrictions at the same price as a Select Medicare supplement, the traditional plan might be a smarter purchase. There’s no point in narrowing your options unless it saves you significantly on your premiums.
The final word on the matter: Almost all Medicare supplement plans have no network restrictions.
Hyers and Associates is an independent Medicare supplement agency. We specialize in Medigap and Part D plans and work hard to make sure our clients understand the insurance they are purchasing. Contact us today to discuss your options, compare plans and enroll direct in the supplement that best fits your needs and budget.
Category: Medicare Supplements
Reviewing and understanding your supplemental insurance options can be overwhelming when you are new to Medicare. There are several options to choose from and it’s hard to know which plans with which provider will be most suitable for the long haul.
In the following article, we provide tips and advice to help you navigate this somewhat complicated product category. With this knowledge, and our experience, you can form an educated plan of attack in order to find the supplemental plan that best fits your needs. (Note: Medicare supplements are sometimes referred to as Medigap plans and we will use these two terms interchangeably.)
For the purposes of this post, we’ll assume you have decided to enroll in a Medicare supplement over an Advantage plan. By rule you can’t have both – so you’ll want to decide which policy fits you best. Most of our clients prefer that Medicare supplements have no network restrictions and little out-of-pocket exposure, but one size does not fit all.
That’s not to say one is better than the other, they are just different. Advantage plans can be less expensive and usually include Part D drug coverage rolled into one bundle. We offer both types of policies and can help you compare and contrast them if you’re unsure which you prefer.
When starting this process, you first want to know that Medicare supplements are very much a cookie-cutter type of product. Plan F from company A has to cover the exact same benefits as a Plan F from company B – while also providing the exact same network.
Insurance providers cannot monkey around with the benefit design. These policies simply piggyback off of Original Medicare and help fill in the leftover gaps depending on the level of coverage you choose. There’s no wiggle room for the insurance companies to deny claims. If you encounter a Medicare approved expense, your supplement will cover its designated gaps.
And with almost all Medicare supplements (the rarely purchased Select Plans being the only exception) there are no networks to worry about. You will have the same network of hospitals and doctors with Aetna as you would with Anthem BCBS, United Healthcare, Mutual of Omaha or any other provider you may or may not have heard of.
Medicare is your primary insurance and your permanent network. If your doctor or hospital accepts Medicare, then they will accept any traditional supplement you present them. You are never shopping networks with a supplement like you would with an Advantage plan.
At present, there are ten different Medigap plans sold today – Plans A-N.
| Medicare Supplement Plan: | A | B | C | D | F | G | K | L | M | N |
|---|---|---|---|---|---|---|---|---|---|---|
| Part A Hospital Coinsurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Lifetime Reserve Days | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| 365 More Hospital Days | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Parts A and B Blood | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Part B Coinsurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔* |
| Part A Hospice Coinsurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Skilled Nursing Coinsurance | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ | ||
| Part A Deductible ($1,288) |
✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | 50% | ✔ | |
| Part B Deductible ($166) |
✔ | ✔ | ||||||||
| Part B Excess Charges | ✔ | ✔ | ||||||||
| Foreign Travel Emergency | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
Key: A ✔ means the benefit on the left is covered. For example, Plan F checks all boxes and fills in all gaps in Medicare Parts A & B. The * denotes that Plan N has office copays.
You can see from the above that some plans are very similar. Plans F and C are very similar as are Plans G and D. In our experience, Plans F, G and N are the most commonly purchased policies. We see very little demand for Plans A, B, K, L and M as they are not as comprehensive.
It’s important to note that Plans C, F and N also come in “Select” versions which require network use for routine care. We don’t see much demand for Select plans either. Finally, there is also a High Deductible Plan F option that requires the insured to cover a $2,180 deductible before the supplement will pay its share.
Plan F is the most popular Medigap plan at present capturing an estimated 4 out of every 10 buyers. The reason: It’s the most comprehensive plan available. However, new legislation passed in 2015 states that beginning in 2020, no Medicare supplement plans can cover the Part B deductible. This means Plans F and C will no longer be for sale, but if you’ve enrolled previously, then you can keep your existing plan.
In our opinion, it’s important to consider policies other than Plan F. We’ve written extensively about the value Plan G provides in terms of cost, benefits and renewal history. In many cases, the lower monthly premiums Plan G provides more than make up for the small Part B deductible it does not cover.
And Plan G (as well as Plan N) are not Guaranteed Issue plans. This simply means they are more exclusive in their enrollment and do not have to accept as many applicants as Plan F. Therefore Plan G tends to have a healthier pool of applicants causing the premiums to rise more slowly. Our agency is regularly updated with rate increases and we see Plan F increasing more quickly than Plan G in many instances.
The temptation is to buy the cheapest Medicare supplement in the letter you prefer most. It pays to take it a step further. You’ll want to know how long said insurance company has been offering that line of supplements and their renewal history.
Many providers release new lines of supplements under a slightly different name every few years so as to offer lower premiums. This sometimes causes above-average rate increases for those stuck in the old, no-longer-for-sale line of business. You should ask your agent about the age of the supplement as well as the yearly renewal history.
In most cases, agents have access to about 4-5 year of rate increases. We can tell you which plans with which companies have been most stable. These Medigap plans may not be the least expensive, but they can save you money going forward if their rates are more stable. In other words, pay a little more now so you pay less later.
We see a lot of demand for Issue Age Medicare supplement insurance plans over Attained Age coverage. Most of the time, it’s because these policies are misunderstood. Issue Age plans will usually increase in price each year just like Attained age plans, but not because you are a year older.
And most of the time, Issue Age plans are more expensive to begin with. Well, if the more expensive Issue Age plan passes along an 8% annual increase compared to, say a 4% increase with the Attained Age plan – it’s pretty clear which one is better.
Community rated plans offer the same rates to everyone no matter their gender or location. If I’m a female living in Pittsburg, why would I want to pay the same rate as a male in Philadelphia? The answer is you wouldn’t. Again, talk to your agent about rate increases before settling on a rating class.
You sometimes hear the saying, that if you are your own lawyer, doctor, accountant, etc – then you have a fool for a client. The same could be said for insurance broker. You don’t know what you don’t know and that lack of information can lead to poor decisions. Many of our clients have first spoken to friends, family and neighbors and come to us with a lot of conflicting and wildly inaccurate information.
Don’t miss out on important information, use an independent agent. Know that it does not, by law, cost you any additional money to place your business with us. By rule, we offer the same rates as if you called the insurance company yourself. But those of us who are independent can quote you the direct rates with several carriers at one time.
We can also talk about the experiences of our clients with various carriers, their rate increases and reputations, as well as other nuanced items like premium discounts and the like. Don’t go it alone. You are not saving any money and likely missing out on valuable information an agent can provide now – and in the future. Medicare changes yearly and sometimes significantly. It’s nice to have an unbiased agent in your back-pocket when you have questions.
Many carriers offer spousal and/or household discounts on their supplemental plans. In some cases, you don’t have to be married (just living with someone) to qualify for a premium reduction. Savings will vary between companies and by state regulations, but can be as much as 12% in some areas.
It’s important to bring your household makeup to the attention of your agent. Maybe you have a spouse who will be Medicare eligible in a few months, or maybe you live with an adult child, sibling or significant other. These factors will help agents make recommendations so you can maximize your savings.
In most cases, the least expensive way to pay is monthly (via automatic bank draft) or annually by check. If you choose to pay quarterly or semi-annually, your rates can be higher. And many companies will not bill you monthly – they’ll want to draft automatically in order to avoid higher administrative costs. We recommend that our clients consider bank draft – it’s safe, secure and reliable. It will also help to prevent policy cancellations if you are travelling or your invoice is lost in the mail. Most insurance companies offer several payment options, however.
Sometime our clients choose the same Part D prescription drug provider as the one offering their Medigap plan. Don’t do this without first comparing all drug plans for the prescriptions you take. There is no bundled savings by using the same provider and in many cases you’ll be paying more than you need to.
We help our clients compare their Part D plans at Medicare.gov. It’s a good website to see who offers you the most savings at the pharmacy (or mail order option) of your choice. Part D Rx plans can differ by wide margins, so it’s important to shop these plan independently of your Medicare supplement.
We are an independent Medicare supplement brokerage and have been working in this market for several years. Using our knowledge and experience, you can find the supplemental coverage that best suits your needs and budget. You will also have us as a resource in the future when you want to discuss changes to your insurance plans.
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Category: Medicare Advantage, Medicare Supplements
As part of the Medicare Access and CHIP Reauthorization Act of 2016, supplemental plans that cover the Part B deductible will no longer be for sale in 2020. This legislation means that Plan F, Plan C and High Deductible Plan F will no longer be fore offered to those who are new to Medicare in 2020.
If you have purchased one of these three plans before 2020, you can keep your coverage. You’ll also be able to shop for a new Plan F, C or HD Plan F. These changes only affect those who are new to Medicare in 2020 or after. It does not change anything for those who were already eligible.
Your existing Plan F, C and HD F policies will no be cancelled by your insurance company. You can keep them for as long as you wish.
Yes and no. It will only be available to those who were Medicare eligible before January 1, 2020. This applies to those who were on Medicare due to age, retirement and/or disability. If your Medicare Part B begins after 2020, you will have to choose another policy like Plan G or Plan N.
This is not the first time Medicare had discontinued supplemental plans. In 2010, Plans H, I and J were taken off the market for everyone. Of the three, Plan J was most popular because, like Plan F, it was most comprehensive. Those who owned it could keep it, but no other plans were available for purchase under any circumstances.
In our experience, reducing availability of any supplement can have adverse consequences for current owners. With no new members coming in, there are fewer younger and healthy people to offset claims from the group. This usually drives rates up more quickly.
Consequently, those who are in good health may enroll in less expensive coverage due to above-average rate increases. This can leave a remaining pool of unhealthy members who may have more trouble qualifying for a new policy due to health issues. Those left behind may experience higher rate increases than those who are in a policy that is still available for sale and accepting new members.
When Medicare officials modernized supplemental plans in 2010, a very strong argument for Plan G could be made over Plans F and C. Plan G covers everything these plans do except for the small Part B deductible ($185 in 2019).
When you compare costs, the lower premiums with Plan G almost always make up for the Part B deductible – and then some. In other words, why pay an extra $25 a month for Plan F to cover a $185 one-time yearly deductible. It doesn’t make good financial sense.
And Plan G and Plan N are not Guaranteed Issue policies. The only time you can purchase Plan G without the need for medical underwriting is when you’re within 6 months of your Part B effective date. There are a lot of other circumstances where you can purchase Plan F well after your Part B effective date and not be turned down.
This simply means Plan F has to accept many members who might be in poor health. This difference translates to higher rate increase with Plan F when compared to Plan G. As an agent, I see rate increases cross my desk often. It’s not unusual to see insurance companies raise their Plan F rates by a couple of percentage points more than their Plan G and N rates. Again, this makes Plan G more attractive for the long haul due to smaller premium increases.
It’s worth noting that Plans D and G will replace Plans F and C as Guaranteed Issue policies in 2020. Like Plan F before them, these two coverages will now have to accept members in certains situations when they did not before. All of these changes now make Plan N look like the best policy in for lower rate increases over the long run.
If Plan F follows the trend of Plan J upon phaseout, there will be some policyholders who experience unpleasant, above-average rate increases. The questions is: How far ahead should we start to plan? There’s no time like the present to discuss your options. If you’re in good health, it may be wise to explore changes now.
Certainly Plans D, G, and N are good choices. Their out-of-pocket exposure is low and their premiums are affordable. If you are in good health and able to switch coverage before 2020, it might be a good idea to consider a new policy that will remain on the market for everyone.
And there will also be the addition of High Deductible Plan G to replace High Deductible Plan F. Both of these policies will offer low premiums (under $50 a month in most states), but High Deductible G will cost less and most likely have lower premiums increases year over year.
There’s a lot to think about when purchasing a supplement for the long run. We help take the mystery out of Medicare insurance shopping for our clients.
We are an independent Medicare supplement brokerage with over 20 years of experience. Don’t just place your coverage with anyone. Talk an agency that specialize in these policies and does so everyday. We can help you find the insurance plan that’s reliable now and in the future.
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Category: Medicare Supplements
If you would like to purchase health insurance outside of the yearly Open Enrollment window, then you will need a qualifying life event (QLE) to do so. Open Enrollment begins on November 15th and lasts through February 15th each year. Without such an event, insurance companies will turn down your application.
There are several events that will allow you to purchase health insurance outside of Open Enrollment. We list the most common ones just below. It’s important to know that these Special Enrollment Periods only last 60 days, however. If you do not seek out and purchase health insurance within this 60 day window, you may have lost your opportunity to enroll in a health plan.
It’s also important to know that voluntarily canceling your health insurance outside of Open Enrollment does not constitute a QLE. Some carriers will allow you to change plans if your plan is renewing outside of Open Enrollment, but if you simply cancel your coverage because you are not happy with it, you may not be able to find new coverage.
There are several common QLEs that will allow for a Special Enrollment Period. Insurance can be purchased on or off the Federal (or your State) Exchange during this window of time.
The only place where you can enroll and claim a tax credit or subsidy (based on your income and family size) will be the exchange that serves your state of residence. We can help you understand how that works while also helping you to find coverage that meets your needs and budget.
If you have missed your Special Enrollment Period or otherwise do not want to enroll in an Obamacare compliant plan, then short term insurance can help to fill a gap. These plans can be purchased for up to 6 months (12 months in some states) and will help to cover catastrophic costs.
It’s important to understand that short term health insurance plans are not compliant with the Affordable Care Act. In other words, you can face a penalty for not owning Minimum Essential Coverage. And they are medically underwritten – which means you can be turned down. Finally, short term plans do not usually provide coverage for preexisting conditions.
Typically, short term coverage works best to fill gaps for 6 months or less. They may not be advisable as plans to purchase in lieu of more permanent ACA compliant coverage. But if you have missed your Special Enrollment Period, they can be your next best option.
If you are experiencing a Qualifying Life Event and would like to explore your health insurance options during your 60 day Special Enrollment Period, we can help. We work both on and off the Federal Marketplace and can assist you with your needs. Contact us today to get started.
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Category: Health Care Reform, Health Insurance
If you are over 65 and leaving your group health insurance, you’ll need to plan carefully when considering COBRA as your semi-permanent insurance. If you do not enroll in Medicare Part B upon separation from employment, you can face late enrollment penalties including fines and delays.
Unfortunately, the transition from group health insurance to Medicare – and the role that COBRA may play – is poorly understood by many who advise on the subject. You may receive bad information by speaking with the consultants at Medicare.gov., your HR person at work, and those who work in the insurance industry. It’s wise to talk with several people before making a decision.
The mistake most often made is when you’re over age 65, do not enroll in Medicare Part B and choose to make COBRA your primary insurance. While the COBRA plan may satisfy your medical needs, delaying enrollment into Medicare Part B can create delays and fines down the road.
Enrollment into Medicare Part A is automatic and usually without cost at age 65, but Medicare Part B enrollment is not always automatic and monthly premiums must be paid. The important catch here is the expiration of your COBRA insurance does not allow for the automatic enrollment into Medicare Part B, but your original loss of group health insurance does.
In other words, you can enroll in Medicare Part B when losing your group insurance, but if you wait to do so until after your COBRA policy has expired you will face delays and permanent fines. You will have to wait until the General Enrollment Period (GEP) that occurs from January 1 to March 31 – and your Part B won’t take effect until July 1. When it does take effect, you will have an additional, permanent charge (late enrollment penalty) attached to your monthly premiums.
You will also need to be enrolled in Part B if you wish to purchase a Medicare supplement insurance plan, like Plans F, G, N, etc. You can always supplement your Medicare Parts A & B with your COBRA coverage, however.
It’s important to compare the cost of your COBRA plan with that of supplement and Part D rx coverages to see which option offers more value. Usually, the supplement and Part D combination are more affordable with less out of pocket than COBRA insurance, but every situation is different. (You may also want to investigate a Medicare Advantage plan as another alternative.)
If you do decide to supplement Medicare Parts A & B with COBRA, most insurance companies will allow you to enroll in a “Guaranteed Issue” Medicare supplement (Plan F, C, etc.) after your COBRA expired. You will have missed your chance to purchase non-guaranteed issue supplemental policies like Plan G and Plan N, however. Medical underwriting will be required to enroll in non-guaranteed issue plans, so there is a trade-off.
It’s important to note that in some cases enrolling in Medicare Part B once COBRA has already been selected may give your employer the right to cancel your COBRA policy whereas the opposite is not true. It depends on the order of enrollment. Enrolling in Medicare first (before selecting COBRA) gives you more options.
If you choose to supplement your Medicare A & B with COBRA, then you must make sure that the drug coverage associated with your COBRA policy is deemed “creditable.” In other words, it must be as good or better than what is offered by stand-alone Medicare Part D prescription drug policies.
If your COBRA drug coverage is creditable (your HR or insurance rep will know) then nothing more needs to be done until your COBRA policy expires. At that time, you can enroll in a Part D drug policy no questions asked. There will be no late enrollment penalties or fines to worry about.
If your drug coverage is not creditable, then you will likely want to enroll in a Part D policy – even if you choose COBRA over a Medicare supplement or Advantage plan. By waiting until after your non-creditable COBRA policy expires, you will face a permanent Part D premium penalty and likely have an enrollment delay as well. It’s a double whammy – just like the Part B enrollment penalties.
When it comes to Medicare enrollment, there’s a lot to know. And there are traps that can cause difficulties – even when you try and do everything right. Permanent fines, delays and penalties can cause financial hardship and overall aggravation when mistakes are made.
At Hyers and Associates, we help our clients avoid such pitfalls while operating within the Medicare guidelines and timelines. Contact us today to talk more about your insurance options.
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Category: Medicare Supplements, Retirement Planning
If you’ve ever been declined a Medicare supplement insurance plan due to medical underwriting, then you know the frustration. Some carriers are more stringent than others and the slightest health issue can be grounds for denial.
And in most states, you have only one or two chances to choose a supplement without the need for medical underwriting. Those times are during your 6 month Open Enrollment window – or if you qualify because of a Guarantee Issue event.
The good news is that a couple of Medicare supplement providers are now offering insurance policies without significant medical underwriting requirements. This can be beneficial if you have been stuck in a high-cost Medigap plan and been denied coverage elsewhere due to health history. You can apply for these plans any time during the year.
If you have been turned down in the past while trying to switch coverage, you may qualify for insurance with two of our carriers. While it is not guaranteed that you will be eligible for either, the underwriting standards are far less strenuous than with most other insurance companies. And a switch may help to lower your monthly premiums.
There are several health conditions that are almost always automatic declines for a Medicare supplement when outside of an open enrollment window. And sometimes, it’s a culmination of factors and not one on its own. The good news is that there are a couple of insurance companies that will consider applicants with the health issues listed below.
Some of these conditions include, but are not limited to: Alzheimer’s disease, Angina, Angioplasty, Atrial fibrillation, Atherosclerosis or arteriosclerosis, Cardiac pacemaker, Cardiomyopathy, Carotid artery disease, Cerebral palsy, Chronic bronchitis, Chronic lung or respiratory disorders requiring the use of oxygen, Chronic COPD or COLD, Liver Cirrhosis, Coronary artery disease (CAD), Dementia or Senility, Diabetes with neuropathy, retinopathy or vascular disease, Emphysema, Heart valve surgery, Hepatitis (other than hepatitis A), Implantable or subcutaneous defibrillator, Irregular heartbeat, Myasthenia gravis, Other liver disease, Parkinson’s, Peripheral vascular disease, PSA levels greater than 6.0, Stent placement, Systemic lupus, Transient ischemic attack (TIA).
Height and weight (build) can also be an issue when trying to switch to a new Medicare supplement plan – especially when other chronic conditions are present. Fortunately, height and weight will no longer be used to decline coverage when determining eligibility outside of the 6 month Open Enrollment window with this new rating class.
Now it’s important to note that these new Medicare supplement underwriting classes are not guaranteed issue. And depending on your rating class, the premiums may not be lower than what you have now. This is a step in the right direction, however. If more carriers follow suit, then this additional competition will provide more choices and flexibility while driving down rates for everyone.
We are independent Medicare supplement brokers and can help you shop for the best rates on the plans that best suits your needs. If you have been declined in the past and your current rates are becoming unaffordable, then we may be able to help. Contact us today for more information.
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Category: Medicare Supplements
Mutual of Omaha has many offerings, but they may be best known for their Medicare supplement insurance plans. Their policies are competitively priced across the U.S. and rate increases with their Medigap coverage has been trending lower the last few years.
A.M. Best rates them A+ due to their large base of policy holders, cash reserves and strong balance sheet. More recently, they began offering Prescription Part D, Medicare Advantage as well as dental and vision insurance in the senior markets.
Like all supplemental carriers, Mutual of Omaha does not offer each of the ten plans available. Depending on your state of residence, Plans A, B, C, D, G, N and F and High Deductible F will be available in most cases. They also offer High Deductible Plan G as of January of 2020.
In some zip codes, Select Plans C, F and G will be available for purchase as well. Select Plans are network-driven policies that require the insured to use an in-network doctor or hospital for non-emergency care. Monthly premiums will be lower for Select Plans when compared to traditional non-network coverage.
There are several factors that will influence your Medicare supplement rates and some of these variables only apply during certain time periods. Our agency can help you determine your rating class whether you’re in your 6 month open enrollment window, a guaranteed issue time period, or if you’re simply shopping for lower Medigap rates.
Tobacco use, height and weight, gender, age, household discount availability, plan preference and zip code can all affect your final rates. During your Open Enrollment window (when you are age 65 or new to Medicare Part B) some of these factors cannot be used to determine your monthly premiums. If you are guaranteed issue (already enrolled in Medicare Part B, but losing creditable coverage elsewhere) then some factors can raise your overall premiums – and some plans will require medical underwriting.
The household premium discount will vary in amount (7%-12%) and availability from state to state as well. In some areas, a member of your household must also be applying with you (or already own a policy) in order to qualify for the discount. In others states you must only reside with a spouse, sibling or domestic partner to qualify for the discount.
Plan G is quickly becoming a popular Medicare supplement and for good reason. The rates are low, the annual premium increases can be smaller and the overall savings can more than make up for the small Part B deductible. In many states, Mutual of Omaha offers some of the lowest Plan G rates available. This is especially true when the household discount applies.
When shopping for supplemental insurance, one of the most important variables can be future rates increases. You want to purchase a plan that can provide stable future rates as switching supplements in the future can be difficult. Plan G tends to be more stable as it’s not a guaranteed issue plan unless your new to Medicare Part B. As Plan G requires medical underwriting in more instances than Plan F, it tends to have fewer enrollees. This can translate to smaller rate increases over time.
Many Medicare Supplement providers are now offer both free and at-cost ancillary benefits and/or discounts as part of their coverage. Gym memberships are important to many of our clients. Mutual of Omaha offers either a discounted membership (up to 30%) or a full membership at only $25 a month at several participating locations nationwide. This benefit can save members hundreds of dollars.
There are also discounts on hearing aids, eye exams, lenses and frames, and several other value added benefits. Should you want full dental and vision coverage as part of your Medicare Supplement plan, then that can be added at a reasonable monthly cost. This is beneficial for those who might need more than just routine cleanings.
Our independent insurance agency offers Medigap coverage direct from every carrier we work with. We are licensed with dozens upon dozens and can help you compare quotes all across the country. If you are interested in Mutual of Omaha’s Medicare supplement insurance coverage or if you would like to see how they stack-up against the competition, contact us today.
Category: Medicare Supplements
When you’re new to Medicare, there are decisions to make. Most of our clients compare traditional supplements (Plans, F, G, N, etc.) to Advantage plans, but inevitably the questions arises, ‘What is a Medicare Advantage (MA) plan?’
Through the years, we have found there’s a lot confusion about Advantage plans. They are different from supplements – and it’s important to understand how. We answer several of the most common questions below so you will have a better understanding of what to expect from this type of insurance.
Simply Put, What Is a Medicare Advantage Plan?
CMS (Centers for Medicare and Medicaid Services) defines Medicare Advantage plans as, “a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits.”
In other words, you are allowing a private insurance company (like Aetna, Humana or United Healthcare) to cover all of your normal Part A & B benefits instead of Original Medicare that is provided by the government. You still pay your Medicare Part B premiums each month, but your A & B benefits are covered privately from a chosen insurance company.
Medicare A & B Has Gaps. Do Medicare Advantage Plans Fill These Gaps?
Yes and no. There are several gaps associated with Original Medicare (Parts A & B) including deductibles, coinsurance, etc. That’s why consumers usually purchase supplemental insurance of some kind.
Advantage plans reduce these gaps so your out-of-pocket exposure is reduced. They do not eliminate all of the Part A & B gaps however. All MA plans detail their out of pocket exposure – both in and out of network. There are yearly maximums that limit the total amount the insured might face if healthcare is needed.
You will know upfront what a doctor’s office, ER or Urgent Care visit will cost as well as an extended hospital stay. All of these amounts will be carefully detailed in the Summary of Benefits and Evidence of Coverage documents provided by the insurance company.
Are There Different Types Of Advantage Plans To Choose From?
Yes, there are HMO, PPO, PFFS, Medical Savings Account, Cost Plans, Special Needs Plans and more. The two most common types are HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans. Of the two, typically PPO plans have larger networks of doctors and hospitals to choose from.
Plan availability will differ from state to state and county to county. Your neighbors on the other side of the street may have access to different plans if they live in a different county than you.
It Sounds Like MA Plans Can Vary – Is There An Easy Way To Compare Them?
Yes, you can go to Medicare.gov and use their Plan Finder software. It will return all of the available MA plans in your county. You can enroll in an MA plan direct from the provider or through an insurance agent. The monthly cost (if there is one) will be the same no matter your source.
If you are not sure which plans might be best for you, then speaking to a licensed independent agent can be wise. We can help you compare and contrast your options in order to find the most suitable plans to fit for your needs.
What About Networks And/Or Network Restrictions?
Most (not all) Advantage plans use a network of doctors and hospitals to provide care. This is how they keep costs down. If you enroll in a Humana HMO plan, then you will need to use the Humana doctors and approved medical facilities for your care. You do not need to stay in-network for emergency care, however.
With most MA plans, you will need to choose a Primary Care Physician. This is different than if you stayed on Original Medicare and instead purchased a supplement – like Plan F, G or N. With almost all supplements, you can see any doctor who accepts Original Medicare.
In most cases, you may have a smaller network of medical providers with a Medicare Advantage plan. This is not an issue for many members – it’s just something to be aware of. Most doctors accept many different types of MA insurance plans from different providers.
Is Prescription Part D Drug Insurance Included?
Yes, most Medicare Advantage plans include prescription Part D insurance, but not all. And if your plan of choice does not include Part D coverage, you may not be able to enroll in one without cancelling your Advantage plan.
So it can be a little complicated – and it’s different than how Medicare supplements and Stand Alone Part D plans can be paired together. This is another instance when you may want to talk with a knowledgeable agent to make sure you’re aware of the rules and regulations with Medigap plans.
(Typically plans that do not include Part D drug coverage are designed for those who have prescription drug coverage elsewhere – like the VA.)
Are There Extra Benefits With Advantage Plans Like Dental, Vision & Hearing?
Yes, and this another area where they differ form Medicare supplement insurance. Advantage providers are allowed to bundle dental/vision/hearing packages if they wish. Some do and some don’t. Undoubtedly, it’s nice to get these extra benefits – especially if your MA premiums are low.
In this way, MA plans can be a total package if they include Part D drug coverage, dental, vision and hearing. Plans with these types of extra coverage may cost a little more however than plans without.
How Much Do MA Plans Cost? Why Do Many Plans Have No Monthly Premiums?
MA come in different shapes and sizes and will vary in cost. In most counties, there are a few plans offered for $0 a month. More robust and comprehensive plans can cost upwards of $150 a month. PPO plans typically cost more than HMO plans. A good rule of thumb is: the more expensive the plan, the better the network and the more comprehensive the coverage.
We are often asked about $0 premium plans and how they can exist. The primary reason is the federal government subsidizes these plans. They pay the insurance company a certain amount per member. Additionally, these plans may have a smaller network of doctors and hospitals that have agreed to set reimbursements from the insurance company. Those two factors allow for $0 Medicare Advantage plans.
I’m On Medicaid. Can I Still Enroll In a Medicare Advantage Plan?
Yes, you can. This can be a little complicated so it’s best to speak with your local Medicaid official as well as an agent before doing both. But many Medicaid eligible beneficiaries do choose to enroll in an Advantage plan while also maintaining their Medicaid eligibility.
Can I Enroll In Both A Medicare Supplement & Advantage Plan?
No. There’s not too much else to say. It’s one or the other and there are no circumstances where you can enroll in both. In some cases, you can enroll in both an Advantage and a separate Part D drug plan, but never a supplement like Plan F, G, N, etc.
Which Insurance Is Better – Medicare Supplements or Advantage Plans?
That’s the million dollar question. The answer: It varies from person to person. Typically Medicare supplements are more expensive, but they are also more comprehensive and usually don’t have network restrictions. And supplements are more portable for those who travel frequently or winter/summer in different states.
Conversely, Medicare Advantage plans can be less expensive and also bundle Rx, dental, vision and hearing. If your doctors accept your chosen insurance plan, then you need not worry about networks quite as much. For those under age 65, Advantage plans can be one of your only options. There’s not a right or wrong answer so long as you know the ins and outs of the two different options.
Are There Pitfalls/Concerns With Medicare Advantage Plans?
There can be. As an agent, the ones I hear about most are network issues. Extended care/rehab facilities are somewhat notorious for not accepting certain MA plans. And sometimes well-regarded hospitals like the Mayo Clinic are very selective in what they will accept. Additionally, the out-of-pocket costs can add up over time.
The other pitfall is that you only get a one year free-look with any Medicare Advantage plan. After one year, you can return to Original Medicare and purchase a guaranteed issue Medicare supplement (like Plan F) for the first time or re-enroll in a supplement with your old provider. After two years or more, supplemental providers are allowed to medically underwrite and decline coverage. There is no open enrollment window to purchase a supplement if you don’t like your Advantage plan.
What is The Annual Election Period – How Does It Affect MA Plans?
The Annual Election Period (AEP) occurs from October 15th through December 7th each year. Unless you are experiencing a special enrollment period (SEP), this is the only time of year when you can change Medicare Advantage plans.
If you are already enrolled in a MA plan, you can switch to another one. Conversely, you can disenroll from your Advantage plan, rejoin Original Medicare and apply for a Medicare supplement plan, but medical underwriting may be required to enroll in a supplement. There is no underwriting to enroll in a Part D drug plan however.
Are There Special Enrollment and Disenrollment Periods? What is a SEP?
The Medicare Advantage Disenrollment Period runs from January 1 through February 14th. During this window of time, you can disenroll from your MA plan, rejoin Original Medicare and purchase a Part D plan – no questions asked. The only other times to leave an MA plan are during the aforementioned AEP window or if you’re granted a Special Election Period.
SEP’s (Special Election Periods) are somewhat common and can occur when an insurance company discontinues your MA plan, when you leave their service area or when Medicare rates them as poor performing plans – to name a few. If you’re granted a SEP, then you want to explore all of your options right away.
It goes without saying that there is a lot to think about when it comes to Advantage plans. We are here to help. We’ve been working with these policies for several years and in several states. If you would like to know more about your options, please feel free to contact us.
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Category: Medicare Advantage